Cooperative societies lay claim to dairy company

KPDL was created in October 16, 1995 through the assistance of Bill Gates Foundation with funds channeled through Eastern Africa Dairy Development Project (EADDP). The company initially worked with six cooperative societies namely Endarasha Dairy, Watuka Dairy, Thuruthuru, Lamuria, Gataragwa, Mweiga and Nairutia with the most active societies in milk collection being Endarasha Dairy and Mweiga Dairy.

And due to the ongoing differences, one of the largest dairy cooperatives in Kieni Constituency decided to boycott the dairy processing company.

Endarasha Cooperative Society manager Charles Kingori said they decided to take their milk to New Kenya Co-operative Creameries (KCC) after negotiations over representation of thesociety hit a snag.

“There was a clear understanding between the company and the cooperatives that the chairmen of the societies are automatically board members but KDPL leadership replaced the Endarasha Dairy chairman Samuel Mutua as treasurer of Board,” Mr Kingori said.

He confirmed that a meeting to resolve the differences between the two had failed after KDPL officials walked out of the negotiations.

“The county government attempted to help us find a solution to farmers concerns that they had no representation in the company which they bought shares from and considering farmers have no proof they own shares in the company,” Kingori said.

Members through their respective cooperative societies bought shares and the money raised was used to provide capital and acquire the plot where the cooler are housed.

One of the farmers at Endarasha Cooperative Mwangi Thaberia explained that each farmer made a contribution of Sh 5,500 to the buy shares within the company.

“We made our contributions and for those who could not afford to pay lump sums would be deducted the money from their milk sales, since we believed KPDL was our company,” Thaberia noted.

Farmers were comfortable with the decision because the management of KDPL comprised of Board members from the six cooperative societies.

The societies are represented by the chairmen and one other committee member of the societies. Others include the three secretary managers, one technical officer and Kenya Dairy Board. To ensure gender representation, three other Board members were included from Endarasha, Mweiga and Watuka Dairy.

However, in 2011 the membership of the board was reduced to 11 who were to run the plant for one and a half years after which elections were to be held.

Majority of KDPL members are from Endarasha Dairy who contributed Sh4.3million from 748 farmers. However, the farmers who bought shares through the cooperative society have no share certificates.

In 2012 a disagreement between KDPL and Mweiga Dairy Cooperative Society arose after the company failed to incorporate the new Mweiga leadership into the Board after elections.

Mweiga Dairy Manager Charles Wanjau confirmed that they deliver 7,000 litres of milk per day to the company and has about 2,500 members of which half are shareholders.
The Society thereafter withdrew most of their milk delivery to KDPL in 2013 until their chairman was reinstated to Board.

“We resolved our problems with KDPL and have been delivering our milk to the processor, however we are yet to get our share certificates for our farmers and our chairman who is now a member of the board is spearheading the initiative,” Wanjau said.

He insisted that he did not want to comment on the issue because of the disagreement between KDPL and Endarasha Cooperative Society,” Wanjau concluded.

The dispute appeared to have been sparked by withdrawal of milk by Endarasha Dairy which was marketing over 12,000 litres of milk per day through KDPL.

“Each litre of milk delivered to KPDL was earning the company Sh2 in profits which would translate to Sh24,000 per day, the withdrawal by Endarasha Dairy was prompted by installation of a milk cooler by KCC,” The report states. Endarasha Dairy complained of lack of proper representation in KDPL based on shareholding and volumes of milk.

“There has been no contractual agreement for sale of milk by Endarasha Dairy through KDPL for the six years the company has been operating. The sale was through gentleman agreement which any party could revoke depending on the benefits to members,” The taskforce confirmed.

There is also no documentation of members share contribution as it appears the contribution was done through the cooperative societies. KDPL has also not held any meeting for members since inception.

There were claims that KDPL was recruiting individual members to the company for milk marketing which may result in the collapse of Endarasha Dairy.