Mount Kenya Milk: from 30,000 to 300,000 litres of milk per day with Agriterra

In 2010, Cees van Rij was faced with absolute chaos at the Meru Central Dairy union in Kenya. He didn't give the union a single penny more. But now, under new and decisive management, it is one of Agriterra's top cooperatives. The most recent success: a new modern production line in the cooperative's own milk factory.

The production achieved by the cooperative in its milk factory is growing at an astonishing rate. In the early days of the partnership with Agriterra, back in 2012, the common goal was to give the processing factory a boost in efficiency, and to strengthen financial management and governance. The new production line is an important step towards this goal.

Targets
In 2018, the milk factory has to process 300,000 litres of milk per day. To hit this target, huge efforts will be poured into growth, more members and a better management and company vision. They're already working towards interim targets for 2016 of:

  1. Receiving and processing 200,000 litres of milk per day by the end of the year
  2. Increasing production per cow and per farmer
  3. Increasing the national average market share by 2%

The union represents 19 affiliated cooperatives, with a total of approximately 10,000 members. They have their own milk factory and artificial insemination centre. The union manages the entire process, from collecting the milk to its processing, and the sale of the milk products. Sales are conducted under the cooperative's own dairy brand: Mount Kenya Milk.

Situation in 2010
In 2010, Cees van Rij from FrieslandCampina paid a visit to Kenya. He was rather shocked by what he found at Meru Dairy: the cooperative was floundering in debt and almost bankrupt, the factory was seriously outdated and the position of chairperson had not been occupied for some time. Cees: "But the biggest problem was the indifferent management, which didn't see the need for action and change at all." Needless to say, it was decided that the Meru Central Dairy didn't qualify as a candidate for collaboration with Agriterra. Cees: "If the management isn't worried about the future, why should Agriterra be?"

New management achieves miracle
In 2011, the affiliated farmers elected a new and decisive management, who really hit the ground running. A qualified director was hired straight away to support the transition. The debt was restructured and, with the help of a loan from the Cooperative Bank, the old equipment was replaced with a new, modern production line. 

Thanks to this unprecedented progress and ambitious goals, in 2012 Agriterra saw a promising future in a partnership. Cees van Rij: "It's incredible what has been achieved. The factory is running at full capacity, so investment really does work. This turnaround is down to the management's new vision coupled with the expertise and commitment of the new director. The members have renewed faith in the cooperative and 'Mount Kenya' dairy is back on the map."

Outlook
Since the launch of the partnership in 2013, various Agripoolers and Agriterra team members have travelled to Kenya. Ever since, developments have been happening at an incredible pace, the ultimate goal being the production of 300,000 litres of milk per day in 2018. With this ambitious growth target, the union will soon run into new problems, such as:

  • How to deal with the large fluctuations in milk supply between the dry and rainy seasons;
  • How to achieve the best balance between supply and demand;
  • How to effectively cope with the importance of food safety;
  • How to deal with the turbulent growth in cash flow and the 'bath tub' of interest and depreciation.

These challenges are being tackled in collaboration with Agripoolers from FrieslandCampina and Flynth, amongst others. A new marketing strategy has been developed, members receive better training and, through internships and training programmes, investments are being made in the reinforcement of the factory's financial management.  Everything is aimed at hitting the 2018 production target.

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