Mueller Co. works with Uganda to supply milk-collection equipment

hrough its business-development efforts in Africa, Springfield-based stainless steel manufacturer Paul Mueller Co. (OTC: MUEL) is bringing fresh milk and improved trade opportunities to 140 villages in one of the poorest countries in the world.

Christine Daues, a senior marketing strategist for Paul Mueller Co., said the project in Uganda was launched earlier this year, and so far 80 collection centers have opened. The final 60 are expected to be equipped in 2016.

“Mueller supplies the tanks, the refrigeration units and the generators that power them,” Daues said. “These farmers typically have one to three cows they own. They only really milk what they can use right away. So, these collection centers have opened it up and people can congregate at one place in their village, dump their milk in and get paid by the weight and the butter fat in their milk. They’ll get paid, and then the milk will travel to distribution centers where it will go out to everybody.”

She said often farmers in Uganda depend on trade, and the new milking centers minimize travel and bartering at night.

“It’s all about making the supply chain safe, which wasn’t happening before,” said Daues, who declined to disclose Mueller revenues generated by the project.

Dairy Division General Manager John Hawkins said the Mueller collection centers could help raise the bar for nutrition in the developing country.

According to WorldBank.org, the 2014 per capita income in Uganda was the equivalent of $680. The life expectancy at birth is 59 years. By comparison, the World Bank says the U.S. life expectancy is 79 years old, and the per capita income is $55,200.

Hawkins said the bulk of Mueller’s dairy business comes from much smaller deals – one or two farms or facilities at a time. But he said it is not unusual to work with government agencies or farming cooperatives in poverty-stricken areas.

“We do try to partner with developing countries or milk co-ops expanding into developing countries to try and help them in their missions abroad,” said Hawkins, who manages dairy-equipment sales in North and South America from Springfield. “We’ve done this is Africa; we’ve done this in Asia; we’ve done this throughout South America.”

He said Mueller works to grow its bottom line by concentrating on projects that make dairy farmers more profitable.

“If we can help the dairy farmer be more successful, it aids in a more stable food supply, and it also helps to drive investment in more rural communities, which, especially in Third World countries, is a big deal,” Hawkins said. “If we can teach our children there’s a future in agriculture, it helps slow urbanization, which is going to help all of us down the road.”

By establishing a business infrastructure for farmers, he said the Ugandan project can attract bright minds to agriculture.

“So many of our younger generations today focus on getting an education. They think the next natural step is getting a white-collar job in the city,” he said. “Education is very important, but we can take those same business principles that are important in the urban environment, and we can bring them back home to the more agricultural-based communities and be successful there as well.”

Dairy farm equipment remains a staple for the manufacturer that launched in 1940 as Mann and Mueller Heating & Sheet Metal Works. In 1946, Paul Mueller Co. was incorporated in Missouri and entered the dairy business. Last year, the company generated $91.4 million in dairy-equipment sales – nearly half of all sales.

The company’s operations in the Netherlands already was selling milk coolers and brewing equipment into Africa, Daues said.

“We do have regular customers, especially in south Africa, where it is a bit more developed, who are purchasing our milk tanks, our silos and coolers,” Daues said, adding Mueller also sells milk-cooling products in the Middle East.

Equipment for the Ugandan project was manufactured in the Netherlands, and its European representatives put the deal together with the African nation.

Erin Kenny, an associate professor of anthropology at Drury University who has worked as a Fulbright professor in Tanzania to the south, said rural areas in the region are in need of the type of infrastructure Mueller’s equipment is making possible.

“About 10 or 15 years ago, a lot of those east African countries – Tanzania, Uganda, Malawi, Zambia and Kenya – implemented ‘kilimo kwanza,’ which means, ‘food first.’ These were agricultural initiatives that were designed to use the private sector in order to push innovations in agricultural technology,” Kenny said. “I think the intention is to prioritize agriculture and help folks get the kinds of innovative and technological guidance they need.”

She pointed to groups such as Little Rock, Ark.-based Heifer International and Irish Aid among the organizations working to develop the area’s agricultural infrastructure.

Agriculture in east Africa, particularly as it relates to milking cows, has its share of challenges, she said. Uganda is on the equator. The hot climate means cows in the area need to be indigenous or bred as hybrids. They typically produce less milk and need regular veterinary care. Also, many Africans are lactose-intolerant.

“Cows are probably not the solution to poverty in Africa,” Kenny said, adding many poor rural farmers wouldn’t have the money to take care of cows to begin with, so the Mueller project would mostly benefit people who already have some cash on hand.  

But there is definitely a market for more milk products, particularly in the urban areas, she said, and these centers should help farmers reach those markets.

“Mueller is important to the commodity chain. This could help get cheese and yogurt and ice cream to the guy in the city with a little extra money,” Kenny said. “This is a cool thing.”