• Rs. 500 m owed to farmers fully settled; half of other debts repaid
• Daily milk collection doubled to over 120,000 litres with higher farmer payments
• New administration scraps previous plans to sell assets to Amul-linked venture

The Government has ruled out selling Milco Ltd. and has launched efforts to transform it into a profit-making company while working to settle its massive accumulated debts.

Speaking to The Sunday Morning Business, Deputy Minister of Agriculture and Livestock Namal Karunaratne stated that when the new Government assumed office, Milco had been reduced to a loss-making entity burdened with massive debts, including over Rs. 500 million owed to farmers and a similarly large sum owed to milk collectors.

He stated: “As of now, all outstanding payments to farmers have been settled and approximately 50% of Milco’s remaining debts have been repaid.”

The Deputy Minister further stated that he had led the movement opposing the previous regime’s attempts to sell Milco’s five milk factories, 96 milk-collecting centres, and the National Livestock Development Board (NLDB)’s 32 farms totalling 28,802 acres to India’s Amul, and had succeeded in delaying these efforts, thereby protecting the assets until the elections.

Accordingly, he claimed that the new Government had no intention of selling these assets under the previous arrangements and was instead working to transform Milco into a profit-making institution.

“When we assumed control, Milco was collecting only 60,000 litres of milk per day. As of today, we have increased this figure by more than twofold and have also raised the payment to milk farmers by Rs. 20 per litre of milk,” he stated.

In September 2023, the Cabinet of Ministers of the previous regime approved a joint Cabinet memorandum granting approval to commence the valuation process of the NLDB and Milco as part of a process of divesting the Government’s stake in the two bodies to a proposed Joint Venture (JV) comprising the National Dairy Development Board (NDDB) of India, Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), and Cargills (Ceylon) PLC. 

Accordingly, in terms of the joint Cabinet memorandum, the respective boards of the two entities were instructed to refrain from making any key decisions in respect of their immovable and movable assets and the respective staff, going forward.

It was further revealed that the Government of Sri Lanka intended to retain a golden share without rights for dividends or liabilities and the partners of the JV company had proved amicable to the said proposal, provided that the golden shareholder had no control over the company’s affairs.