Prospects of income opportunities for about 5 000 dairy farmers and the creation of 200 jobs lie in limbo as a newly established milk powder production firm is failing to start operations due to high electricity costs.
Mach Milk Company, a Blantyre-based firm that has so far invested over K150 million with K65 million being a loan from the Malawi Agricultural and Industrial Investment Corporation (Maiic), was set to start operations in May this year.
But to get connected to the national grid, the Electricity Supply Corporation of Malawi (Escom) is demanding K32 million, a fee which the investor says is prohibitive, putting the prospects of opening the country’s first-ever milk powder firm in limbo.
In a written response on Tuesday, Mach Milk executive director Madalisto Phiri said the fee is on the higher side for a newly established firm.
He said: “This is an area where government support is sought to bail us out. Once it becomes operational, it will be the first investment in Malawi since all the milk powder consumed in the country is imported.
“Farmers sell raw milk cheaply among themselves in villages and if they are lucky to some scrupulous buyers who pay low prices.”
The company will create jobs for 5 000 dairy farmers in and around Blantyre, who will be supplying fresh milk and targets over 200 employment opportunities at the plant and through its outlets in the country.
Imported milk products, especially liquid milk continue to put local farmers at a substantial comparative disadvantage.
Cheaper liquid milk, with short shelf-life crowds out local milk and does not provide a level playing field.
Malawi Milk Producers Association national director Hebert Chagona said Malawi needs these new technologies to compete and create a market for the local products, but Escom is a hindrance.
Escom spokesperson Innocent Chitosi was yet to respond to our questions.
However, Minister of Industry Roy Kachale said his ministry is in constant contact with Ministry of Energy to streamline the processes of acquiring utility services, saying the situation on the ground is not good.