From Banking To Milk ATM Business In Kenya – 0726410068

Two years ago, Julius Kambi was concerned that many residents of Bombolulu in Mombasa County could not afford packed milk and oil from shops. The Sh60 needed for a packet of milk was beyond the means of many households.

This got him thinking how he could package the items in smaller portions so that the residents could afford them. He identified the solution lay in automated milk ATM machines in Kenya.

In January last year, he resigned from his banking job after working for four years at one of the leading financial institutions in the country to actualise his dream.

“I was uncomfortable in my job having identified a business opportunity that I knew could earn me more money and at the same time be a relief to my neighbourhood,” says Mr Kambi.

He bought two automated dispensing machines — one for milk and the other for cooking oil — from Tassmatt, a firm based in Industrial Area, Nairobi.

He used his savings of Sh450,000 and a bank loan of Sh320,000 to buy the machines and to set up the business.

“I was taken through training on how to use the machines and maintain them before I began operations,” he says.

Before setting up the venture, he had to go through a laborious licensing process. Aside from obtaining business licences from local authorities, a milk enterprise needs clearance from the county public health department and the Kenya Dairy Board. Also, inspectors from the Kenya Dairy Board assess the hygienic conditions of the machine and recommend the kind of milk to be sold to the public.

With the business set up, Bombululu residents could now buy milk for as little as Sh5.

“These machines have offered relief to residents who now buy milk for as little as Sh5,” the entrepreneur says.

Bulk milk

Mr Kambi receives his milk daily from the Kenya Co-operative Creameries.

An advantage with the bulk milk from the creameries is that it is already pasteurised and has no preservatives. He says quality is key in his business.

“The Kenya Dairy Board agents make impromptu visits to inspect the quality of the milk and to make recommendations,” he notes.

He purchases one litre of milk at Sh65 and sells for Sh90, making a profit of at least Sh5,000 from the venture every day. “In a day, we can sell up to 200 litres. Our day starts from 6am till 6pm in the evening when we receive another bulk of milk,” he says.

He has hired two assistants whom he has trained on how to handle the machines to help him run the business.

Mr Kambi earns about Sh210,000 from the business every month. His expenses, which include machine maintenance, electricity costs and wages for the workers, consume about Sh38,000 monthly. The business is looking to expand by opening milk shops in Mtwapa and Likoni.

Some of the challenges he faces include unexpected breakdown of the machines if they are not well serviced and milk shortage that sometimes hits the market.

“Sometimes there is a shortage of milk supply in the market following drastic weather conditions and other market factors. This tends to be a challenge in terms of pricing,” says Mr Kambi.