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Personal experiences with the promotion of milk processing in developing countries

1. Initial of dairy development in Nepal, 1952-1964.
2. Dairy development in Madagascar, 1964-1974.
3. Training and extension in the department of food technology & applied human nutrition (DFTN) at the university of Nairobi, 1974-1989.
4. Experiences in South America, 1992 and 1994.

W. Schulthess
Dairy Consultant
Karen, Nairobi, Kenya


The Paper gives a personal account of experiences observed by the author in course of more than 50 years involvement with dairy industry development in a number of developing countries ranging from Nepal and India in the early fifties and Madagascar and Kenya in the seventies and eighties. A number of lessons can be drawn from these experience and obvious mistakes and oversights can be avoided if the special conditions existing in developing countries are taken into account while designing and implementing dairy development programmes

1. Initial of dairy development in Nepal, 1952-1964.

I left for Nepal with an FAO assignment to advise and assist in the promotion of dairy development in remote regions of the Nepal Himalayas. Several months of investigations on foot in the north and north - east of the country established the fact that scattered seasonal surpluses of milk were produced by herdsmen of a semi-nomadic mountain tribe of Tibetan origin called Sherpa.

The dairy animals kept by them were F1 cross-breeds of yaks and mountain cattle referred to as Chowries. Surplus butter prepared by individual herd owners found a market in neighbouring Tibet and air-dried casein derived from sour butter milk was prepared as staple food for use in soups.

In 1953, I took up work at Langtang, a mountain valley close to the Tibetan border at seven days walking distance from Kathmandu, the capital. I decided to manufacture alpine-type hard cheese of 10-20 kg. per loaf and financed initial investments personally, using equipment which I had made with help of Nepalese craftsmen to a great extent. The success of this venture brought about Swiss bilateral assistance to promote cheese-making in the Nepal Himalayas along similar lines.

When I left Nepal in 1964 production of export quality cheese was of the order of 20-25 tons per summer season in three pasture areas of north and north-east Nepal. On a private visit in 1986 I found that cheese production ha quadrupled. Disregarding my recommendations to privatize, the Government had continued to entrust a parastatal enterprise with this operation. Through privatization with appropriate incentives for cheese makers and reinvestment of benefits, cheese production would have yielded better results, qualitatively and quantitatively.

A second venture in Nepal was the collection and pasteurization of buffalo milk for the market of Kathmandu. To this effect a first collection centre for buffalo milk was established at Tusal, about 30 km east of the capital. For small scale operations without electricity supply a wood-fired heat exchanger with hot water jacket had been developed by British military dairy farms in India. Gravity feeding ensured a continuous flow of milk through an upper section for water cooling and a lower section for chilling by means of direct expansion of Freon. After pasteurization and chilling, milk was stored in an insulated tank and tapped in to transport cans at midnight. Porters brought the milk to the nearest terminal for motor transport at three hours walking distance. A private lorry then took the milk to the capital, where a local agent arranged for distribution. Buffalo milk with an average of 7-8% butter-fat and a range of variation from 4½ to 11% had to be paid according to fat content from the outset.

The Government officers concerned did not believe that such an operation could work and refused to meet requisite investments from a fund of Pound St. 60,000 at their disposal that had been provided for dairy development by the Government of New Zealand. Under the circumstances I financed this first phase by means of loans from well-to-do Nepalese acquaintances, providing these lenders with a personal guarantee for reimbursement with interest. After a fairly successful operation of this pilot venture for about two years (1953-55), the Ministry of Agriculture decided to refund my investments. Furthermore, it gave the green light for a second milk collection station with refrigeration facilities and for a central dairy at Kathmandu, with a capacity of 2,000 - 4,000 I/day comprising adequate installations for pasteurization, bottling, cold storage and manufacture of cultured milk products, to which a small cheese processing plant was added later.

