Fresh milk helps co-op grow in Cebu – Cefedco

By Cris Evert Lato

Cebu City, Philippines – It started with a government project to help revive the country’s dairy industry in the late 80s.

Eighteen years after, the success story of the Cebu Federation of Dairy Cooperatives (Cefedco) is one that exemplifies good leadership and efficient public and private partnership.

“In 1989, we identified farmers in Cebu who can fill the need of the dairy industry. From the start, we had four primary cooperatives in Consolacion and Liloan who formed the federation,” said Grace Cenas, regional manager of the National Dairy Authority (NDA).

The NDA, then called Philippine Dairy Corp., is an attached agency of the Department of Agriculture.

Cenas said the need to address the growing demand for dairy and dairy products was obvious. About 90 percent was imported from countries abroad.

Because more interest was generated from farmers in Consolacion and Liloan, the NDA decided to pilot the project in the two towns.

In 1990, the four cooperatives formed the Liloan-Consolacion Federation of Dairy Cooperatives (Licon).

Cooperative members underwent training on dairy cattle-raising in Bukidnon. On the same year, 281 pregnant dairy cattle imported from New Zealand were given to 100 farmers of the said towns.

To jumpstart operations, each cooperative contributed P5,000 to make up the P20,000 initial investment of the federation.

“They also loaned P250,000 from the government which they used in purchasing raw milk from farmers, packaging,” Cenas said.

In 1991, the NDA began the construction of P12-million dairy plant in Barangay (village) Pitogo, Consolacion. The plant was turned over to the federation in 1992.

Interest to go into the dairy business spread across other towns and mountain barangays in the province. With the entry of more cooperatives, the federation changed its name to Cefedco in 1994.

On June 2003, the cooperative was granted a P10-million loan from the Agriculture Competitiveness Enhancement Fund. The money was partly used to buy milk sterilization equipment sets and automated fill-seal machines.

Today, Cefedco gives livelihood to 291 farmer families in Cebu province. It produces dairy products such as fresh milk, milk bars, pastillas, butter, yoghurt, polvoron and white cheese.

These products carry the Cebu Dairy Fresh brand.

Cefedco has a total of 23 member cooperatives across Cebu province. This includes teacher cooperatives whose role is to sell the products.

Operations

To ensure that each federation member benefits from the business, Cefedco manager Bienvenido Rodriguez said the three-tier operation structure is followed.

First, raw milk production is done by the individual farmers.

Second, each cooperative, to which a farmer is a member has its own milk collection center. This is where milk quality test is done before delivering it to the Consolacion plant.

The third operation stage involves milk processing at the plant, which is handled by Cefedco. Marketing and selling of the products are also taken care of by the federation.

Cenas said the federation was up to a challenging start when it started selling in the local market.

The market for fresh milk then was virtually zero. Added to that, was the presence of dairy brands of multinational companies.

Federation members decided to do what the big names did not do to generate sales—direct selling. With marketing staff, they approach government offices, sari-sari stores and dealers.

The hard work paid off.

Today, Cefedco products can be found in almost all supermarkets in Cebu. They also supply fresh milk to high-end resort, Plantation Bay, and coffee shops such as Bo’s Coffee and Coffee Bean and Tea Leaf.

In 2003, Cefedco put up its dairy stall inside SM City Cebu. It also aired its first television commercial in 2006 with Cebu First Lady Margot Osmeña as the endorser.

Leadership

Much has been achieved by the low-profile cooperative in the past 18 years.
Chairman Joseph Durado owes this to a good sense of leadership and the vigilant assistance of the NDA.

“You have to be hands-on on this business. You just don’t let people understand what they have to do. You need to really see if they do the job,” said Durado.
Cefedco business committee head Stephen Lua said the failure of some cooperatives lies on the lax attitude of leaving all the work to the “leader.”

Lua said the partnership with NDA has also been instrumental in making the dairy business successful.

Aside from a strong leader, a pro-active set of members is needed to remind leaders that the cooperative is moving in the proper direction.
Cefedco may have its share of organizational problems, but its leaders believe that hardwork and passion in bringing Cebu’s name on its dairy products will make the cooperative live for another 18 years and beyond.