Dairy Board seeks tax cuts to boost growth

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By Luke Anami

The Kenya Dairy Board (KDB) wants the Government to consider tax cuts as a means of encouraging more investors to the sector.

Speaking during the rebranding of Sameer Agriculture and Livestock Limited (SALL), processors of "Daima" milk, at a Nairobi hotel, Managing Director Machira Gichohi said the regulator had made a number of recommendations, among them the removal of VAT to promote a favourable investor climate in the industry.

"We have recommended the removal of VAT on value added products such as Yoghurt and tax cuts on packaging material which we hope the Government will consider," Gichohi said during Sameer’s launch of new dairy products.

Avoid milk glut

"More milk processors will help mop excess milk in the market and avoid a repeat of another milk glut as witnessed last year."

He said storage of milk this time round has well been taken care off.

"Processors have invested in new technology such as UHT plants for production of long life milk products.

"This is a departure from the past when majority of milk processors relied on fresh milk production only," Gichohi explained.

The Government has created an enabling environment for milk processors saying farmers’ education in dairy farming has seen milk production increase by 195 per cent in the past six years.

Sameer Chairman Naushad Merali said the introduction of the new products and launch of new logo is part of the ongoing process to achieve the group’s vision of being the market leader in the dairy industry throughout East Africa.

"Sameer Agriculture begun its operations in Uganda in 2006 with 10,000 litres per day to a combined production of 200,000 litres per day today," Merali said.

"As a fast growing player in the dairy sector, Sameer Agriculture is now dealing with over 2,500 farmers nationwide through partnerships with dairy cooperative societies."

In the last four and half years, Sameer Agriculture has invested more than $55 million (Sh4.5 billion) in refurbishing the factory milk collection and bulking centres.

Among the new products Sameer Agriculture launched in the market include UHT milk, yoghurt and butter.

"Research findings indicate that consumption of processed dairy products in Kenya is increasing by between eight to 10 per cent per year," said AG Gaggar, Managing Director Sameer Agriculture."

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