Sri Lanka is Fonterra’s second largest investment next to China

The New Zealand-based dairy products firm which owns the Anchor, Raththi and Newdale brands is making its second largest investment in the Asian region, in Sri Lanka, according to Fonterra Brands Lanka Managing Director Achyut Reddy.

Speaking to The Sunday Times FT at the foundation stone laying ceremony at the firm’s Biyagama production plant this week, he said that the Rs. 1.2 billion they will be investing in the operation was a result of the double digit growth in the local market for yoghurt.

The investment is set to increase the yoghurt manufacture of the firm as well as treble its raw milk supply. The project will be bringing in an additional 3000 local farmers vis-à-vis milk collection centres around the island and will be aiming at achieving 52,000 litres of raw milk per day, thrice the current quantum. “The goal is to make local milk for local yoghurt manufacture,” he said. The milk will all be brought to the Biyagama plant where it will be processed.

The up-country farmers who are being brought in to the project will be trained mainly by the expertise given by the Livestock Development Ministry as well as Fonterra’s milk procurement teams. C.B. Ratnayaka Minister of Livestock Development and Chief guest at the ceremony mentioned the East as a literal breeding ground for livestock. According to him, 68,000 cattle have been directed into rearing for dairy again, after the area was reclaimed by the troops. “Now there is an opportunity to speak to farmers and offer them technical support as well as retrieve the livestock that was lost before,” he said.

Sri Lanka has one of the highest yoghurt consumption rates in the region with per capita yoghurt consumption being 12,000 metric tonnes. Managing Director Reddy said this was as a result of increased per capita incomes and higher living styles. Of the two large landmasses in the region, Fonterra is highly productive in China but is still tentatively moving operations into India.