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Manufacture of Dairy Products
BY Marc Bosman
South Africa
10 April 2019
R 14 400.00 (ZAR)  
estimated $ 1 026.30 (USD) *
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Manufacture of Dairy Products


Volumes of raw milk and other dairy products grew in 2017 and 2018 after five years of challenges including continuous decline in demand, contraction in producer numbers, low producer prices, shrinking margins and growing competition from within the sector and other beverage industries. Raw milk production increased by 2.7% in 2017 and almost 4% in 2018. Sales of UHT (long-life) milk, fermented milk product maas and packaged cheese grew strongly, but sales of butter and yoghurt declined due to high prices.


Industry Concerns


Rising UHT milk imports are a concern to the industry which may approach the International Trade Administration Commission (Itac) for trade protection and tariff dispensation. The industry expects better balance in supply and demand, locally and globally, in 2019, with tightening supply leading to improved producer prices. Rising input costs such as electricity, fuel, fertiliser, feed costs, machinery and equipment and packaging are affecting producers in the sector. While consumption of fresh milk is fairly stagnant or declining in developing countries, there is an increase in demand for products such as butter, cheese, yoghurt, whey, milk powders and dairy desserts.


Report Coverage


This report focuses on the South African manufacture of dairy products. It describes the producers and processors across a range of products and the factors influencing their success. There are comprehensive profiles of 34 notable industry players. These include the Coega, Sundale and Woodland dairies in the Eastern Cape, where milk production has more than doubled since 2005, making it the top milk-producing province. