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‘Board spent M1.5 million to save plant’

 Billy Ntaote

 

MASERU — The Lesotho National Dairy Board (LNDB) spent M1.5 million to salvage the collapsing Lesotho milk processing plant owned by the Lesotho Dairy Products (LDP), the Sunday Express heard this week. LNDB Executive Director Selematsela Montši told this paper that the body is aware that in the long journey to  attain stability, the Lesotho Dairy Products (LDP) has experienced a lot of governance and operational challenges which “severely affected its productive capacity”.

The cost, Montši said, arose from a partnership with a South African dairy company made in pursuit of the implementation of “section 2 (h) of Legal Notice No.51 of 1995”. “LNDB, in collaboration with the LDP, entered into an arrangement with the company’s commissioned distributor, a South Africa-based dairy processing and marketing company without which Lesotho dairy products would have long collapsed,” Montši said.

“This intervention cost the dairy board about M1.5 million. In a majority of cases the various forms of interventions were provided by the LNDB to salvage the company.” He added: “The LNDB was acting as a body mandated by government, to provide an oversight responsibility in functions of the dairy industry.” Montši said these interventions were transparent since they were all undertaken in collaboration with government, as the chairperson of the LNDB is the PS for the Ministry of Agriculture and Food Security.

“It became apparent the LDP could no longer produce good milk, and handle the full scope of the milk processing activities because of, inter alia, its dilapidated plant demanded lots of funds to refurbish,” Montši said. He added that the arrangement was that the partnering company should further process LDP pasteurised milk, package it still as LDP Maluti Maid Brand, a Lesotho product.”

Montši said this was a deliberate strategy which, while securing and retaining the market under the well established “Maluti Maid Brand”, would allow the local company to reflect and come up with appropriate strategies and operational plans that would “enable LDP to run their own business effectively”.

“In addition to these interventions, the national dairy board requested funding from government in the 2012/13 financial year, and the current financial year,” Montši said. “The Board is waiting for government to respond to this request in order to commence the refurbishment process.” He said services of a local consulting company (TABFIN Financial Services) have been secured to assist with the formulation of “a turnaround strategy and preparation of a business plan”. “This would create an appropriate platform to re-organise the LDP and enable it to carry out its operations effectively,” Montši said.

Montši also said at the core of this strategy was the objective to create a market for an increased production of quality milk, and in the final analysis “help to set people up in running small to medium scale milk operations”. “This consultancy cost LNDB another M244 000. “It is our vision that this new outlook and strategy will promote the necessary dialogue,” Montši said.

“This would facilitate for a platform where all interested and legal groups should be able to discuss set the roadmap regarding their noble business.” Montši said it is within this context that the LNDB requests ministries of agriculture and trade to “create an environment where serious stakeholders and the LNDB” can meet and share the information for the benefit of all parties involved in dairy development in Lesotho.

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