Serbian President, U.S. Ambassador Hail Launch of Biogas Plant

May 29, 2012

As the operator of one of the larger dairy farms in Serbia, Lazar Dairy has had a significant problem dealing with the manure produced by the cows on the farm. Previously, Lazar pumped the manure into a large lagoon, where the solid materials settled and the remaining liquid was used to fertilize crops.

In early May, Lazar and the farming village of Gornja Dragusa in southern Serbia celebrated a big day when outgoing President Boris Tadic and U.S. Ambassador Mary Warlick pushed the button that fired up one of the country’s first biogas plants.

Cow manure from Lazar is now being “digested” by the biogas plant and converted into electricity that the dairy sells to the national electricity company. Waste from the dairy’s 700 milking cows, along with other biodegradable materials, is expected to generate approximately one megawatt of power, enough to power more than 1,000 homes.

“This biogas plant is one of the most significant technology transfers in Serbia, in both the agricultural and renewable energy sectors,” Ambassador Warlick said. “The imminent success of the Lazar Dairy biogas plant will stand as a positive example to other dairies and agribusinesses on how investments in cleaner production technologies can also lead to greater profitability.”

Approximately 250 invited guests attended the event, including Serbian Minister of Agriculture Dusan Petrovic. Ushering the $2 million plant from drawing board to full operation was a two-year process facilitated by the Serbia Agribusiness Project, which is implemented by DAI and funded by the U.S. Agency for International Development.

In addition to generating the biogas that powers the electric generator, the recycling of organic waste also results in a liquid fertilizer, high-quality bedding for the cows, and waste heat in the form of hot water that can be used to heat buildings. Should future environmental regulations in Serbia allow it, the dairy would be eligible for additional revenue through the sale of carbon credits.

Lazar Dairy, which employs 120 people, is an economic engine for Gornja Dragusa and other villages around the small city of Blace (population: 11,000). In addition to its dairy farm, Lazar buys up to 45,000 liters (12,000 gallons) of milk per day from a network of more than 2,000 local farmers within a 100-kilometer radius of the plant. Its processing plant converts this raw milk into processed milk, yogurt, creams, and cheeses. On average, Lazar pays out more than $6 million annually in milk payments to farmers, and as a result is one of the area’s most important sources of income for rural residents.

The biogas plant was designed by DVO Inc., of Chilton, Wisconsin, a leading U.S. designer and builder of anaerobic digesters, which in 2009 was contacted by the U.S. Department of Agriculture to present its technology to potential customers in Serbia. Local USDA staff contacted the Serbia Agribusiness Project to invite dairy and meat processing companies to a presentation by DVO President Steven Dvorak. After much research, including a trip to the United States to see DVO digesters in action, Lazar’s owner, Milan Vidojevic, decided to invest in the plant, which is expected to pay for itself within three years.

The Serbia Agribusiness Project has been providing assistance to Lazar since early 2009, when Lazar participated in a business-to-business trade show organized by the project to bring together Serbian dairies and the Montenegro Hotel Association. Following that event Lazar has been fully involved in the project’s efforts to facilitate the creation of a Serbian Dairy Association, which was launched on January 25. Lazar was also one of 24 client firms that participated in a project-supported booth at the World Food Moscow show in September 2009.

Lazar has participated in other training events related to sales and marketing. Over the past three years, Lazar has reported that $1.16 million of its sales revenue can be directly attributed to project assistance.