Pakistan is the world's fifth largest producer of milk, yet milk is very fragile in our hot climate, and distribution historically depended on a network of suppliers and middlemen. Without refrigeration, the milk arrived in towns already soured or adulterated with preservatives, such as vegetable oil or caustic soda. When Milkpak Ltd began operations, such was the state of affairs that though the milk was cleaned, pasteurised, homogenised and sterilised at the Milkpak factory in Sheikhupura, its shelf-life in summer was, at most, four weeks. By contrast, in Europe, UHT milk had a shelf-life of six months. Something had to be done. Milkpak immediately took measures to improve milk quality and the collection system; when Nestlé entered in 1988, these efforts were stepped up.
The Nestlé Miracle
Milkpak set up reception centres with cooling facilities where farmers and dodhies, small-time milk merchants, could bring their wares. It was a simple solution, but difficult in practice: importing the stainless steel chilled containers required was prohibitively expensive. By 1988, the company purchased 120 tons of milk a day from 26,000 farmers. After acquiring a share in Milkpak Ltd in 1988, Nestlé immediately began investing in milk cooling tanks. Between 1988 and 1992, 100 milk tanks were installed. 1992 onwards, with full support from the Nestlé headquarters in Switzerland, reorganisation of the milk collection operation and the provision of agricultural technical assistance became top priorities. The investment paid off. Within a decade, Nestlé's purchase of fresh milk had quadrupled,
and the number of small farmers selling milk to Nestlé tripled.
Milk Collection System
This is the story of Nestlé's dairy products; from humble beginnings on tiny farms in Sheikhupura district, all the way to your table!
Step 1
A small farmer in rural Sheikhupura district milks his buffalo twice a day and takes about 4 litres to one of Nestlé's 500 Village Milk Collection Centres.
Step 2
At the Village Milk Collection Centre the farmer's milk is poured into aluminium churns. The agent checks the milk's freshness and purity, and enters the quantity into the farmer's logbook. He takes it to Nestlé's Secondary Reception and Cooling Stations, about 2-4 kilometres away.
Step 3
The Secondary Reception Station has a large electrically powered cooling tank. A milk inspector measures the fat content, the non-fat solids content, and the milk's acidity. Once satisfied, he takes the milk to the Main Reception and Cooling Stations.
Step 4
At the Main Reception and Cooling Stations the milk is poured into huge tanks and thoroughly checked for quality. The milk is then dispatched to the factories.
Step 5
At the Sheikhupura and Kabirwala factories, the milk is processed and packed into the familiar Nestlé cartons you can find in your grocery store. It is checked for quality thrice before being released for sale. Some is processed into yogurt, powdered milk, or other dairy products.
Partnership For Success
In our efforts to provide pure, high quality milk to consumers in distant towns, Nestlé entered into an unprecedented partnership with local farmers. A complex network of collection centres ensures that no farmer has to go far to deliver his daily produce. His payment is prompt and transparent. Advanced chilling systems are in place so as milk travels to our factories in Sheikhupura and Kabirwala, its quality is not degraded.
To improve the quality of milk and the lives of our suppliers, we have established a unique technical assistance team that trains farmers in modern techniques. The milk collection system has an economic and social impact far beyond the farmers themselves. We have created hundreds of jobs, instituted a communications and transport network. More than 900,000 farmers and their dependants have been directly affected by our milk purchases.
Today, the hard work and determination of our milk collection & technical assistance teams and their dedication to Creating Shared Value has raised the bar for dairy concerns in Pakistan.