Business Feature By Leo Odera Omolo

A milk processing plant and marketing outlet firm in Kenyan in which the family of the country’s founding president the late Jomo Kenyatta has the monopoly of shares has been given the ultimatum to strictly comply with business rule in Tanzania or else its operation in the country would be closed. Down.

THE Brookeside Dairy Tanzania Limited, is a subsidiary of the Kenyatta family business flagship, THE Brookeside Kenyaa Limited, based in Ruiru Town, Thika district is currently locked into a big dispute with the Tanzanian authorities. It had acquired the Tanzania Dairies Limited Plant in Arusha as part of its aggressive marketing system to monopolize milk trade in the region.

Reports emerging from Dar says that the relevant ministry in Tanzania is now insisting that the Kenyan firm must stop the bad habit of using the Arusha plant which it acquired in 2004 as a mere collection cerntre and then export the milk to Kenya for processing.

The government of Tanzania is now insisting that the Kenyan firm, which has its headquarters in Ruiru, Thika district must stop immediately the habit of sending the milk it collected in the Arusha region across the common borders of the two countries for processing in Kenya or else leave the country altogether.

The tentative directive was recently issued by the Tanzania Minister for Agriculture and Livestock Dr. Diodorus Kamala when he toured the plant in Arusha.

“I would like to see all Tanzania’s milk being processed here. We can’t turn our factory into a mere collection centre for a Kenyan factory”, said the Minister when he addressed workers and official at the plant.

According to Dr. Kamala, turning the Brookeside Milk Plant in Arusha into a collection point denied Tanzanian citizens the employment opportunities that they would have enjoyed if the milk were processed locally.

The Minister was further reported as saying that the intention of the Tanzanian government when they privatized the company was to encourage value addition. And create employment in Tanzania.

In the background are the following facts;-In 2004, the Ruiru based Brookeside Dairy Limited, a firm which is owned by the family of Kenya’s Deputy Prime Minister Uhuru Muigai Kenyatta acquired the Arusha based plant, which was by then owned by Tanzania Dairies Limited in readiness to set up an ultra high temperature milk processing line in the northern Tanzania town of Arusha.”

HOWEVER, for nearly two years, Brookeside has been collecting milk from 3,000 or so dairy farmers in northern Tanzania and exported it to its plant in Ruiru near Nairobi for processing and packaging.

The Kenya company maintained they only collect 14,000 litres of milk a day , while the full fledged milk processing factory needs at least 60,000 litres a day to process milk into UHT on a commercially viable scale..

At the same time the Arusha based regional directoir of livestock in the area Mr. Hagney Chitukuro was quoted in the press as saying that that the regional authorities found the argument that Brookeside can only afford to collect 14, 000 litres a day highly unconvincing because the region has more than enough milk to make the processing plant fully operational all time the year round.

According to the data availed from 2002-2003, the agricultural sample census conducted by the National Bureau of the Standards shows that ther Arusha region can produce between 200,000 and 300,000 litres of fresh milk a day depending on the time of the year.

According to the document produced by Brookeside at the meeting with the Minister Dr. Kamala the company has managed to assist 65,000 smallholder dairy farmers in Kenya engaged in milk production by providing train ing and other aspects related to improving the as they handle the delicate milk commodity.

DURING THE Minister’s tpour of the plant, the price paid by Brokeeside to the farmers and lack of co-ordinated system to collect the milk came up as among the impediment to the dairy farming in the region.

Mr. Chitukuro said that the Arusha plant needs to look at bthis with a “ view to replacing what they had done in Kenya’s smallholder farmers also should be done in Tanzania so that local dairy farmers could also benefit by way of training in hygiene and co-ordinating milk collection centres.”

He farmers are also said to be selling a litre of milk for Tshs 300 {USD centso.3] to Brookeside, but in urban areas, the same quantity of milk the same amount of milk fetches Tshs 500 [USD cents 0.5}.

On the other hand a half-litre packet of processed UHT milk from Brookeside sells for Tshs 1,100 {USD 1} in most Tanzania shops including supermarkets.

At was further disclosed that the recently refurbished Musoma Dairy plant has tried its hans in vain at exporting its processed milk to Kenyta only to be denied access to the Kenyan market, through non-tariff barriers applied by the Kenya Revenue Authority [KRA}, Kenya Bureau of the Standards and the Dairy Board of Kenya.

Ends
leooderaomolo@yahoo.com

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Date: Sun, 7 Sep 2008 03:55:57 -0700 (PDT)
From: Leo Odera Omolo
Subject: MILK TRADE WAR HAS INTENSIFIED BETWEEN KENYA AND TANZANIA WITH KENYATTA FAMILY BUSINESS THREATENED WITH EXPULSION