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The young agriprenuer who revived collapsed milk firm

Saturday December 14 2019

Victor Otieno, the founder of CowSoko, an online platform with an employee at their New Yala Dairy Co-operative milk processing plant in Siaya County.

Victor Otieno, the founder of CowSoko, an online platform with an employee at their New Yala Dairy Co-operative milk processing plant in Siaya County. CowSoko provides financial and technical expertise to run the plant while co-operative deals with the welfare of the farmers. PHOTO | ELIZABETH OJINA | NMG 

ELIZABETH OJINA
By ELIZABETH OJINA
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Yala is a rural town in Siaya County, but it’s quite vibrant especially on market days when farmers, traders and buyers meet to sell and buy various produce.

Not far from the main town market, there is a small milk processing plant named Yala Milk Factory that is putting a smile on farmers’ faces.

The plant is operated by CowSoko, an online firm specialising in the sale of dairy cows, in partnership with New Yala Dairy Cooperative.

In the deal, CowSoko provides financial and technical expertise to run the plant while co-operative deals with the welfare of the farmers.

The plant and the co-operative were established in the 1990s, but both collapsed in 2013 due to mismanagement and political interference. But the two institutions were revived by a new management team last year.

Victor Otieno, 31, the founder of CowSoko, is behind the revival of the two outfits. He is the factory director while James Randiki is chairman, New Yala Dairy Co-operative.

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“We needed an investor who would be in charge of milk collection, the processing bit and marketing the value-added products. We arrived at a decision of partnership after attending a dairy workshop in Kisii,” Randiki says.

The group shortlisted five firms and settled on CowSoko that “had a model that was friendly to our dairy farmers,” Randiki explains.

Otieno says the partnership with the co-operative was an exciting entry point for his online firm.

“Our mandate was to revive the plant. We had an agreement to run the processing plant professionally and profitably to support farmers,” says Otieno. The factory employs 18 people, he adds.

The co-operative was formed by farmers years ago and an NGO, Village Millennium, helped them to add value to the produce by buying pasteurising machines.

The government then bought for them cooling machines under the Western Kenya Community Driven Development programme. But the factory soon collapsed and the machines were rusting away until recently.

MILK IS NOT ADULTERATED

“When we came on board, we bought a packing machine and repaired the others,” says Otieno of the factory that today processes 500 litres of milk daily. Inside the factory, all the machines that include pasteurises and coolers are in top form.

“We are working with 80 farmers from the dairy co-operative who actively supply milk. They now have a ready market. We process fresh milk, yoghurt and male branded Yala,” says Otieno.

In past years, farmers had a hard time getting ready a market for their milk, with a majority of them producing less so that they don’t struggle selling, Otieno says. The factory resumed full operations in June after getting Kenya Bureau of Standards certification.

Workers code yoghurt packs at the New Yala
Workers code yoghurt packs at the New Yala Dairy Co-operative. The plant and the co-operative were established in the 1990s, but both collapsed in 2013 due to mismanagement and political interference. But the two institutions were revived by a new management team last year. PHOTO | ELIZABETH OJINA | NMG

“We currently collect 300 to 600 litres of milk daily. We have four collection centres in Marenyo, Nyagundo, Apuoyo and Bar Sauri in Gem constituency. We buy milk from farmers at Sh45 per litre. Our highest supplier offers 70 litres a day,” he says. The milk arrives at the factory by 9am and goes through a series of tests.

“We test for alcohol and water to make sure the milk is not adulterated. This helps us know whether to accept or reject the milk,” says Otieno, adding that a litre of processed fresh milk goes for Sh70. For yoghurt, the tested milk is fed into the pasteurising machine and heated up to 40 degrees Celsius.

They then add sugar and corn starch to make the yoghurt thicker. The heating is intensified to 95 degrees Celsius.

“We let the milk cool to 42 degrees Celsius before we add starter culture. The sugared milk then goes for incubation for four to six hours depending on the acidity one wants to achieve. We then add flavours that include vanilla, strawberry and mango,” he says.

Part of the cooled milk is also used to make mala milk. “The procedure is practically the same; the only difference is that we use a different starter culture and the process takes a bit longer.”

The yoghurt is packed in 500ml, 250ml and 150ml plastic cups. “If you are buying a single pack, a 500ml, 250ml and 150ml goes for Sh85, Sh45 and Sh35 respectively. But if buying in bulk for resale, they go at Sh70, Sh50 and Sh30 each,” he says.

Yala Milk market their yoghurt in Maseno and Kondele, among other areas. “We’re also working with a women group in Usenge, which promotes and sells our products. We deliver about 300 litres of milk daily,” Otieno says.

GOOD FOR FARMERS

In a month, the company sells some 12,000 litres of milk products. Otieno’s target is to process at least 1,000 litres daily.

According to Randiki, many farmers in Nyanza are yet to embrace new dairy technologies to boost their milk output.
“A majority of farmers still keep the local Zebu breed, which offers little milk.”
Working with farmers has created new opportunities for CowSoko, says Otieno, with the app incorporated in the management of the dairy farms.

Victor Otieno (left) the director of the New
Victor Otieno (left) the director of the New Yala Dairy Co-operative displays some of the dairy products they make, and Jonah Chemitai makes yoghurt at the establishment in Siaya. In a month, the company sells some 12,000 litres of milk products. PHOTOS | ELIZABETH OJINA | NMG

“CowSoko experts train farmers on aspects of modern dairy farming such as feeding, pest and disease control and artificial insemination. Already, a number of farmers have ordered dairy cows that will be delivered in January.”

George Orony, a dairy farmer with three cows, supplies some 25 litres of milk to the plant daily. He makes about Sh30,000 a month.

“We have a ready market and we’re paid on time. We also have a working extension programme that’s good for farmers,” he says.

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Expert's view

Partnership model

Maseno University’s Department of Agriculture Head Matthew Dida notes the partnership model is a good idea to give the cooperative a new lease of life.

“However, it is essential for the management to keep in mind the reasons why the cooperative and factory collapsed. This will help them keep track so that they don’t make the same mistake,” he says.

He advises that a milk processing company should develop a programme to upgrade the breeds.

“Most farmers in the region don’t have the improved dairy animals. However, they can use cross-breeding to boost milk production and have animals that can adapt to the environment,” Prof Dida says.