Meru - dairy cooperative in Kenya

Meru Central Dairy in Kenya converted to production of UHT milk. The Union also works on marketing this new product.

Introduction

Meru Central Dairy Union is formed by 19 affiliated societies. With its factory and marketing organisation, it serves these societies. Meru Central Dairy serves approximately 10.000 active farmers. Meru Central Dairy manages the full process, from the collection of milk from the societies to processing of the milk and marketing of the produced products. Meru Central Dairy has its own artificial insemination services.

Results

After the company assessment, Agriterra signed a first contract with Meru Central Dairy for the period 1 September - 31 December 2013. Meru Central Dairy made significant progress in 2013, and in the second half of the year it converted to production of UHT milk. The Union then focused on marketing this new product. A start was also made on Information and Communication Technology (ICT) optimisation within the organisation, and the use of digital weighing scales was adopted. A proposal for a new milk price system was drafted, and extension work and support to primary cooperatives undertaken. Because of time constraints and the new focus on UHT production, it was not yet possible to conduct training of board and staff. Meru appointed a project manager responsible for the Action Plan, supported by Agriterra, and this has facilitated easier and quicker communication.

In 2014, the business of Meru Central Dairy really took up. Milk intake increased to 85,000 kg daily. Because of increase in milk volumes, much effort was put in marketing. Sales volumes increased to 1,87 M Ksh. Five new primary cooperatives became member of the union, making the total of 27. The approach of working with 30 extension officers paid off, mostly by re-activing members. It increased confidence of farmers, through training and exchange visits to each other’s farms. However, average production of members is still only 4-5 kg.

In 2015, Meru is underway constructing a new building that will house the new processing line (2nd UHT line). The new line is touted to have 10,800L processing capacity per hour and all the costs associated with it comes to a total of KES 230M (EUR 1.9 M). This will be financed by internal capitalisation with the money coming from monthly contribution of up to KES 3M from its members. Furthermore the supplier has also agreed to deliver the equipment based on hire purchase terms. The master plan for expansion was elaborated with assistance of Agriterra and involvement of several Agripool experts.