Kotmale Sri Lanka’s largest private sector collector of fresh milk

Kotmale manufacturing facility in Banduragoda

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 percent Sri Lankan company. 

By sourcing fresh milk from over 17,000 local dairy farmers, Kotmale generated over Rs.5.2 billion 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 litres on a daily basis.

Sri Lanka imports about 60 percent of its milk requirement. That amounts to about US $ 320 million (or Rs.64 billion) 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 percent 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 three litres per day, whereas the average global yield is around seven litres per day and the yield in neighbouring India is eight litres per day. Low yield and low profitability have forced many farmers away from dairy farming, which has further weakened local milk production. 

Dairy is a key component of a balanced, nutritional diet for both children and adults. Fresh milk contains important nutrients like calcium, phosphorus, B vitamins, potassium and vitamin D. Unfortunately, however, Sri Lanka’s per capita consumption of dairy is below globally recommended levels. One of the main reasons for this is the affordability factor. By increasing local production of fresh milk, Sri Lanka cannot only reduce its dependence on imported milk but also improve the affordability of milk for local consumers, which will increase the per capita consumption of fresh milk.

A proud Sri Lankan dairy farmer

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 COVID-19 lockdowns. In addition to guaranteeing the best price for the farmer’s milk, Cargills contributes 50 cents for every litre 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.

Cargills remains committed to the Sri Lankan government’s vision of achieving self-sufficiency in dairy. To further support this national goal, Cargills started a dairy modernisation programme in partnership with 500 dairy farmers. As part of this project, Cargills established dairy model farms during 2020, providing farmers with assistance in improving the breeding stock, feeding systems, including grass and fodder cultivation, improved cattle sheds, along with better nutrition and care for the animals. 

Farmers are also supported with land preparation and the necessary seeds for fodder cultivation. The company hopes that the success of the dairy model farm project will encourage more farmers to emulate such a programme and adopt similar practices, which will eventually lead to increased fresh milk production. By doubling the milk yield across the farmer network, Kotmale will be able to improve the incomes of farmers and further support the sustainability of the dairy industry. Given that smallholder dairy farmers form the backbone of the Sri Lankan dairy industry, making up more than 80 percent of local milk production, it is imperative that any future project to reach self-sufficiency and increase domestic milk production keeps the small dairy farmer at the centre of it.

The Kotmale dairy supply chain from grass-to-glass is an extensive one with stringent quality checks to ensure the customer receives the highest quality products. The farmer network of over 17,000 smallholder dairy farmers bring their milk to the Cargills milk collection centres spread across the country. Once the quality of the milk is assessed, the milk is taken to a milk chilling centre, where the quality of the milk is assessed once more. 

Currently, there are 33 Cargills-owned milk chilling centres around the country. The milk then makes its way to one of the four Cargills dairy processing facilities located in Banduragoda, Hatton Bogahawatta, Kelanimulla and Kilinochchi, where a third and final quality check is carried out.