Chitawon Milk to give stake to farmers

CHITWAN, Jan 16: Chitawon Milk Ltd (CML), the first public limited dairy producer that has replicated the operational model of Anand Milk Union Ltd (Amul) of India, has said that it will soon transfer up to 15 percent of its stake to farmers.

The company presently preparing to launch its production in a couple of weeks has organized dairy farmers of Chitwan, Gorkha and Nawalparasi and guaranteed them a certain market, encouraging them produce more milk. [break]

"As dairy industry can´t survive without involvement and development of farmers, we have decided to follow co-operative model. Farmers will be inseparable part of our company," said its promoter Rajesh Babu Shrestha, who introduced cable car service in the country.

Shrestha said CML would follow the model of Amul -- a dairy co-operative in the Indian state of Gujarat. To replicate the model thoroughly, CML has appointed former employees of Amul like NB Patel (ex-general manager) and other technical experts as consultants.

"The co-operative model won´t only generate sense of ownership but also ensures better price and market for dairy farmers," said Patel.

Replicates Amul´s operation model

Promises 15 percent stake to farmers´ co-operatives

Guarantees market for farmers

Plans to export to Bangladesh, Tibet and Europe

Amul, which has been collecting over 10.16 million liters of fresh milk through farmers´ co-operatives, is the largest food brand in India and world´s largest pouched milk brand with annual turnover of $ 1.05 billion.

CML has also arranged loans to farmers from the financial institutions at soft interest rate on the basis of its purchase-guarantee letter. Its initiative has enabled farmers in Gorkha and Chitwan rear as much as 150 cows in a single farm.

The company is also planning to assist farmers to import cows in order to maintain adequate supply needed for the production of pouch milk and powdered milk. "Increasing production of milk isn´t possible overnight. Hence, we are also arranging imports of cows from India and China,” said Shrestha.

The company is also importing 15,000 viles of semen of improved breeds of cows for local production. It has also allocated 11 percent stake to Dairy Development Corporation (DDC) -- the state-owned dairy producer. The total investment of CML stands at Rs 580 million.

"We are utilizing DDC´s network for collecting milk and distributing our products. We will also share technical expertise," said Shrestha.

CML has capacity to produce 150,000 liters of milk and 15 ton of powdered milk a day. It will produce skimped-milk, dairy whitener, powdered milk, whole milk besides, paneer, butter, curd, ice-cream, cheese and ghee.

Shrestha claimed that smooth operation of CML will displace 35 percent of powdered milk import. He even disclosed the plan to penetrate Tibetan, European and Bangladeshi markets within three years.