Financial Times

Sri Lankans down 1 million litres of
‘Magic’ ice cream in September Cargills says market leader in this field
By Dilshani Samaraweera

Sri Lankans sweltering in the September heat slurped up a record 1 million litres of Cargills Magic ice cream in that one month. Over the six months from March to September, Sri Lankans consumed over 5 million litres of Magic and by the end of the current financial year, they are expected to polish off over 12 million litres of Magic. Cargills says it has used Magic to expand the Sri Lankan palate for ice cream.

“From the time we started in 2002, we have grown the ice cream market in Sri Lanka from 12 million litres per year, to 25 million litres. This year, in the month of September alone, we crossed the 1 million litre mark. In the first half of the financial year we have crossed the 5 million litre mark. By the end of the financial year we will exceed 12 million litres” the CEO of Cargills Ceylon Plc, Ranjit Page told journalists on Wednesday during a media visit to the Cargills Magic ice cream factory in Banduragoda in the Gampaha district.

The state of the art factory that has international certifications in food safety, quality management and environmental management, is the core of a massive distribution network spanning the entire country, including the war recovering Eastern Province and some parts of the North. By now, some 30,000 retail outlets and an expanding network of mobile vendors, ranging from bicycles to trishaws to ice cream trucks, are busily peddling Magic in tubs, in cups, in sticks and in cones, to Sri Lankans of all ages and sizes.

The company has also developed a range of Sri Lankan flavours to expand the local palate for ice cream. At this point, says Cargills, Magic is the market leader in Sri Lanka’s ice cream market. The company says Cargills Magic is a true ‘ice cream’ made entirely of fresh milk, including the use of milk fats, instead of the lower cost vegetable fats, in its manufacturing process.

Magicking the North and East

The Western province is the biggest consumer of Magic accounting for about half of total sales. While the rest of the country collectively accounts for only the balance half of sales, the normalising North and East, are earmarked for rapid growth in Magic consumption. “About 50% of total sales are in the Western province. The North and East is about 10% - 12%, but we expect fast growth in the North and East, because they have very hot weather and because of resettlement,” said the National Sales Manager of Cargills Quality Dairies, Buddhisha Herath.

Cargills is already looking at working its magic in the North.“The end of war means we have new markets for consumers and also for supplies of raw materials. So we will soon be entering the North to develop the dairy industry. We are looking into the possibilities of sourcing milk and developing the milk supply chains and cold chains in the North. We will open an office there very soon,” said Mr Page.

Magic for a better life

Cargills sources all of its milk requirements for the manufacture of ice cream, from very small scale farmers in rural Sri Lanka. The system has given a new lease of life to Sri Lanka’s dairy sector and has directly improved the quality of life of local dairy farmers and families.

“We source all of our milk requirements locally from about 5,000 very small dairy farmers. We get about 16,000 litres to 20,000 litres of milk per day. We also provide them with training, technical assistance and help them with bank loans,” said the General Manager of Cargills Quality Dairies, Nimal Pathirana.
Cargills says promoting domestic milk production will lead to higher consumption of fresh milk, resulting in direct health benefits to the country.

The company has already invested around Rs 600 million in its ice cream operations and says it will continue to invest in the sector and in promoting the local dairy industry.

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