Nestle to Invest Rs 8-10bn to Double Milk Production in Sri Lanka

28th November 2010, www.sundaytimes.lk

Nestle Lanka Plc, Sri Lanka’s largest private collector of fresh milk, plans to invest between Rs 8 to 10 billion rupees in an accelerated growth plan over the next five to eight years aimed at, among other objectives, sourcing all its fresh milk requirements from Sri Lanka.

“At the moment, 40% of the milk for our milk powder (all produced locally) comes from here and the balance is imported, as there is insufficient fresh milk supply. We want to double the number of farmers from over 14,000 whom we collect or buy milk from and thus double production,” Alois Hofbauer, Managing Director, Nestle Lanka Ltd told the Business Times.

“The more milk we buy from local farmers, the better it is for the country,” he said, explaining the company’s plans in the post-war era. The company daily purchases of 125,000 litres of milk through 115 chilling centres and over 1000 collection centres in the country. Plans are underway for extensive dairy development in 2011.

Commenting on the budget in which dairy farmers have been assured a price of Rs 50 per litre from less now, Mr Hofbauer said while the budget looked good and provided more disposable incomes that could ‘set the economy rolling’, local milk prices need to be competitive with world prices otherwise it would cheaper to import milk food.

The Nestle local chief, who was joined by External & Public Affairs Manager Bandula Egodage in the interview, said the company has been aggressively opening chilling and collection centres in the Northeast of the country over the past year.

Mr Hofbauer said there are thousands of stray cows in former battle zones like Killinochchi in which ownership needs to be established and re-domesticated to provide a regular income for people. “Dairy farming is much better than agriculture as it provides a daily income unlike from crops,” he said, adding however that there is a need to lift production from a current 1.2 litres per day per cow against 30 litres per day per cow in the West.

The Swiss-based company has been in Sri Lanka for over 100 years and considers itself more as a local company. “I don’t think the term ‘multinational’ applies to us in the true sense of the word – we are perceived by most of our local stakeholders as a truly Sri Lankan company with a Swiss heritage,” he noted, adding “a considerable portion of our profits are utilized for investments for growth and development.”

This year the company contributed an estimated Rs 2.5 billion directly to the rural economy this year through raw material procurement for fresh milk and coconut products. Last year Nestle paid Rs 4.1 billion in taxes.

Sri Lanka Good for Investments in Rubber-based Industries, IT, BPO and Auto Components

24th December 2009, www.thehindubusinessline.com

Indian investors could look at their neighbour Sri Lanka for investments in a wide range of sectors, including agriculture, dairy, fisheries and manufacturing sectors, according to Mr Vadivel Krishnamoorthy, Deputy High Commissioner of Sri Lanka.

After nearly three decades of strife, peace has come to Sri Lanka which is now looking to fully exploit the benefits of a liberalised economy Mr Krishnamoorthy said. Sri Lanka was among the earliest in South Asia to open up its economy in the 1970s. It now has a lot of catching up to do. The North and the East offer major investment potential in agriculture, construction and infrastructure.

Thrust areas

Sri Lanka offers scope for investments in other areas, including in rubber-based industries, IT, BPO and auto components – Indian automobiles are “everywhere” in Sri Lanka, he said.

Addressing a meeting organised by the Sindhi Chamber of Commerce, he said the Sri Lankan Government has created a favourable environment for investments including tax holidays which can extend up to 15 years for investments in North and East.

The time is ripe now for India and Sri Lanka to fully take advantage of the decade-old free trade agreement which covers over 4,000 products. Both countries should work together to finalise the comprehensive economic partnership agreement to extend trade relations, he said.

USAID Funds Dairy Project in East, Sri Lanka, With Support from Land O’Lakes and CIC Agribusiness

11th November 2009, asiantribune.com

The U.S. Ambassador, Patricia A. Butenis, officially opened a new ice cream plant in Batticaloa District as part of a dairy revitalization project that will increase the incomes of 4,000 dairy farmers and create new jobs in the former conflict-affected area.

The project is funded by the U.S. Agency for International Development (USAID), the development agency of the U.S. Government. USAID provided $3.75 million to initiate the project, leveraging funding from Land O’Lakes, a leading U.S. dairy producer, and CIC Agribusiness, a major Sri Lankan agricultural company.

Ambassador Butenis said, “The U.S. Government is proud to support this effort to revitalize the dairy industry in the East. This project will increase the incomes of participating farmers, ensure that the quantity and quality of milk produced in Sri Lanka improves, and reduce dependence on imported milk products.”

The project has established a network of farmers from Batticaloa, Trincomalee, and Polonnaruwa districts, teaching them new skills to increase the quantity and the quality of milk production. Before the conflict, the Eastern Province provided 30% of all milk production in the country, reflecting the great untapped potential of the dairy industry in the east. This project alone is expected to increase national milk collection by 9%.

Following the plant opening, Ambassador Butenis met with a group of mostly female dairy farmers who attended the event.

Image: U.S. Ambassador Patricia A. Butenis with women farmers in Punani.