A serious marketing problem arose from the seasonally of milk production when milk intake dropped by more than 50% from the monsoon season to the advanced dry season. With buffalo milk it is easy to standardize the butterfat content to 31/2 - 4% during the flush season through partial skimming and to make up for the shortfall during the dry season by means of milk toning, i.e. by admixing upto an equal volume of reconstituted skimmed milk. When I left Nepal in 1964, the daily turnover was of the order of 2,000 l. Shortfalls during the dry season were made up through such toning operations for which skimmed-milk powder was provided under an agreement with the World Food Programme (WFP). At my private visit 22 years later milk collection during the dry season amounted to 20,000 - 30,000 I/day and increased to 50,000 - 60,000 l with the monsoon rains. Little or nothing had been done to promote dry-season production through price incentives and extension work.

In 1986 I observed further that the summer production of 80 tons of cheese from mountain dairies was sold predominantly to tourist hotels at a rate of 30-40 times the milk price paid to producers, roughly twice the cost of production and retailing. This extraordinary profit margin was used to subsidize the politically motivated deficit on the sale of pasteurized milk in the capital, an aberration typical for many parastatals, not only in developing countries.

2. Dairy development in Madagascar, 1964-1974.

In contrast to Nepal. Madagascar had a colonial past and structures for dairy development with the Bureau Central Laitier (BCL) as coordinating body were in place. However, some 50,000 US $ of the annual development budget were used to cover the deficit of two large breeding farms for dairy cattle and of the Centrale Laitiere de Tananarive (CLT), an enterprise supplying 4,000 - 8,000 l pasteurized milk to the capital per day.

My first task was to transform the breeding centres into economically viable mixed-farming enterprises. Subsequently it was also possible to rehabilitate the CLT. In the end a contract with an experienced managing agent ensured proper functioning of the dairy plant and timely payment of rental dues to BCL. Budgetary savings were invested in milk collection stations with refrigeration facilities. Furthermore. small-scale dairies for manufacture of cultured milk and cheese were established in the townships of Ansirable and Fianarantsoa. In the mountainous region of Vakinankaratra between Tananarive and Antsirabe, where poor roads and scattered milk production had rendered milk collection too costly, the first rural cheese factory operating without electricity was installed. Milk collection for the same was organized by means of donkeys and with the help of cyclists.

In 1968 contacts were established with a French settlement organization for landless farmers from the island La Reunion operating in the Sakay 130 km west of Tananarive (SPAS). Prior to that SPAS had pasteurized 1,500 - 2,000 l milk per day and packed the same in plastic pouches for the market in the capital. However, the modest quantities handled and the transport distance had resulted in considerable losses. The collaboration between BCL and SPAS brought about every suitable enterprise for cheese making handling 2,000 - 4,000 l milk per day with facilities to raise the daily intake up to 8,000 l. First the BCL demonstrated the economic viability of cheese making, predominantly Tilsiter and Danbo, under adverse climatic conditions. Thereupon SPAS expanded curing and storage facilities from 10 to 30 and finally to 50 tons cheese. All the skimmed whey was made best use of by the pig breeding station of SPAS which produced young stock for fattening by their farming members.

With all these achievements to the credit of BCL and no more deficits to be met when I left Madagascar in 1974, it should have been possible to make fast progress through meaningful further extension work. However, I am informed that the politically motivated nationalizations during the subsequent decade brought about many setbacks, primarily on account of incompetent managers and lack of incentives.

3. Training and extension in the department of food technology & applied human nutrition (DFTN) at the university of Nairobi, 1974-1989.

When working as coordinator for the establishment of DFTN at the University of Nairobi under a Swiss bilateral agreement, I paid particular attention to the establishment of special links with industry and extension services. To this effect a professional organisation, the Kenya Institute of Food Science & Technology (KIFST) was founded and a first training course in milk processing was conducted for private parties interested. At independence in 1963 Kenya had inherited a dairy industry which was second to non among all the African nations south of the Sahara, apart from the Union of South Africa. One of the big achievements after independence was the encouragement of small milk producers whose share in market milk production grew from less than one third to more than two thirds.

