Table of content

Executive summary.3
Chapter 1
1.1 History..4
1.1.1 History of New KCC ltd 4
1.1.2 KCC Vision6
1.1.3 KCC Mission.....6
1.1.4 KCC Objectives6
Chapter 2
2.1. New KCC Organization Structure7
2.2 General activities undertaken in the organisation8
2.2.1 Core functions8
2.2.2 Finance Department..8
2.2.2.1 Mandate of the Finance Department8
2.3 Specific activities undertaken .8
2.4 Profile of skills and competences gained .9
2.4.1 Skills Gained..9
2.4.2 Core competences.10
2.6 challenges
Chapter 312
Analysis,Observation and critique.12
3.1 Analysis12
3.1.1 Swot Analysis..12

3.1.2 Stake holders Analysis13

3.3 Critique..14
Chapter 415
Conclusion and recommendation15
4.1 conclusion15
4.2 recommendation.15

EXECUTIVE SUMMARY

This document aims to describe the work done during my internship, which took place from
January 14 to April 14 2015 covering a total of 13 weeks at the New Kenya Co-operative
Creameries.
The main goal of my internship was to be able to gain experience, to learn, and to contribute
towards the realization of the companys goal.
Firstly I will present the history of the company since its inception which was in 1925, how the
company was able to conquer not only the Kenyan market but also the East Africa. It will also
encompass the reason why it collapsed and how the government was able to revive it to become
the leading producer of dairy products.
Secondly I will show the organization structure of the company and the different functions of the
department in finance department where I was attached.
Thirdly I will talk about my internship, skills learnt and challenges faced during the study.
Finally I will do various analysis of the company (swot and stakeholder), observations, critique
propose various

recommendations to be done to improve the efficiency of the running of the

company efficiently.

Chapter 1
HISTORY BACKGROUND
2.1.1 History of New KCC ltd .
The history of KCC Ltd to KCC 2000 Ltd to New KCC Ltd is equal to that of Dairy Sector in
Kenya. The New Kenya Co-operative Creameries Ltd was registered on the 25th of June 2003.
Its predecessor, the Kenya Co-operative Creameries Ltd has operated in Kenya since 1925. This
makes it the oldest dairy processor in the country. The company was created so that it can
provide a channel for dairy farmers to sell their milk. The principal business of KCC Ltd was
buying, processing and selling dairy products both in the domestic market and export market.
The company started with only one factory in Naivasha . Growth was mainly achieved during the
period 1966 to 1988. As at the time there was a lot of technical, technological and financial
assistance from DANIDA.
Besides the factory that was set up at Miritini to serve the coastal region, the rest of KCC
factories and cooling plants exist in the medium and high potential parts of Kenya, where over
70% of the population lives and where poverty is prevalent. By 1987/88, KCC was selling 1
million litres per day with purchases from dairy farmers reaching a peak of 1.4 litres per day. The
company operated as a monopolistic environment until the 1990s .Due to liberalization of the
dairy sub sector mismanagement in the company caused it to collapse in 2000 and was put under
receivership.
In August 2000, a select group of dairy farmers (majority of who were members of KCC)
decided to form a new entity, KCC 2000, to bid for the business and assets of KCC. KCC 2000
bid to acquire the business and assets on a going concern basis at Ksh. 406 million was
successful (KCCHL, 2001).
Come June 2003 the NARC government bought back the company at the same price and
renamed it New KCC Ltd. Over the last four years, the business has mainly been focused on
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revival and rehabilitation of its factories and plants which were in desolate state when the
company was revived in June 2003 (New KCC, 2007). According to the New KCC annual report
2006/07 the business is at its tail end of revival and rehabilitation program having successfully
re-opened all the 11 Cooling Plants, 11 factories and 12 Sales Depots at an estimated cost of Ksh.
3 billion. During the year under review, the company achieved the operational targets set by the
government in the performance contract for the year. New KCC has sustained growing
profitability in the financial year ended 30th June 2007 despite increased competition and
historically high fuel prices in the year which led to an escalating cost of production (New KCC,
2007). 7
Kenyas political environment traditionally has an impact on the economy. Following the
disputed outcome of the general election in 2007, there was widespread violence and
displacement of people throughout the country. This had a significant impact on milk supplies to
NKCC factories in the Rift Valley.
In 2006 New KCC was awarded the Parastatal status which required the company to follow the
Parastatal Act. The management staffs were put on Performance Contract as provided by the
Public Service Act. According to the New KCC annual report 2006/07 the company had put the
Performance Management system which has redefined the key result areas for the organization,
department and individuals and also put in place an appraisal tool and a reward scheme aimed at
realizing the full potential for individual employees and entire organization.

