Profile of Rut & Hirut Dairy Processing Company

Rut & Hirut Milk Cow Breeding, Dairy Production & Processing PLC is located 110 km North of Addis Ababa at Chacha district in Amhara Region. The company is established by the owner, Hirut Yohannes, in 2011, on a leased farmland around Sululeta North of Addis. Hirut used to make and sell local yoghurt, cheese and butter sourcing milk from a few milk producers in the area and own farm (2 cows). Currently the company produces wide range of dairy products, including pasteurized milk, 16 different types of cheese, 3 types of plain &flavored yogurt, 3 types of butter and cream. The plant collects about 3000 lt. milk per day via 7 milk collection sites that created sustainable market for 450 dairy smallholder farmers.

Since she came into contact with AGP-LMD in 2013, Hirut has received various supports to enable her collect, process, and market quality milk & milk products. The types of support provided included trainings to her staff and suppliers, linkage to market, and facilitating access to finance. Staff of Rut & Hirut were trained on product diversification and quality yoghurt and cheese making. In addition, to strengthen her Quality Based Payment (QBP) initiative, AGP-LMD trained 35 of her raw milk suppliers in QBP best practices. Currently, there are 450 suppliers delivering a combined total 3000 liters of raw milk per day.

To strengthen her linkage to the market, AGP-LMD sponsored her participation at the 2014 ALEC exhibition. As well as facilitating her active participation in Business to Business (B2B) meetings organized by AGP-LMD. Hirut is a vibrant and driven entrepreneur with little formal training in management and leadership. In relation to this, Hirut also benefited from the Women’s Entrepreneurship and Leadership training organized by AGP-LMD.

Leveraging the USAID/DCA – Loan Guarantee Program, AGP-LMD assisted Hirut in accessing a 3 million birr loan from Abyssinia Bank. While, the loan is meant to address her immediate working capital needs; Hirut is also one of the pre-selected RFA-2 grantees for the expansion of her processing plant from a daily processing capacity of 3000 Lt. to 7000 Lt. If the grant is successfully approved, it will enable her to create market opportunities for 500-700 milk producers in Chacha area.

As a result of AGP-LMD support and the promoters own initiative, Rut & Hirut is practicing a number of innovative production and marketing approaches, that will eventually enable it to competitively position itself in the dairy market.

For instance; the 20+ milk processing plants in Ethiopia operate on average at about 20 to 30% of their total processing capacity. The dairy sub-sector in Ethiopia suffers from weak supply chains for raw milk and market fluctuations during the major fasting seasons of the Orthodox Church. Hirut, however, has found a way to overcome both challenges; by building strong relationships with milk suppliers and producing longer shelf life dairy products such as Cheese and Butter.

As a result Hirut collects all of the milk produced by her suppliers every day of the year. This is different from the informal market and other processors. In addition, the processing plant is able to operate at no less than 70% of its processing capacity throughout the year.

Leave a Reply