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Milk processing business not for the faint hearted

Businessman at first regreted venturing into the dairy products cooling plant but is now enjoying fruits of his labour   

Milliam Murigi @millymur1

I wish I knew,  I would have not ventured into milk business”. Those were words from Joseph Githahu, Kirere Diary Services proprietor as we settled for an interview in his office at Kirere shopping centre in Murang’a.

Githahu was, however, quick to note that since he is already in the business, he has no other option than to continue and improve it.  “This is an ever-growing industry,” he said.

Despite being a civil servant for eight years, Githahu opted to quit his job to join Tetrapack as a technician, where he worked for 10 years (1986-1996).  He then resigned once again to venture into flour-milling and selling jaggery materials.

Middlemen

One day while driving back to Nairobi from his rural village in Kigumo sub-county, his car got a puncture and he couldn’t get anywhere to mend the tyres. Over a stretch of more than 40km from Kigumo divisional headquarters towards either Murang’a or Thika towns, there were no petrol stations.

This is when an idea of setting up a petrol station was born. Later, he invested Sh1.8 million to set up one at Kirere shopping centre. However, the business didn’t pick as well as expected. By then, few vehicles plied the Kaharati-Kangare route.

One advantage was that he had to manage the petrol station himself since it was a new business. In 2009, he realised that the area, which also relies on dairy farming, lacked milk-cooling plants and organised supply systems to dairy processing plants.

After interacting with different people working in the dairy industry, he realised that middlemen were exploiting farmers.

Githahu later decided to invest in professionalising milk-collection and processing. Since this is a capital-intensive business, he required about Sh1.5 million to start with. However, his savings were inadequate and he had to borrow money to purchase milk coolers and other equipment.

After that, he embarked on a programme on spreading information on the proper handling and certification of fresh milk so that he could get farmers to supply him with milk. To ensure a ready market, Githahu approached a big dairy products factory where could sell his milk.

He agreed with the factory managers that once he started collecting milk, they would willingly buy it from him.

After testing and commissioning of the equipment, Githahu was ready to start his milk business. In mid-2009, Kirere Dairy Services opened its doors, collecting about 250 litres of milk on day one.“I had very high hopes in this business so I paid Sh3 more per litre than the market price. That’s how I managed to buy all those litres on the first day,” he said.

Unfortunately, Githahu couldn’t find a buyer after the dairy factory now refused to buy his milk. After approaching different buyers without success, he was forced to pour all the milk away.

Fortunately, the following day was better as he managed to sell the milk he had collected to individuals. From then on, the business grew. He has even graduated from paying farmers on a daily basis to monthly.

High-tech

“The best thing that I am proud of is that since I ventured into this industry, I have managed to bring back sanity in milk handling in this region. Hooliganism and frauds have also drastically dropped,” he says.

Githahu recently upgraded his equipment to high–tech cooling system that chills the milk to the required four degrees Celsius rapidly. He has also increased the number of delivery vehicles in the venture to 12 and is currently pasteurising milk before selling it. “I have changed the local industry to an extent that farmers are earning double of what they used to earn before,” he says.

He sells some of his milk to the New KCC and the rest through Milk ATMs (Automatic Teller Machines) and to individuals who buy for resale.  “The only challenge I am facing now is low power supply despite paying for additional electricity loads.

This has forced me to be using a generator because the available power is not sufficient to run all the machines that I have. I hope this issue will soon be solved once and for all by Kenya Power staff,” he says.

Milk processing is a sensitive food industry. Githahu has invested a lot in milk testing equipment, an essential component of quality assurance. He has also set tough rules and regulations to be followed by farmers and once a farmer breaches any of them, he is not paid to begin from the day the problem was detected.

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