2.1.2 Vision
To be the market leader in quality refreshing dairy products in East and Central Africa

2.1.3 Mission
New KCC is committed to provide quality dairy beverage and food products and
services that are of international standing through sustainable innovation and effective value
chain management.
2.1.4 Core values
Integrity
Loyalty
Innovativeness
Quality

2.1.5 KCC Objectives

To recruit suppliers through farmer registration and supplier registration

To set up more coolers and collection points to ensure close proximity to our suppliers.

To develop an effective transport network that will ensure access to the various milk
collection points

To Provide farmer training.

To enhance fodder production

Through cattle registration into NKCC herds and later Kenya stud book

Promote cattle insurance cover

Support in developing regional breeding scheme

Support in developing regional animal health scheme

CHAPTER TWO

2.2 General activities undertaken in the organization

2.2.1 Core functions
Provision of quality products and services
Customer satisfaction
Corporate social responsibility
Good corporate governance
2.2.2 Finance department.
2.2.2.1 Mandate of the Finance department.
manage financial resources of the company , it includes services to our taxpayers and our
customers and suppliers.
During the attachment period I was attached in the finance department. Finance department
comprises of a number of small departments; account receivable, account payable and payroll.
2.2.3 The different activities undertaken by the different departments
2.2.3.1 Payroll

Processing the payroll

Dispatch payments using EFTS and RTGS modes of payment

Verification and posting of staff claims and overtime payments into the payroll using
memory software and sap

Making voluntary and statutory deductions from payroll such as NHIF, NSSF, monthly
insurance deductions, Sacco and loan deduction.

Communicating with Human Resource Department on staff issues affecting the payroll,
e.g. hiring, and termination.

Updating staff bank accounts records

2.2.3.2 Accounts receivable

Bank reconciliation and coming up with the summary of both presented and presented
payment.

Receipt of sales revenue cheques from customers, listing them and banking them
according to due dates.

Allocation of customers payment to specific customers.

2.2.3.3 Accounts payable

Posting vendor invoices into respective accounts.

Posting supplier cheques and allocating to the respective invoices paid using sap system.

Reconciling supplier ledgers with their invoices.

2.3 Specific activities undertaken during attachment in payout.

Raising payment vouchers for transport, feeds, extensions, and payout.

Posting invoices for transport, feeds, to Sap system.
Posting payment for transport, feeds, Efts in Sap system.
Filling and proper maintenance of accounting records and reporting.
Receiving bank refunds and making payments to farmers on claim.
preparing farmers payments
Updating the payout deduction for various plants.

2.4 A profile of skills and competencies gained

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2.4.1 Skills Gained

Time Management skills: During my attachment I learnt how to manage time. Time
management involved my ability to adhere to a schedule and complete tasks correctly within the
given time. It also involved my ability to organize tasks allocated effectively. I was able to plan
my days and utilize available resources to work more efficiently.
Technical skills: During my attachment I gained technical skills and the ability to effectively
utilize workplace technologies and equipment. Technology skills include computer literacy,
understanding of basic hardware and software applications.
Research skills and problem solving skills: These skills allowed me to properly assess a
situation and make sound decisions based on the information available. Problem-solving skills
helped me use knowledge and information to think of creative ways to find solutions to studentrelated issues.
Communication skills
During my attachment I learnt how to communicate appropriately. The communication skills
gained will help me to write and speak effectively. Effective communication also involves good
listening skills. These skills will not only help me understand the needs of others through
effective listening, but also convey information in a manner that is easy for others to understand.
2.4.2 Core Competencies
These are organizational competencies that all individuals are expected to possess. These
competencies define what the organization values the most in people.
During my attachment I gained teamwork, flexibility and communication competencies as the
requirement of the organization for all its employees to enable them perform in adverse number
of positions throughout the finance department.
2.5 Challenges
The challenges that I faced during my attachment period were limited and could be easily
solved.
The computers were limited in number and this affected my work schedule.
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The work load was a lot since we were short with one person, thus was not able to go to other
parts of the department to learn.

CHAPTER 3
ANALYSIS, OBSERVATION AND CRITIQUE
3.1 Analysis
3.1.1 SWOT analysis
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It is a way of summarizing
the current state of a company and helping to devise a plan for the future, one that employs the
existing strengths, redresses existing weaknesses, exploits opportunities and defends against
threats.
Strength -Internal attributes that are helpful to NewKCC in achieving its objective
a. Diversified and well balanced marketing strategies to attract interest of the farmers
b. Innovative technological advancements with the institution using the best system to
manage its resources called the SAP.
c. Opportunities for increased revenue from income generating projects
d. Integration of ICT in the payout process saves time and its much easier to do.
e. Amiable relationship between farmers and the parastal this is enhanced through timely
payments
f.

