A group of farmers from Keringet town in Nakuru County has built a milk processing plant as a solution to the problems that ail milk production business.
Situated about 26 kilometres from Molo town, Keringet Foods Limited stands tall as a product of combined effort between the farmers and the Gorta Self-Help Africa organisation.
According to the chairman of Keringet Foods Gilbert Rotich, the project began in 2009 with only 48 members at the time. Its sole purpose then was to perform social functions like digging wells and introducing self-empowerment projects to the residents.
“In 2014, we decided to empower the farmers by introducing a business sense by adding value to the products we produce,” said Mr Rotich.
Although it was a noble idea, Mr Rotich said he had a hard time convincing the residents to join him given this was an indigenous company.
“Since most people had a cow, we started with milk production and decided to do bulking for the farmers willing to sell the milk to us,” he said.
Mr Rotich noticed that the farmers were relying on unstructured markets to sell their produce and came up with a way to consolidate the produce and hence magnify individual returns. He also wanted to create jobs.
Each of the 48 members contributed Sh10,000 each and with the assistance of the donor company, Gorta Self help Africa, Keringet Foods Company was born.
In 2014, the milk plant began milk bulking where they bought milk from the farmer, pasteurised it and sold it a profit through milk “automated teller machines”.
“We started with 200 litres per day but now we receive and pasteurise 10,000 litres a day,” said Mr Rotich proudly.
He said the company buys milk from the farmers at Sh30 to Sh35 per litre and sells raw milk at Sh34 to Sh40 per litre, depending on the market prices.
MILK ATMS TO BOOST SALES
Pasteurised milk ranges from Sh55 to Sh70 a litre.
The biggest challenge for the company has been competition from milk processing giants like Brookside and the state-owned Kenya Cooperative Creameries.
To beat this competition and maintain a grip in the market, Mr Rotich said the company endeavours to make prompt payment to their customers as a way to keep the customer’s trust.
The company has also tried to reach a wider market by selling pasteurised milk through the “milk ATMs” distributed at Salgaa trading centre, Keringet town, Nakuru town and Narok town.
However, this comes with the challenge of getting the customers to understand the difference between pasteurised milk and raw milk.
“Some of the buyers do not understand why we sell a litre of milk at Sh70 while they can get it at Sh40 in the siosks,” said Mr Rotich.
The company has also faced teething problems after the donor organisation detached itself.
For example, in 2016, the company recorded a loss of Sh369,000 that was caused by, among other factors, taking up expenses that used to be paid for by Gorta and the depressed raw milk prices at the time.
Despite these challenges, Mr Rotich said the company hopes to become a renowned milk processor, and has started an ambitious journey by buying equipment worth Sh25million to manufacture yoghurt beginning 2018.
“We are now looking for donors; both governmental and non-governmental organisations that are willing to partner with us and help expand the milk plant to a processing company.”
The short term goal however, according to Mr Rotich is to roll out more milk ATMs across the country to boost sales.