The government of Sri Lanka has taken serious steps towards revitalizing the local dairy industry with particular emphasis on the country’s number one dairy producer, Milco Private Limited, or MILCO for short.
Key elements of this approach have been investments in dairy farming and modernisation of production facilities.
Milco has certainly become a core part of the campaign to increase local milk production; the company’s financial and production capacity has grown rapidly over recent months.
This was stated by Nishantha Wickramasinghe, Secretary of the Ministry of Livestock: “Milco has been able to achieve an attractive milestone of recording Rs 2 billion as the monthly sales target in October.
This is the highest revenue ever achieved in a single month by the company.
” This superb performance follows a dark period when Milco was experiencing financial problems and had even been put up for sale by the previous administration after it continued running losses.
The improvement of Milco has been blamed on strategic efforts aimed at enhancing operational efficiency and raising production capacity.
Contrary to these record sales, Milco is in financial turmoil, having a bank loan of Rs. 1.8 billion outstanding and paying Rs. 240 million per year as interest.
The previous government had even contemplated selling off Milco due to the perennial losses but the new regime hopes to turn it around.
Chairman P.H.V Gotabhaya said that they reached the target despite an unfavorable financial scenario and added, “We managed to reach this target even with financial hurdles, such as a two-week delay in payments to dairy farmers and an inactive internal audit system.
“However, the strategic changes we introduced within these last two years have been of prime importance for this change,.” commented former Minister of Agriculture and Plantation Industries, Mahinda Amaraweera on the turn around
Milco’s financial position has been considerably strengthened due to the previous regime’s stance, with much focus being laid on increasing production and cutting down on the cost of production.
The company has also slashed the price of its products in order to make milk and dairy products more affordable for the masses.
The price of a 400g packet of Highland milk powder has been reduced by Rs. 75, now available at Rs. 1050, while the price of a 1kg packet is now available for Rs. 2585 after a reduction of Rs. 190.
Milco’s financial comeback finds reflection in the improved stock value of the company, which stood at Rs. 2.5 billion as of September. Former Minister Mahinda Amaraweera has made the following remark regarding the progress: “Reforms carried out during the last two years have transformed Milco into a profitable company. Improved finances and increased production capacity indicate that these efforts have begun to bear fruit.
In addition, the company has managed to secure the market continuously with Highland milk powder since the beginning of this year. Equipped with more than 20,000 metric tons of milk powder in storage, Milco is confident of meeting the demand by its consumers for the rest of the year.
The company’s milk collection, too, has jumped. Milco’s daily milk collection, which had shrunk to 15,000 liters, is now over 170,000 liters. “This increase in milk collection is a result of consistent efforts over the past several months.
“The introduction of new management in the sales division, coupled with strategic outreach to dairy farmers and retailers, has been instrumental in increasing our sales,” he said
While Milco’s financial recovery was not gradual, the positive results did not come in overnight. “The claim that sales have gone up in a few days is without merit.
This is not an overnight success but the result of months of hard work during which we restructured operations, improved the collections mechanism, and enforced all the necessary reforms,” he clarified.
