• Govt. scraps plans to privatise Milco; opts for restructuring
• Milco adopts 5-year plan to enhance market presence, production
• Liquid milk production prioritised over milk powder under new strategy
• High liquid milk prices identified as key consumer deterrent

Milco Ltd. has revealed plans to restructure the company rather than move towards privatisation, adopting an ambitious five-year plan aimed at improving product availability in the market with a special focus on liquid milk, pending the commencement of the restructuring process. 

Speaking to The Sunday Morning Business, Milco Deputy General Manager Kumara Jayarathna confirmed that the Government had abandoned all plans to privatise Milco and that the plan going forward would be to restructure the organisation.

However, he stated that the restructuring process was yet to commence, adding that they were not pursuing restructuring at present.

“There is no restructuring happening at present. However, we intend to do it in future,” he stated.  

He further noted that they had introduced a five-year plan aimed at improving the production and availability of Milco products in the market. 

“When you consider yoghurt, around 50% of the market is Highland. When you consider milk powder, our market share is less than 10%,” Jayarathna said.

Additionally, he stated that the priority of the company’s five-year plan was not increasing the production of milk power but rather increasing the production of liquid milk.

“At present, liquid milk is too expensive in Sri Lanka. A milk carton is around Rs. 500. The reason people don’t opt for liquid milk is because of the high price. Our plan is to produce and sell liquid milk at a price customers can afford,” he stated.

In September 2023, the Cabinet of Ministers approved a joint Cabinet memorandum granting approval to commence the valuation process of the National Livestock Development Board (NLDB) and Milco as part of the process of divesting the Government’s stake in these organisations to a proposed Joint Venture (JV). 

This JV comprised 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 intended to retain a golden share without rights for dividends or liabilities and the partners of the JV company had proved amicable to this proposal, provided that the golden shareholder had no control over the company’s affairs.