The Tiup region in the north-east of Kyrgyzstan with its favourable climatic conditions and abundant supply of water has traditionally been a major milk-producing region. During the Soviet era, Kyrgyzstan had a well-developed network of milk-collection points that supplied the country's milk-processing plants. Following independence in 1991, the system collapsed and the volume of milk produced declined drastically. This hit the local population in remote villages hard, where farmers had no other source of revenue or possibilities of making a living.
The Kyrgyz-Swiss milk-processing programme was launched in 1995 in order to reduce poverty in rural areas and give people the possibility of improving their livelihoods. The aim was to revive the region’s milk processing industry and to promote the sale of milk products.
The Siut Bulak cheese factory was established in Jyluu-Bulak, a village of just under 2,000 inhabitants in the north-east of the country, within the framework of a Swiss programme funded by the SDC. This region, which borders on Kazakhstan in the north and China in the south, is well suited to cheese production. Local herbs give the milk a particular aroma and taste.
Cheese production with Swiss techniques
Initially, the programme focused on knowledge sharing: as part of the close cooperation between Kyrgyz and Swiss cheese producers, recipes and techniques were exchanged, so that now tilsit, emmental (marketed locally as Dairy Gold), as well as semi-hard cheeses and mozzarella are on sale in Kyrgyzstan. In addition, the factory makes fresh cheeses, and other fresh dairy products such as sour cream, yoghurt, quark, cream and butter. At the beginning, the problem of seasonal variations in the quality of the milk arose. This problem was overcome, however, and today the quality of the factory's products across the board is higher than those of other Kyrgyz dairy companies.
Since the start of the project about 20 years ago, the original SDC programme has proven its worth with the constant increase in the production volumes of the Siut Bulak cheese factory and the region’s improved state of development. The volume of milk for processing has grown from 500 litres to 50’000 litres per day.
Jobs and incomes for the region
The cheese factory employs around 100 people and more than 2,000 farms sell their milk via a network of 34 milk collections points to Siut Bulak.
In total, local farmers earn more than 35 million soms per year (ca. USD 675’000) in cash from their sales of milk, generating a considerable increase in revenue. In addition, Siut Bulak has created further jobs at the milk collection points, for instance as drivers and quality controllers, who test the milk on delivery. The profits and newly created jobs have made an essential contribution to improving the economy of the Tiup region.
Siut Bulak has well-established distribution chains that supply local supermarkets, businesses, restaurants and hotels. Some of its cheeses are exported to neighbouring districts as well as to Kazakhstan. With Kyrgyzstan’s entry into the Eurasian Economic Union (EEU) in 2015, Siut Bulak’s products could be exported to other EEU member states.
Over the last some 20 years, the cheese factory has developed from a subsidised development project to a private-sector operation run wholly along commercial lines. Since 1996, the milk processing factory's legal form has been a Kyrgyz-Swiss commercial enterprise, known as the Siut Bulak Closed Joint Stock Company, or Siut Bulak CJSC. In the same year, the company started producing hard and semi-hard cheeses and has been marketing them under the brand “Dairy Springˮ.
In 2008, the European Bank for Reconstruction and Development acquired a 34% share in the company, becoming the second-biggest shareholder after the SDC, which held 52%. The remaining shares are held by local farmers.
On 14 August 2017, Siut Bulak CJSC was sold to Spielhofer Swisscheese SA. As part of the deal, the SDC gave due importance to the principles of corporate social responsibility and sustainability, as well as to the existence of a clear project of industrial development proposed by the new owners. The proceeds of the sale of the SDC’s shares went to the Federal Administration. With this, the SDC’s involvement came to an end and Siut Bulak has become a private-sector company.
