The beleaguered dairy sector of Sri Lanka has got a shot in the arm with Indian firms drawing up the revival path for the country, which imports 60% of its milk and milk products requirement.
It is to be noted that the island nation is facing its worst-ever economic crisis and much of its industrial base has been routed in the last few months.
Anand-headquartered National Dairy Development Board (NDDB), India’s apex body for dairy development and the Gujarat Cooperative Milk Marketing Federation (GCMMF), that markets brand Amul, will acquire a majority stake in a joint venture company in the country. Sources said Lanka plans to bring dairy farms currently managed by MILCO, a government-owned organisation, and its brand, Highland, under the new JV.
Sri Lanka’s President Ranil Wickremesinghe had last year appointed a committee with representatives from the country’s public and private sectors to work with NDDB and prepare a roadmap to increase local milk production and reduce dependence on imported milk powder.
The joint declaration of intent (JDI) has been signed between the Indian and Sri Lankan governments. The details will be finalised within a week. The shareholder agreement, which will lead to the formation of a JV that will have Indian as well as Sri Lankan shareholders, is being finalized,” he said.
GCMMF’s vice chairman, Valamji Humbal, said NDDB and GCMMF will have a 51% stake in the new venture, while Sri Lanka is finalising the local shareholder, who will own 49%.
GCMMF, which will manage the commercial aspects like marketing and branding, is chalking out a business plan and the financial details. NDDB will take care of the development side of the dairy sector, like setting up co-operatives, breeding, fodder, nutrition, etc.
Interestingly, former Sri Lankan president Chandrika Bandaranaike Kumaratunga had invited the late Dr. Verghese Kurien, the father of India’s White Revolution, which led to the formation of ‘Kiriya Milk Industries of Lanka (Private) Limited’ in 1998. But in the wake of labour issues, the project did not take off, after which NDDB withdrew from the agreement while all the assets and liabilities were transferred to MILCO.