First contacts in the dairy field were made with Kwale/Kilifi Dairy Cooperative Union Ltd. at Mariakani near Mombasa, where a collection network and a processing plant for 20,000 - 30,000 l milk per day had been built up with UNICEF assistance under adverse climatic conditions. DFTN conducted experimental work there and in other places to test the possibilities and limitations of milk preservation through activation of lactoperoxidase referred to as LP-system. This, as well as the application of hydrogen peroxide, arc valuable means of last resort but cannot replace refrigeration in the long run. Unfortunately, this dairy scheme with considerable financial reserves accumulated under competent management was subsequently operated as a parastatal enterprise under the Ministry of Livestock Development. It took just a few years to squander all the resources, which led to the closure and ultimately to the liquidation of this dairy plant.

Until 1990 the Kenya Cooperative Creameries Ltd. (KCC) held the virtual monopoly for milk collection, processing and marketing in Kenya, handling an average of one million l/day or approximately one fourth of total milk production in the country. It benefited from cheap credits for investments, as well as advice and assistance by DANIDA through Turnkey Dairies Ltd. However, it missed opportunities to correct faulty policy decisions dating partly from colonial times.

One of these was the decision to use cardboard packaging instead of bottles for pasteurized milk and subsequently also for cultured milk. Whereas high labour cost and centralization of processing in western Europe render returnable packaging materials more. expensive than one-way packing, this stage has not been reached in most developing countries including Kenya. Furthermore, it missed opportunities to correct faulty policy decisions dating partly from colonial times.

One of these was the decision to use cardboard packaging instead of bottles for pasteurized milk and subsequently also for cultured milk. Whereas high labour cost and centralization of processing in western Europe render returnable packaging materials more expensive than one-way packaging, this stage has not been reached in most developing countries including Kenya. Furthermore, the cost of packaging in plastic pouches is roughly half of that in cardboard. As regards supplies to big users such as hotels, catering establishments, canteens, etc., KCC has steadfastly refused to deliver the goods in milk cans instead of half-litre and one-litre packages, resulting in higher cost and inadmissible waste of packaging materials.

In Kenya butter making is the least remunerative outlet for surplus butter fat. Considerable efforts have been made by DFTN to promote alternatives such as basic mix for ice-cream and sterilized coffee cream. However, no such innovation has been introduced by KCC so far. The only product developed by DFTN and subsequently adopted by KCC was the cultured milk product Mala which became an immediate success.

A major policy error during British time was the decision to establish the cheese factory of KCC in Nairobi, disregarding the long distance transport of the milk required and the whey disposal problem. Whey still flows into the gutter unskimmed at the rate of 20,000 l/day, creating an environment problem in the process. When meeting the newly appointed factory manager, a former student of DFTN, in 1993, I suggested that he prepare a cost benefit estimate for whey skimming, heat treatment of whey cream and sale of skimmed whey to major port producers. His respective proposal to the general manager made it clear that product sales would pay the requisite investment in less than a year. Now, two years later, the factory manager is still waiting for the approval of these recommendations.

In 1987/88 one of the lecturers of -DFTN investigated the energy use in the milk powder factory of KCC at Kitale with a flush season intake of 150,000 l/day. This work was published as a major thesis in December, 1990. It revealed that the potential for fuel oil savings was of the order of 30%. This was brought to the attention of KCC officially in January, 1991. Three months later I received a brief acknowledgment of receipt from the managing director of KCC without as much as a word of thanks for the efforts of DFTN with financial and technical support of the Swiss Government. I doubt that anything has been done during the last four years in order to remedy the situation at the Kitale factory of KCC.

Newspaper reports in March 1995 indicated that KCC was three months in arrears with payments for milk supplies. In order to safeguard the interests of the Kenyan milk producers, the Government will have to bail KCC out of the impasse once more. The sooner this limping parastatal is privatized or entrusted to a competent managing agent, the better!

