State-owned dairy firm Milco Pvt Ltd, amidst allegations of attempts to privatize the company, is to kick-start ‘Sri Lanka’s Milk Revolution’ through a corporate plan in popularizing fresh liquid milk countrywide and thereby making the firm commercially viable and profitable.
Its chairman, Sunil Wickremasinghe said a sum of Rs. 1 billion will be invested to develop dairy farming and other industry related activities in Sri Lanka.
He told the Business Times that in addition to this massive investment, the private sector would be investing around US$80 to 90 million to set up new dairy farms in the country.
He said the Milco target is to increase milk production to 50% of the national requirement by 2013.
Recently DNA Parliamentarian Anura Kumara Dissanayake charged that the government is attempting to privatize and sell Milco to a Danish company, Demsey Contractors under the cover of modernization of the company by obtaining a loan of 39 million Euros. He said that according to a recent cabinet paper put forward by the Ministry of Livestock and Rural Community Development, approval has been sought to allow Milco to negotiate the loan bypassing the Treasury.
In response, Mr. Wickremasinghe said that this modernization plan was devised in 2008 and it was not aimed at privatizing the company.
Fresh negotiations are underway with the Danish firm to obtain the loan facility and it was not finalized, he added. He noted that the company is now expanding its milk production facilities making heavy investments and there was no need to sell it to a multinational company
“Two years ago we were producing only 225,000 litres of fresh milk a day but today the production has gone up to 510,000 litres a day and is still growing,” he said.
The bid to increase production comes at a time when the Finance Ministry has issued a directive to curb milk powder imports and encouraging local producers to expand their production facilities as the government utilizes a colossal $400 million a year on milk powder imports. “At present Milco is selling around 250,000 to 275,000 yoghurt cups per day and is optimistic of selling one million yoghurt cups per day soon,” he disclosed.
Milco produces 100,000 liquid milk (UHT) Ultra-high temperature packs per day. “The milk marketing and processing [needs] will be developed through establishing proper cold chains with the support of the private sector and private-public partnerships by strengthening distributors .."“Liquid milk collected by organizations from dairy farmers in various parts of the country, will be purchased by MILCO to be sent to its factories for the manufacture of all milk-based products in the country,” he disclosed
The Livestock and Rural Community Development Ministry meanwhile will team up with foreign investors to import milch cows to the country and these cows will be given to National Livestock Development Board farms.
“We are encouraging dairy farmers in this country to produce milk, by paying them Rs.50 per litre,” he said, adding that the company will buy the milk directly through the 2,000 dairy farmers' societies in the country. Sri Lanka, is looking beyond the vistas of pasteurized milk by setting up of a fully fledged dairy facility with ultra-heat treatment pouch production plants.