Local dairy farm to invest Rs1bn in expansion

KARACHI: A leading corporate dairy farm in Pakistan on Saturday unveiled its plan to invest around one billion rupees to expand its milk production and processing business in the wake of growing demand of pasteurised dairy products in the port city.
“We have acquired 40 acres of the closed Ahmed Textile Mills [near Gharo] to double the number of milking cows to 5,000 in the next two to three years...will invest another Rs1 billion in milk processing by January-February,” said Nadeem Monnoo, a director of DairyLand, one of the 14 large scale corporate dairy farms in Pakistan.
The investment in processing will allow the corporate dairy farm to launch tetra-packed milk, Monnoo said.
The firm, established in 2008 in the vicinity of closed Kotri Textile Mills in Gharo, produces, processes and supplies 18,000 to 40,000 litres of milk in the city on daily basis. The yield peaks in winter season and drops in summer.
"An average yield of the imported Holliston, Jersey and their cross-breed is 25 litres per day," he said.
He said all their 2,500 cows are imported from Australia. The imported cows are adaptable to the local environment.
"Our Sahiwal breed is good for quality and high yield milk. However, we did not buy them because of the issue of their availability," he said.
Monnoo said that his firm would not import more cows to double the number of milking cows, but the expansion is being done through local reproduction process of the imported cows.
He said the firm is facing issues in milk supply across the city, as the milk needs to remain stored at four Celsius till it is consumed.
"Its shelf-life is not more than three days due to non-mixture of preservative chemicals. We sustained huge losses in June when the city experienced heat wave," he said.
Haroon Lodhi, chief executive officer at Corporate Dairy Farmers Association said large scale dairy farms invested Rs20.7 billion from 2007 to 2012.
However, no new large scale farm is in the pipeline because of some regulatory, taxation and health issues.
"We have asked the government to allow us to import some essential vaccinations, but there is no response from the Sindh government," Lodhi said.
“Our working capital worth Rs500 million is stuck with the Federal Board of Revenue on account of sales tax refunds.”
He said Pakistan is the world's third largest milk producing nation with over 50 billion liters of annual milk production.
"Almost half of the produced milk is consumed by small farmers and rest of the 50 percent is sold at commercial markets," he added.
There are over 60 million cows and buffaloes in the country and some 8.5 million families are involved in milking business.
He said the share of processed milk in the sold commodity is around three to four percent, and "the share of pasteurised milk is nominal."