Nixon Sigey: I have left a mark at New KCC

The oldest and largest dairy processor in East and Central Africa, New KCC, will have a new chief executive soon. From loss-making to the biggest payer of bonuses, the processor has transformed the lives of farmers. Seeds of Gold writer Francis Mureithi talked to Nixon Sigey, the outgoing CEO, on his performance and lessons

 What has been your experience at the helm of New KCC since you took over in 2015?

It started with baptismal by fire. I took over an organisation that owed dairy farmers Sh500 million. Technology was obsolete. I initiated Sh1 billion modernisation at Eldoret, Sotik, Nyahururu and Dandora plants to enhance efficiency. New factories were opened in Meru and Kiganjo.

How has modernisation changed the New KCC marketing strategy?

It has allowed New KCC to diversify its product range. We introduced lactose-free milk, the first of its kind in the region.

It means we can produce all the dairy brands the Kenyan market requires.

What are some of the challenges you had to overcome and stabilise the ship as the captain?

The pandemic disrupted the animal feeds supply chain. Prices skyrocketed. Farmers have never recovered from that.

Then two years of drought followed and it became difficult for farmers to manage their animals. A glut challenge was addressed by modernising New KCC factories.

What was your vision when you became new KCC Chief Executive?

My vision was to maintain the rich New KCC heritage brand of quality, give consumers value for their money and make dairy farmers trusted partners to work with through stakeholder management.

 How did milk payment and delivery improve during your tenure?

When I took over, the milk delivery was 300,000 litres per day. Today, it is 800,000 litres. Before, we were paying farmers annual bonuses to the tune of Sh2 billion. As I leave the stage, our annual farmer bonus payout has more than doubled to at least Sh5 billion. The company is paying Sh50 per litre of milk, up from Sh45 starting March 1, 2024.

How can Kenya unlock its massive potential and become a dairy hub in Africa?

I’m happy the government has put in measures to address this challenge by introducing the genetically improved BT cotton variety whose by-product will support dairy farmers as it will be used to make cotton seed cake.

The growing of sunflower for edible oil will produce by-products that will be used to make protein sources.

The fertiliser subsidy has encouraged dairy farmers to invest in maize production for silage. That will obviously reduce the cost of producing milk.

What are some of the lessons you have learnt about managing a massive state-owned processor?

Management during my term involved farmers as key stakeholders. I created an extension programme to support farmers on important matters like breeding, animal husbandry, animal health, artificial insemination and financial services to access cheap credit.

I also worked closely with business partners and built trust and confidence with consumers.

What strategies did you come up with and implement that you think have left an impact on dairy farmers?

I created loyalty by involving farmers in managing New KCC. Dairy farmers actually own the company.

They are involved in transport. We facilitated them to buy milk tankers and introduced them to check-off system with feed companies. They can now get animal feed and inputs on credit. Farmers went for exchange programmes in Israel, India, Zimbabwe and South Africa. This improved milk production.

 Prices of milk are now better than before. You are credited with having paid farmers highly. How was this possible?

My team and I spearheaded the launch of the milk powder strategic plan, which came in handy during the glut. It means farmers can still enjoy high prices even when supply far outstrips demand. This has ensures that they get value for their money.

The school feeding programme also saw our milk production increase since farmers had new opportunities.

What leadership style did you apply that helped navigate the turbulence?

The first thing I did on taking office was tap into exposed and trained human resources that was experienced.

I made delivery targets mandatory and ran New KCC like a private entity. I ensured the employees’ mindset changed from government to commercial enterprise, making us challenge competition.

What in your opinion are the dangers of Kenya importing milk and dairy products?

Importing dairy products compromises the market for locally produced food. It also means Kenyans are supporting farmers in the exporting countries. It is a big loss of foreign exchange.

Government officials and other stakeholders must address competitiveness. If we do this by making quality trusted products, there will be no room for importing dairy products.

Part of the success of New KCC is producing quality products that can compete with others anywhere in the world.

We encourage farmers to focus on quality. As a processor, we are looking at rolling out a quality-based payment system.

The good thing is that the local dairy industry is maturing fast. New KCC and other processors are capable of producing all the products being imported.

What role has the sector played in food security and the bottom-up agenda of the Kenya Kwanza administration?

We now export dairy products to Tanzania, South Sudan and Rwanda. This means the government supports productivity at farm level by providing milk producers with coolers and supporting cooperatives by improving their governance structures.

There’s an opportunity for export in the region and the whole continent.

What does the future portend for the local dairy industry?

The future is bright if the government maintains the ambition of providing coolers to dairy farmers so that they can aggregate into cooperatives. That is the case with India.

If the government maintains the momentum, the industry will improve the economic prospects of this country.

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