The Milco Company has had to incur a loss of Rs 500 million due to the production of 1.5 million packets of substandard Highland milk powder as a result of a fault in the new machinery set up at the Ambewela plant, said Fisheries, Aquatic Resources Development and Rural Economic Affairs Minister Vijith Vijayamuni Zoysa yesterday.
Minister Zoysa was speaking at a press conference at the Fisheries and Aquatic Ministry auditorium.
Minister Zoysa said that he ordered the officials to initiate an investigation and hand over the report to him and President Maithripala Sirisena. The Minister explained that he found those packets stored in a separate warehouse. Production at the new factory had been stopped and milk powder was being produced with the old machinery to meet demand.
He added that the new machinery which was installed two years ago had not been able to process milk of all grades.
The minister said the old machinery had better capacity to process milk of all grades.
Minister Zoysa said that on Thursday the ministry took a policy decision not to reimburse a security fund of Euro 1.3 million to the construction company of the new factory.
He added that the same fund would be used to repair the new machines.
Minister Zoysa said that as of May 21 when he took over the Ministry, Milco suffered a debt of Rs.1,078 million. Further, this had resulted in them delaying payments to dairy farmers.
He added that some payments would be paid next week and things would return to normal within three months.
He also said that he would take measures to popularise toxic free local milk powder, Highland and others through a programme aimed at school level.
He said that locally produced milk powder was free of all toxins and encouraged children and adults alike to drink local milk instead of the imported variety.
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