Milco to invest € 62 m in new milk processing factory | Sunday Observer

Milco to invest € 62 m in new milk processing factory

Milco Chairman Keerthi Mihiripenna addresses the media. General Manager Sudath Munasinghe, Manager, Marketing and Sales, Sarawana Bavan and Manager, Quality Assurance, R&D, Kumara Jayaratna look on. Pic: Wimal Karunatilleke
Milco Chairman Keerthi Mihiripenna addresses the media. General Manager Sudath Munasinghe, Manager, Marketing and Sales, Sarawana Bavan and Manager, Quality Assurance, R&D, Kumara Jayaratna look on. Pic: Wimal Karunatilleke

Milco (Pvt) Ltd., the State-run entity, will set up a state-of-the-art milk processing factory in Badalgama, Negombo with an investment of Euro 62 million to boost milk production and become self sufficient within the next five years, a top official of the company told journalists at a media briefing last week.

The investment in the new factory aims at expanding the operations of the entity which runs factories at Ambewela, Digana, Polonnaruwa and Colombo, each contributing around 30,000 litres daily for local consumption.

Milco (Pvt) Ltd., Chairman Keerthi Mihiripenna said the factory which will be commissioned in 2020 will have a capacity to process around 200,000 litres of milk a day adding to the current capacity of processing 450,000 litres a day by the existing factories.

“Construction work on the factory to be set up at Badalgama, was delayed due to unavoidable circumstances. However, we are confident that work will commence and the factory will be operational according to schedule,” he said.

He said the company is keen to set up more collection centers across the country and increase the present production level to support the local dairy industry.

“We are the largest collector of milk from over 60,000 farmers and 2,300 dairy farmer societies who provide milk to our 100 chilling centres across the country,” he said.

Rs. 4 billion is drained out of the country each year on the import of milk powder. The local dairy industry meets only around 42 percent of local consumption creating an acute need to raise milk production.

The government imported high yielding Jersey and Friesian cross breeds from New Zealand and Australia to boost local milk production. However, the project has failed to yield the desired results making room for imports of around 90,000 mt of milk powder a year.

“We can reach self sufficiency in milk provided policy makers take pro active measures, such as reducing imported milk and supporting the local dairy industry with a long term plan,” Mihiripenna said.

With regard to the fresh milk market, company officials were skeptical whether imported milk powder is being used to manufacture fresh milk.

“There should be a regulatory body to check such practices and regulate the industry if it is to achieve its objective of reaching self sufficiency in milk production,” Mihiripenna said, adding that the company has the capacity to increase milk production following the modernisation of the Ambewela factory which has the capacity to process around 250,000 litres a day.

However, there was a marginal drop in milk processing by the company last month compared to the corresponding month of last year.

“The maximum that a local dairy processor could contribute is 30 percent to the market of which Milco’s share is about 20 percent,” an official of the company said adding that Mico milk power is not found much on shelves in markets due to the demand for it, accounting for around 40 percent in the Western Province.

Milco General Manager Sudath Munasinghe said the company absorbed losses when there was excess milk surpassing the processing capacity in 2017. The collection capacity was 200,000 litres a day then, but we had a collection of over 300,000 litres a day.

“We have withstood many challenges and still continue to perform well even when the Rs. 25 subsidy granted on a kg of milk power by the government was withdrawn and the price per litre of milk purchased from farmers was increased from Rs. 35 to Rs. 67,” he said.

Highland ice-cream and yoghurt have been Milco’s flagship products in its range comprising Highland milk powder, ice-cream, liquid milk, condensed milk, curd and yoghurt.

“Minister of Agriculture and Livestock Development, P. Harrison has shown immense interest in developing the dairy industry encouraging everyone to contribute their best to create a vibrant industry,” the Chairman said. 

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