History Of Meru Dairy Cooperative Union Ltd (MCDCU Limited)
The first Dairy Co-operative Union known as Meru District Dairy Union (MDDU) was formed in 1967 by three primary co-operative societies. These societies are Katheri Dairy Farmers Co-operative Society, Naari Dairy Farmers Co-operative Society and Buuri Dairy Farmers Co-operative Society. These societies came together primarily to pull the
ir resources together in order to transport their raw milk to the nearest processing plant owned by Kenya Co-operative Creameries (KCC) in Kiganjo in Nyeri District, a distance of about 110 Kms from Meru Town. In that period, there was another strong Union for coffee primary societies known as Meru African Coffee Co-operative union (MACCU). In 1972, a directive was issued by the Ministry of Co-operative Development that there should be only one co-operative union in any administrative district. The Dairy Union thus amalgamated with the Coffee Union (MACCU) to form the then giant Meru Central Farmers Co-operative Union (MCFCU). Following the merger all dairy activities were run as a department of the newly created Farmers Union. It is important however to note that since coffee played a major economic role to the small scale farmers in the District, attention was naturally concentrated to activities related to coffee. As such the main pre-occupation of the Dairy Section was in selling of raw milk to the main urban centres and delivering of the surplus milk to K.C.C. – Kiganjo. As selling of raw milk in urban centers intensified a need to improve the cumbersomeness of distributing the raw milk led to innovation. A semi manual chilling and packaging system was installed in 1978. It was located at the present site of the milk bar in the town centre next to Kenya Commercial Bank. This semi manual installation made an immediate impact in revenue generation for the dairy section and therefore the management of the Union started viewing this development in a different perspective. In the 1970’s the country was generally enjoying substantial economic growth. There were a number of development partners who were participating in assisting Kenya to attain its development agenda. In this regard, the Finnish International Development Agency (FINNIDA) was involved in promoting rural dairy development in the country. It commissioned a consulting company for agriculture and agro food industry known as FINNAGRO to undertake a feasibility study with a broad objective of initiating small scale milk processing plants in areas that were not adequately served by the then Kenya Co-operative Creameries. The study concluded that there was a big potential for milk production in Meru and Bungoma Districts. Through FINNIDA, it was recommended that the two districts be chosen as pilot projects to undertake milk processing activities to promote dairy farming in the potential districts not adequately served by K.C.C. Thus the 1st milk processing plant was installed in 1982 with a grant from the Government of Finland at a cost of Kshs.15.75 million. This plant had a capacity of processing 20,000 litres of milk with only one production line of Ultra Heat Treated (UHT) milk in polythene sachets. The economic impact of the plant to dairy farming was tremendous. Whereas the feasibility study had indicated that it would take about eight (8) years before the full capacity of the plant was realized, it took only three (3) years to exceed the installed capacity. Between 1987 and 1990, plans of expanding the plant were initiated. FINNAGRO was again engaged to carryout a feasibility study of expanding the 20,000 liter capacity plant. Their report became the blue print upon which the new plant was expanded. In line with the outcome of the feasibility studies, FINNAGRO filed an application to the Finnish Export Credit Limited for a loan to facilitate the expansion of the processing plant. The loan was to cover up to 85% of the contract price with the pre-mixed concessional credit. Meru Central Farmers Union was expected to pay a minimum of 15% of the contract price. The foundation for the new factory was laid in 1992 at a staggering cost of Kshs.230 million. On completion, the capacity of the processing plant was 50,000 litres which stands up to today. The processing plant is able to process the following products: -
• Pasteurized one day fresh milk
• Two (2) weeks shelf life milk
• Cream
• Fermented milk (Mala and Yoghurt)
• Ghee
• Butter
• Ice cream
In 1995, the Union launched its own Artificial Insemination (A.I.) Service scheme following the Government withdrawal of A.I. In 1996, the installed capacity of the factory exceeded the installed processing capacity of 50,000 litres of milk per day. However in 1997/98 the El Nino rains tremendously caused a decline in milk production. In 1999/2000 long life milk – Tetra Pak line was inaugurated with a maximum capacity of processing 10,000 litres of milk per day in 500 ml packets. From the year 2000, the Dairy Union started experiencing a lot of challenges. The Union was heavily indebted to its key financiers like the Co-operative Bank as well as other suppliers of goods and services. Payment to farmers accumulated and shot up to three (3) months in arrears as well as salaries and wages of the employees. In 2003 the Ministry of Co-operative Development and Marketing intervened and formed a commission of inquiry which led to the dissolution of the Management Board of the Union. Among the recommendations of the Commission was that the Union be restructured into four (4) independent business entities as follows: -
• Coffee Union
• Dairy Union
• Multipurpose Co-operative Society
• Savings and Credit Cooperative (SACCO)
This resulted in the birth of the current Meru Dairy Co-operative Union (MDCU) which was then registered under the Co-operative Societies Act on 23rd May 2005. The registration of a new union was necessitated by a restructuring process that was spearheaded by the Ministry of Co-operative Development and Marketing which was aimed at improving efficiency and effectiveness of the former giant Union. The area of operation of the Dairy union is Meru County (the greater Meru Central district) in four sub Counties namely Imenti North, Meru Central, Imenti South and Buuri. The core business of the Union is milk processing and marketing. The Union also offers Artificial Insemination (A. services and field extension services to the farmers.
