Sri Lanka is far away from been self-sufficient in milk as the country only supplies less than 50% of the local demand said, Managing Director of Fonterra Brands Sri Lanka and the Indian Subcontinent, Sunil Sethi, at a networking event for the media in Colombo.
He said that Sri Lanka producers only around 42% of liquid milk of the total annual demand which forces companies to import milk powder from overseas. The productivity of local cows too is low as they give around 3.5 liters of fresh milk as against around 7 liters of Indian cows. Due to this today though there is a demand for fresh milk especially from the younger generation the demand cannot be met.
“Economically it’s cheaper to consumer powdered milk.”
“Today we work indirectly with 100,000 people across the country through our network of business partners including traders, retailers, distributors, agents and farmers. Last year Fonterra paid over Rs. 1 billion for local milk farmers. We want to buy more but fresh milk is not readily available.”
He said that last year was the worst year for Fonterra firstly due to the high devaluation of the rupee and also many taxes. Secondly it took far too long to get a pricing formula in place and also low supply of local fresh milk also aggravated our issues in Sri Lanka. However things seem to be taking a turn for the better now.”
He also said that Fonterra was also one of the first corporate to pass on the tax benefit by the government to customers.
Fonterra Brands Sri Lanka in 2018 invested Rs. 309 million in a Fully-Automated Bottle Filling Machine to launch new low fat Anchor Drinking Yoghurt made from locally-sourced fresh milk.
New Zealand dairy co-operative Fonterra also became the first dairy company globally to implement a system that can electronically trace its products anywhere in the world within minutes.
Fonterra Brands Sri Lanka also introduced this world-class electronic traceability system, called ‘Trace’, in Sri Lanka – a first for the nation.
Now the product journey of a packet of Anchor Newdale flavoured milk or yogurt can be tracked using its batch number from the Fonterra local milk collection centre in Sri Lanka to the point it arrives at the factory in Biyagama, through production, packing and processing and distribution.
The system has been developed in accordance with the GS1 Global Traceability Standard, which is adhered to by world-class supply chains internationally. “We have always been able to track our products through the value chain manually. Now we can do it at a much faster pace.”
For 40 years, Fonterra Brands Sri Lanka has provided Sri Lankans with high quality dairy nutrition and we are looking at more investments. “However the lack of raw material (fresh milk) has put these plans on hold.”
Commenting on quality of imported milk powder he said that as a dairy co-operative owned by over 10,000 New Zealand farmers, Fonterra never compromise quality. Also 25% of New Zealand exports are from dairy and the country too makes several compulsory scientific tests before dairy exports.”
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