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The company is currently functioning under 30 percent of its full capacity
The company is currently functioning under 30 percent of its full capacity

Transportation hampers milk supply to dairy plant

While Trashigang remains the largest milk-producing dzongkhag in the country, a dairy processing plant at Chenary in Trashigang is operating below 30 percent of its full capacity.

According to statistics with the Department of Livestock, Trashigang produced 6,710.1 metric tonnes (MT) of milk last year and 4,739MT in 2015.

The dairy plant at Koufuku International Limited (KIL) has a capacity of 4,000 litres. However, the factory receives about 1,200 litres of milk a day. This is also because only nine of the total 22 functional dairy groups in the dzongkhag supply milk to KIL.

KIL operations manager, Sanjok Biswakarma, said transportation remains the main deterrent for farmers in taking milk to the collection points. “Many farmers are reluctant to supply milk to us because some of the chilling centres are located quite far from the villages. The cost of transportation is higher than what they get for the milk.”

Having a lone collection tanker makes it difficult to reach every village to collect milk, added Sanjok Biswakarma. “However, soon we are getting another collection tanker of around 2,000 litre capacity. This should allow us to reach more collection points and increase the milk quantity.”

The dairy processing plant was first started in 2015 as a joint venture between Druk Holding and Investments (DHI) and Japanese counterpart SNBL. The Japanese then had the majority holding of 70 percent while 30 percent was held by DHI.

While under the Japanese, only premium quality of milk was taken by the company. The company was initially established to produce gauda cheese for both domestic and export market in Japan.

However, this deterred many farmers from supplying their milk to KIL.

In March earlier this year, the ownership was changed and DHI now holds 80 percent of the company’s shares. The company is an ISO 22000:2005 (Food Safety Management System) certified dairy processing company.

KIL chief executive officer, Ugyen Dendup, said the factory’s primary product was gauda cheese and to produce the cheese it required high quality of milk with minimal bacterial count. “Now we take in all types of milk after testing.”

Ugyen Dendup said that annually, the country imports Nu 3 billion worth of dairy products. “If we can work our plans effectively we can minimise our dairy import. Dairy business has good prospect in Bhutan to elevate poverty especially in rural areas.”

Last year, the company incurred a loss of Nu 30 million (M). The company aims to reduce the loss by 50 percent this year. “We think this is possible,” said Ugyen Dendup. “The company is currently in the process of standardising existing products and exploring means to diversify products.”

KIL has started producing new products such as drinking yoghurt, chugo (Bhutanese hard cheese), butter (salted and non-salted), ghee (pasteurised butter) and cheese among others.

“Unlike before, there is zero-waste produced during the whole process. We are producing health drinks from whey which used to be discarded in the past,” he said. Fermented and processed cheeses are also made from under-quality gauda and cottage cheese.

The feedback on new products has been positive, he claimed.

KIL spends around Nu 1.2 – 1.5M monthly to purchase milk. “Everyday we pump in about Nu 30,000 into the local economy which directly benefits the farmers,” said Ugyen Dendup. “More than a commercial unit, we see ourselves as social entrepreneurs. “For Koufuku which means happiness in Japanese, financial sustainability should be equal to the social benefits generated for the rural communities.”

Around 206 households supply their milk to KIL. The company is also planning to bring in milk from nearby dzongkhags of Mongar and Trashiyangtse. Officials said that Chaskhar and Ngatsang gewogs in Mongar have agreed to supply milk once the new collection tanker is in place.

Around 1,700 litres of milk is expected to come from the two gewogs.

Younten Tshedup | Trashigang

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