Fonterra’s Rs. 2 b investment creates sustainable impact across dairy value chain

• Dairy communities benefit from first three years of decade-long, Rs. 10 billion commitment to develop local dairy industry and give Sri Lankans access to fresh dairy

 Fonterra Brands Sri Lanka is seeing sustainable returns from its 10-year plan to build a thriving dairy industry and improve access to locally-made dairy products.

The dairy cooperative behind Anchor recently surpassed the Rs. 2 billion investment mark, which has contributed a strong and sustainable wave of change. It has done this through upskilling thousands in the industry and introducing game-changing supply chain innovations to deliver high-quality nutrition to Sri Lankans. 

The latest initiatives, which are part of Fonterra’s decade-long Rs. 10 billion commitment, include training and education for thousands of farmers, expanded processing capacity for local dairy products, and infrastructure development projects that have so far touched the lives of more than tens of thousands of people in Fonterra’s dairy communities.

Managing Director Fonterra Brands Sri Lanka and the Indian Subcontinent, Sunil Sethi, said that the dairy cooperative is focused on enabling the country’s dairy industry to better meet national nutritional requirements and become an active contributor to the economy.   

“With the local dairy industry meeting just 30% of current consumer demand, the industry has immense potential for growth. Realising this potential, our accelerated development efforts aim to support small-scale dairy farmers to build and maintain profitable and sustainable farm businesses,” said Sethi.

One such project is Fonterra’s Rs. 117 million Demonstration and Training Farm in Pannala – a first-of-its-kind private sector initiative established last year to share dairy best practices in farm management. 

In its first year of operation, the facility reached more than 3,500 dairy farmers, veterinarians, Livestock Development Instructors (LDIs) and university students through its training and education programs. 

Furthermore, over Rs. 100 million has been invested on farmer training through Fonterra’s Supplier Relationship Offices (SROs) which are dedicated to working closely with dairy farmers to increase their incomes through milk quality and productivity improvements.

Another key area of focus is future-proofing the industry’s supply chain.

“Setting up suitable infrastructure for storage and transportation is vital in safeguarding the quality of our farmers’ milk for the long term. For that reason, we’ve invested in state-of-the-art milk chilling centres in our dairy communities and equipped them with advanced testing equipment,” said Sethi.   

As part of this program, in 2017 Fonterra invested more than Rs. 50 million to set up the right milk collection and transport infrastructure. 

It recently established a network of new milk chilling centres in the North Western Province, introduced milk testing and chilling technology to the country and strengthened cold-chain transportation and logistics for fresh dairy products.   

To ensure local farmers can help meet the evolving nutritional needs of Sri Lankans, Fonterra has also invested Rs. 1 billion this year in upgrading its local manufacturing footprint to add capacity for existing fresh dairy products and prepare for some exciting innovations to grow the fresh dairy products category.

A further Rs. 35 million has gone towards creating lasting changes in the lives of dairying communities through more than 50 infrastructure projects to date. 

“Enhancing the lives of people in our dairy communities is a significant element of achieving our purpose to build a healthier and happier Sri Lanka. We formed the Fonterra Grass Roots Fund in 2014 with this intention, and have already seen sustainable changes through some 50 community projects around water, sanitation and infrastructure development,” said Sethi.