Developing a dairy business case Mukurwe-ini Dairy  is a farmer-owned dairy company that is collecting, cooling and selling on average more than 25000 kg of milk from approx 6.000 farmers. Ambition is to grow to 150,000 kg/day in 2017 and 17,000 farmers. 

Like with many dairy coops in East- Africa also Mukurwe-ini wishes to enter into value addition and processing so that over time the company will be able to pay higher milk prices to the farmers. The building of the processing plan has already started, but it also had to be stopped six months ago, due to lack of internal finance and current unaffordable interest rate for a loan in local currency. The company requested Agriterra to structure a Ksh 150 million (approx. EUR 1.5 M) 6-years mortgage loan, including 10% working capital, at a maximum rate of 12% p.a.

Although both market and competition look favourable for the company (a simple feasibility study was done some time ago) Agriterra has -as part of the action plan) insisted on a more independent, thorough and bankable business and marketing plan, which will be executed during the coming months.

In this framework and with technical and financial support from Agriterra the company expects to conduct the following activities:
1.	Development of a marketing plan for processed milk and/or yoghurt
2.	Development of finance model for the construction of the factory and possible future investments.
3.	Investigate effect of selling value added products on the “80% plough back rule” from the Cooperative act of Kenya.
4.	Development of a balanced milk valorization model (shops, processors, milk processing etc), incl. solution for peak milk.

Furthermore the project aims to enhance the extension service system by putting more effort in support of local farmers in the area of feeding and fodder preservation. This is crucial for Mukurwe-ini Dairy to manage the seasonality effect in milk production on their operations. When they can not supply in the low season, they will not be able to build op a loyal customer base for their milk shops and possible processed products in the future.

Expected results:
1 bankable business/investment plan
Increase milk intake by 5,000 l/day for society
2 demo farms established and 100 farmers trained
Sample Farmers increase milk production by 20%
Increased area planted with fodder crops and use of silage by sample farmers (> 10%)

Like with many dairy coops in East- Africa also Mukurwe-ini wishes to enter into value addition and processing so that over time the company will be able to pay higher milk prices to the farmers. The building of the processing plan has already started, but it also had to be stopped six months ago, due to lack of internal finance and current unaffordable interest rate for a loan in local currency. The company requested Agriterra to structure a Ksh 150 million (approx. EUR 1.5 M) 6-years mortgage loan, including 10% working capital, at a maximum rate of 12% p.a.

In this framework and with technical and financial support from Agriterra the company expects to conduct the following activities:
1.	Development of a marketing plan for processed milk and/or yoghurt
2.	Development of finance model for the construction of the factory and possible future investments.
3.	Investigate effect of selling value added products on the “80% plough back rule” from the Cooperative act of Kenya.
4.	Development of a balanced milk valorization model (shops, processors, milk processing etc), incl. solution for peak milk.

Furthermore the project aims to enhance the extension service system by putting more effort in support of local farmers in the area of feeding and fodder preservation. This is crucial for Mukurwe-ini Dairy to manage the seasonality effect in milk production on their operations. When they can not supply in the low season, they will not be able to build op a loyal customer base for their milk shops and possible processed products in the future.

Increase competitiveness of KAJARA SACCO (by implementing tools to monitor costs, budgets and activities) and to support KAJARA with their expansion plans.