New KCC bets on upgrade to tame volatile milk prices

State-owned New KCC is betting on the modernisation of its factories to increase its market share in the dairy industry.

The firm says the plan, which has seen it purchase and install new in its facilities spread across the country, will enable it to absorb an additional 400,000 litres of milk.

New KCC Managing Director Nixon Sigey said the plan is aimed at cushioning both farmers and consumers from price fluctuation.

He said uptake of milk will increase from 700,000 litres to more than 1.1 million litres a day by the end of the year.

The two-year modernisation programme that began in 2016 will see Sh1 billion spent by the next year.

Last week, President Uhuru Kenyatta and his deputy William Ruto commissioned a new line, which will increase the firm’s daily capacity from 100,000 litres of milk to 300,000 litres.

“In the North Rift region, farmers in six counties namely Nandi, Uasin Gishu, Trans Nzoia,West Pokot, Elgeyo-Marakwet and Bungoma are expected to earn Sh 2.5 billion up from Sh 1billion  with increased handling capacities for the Eldoret factory,” said Mr Sigey.

He noted that the firm was installing state-of-art equipment in the factories to enable it play the crucial role in stabilising milk prices in the market.

“We have also installed new modern dryers to enable us to convert more excess raw milk to powder during milk glut and reconstitute when there is shortage… As a long-term strategy, we want to increase the powder stocks from the 1,200 tonnes in the current financial year to 4,500 tonnes,” he said.

The President said the days when milk produced by farmers went to waste will be a thing of the past.

New KCC is also targeting the processing of Ultra Heat Treatment (UHT) milk, powdered milk and other high valued products as it seeks piece of export market for the products.

“With this increased volumes we want to assure farmers of market for their milk. We want to tap into South Sudan, Zambia and Malawi regional markets… we are also eyeing the Middle East market especially with our high valued products like Ghee and butter products,” he added.

Recent data by the industry regulator, the Kenya Dairy Board, estimates that milk production increased to 5.2 billion litres last year.

The provision of milk coolers and affordable artificial insemination services by county and national government has seen the rise in the volume of milk.

New KCC expects the number of farmers who supply milk to to its factories to increase from 60,000 to over 80,000 with enhanced capacities.

“The challenge in the past has been feeds and in the last two months milk supply has dropped by 30 per cent due to the drought. We want to encourage them to invest in fodder and silage making as well as improve on the breeds to ensure enhanced productivity,” said Mr Sigey.

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