2. Githunguri Dairy Farmers Co-
Operative Society
Established in 1961 with a membership of 31
small scale farmers
Current active membership is 9,000 farmers
who produce and supply milk to the society
Members are small scale farmers whose
average land ownership is less than 3 acres
with an average of 5 cows
Membership open to residents of Githunguri
who have to pay €32 membership fee,
purchase ½ share of the plant at €210 and
own at least 1 milk producing cow
Membership payments can be made in
installments from milk proceeds
3. Background cont.
Rapid growth experienced between 2003 and 2007
Construction of processing plant building was funded
by farmers savings over 13 years.
Oikocredit financed purchase of equipment for the
plant with a loan of €880,000 in 2003. The plant was
commissioned in July 2004
Due to unprecedented growth, Oikocredit provided a
2nd loan of €670,000 in 2006 to fund purchase of
additional equipment.
Milk production has increased from 30,000 litres a
day in 2003 to 120,000 litres a day in October 2007
The plant has a highly competent and professional
board and management team
The society’s brand name ‘Fresha’ products are sold
throughout Nairobi and its environs.
4. Achievements
Githunguri were the first to introduce pouch
milk in Kenya. This has since been copied by
all the milk processors in Kenya. Products
include:
- Fresh pouch milk, yoghurt, butter, sour milk, ghee
Unprecedented growth in milk processing
over just 3 years
Introduced stores where members can
purchase commodities and animal feeds
against milk deliveries
Training and extension services for farmers
Oikocredit has provided Technical Assistance
for technical and managerial expertise
5. Structure of Society
Githunguri has 2 interdependent
operations:
- The mainstream society, which involves milk
collection and provision of various services to
members e.g. extension services, stores
- The milk processing plant.
Whilst the plant has recorded
resounding success, the society and
its members are faced with great
challenges.
6. Challenges
Low farm level productivity due to poor husbandry
skills
Lack of quality management systems
Poor handling of milk from the farm to the plant gate
Lack of efficient methods of milk collection
Addressing the above challenges will:
guarantee long-term competitiveness of the operation
secure the livelihood of thousands of households who
depend on dairy farming
benefit farmers in Githunguri, and also in the entire
region – Githunguri is a learning case for small scale
farmers in Uganda, Tanzania and Rwanda
7. Rationale for External Support
The society is seeking support from The
Rotary and PTC+ International in the
following areas to implement the above
initiative:
1) Financial Assistance
2) Technical Assistance
3) Soft loan
8. Components of Support
Establishment of model farms
Milk collection and transport
- Collection Centers
- Road tankers
Training of Staff
9. A: Establishment of Model Farms
Establishment of model production units
jointly with progressive farmers. These
will be farm schools – training on
maximum land utilization, productivity
and milk quality management
A minimum of 40 units to be
established, each to serve approximately
200-300 farmers
To include production of training
information/ content
Estimated investment – Euro 80,000
10. B. Milk Collection and Transport
Existing milk collection facilities
(buildings and utilities) to be
upgraded to acceptable standards
Upgrading of the facilities for
handling milk in line with the
proposal of using road tankers
Establishment of at least 1 centre
with cooling facilities for areas
furthest from the plant with
capacity to handle 10,000 litres
11. Proposed Process
Carry out a situational analysis of the
current collection centers and give a
recommendation of appropriate changes.
This will assist in quantifying the required
investment (€9000)
Development of one model centre based on
the above recommendation (€15-20,000)
Establishment of one collection centre with
cooling facilities (€52,000)
Total Estimated investment – Euro 76,000 –
81,000
12. C. Road Tankers
Replace the current 50 litre milk cans used
for milk collection with insulation or
refrigeration mounted road tankers of 5,000
to 10,000 litre capacity. This will yield
savings in the following:
– cost of cans, repair, replacement, stock taking,
storage, cleaning water and detergents
– Cost of transportation
– Cost of labour
Estimated soft loan – €589,600
13. D. Training of Staff
It is proposed that the training support be
in line with the overall objectives of this
initiative
This will require that PTC+ in collaboration
with Githunguri develop a tailor-made
program covering
– Milk systems and quality
– Milk processing
The above will require an interaction
program of staff of the Society and PTC+
through a study tour – part Netherlands,
part Kenya during the implementation of
the initiative.
Estimated investment – Not Known
14. Summary
Work stream Component Estimates in
Euro
1 Model farms Implementation of model farms 80,000
to be used as farm schools
2 C o l l e c t i o n Situational Analysis 9000
Centres Model collection centre based 15-20,000
on the outcome of the
analysis. This collection
centre will not have
mechanical cooling systems
Model Collection centre with 52,000
cooling facilities for 10,000
litres with cooling systems
3 Road Tankers This can be in the form of a loan 589,600
TOTALS 745,600-750,
600