4. Experiences in South America, 1992 and 1994.

Under a senior expert scheme I had the opportunity to assist private dairy enterprises in southern Chile on two occasions, with an interval of 11/2 years. Contrary to Asia and Africa, countries such as southern Chile, Argentina, Uruguay and Southern Brazil had left dairy development entirely to private enterprise. However, private efforts were supported through improvement of the infrastructure and by means of training facilities. The regional training centre at the University of Valdivia, Chile, with the support of DANIDA, became particularly well-known for its meaningful training programmes.

When working in a cash-strapped enterprise near Valdivia, processing 100,000 l milk per day on an average (cheese + milk powder), I had to make detailed recommendations for some supplementary investments equivalent to 100,000 US $. These funds were made available in an amazing short time. The regional demand for dairy equipment has given rise to an important manufacturing industry, particular in Argentina.

A second enterprise in which I introduced new manufacturing processes and techniques, particularly for cheese, had been started by the present owner 18 years ago with a milk intake of 200 l/day. At present it processes an average of 30,000 l/day with good prospects for further growth. As in East Africa and in Asia, a serious draw-back is the seasonably of milk production. Unless enterprises with average milk intakes of 10,000 l/day find means and ways for joint ventures to dry seasonal milk surpluses, take-overs of the weaker by the stronger will continue unabated.

Though industrial development in South America has a much longer tradition than in-East Africa, there are similarities in development trends. To recognize such similarities and to learn from the same is the art of the true entrepreneur.


Beginning in 1952, the author undertook to process milk in the summer pastures of the Nepal Himalayas into hard cheese of the alpine type. Over the years he managed to establish profitable cheese making operations in three mountain pasture areas using equipment manufactured predominantly by Nepalese craftsment. A second task was the collection and processing of buffalo milk for Kathmandu, the capital. Thereby the milk deficit during the advanced dry season was made up by milk toning (admixing of reconstituted skimmed milk).

In 1964 the author took up a second long-term assignment for the promotion of airy development in Madagascar. To begin with he had to eliminate deficits in the operation of breeding centres for dairy cattle through introduction of economically viable mixed-farming systems. Respective savings were invested in milk collection centres with refrigeration facilities, in the reorganization of the central dairy supplying Tananarive, the capital, and in the establishment of milk processing units in two smaller towns. In remote areas milk was processed profitably through appropriate cheese making operations.

From 1974 till 1989 the author coordinated the establishment of the Department of Food Technology & Applied Human Nutrition at the University of Nairobi. Applied research and extension in the field of dairying were primarily concerned with the development of cultured milk (Mala) and related products, with appropriate utilization of cheese whey and with an analysis of possible savings on energy consumption in a major milk drying operation. Furthermore, the possibilities and limitations of milk conservation by biochemical means, known as LP-system, were exploited.

Experiences made in Nepal, in Madagascar and in Kenya had two things in common:

1. Big seasonal fluctuations in milk supply, calling for seasonal pricing to begin with, in order to bring the offer in line with the demand.

2. Milk processing and marketing in the hands of inflexible and poorly managed parastatal, for which progressive privatisation is the only remedy this conclusion was confirmed by the author's encouraging experience in Chile in 1992 and in 1994, where private enterprises is the promoter of dairy development.


Q. Kurwijila, R.L

Are there any lessons we can learn from Latin America.

Response: W. Schulthess

The consumer habits are very different. Cheese has become a very popular product in Latin America which is not the case here in E. Africa.

Q. E.T. Maganga

Can you comment on the effect of pH changes of milk on the microbial profile of milk especially on the safety of raw milk that has been allowed to go sour?

Response: In the early phases of acidification microbes multiply logarithmically, with a peak at 108 - 109/ml. After a stationary phase of variable height there is a decline in numbers.

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