Transformative leadership style

g.

Strong linkages with regional market that ensure its diversified product sales in volumes

h.

Strategic location of various plants and processors and cooler across the country to serve
the country and the local farmer

o Strong human resource base that ensures quality services is achieved.

Weaknesses -Internal attributes that are harmful to NewKCC in achieving its objective
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a. Lowly motivated staff

b. Lack of elaborate and fool proof reward system for best performing staff
c. Inability to attract and retain best staff
d. Lack of clear policy for appointment to senior positions
e. Weak social and recreational facilities for staff and casual workers
f. Weak marketing strategies for the daily products as a result Brookside dominates more.
Opportunities -External factors that help KCC achieve its objective.
a. Change of government fiscal and monetary policy
b. Political stability in the country and within East Africa
c. ICT growth and its application in the database management and audit trail of all the
plants.
d. Strategic partnership with local micro finances who can give credit advance to the
farmers

incase the payments delay.

Threats -External factors that are harmful to KCC in achieving its objective
a. Management of flush season when farmers are oversupplying-too much milk
b. Dry seasons when there is no milk.
c. Privatization of the plant to private stakeholders that means that famers will lose billions of
shillings from the planned initial public offers to privatize the institution.
d. Stiff competition from other dairy processors.
3.1.2 Stakeholder Analysis
New KCC recognizes the existence of a number of stakeholders with diverse interests and
influence on the conduct of its activities. The major stakeholders identified include farmers, staff,
the Government. New KCC strongly believes that the identified stakeholders are critical to the
success of its activities. It is the commitment of the institution to carry out stakeholder analysis
on a continuous basis in order to identify changing needs to ensure cooperation and support in
the achievement of her mission.
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3.2 Observation
Five forces model was developed by Michael Porter (1979), the idea was to analyze the
organizational environment and industry attractiveness. Hax & Majluf (1996) interpret that
environmental scan identifies external opportunities and threats evaluate industrys overall
attractiveness, and identify factors contributing to, or taking away from, the industry
attractiveness. This report will use this model to analyze the observations of NEW KCC
environment.
Competitors (Private milk processors): There are more private milk processors especially
Brookside that took control of the larger market segment. The private milk processors are
demonstrating a fierce competition by employing best and highly qualified personnel and have
effective marketing strategies that help them market their products.,
New Entrants (Local dairies and self-help groups) : there are upcoming local dairies that
collect milk and offer faster payments and they sell this milk to private milk processor thus
inhibiting kcc access to larger volumes of milk for processing.
Buyers (Customers): with different taste and preference of customers who are the major
consumers of the dairy products have an influence on the sales volume of the company because
if the demand is low the sales volume will be low thus will affect the company overall
performance for example there is already a sh 1 billion worth of stock of powdered milk lying in
the warehouse that will soon cost the company if its not sold.
Suppliers: this are the major players in the success of the company because they are the ones
that supply kcc with the required volume of milk to be processed , thus if they choose not to
supply the company will lose millions of shillings and will be unable to pay its credit balances.
3.3 Critique
It has not completed the adoption of the new SAP system. This leads to poor services given to
farmers and wastage of a lot of time while doing things manually.

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NewKCC has a very complex operational structure/ bureaucracy which lead to wastage of time
and energy.

CHAPTER 4

CONCLUSION AND RECCOMENDATION

4.1 CONCLUSION

The main aim of my attachment was to gain the much needed experience in the field of Finance,
to obtain essential skills that I can adopt in the working environment, improve on my already
existing skills and be able to improve my managerial skills.
The industrial attachment was successful and I learned more about my career, found out what it
is like to work in my potential career, gained valuable experience to build my resume, got some
contacts which will be used anytime I am in need of the institutions service and also for
networking.

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4.2 RECCOMENDATION
1. The company should invest more in information technology in order to improve on the
efficiency of its employees and promote time saving e.g. the company should connect all
branches or purchasing of new printers in every office
2. The company should also device new ways of motivating their employees as this would
improve on the effectiveness and also the time taken to do a certain task. This can be done by
selling of the company products at a subsidized rate to the employees.
3. The company to employ more staff in order to avoid overworking employees.
4. Proper coordination between the employees, in order to increase efficiency.
5. Proper communication network e.g. installation off more telephones
6. Reducing the number process involved in data management or information management
through delegation of duties as this will reduce centralization or reducing the number of
signatories to a cheque

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