Kotmale generated over Rs. 5.2bn direct income for dairy farmers in 2020

Company’s value added dairy products successfully competing with international brands

Fresh milk sourcing alone saved over USD 28mn in foreign exchange for SL in 2020

Kotmale has become one of Sri Lanka’s national dairy brands contributing to the nourishment of the country and strengthening the local dairy farming community. As a fully owned subsidiary of leading food company Cargills (Ceylon) PLC, Kotmale is a 100% Sri Lankan company. By sourcing fresh milk from over 17,000 local dairy farmers, Kotmale generated over Rs. 5.2bn of direct income for the Sri Lankan dairy farming community in 2020. Today, Kotmale has established itself as Sri Lanka’s largest private sector collector of fresh milk, collecting 180,000 liters on a daily basis.

Sri Lanka imports about 60% of its milk requirement. That amounts to about USD 320 Mn (or LKR 64bn) of foreign exchange leaving the country every year. Though Sri Lanka has always had a milk deficit (local supply is less than local demand), regional peers like India are self-sufficient in dairy. Low milk production in Sri Lanka stems from two issues: 1) low and declining number of milking cows, and 2) low yield per cow compared to global levels which has led to decreasing profitability for farmers.

Sri Lanka’s milking cow population has fallen quite drastically in recent times. From 596,000 in 2015 to 444,000 in 2019, the milking cow population has dropped 25% within a span of four years. This is an alarming statistic that needs immediate addressing from all stakeholders involved. Secondly, Sri Lanka’s milk production per cow remains low at around 3 liters per day, whereas the average global yield is around 7 liters per day and the yield in neighboring India is 8 liters per day. Low yield and low profitability have forced many farmers away from dairy farming which has further weakened local milk production.

Over the years, Cargills has made significant investments to improve dairy production and support the smallholder dairy farming community in Sri Lanka. Cargills has provided both technical and financial support to dairy farmers to enhance capacity while providing a guaranteed marketplace. Cargills also ensured uninterrupted collection of milk during the COVID19 lockdowns. In addition to guaranteeing the best price for the farmer’s milk, Cargills contributes 50 cents for every liter of milk collected into a fund. This money is not reduced from the price paid to the farmer but is a direct contribution from Cargills, as a thank you for the dedicated service of our farmers to the country. These funds are used to provide educational scholarships to children of dairy farmers and support community development projects.

Kotmale products offer nutrition for the family with the largest portfolio of dairy products in Sri Lanka.

The Cargills philosophy of sourcing from local smallholder farmers and manufacturing value added dairy products that compete with international brands has proven to be a great success. It provides affordable nutrition for the consumer while increasing incomes for the Sri Lankan dairy farming community. The Company’s fresh milk sourcing alone saved over USD 28 Mn in foreign exchange for the country in 2020, while directing this income towards Sri Lankan farmers. As a food company focused on providing affordable nutrition, Cargills will continue to invest in uplifting local dairy farmers while bringing the best quality products to local consumers.