Cargills launching Sri Lanka's milk revolution

Cargills Quality Dairies (Pvt) Ltd (CQDL), is looking beyond the vistas of ice cream to expand into a fully fledged dairy facility in a bid to kick start Sri Lanka’s own ‘Milk Revolution”.

CQDL which currently produces the ‘Magic Ice Cream’ range, has set itself the ambitious task of spanning into a utility that churns out as much as 150,000 litres of milk a day. Leading the pack of milk lovers is India’s own milk man Dr Jagjit Punjrath, who spearheaded India’s white revolution.

Managing Director of Cargills Ranjit Page who hand picked Dr. Punjrath to guide the revival of the abandoned “Walls” plant in 2002 told The Sunday Times FT that his vision in absorbing Dr. Punjrath was to manufacture dairy products that are affordable to the masses. “The Walls assortment was too expensive and once the hype ended breaking even was deemed virtually impossible. When we took over and started Cargills Magic we wanted make products that the masses could afford. We understood the Sri Lankan consumer and wanted to give them something that was Sri Lankan,” Page said. Building on this vision CQDL now wants to move beyond ice cream manufacturing and invest in a major dairy development project initially targeting the Gampaha District. Currently over 900 dairy farmers are registered with CQDL, to supply milk for the Cargills Magic factory. Under the company’s guidance 400 farmer societies have been formed with each society functioning as a collecting centre. Milk Procurement Manager for CQDL Krishantha Kumarage said that close to 18,000 litres of milk gets collected on a daily basis with the company paying Rs. 25 to 26 for a litre of milk that has the precise amount of fat and solid non fat. The company also assists the farmers with the supply of vermicide, calcium and minerals for the animals while awareness is also provided to ensure that the quality of the milk does not vary. CQDL is also looking to assist farmers by providing cattle feed at a subsidized rate.

But Page noted that with this effective structure already in place, the time is now right to look beyond the production of ice cream. “Definitely we want to move into yoghurt and packed milk because the Cargills goals is to increase the volume of consumption of milk,” he said.

Dr Punjrath who has researched into Sri Lanka’s dairy industry since 1987, noted that the mindset of the Sri Lankan consumer needs a radical change. “Even Sri Lankans who own dairy cows sell fresh milk and buy powered milk which only serves to safeguard foreign dairy farmers,” he said. So Cargills is out to revolutionize the dairy market by infiltrating it with its own fresh milk products.

With the project cost estimated at Rs. 750 million the task CQDL has set itself is ambitious, but not impossible. According to the enthusiastic Dr Punjrath the project will be at full swing within three years with Cargills chipping in with an initial Rs.500 million to cover the cost of a new plant, machinery as well as the marketing campaign. Another Rs. 250 million is required to provide dairy farmers basic infrastructure facilities such as testing equipment, storage mechanisms and transport. The project is eventually expected to absorb 30,000 dairy farmers churning out 150,000 litres of milk a day. With each Sri Lankan estimated to drink 85 millilitres of milk a day, that amount according to Dr. Punjrath is enough to cover the daily milk requirement of close to 160,000 Sri Lankans.

Drawing from the Indian model Page noted that dairy development has been identified as a key instrument of social development. “So we are not willing to sit around and wait for the government to do this. We have taken this task on and we will revolutionize the dairy industry of Sri Lanka,” he said.