By Laurel Redding
We had the opportunity to visit another dairy, in addition to the Pokhara Model Dairy – although perhaps dairy is a bit of a misnomer. It was actually a dairy processing plant – the second largest dairy company in Nepal, with a very interesting business model.
This company, called Sujal Dairy, collects milk from milk cooperatives made up of local farmers – ie: they have no animals of their own, as most dairies in the US do. Sujal, headquartered in Pokhara, collects 50,000L of milk a day from 70 different cooperatives throughout Nepal. Each cooperative collects milk from around 200-300 farmers (70% cow milk and 30% water buffalo milk). The cows – mostly Jerseys crossed with local indigenous breeds – are actually bought (and insured) by Sujal, given to farmers, and farmers slowly pay for the cow in milk. Farmers raise the cows, milk them (manually of course), then bring buckets of milk (usually 2-4L a day) to the cooperative’s holding/cooling vat. Sujal sends its trucks out, collects the milk, then processes it in their plant in Pokhara.
We were given a tour of the plant (unfortunately we were not able to take pictures), provided sample products (ice cream and flavored milk!), and talked with one of the vets who works there. This business model – that of a dairy processing plant collecting milk from farmers – is pretty much the only type that exists in Nepal on a commercial scale. Sujal’s main competitor – Chitwan milk – operates a similar type of business.
Here are some interesting facts about Sujal’s business:
- They have a capacity for processing 100,000L of milk a day, but due to a shortage of milk, only get around 50,000L.
- They distribute 20,000L of liquid milk per day to the city of Pokhara, 5000L is made into yoghurt, 192L is used to make 2000L of ice cream (yes, ice cream is mostly air!), and the rest is used to make powder milk.
- Powder milk is actually their biggest seller – they export most of it to Pakistan, India, China, and other neighboring countries. Their biggest demand in Nepal is for butter.
- They provide veterinary care to all farmers who receive their cows – vaccinations, artificial insemination if desired (although AI has a lower conception rate than natural breeding) and nutritional advice.
Some of the challenges Sujal faces:
- In terms of animals, their cows and buffalos are usually fairly healthy; however, sometimes they have problems of plant poisonings (since most animals graze on pasture), mastitis and dystocias.
- Sometimes cooperatives add sugar to their milk to increase solids (which means a higher price of milk, as Sujal pays based on fat/solids content). However, Sujal cannot terminate the business relationship because there is already a shortage of milk. Instead, the company stations its employees at all cooperatives for quality control.
- Male calves represent quite a burden for farmers, as they can only be used for labor (and only after 2-3 years of age); farmers would like to be able to cull/euthanize bull calves, but doing so is illegal in Nepal (as cows are considered sacred).
It was a very interesting visit, and it was further evidence of how small and tight-knit the veterinary community in Nepal is – the Sujal dairy vet was a student of Dr. Dipesh, our research assistant!