Dendairy invests US$6 million

 

KWEKWE based dairy products producer Dendairy says it has invested in new multi-million dollar state of the art factory equipment which comes with a boxing line.

The move comes at time when the country is trying to reverse a decline in the dairy industry characterised by a shrinking national herd and influx of foreign products on the market.

In an interview a company official Daryl Archibald said the investment was necessitated by the company’s need to produce 3000 tonnes of boxed milk a month per.

"This is a very sophisticated plant and we spent US$6 million on the plant with US$2 million going towards the boxing line.

“Dendairy is currently the only company to have invested in a boxing line and will be the only local supplier of long life milk and juice packaged in this format,” Archibald said.

Archibald said the plant installed by renowned supplier of long life milk and juice packaging plants TetraPak would enable the company to tap into the growing dairy and juice market by producing a diverse line of products.

Currently Dendairy range of products includes UHT milk, flavoured milk, yoghurt, ice-cream, butter and powdered milk.

Milk consumption per capita in Zimbabwe is still very low and is estimated to be between seven to eight litres per person per annum, indicative of the potential the industry has if compared with other regional countries like Botswana and South Africa who consume between 37 and 79 litres per person per annum.

"We will be rolling out numerous product ranges with the first being full cream milk 500ml and 1litre, our proven flavoured milk lines and nectar juice line," said Archibald.

Dendairy’s move is line with the buy Zimbabwe concept which aims at reducing the influx of imports from neighbouring countries predominantly from South Africa which is the biggest importer of boxed milk into Zimbabwe.

"We are looking at reducing our imports from South Africa gradually as we won’t be able to immediately make use of our installed capacity," said Archibald.

At its peak, the dairy sector produced over 250 million litres of milk but the figure tumbled to 56 million litres in 2012.

The national dairy herd also tumbled from 197 000 at its peak to 26 000 in 2012 while dairy commercial farmers decreased from 500 to 100.

The decline in the local dairy industry product has led to the influx of South African products which now dominate the local market.

Currently the country imports four million litres of dairy products a month with 90 percent of the products being boxed UHT milk.

Archibald said the sector had made presentations to government for temporary protection in order for them to regain competitiveness.

Among some of the presentations made to government through the ministry of finance was the imposition of duty on dairy products from South Africa. 

Dairy Farming on the rebound

By Ndafadza Madanha

SMALL scale farmers are leading the revival of the dairy sector in the country which has been struggling since the turn of the millennium.

The development come amid revelations that the local dairy farming sector has collaborated with a Fortune 500 company, Land O’ Lakes and the United States Agency for International Development (USAID).

In a statement, Land O’ Lakes Chief of Party for Zimbabwe, Spencer Ngoma hinted that the collaboration between local famers and his organization dates back to 2010 and has been recording tremendous growth ever since.

“The project has been very successful from the time we started our volumes have increased by over a 1000 percent. We have bought over 425 in calf dairy heifers and distributed them to small scale farmers located in 21 Milk Collection Centers.

“Since the project began in 2010 they have recorded tremendous success and small scale farmers have the potential to anchor the revival of the dairy sector,” said Ngoma.

Land O’ Lakes was founded in the United States of America (USA) and has an annual turnover of over US$15 billion. The organization has satellite offices in Southern and East Africa.

Under the programme funded to the tune of US$5,8 million to date by USAID, Land O’ Lakes has provided in calf heifers to small scale farmers who have recorded phenomenal success and changed the economic landscape in rural Zimbabwe.

The programme has benefited over 1200 small scale dairy farmers and resuscitated over 20 Milk Collection Centres (MCCs) across the length and breadth of the country.

Some of the collection centres include Gokwe (Midlands), Sadza (Mash East), Sangano (Makoni) and Tsonzo and Hauna (Mutasa - Manicaland) and Umzingwane (Matebeleland). Ngoma attributed the success of the project to the business model they have adopted which has seen the project training dairy farmers to run their enterprises on professional lines.

“The project is run on a business model and intensive training that is given to the beneficiaries. Land O’ Lakes has also assisted some of the MCCs process some of their surplus milk so as to remain viable and also creating employment for the community.

“The MCCs produce yoghurt and sour milk which find their way to the local market. Other collection centers are linked to large dairy processors who provide a constant and ready market for the farmers,” added Ngoma.

Research carried by a local stock broking firm revealed that the dairy sector small processing plants are sometimes more profitable than large operations.

“The processing plants in the globalized environment are not always scale-dependent and small operations may be more economically efficient than larger plants, encouraging the participation of smaller enterprises in niche markets,” read the report.

At its peak, the dairy sector produced over 250 million liters of milk but the figure has tumbled to 56 million liters in 2012 against a national demand of 92 million liters.

The national dairy herd has also tumbled from 197 000 at its peak to the 26 000 in 2012 while dairy commercial farmers decreased from 500 to 100. The deficit has resulted in the country importing milk from South Africa which has affected the local producer.

“Our milk producer is higher than that of South Africa and this has adversely affected the competitiveness of locally produced milk. This now requires us to bring down the cost of production so that we can withstand the competition,” added Ngoma.

However, the sector has been gradually showing signs of recovery with Finance minister, Tendai Biti forecasting a four percent growth in lactating cows in 2013.

 Despite the limited production of milk, milk consumption per capita in Zimbabwe is still very low, estimated to be between  seven  to eight liters per person per annum,  indicative of the potential the industry has if compared with other regional countries like Botswana and South Africa who consume between 37 and 79 liters per person per annum.

 Small scale dairy farmers currently produce between two -three percent of national milk output and Ngoma believes with support from government the figure could be higher.

“Government has supported in extension services (Livestock Production and Veterinary services but we are not fully getting the recognition we need. Tobacco has received substantial support but the revenue is seasonal while dairy is constant.

We need government to come in so that we improve our genetics and help reduce the cost of stock feed,” said Ngoma.