Milco’s financial turnaround: A boost to Sri Lanka’s dairy sector
The Sri Lankan government has made significant strides in revitalising the local dairy sector, with a particular focus on Milco Pvt Ltd (MILCO), the country’s leading dairy producer.
Investments in dairy farming and the modernisation of production facilities have been key components of this strategy. Milco has emerged as a central player in the effort to boost local milk production, with the company’s financial and production capacity growing rapidly in recent months.
According to Nishantha Wickramasinghe, Secretary of the Ministry of Livestock, “Milco has achieved an impressive milestone by recording a monthly sales target of Rs.2 billion in October”.
This is the highest revenue ever achieved in a single month by the company. This success comes on the heels of a challenging period when Milco was facing financial difficulties and had been considered for sale under the previous administration due to sustained losses.
Despite the record sales, Milco is currently facing financial challenges, with an outstanding bank loan of Rs.1.8 billion and an annual interest payment of Rs.240 million. The previous government had considered selling Milco due to ongoing losses, but the new administration aims to restore its profitability.
Its Chairman P.H.V. Gotabhaya noted that this achievement was made despite a challenging financial landscape, “We managed to reach this target even with financial hurdles, such as a two-week delay in payments to dairy farmers and an inactive internal audit system”.
Former Minister of Agriculture and Plantation Industries, Mahinda Amaraweera commented that the strategic changes they implemented over the past two years have played a crucial role in this turnaround.
“The reforms carried out over the past two years have been instrumental in transforming Milco into a profitable enterprise. The company’s improved financial position and increased production capacity are clear signs of the success of these efforts,” he said.
Additionally, the company has been able to maintain a stable supply of Highland milk powder to the market. With over 20,000 metric tonnes of milk powder in stock, Milco is well-equipped to meet consumer demand for the remainder of the year.
While Milco’s financial recovery has been rapid, it is important to note that the positive results were not achieved overnight. “The claim that sales have skyrocketed in just a few days is unfounded. This turnaround is the result of months of work, during which we restructured operations, improved payment systems, and implemented necessary reforms,” the former minister explained.
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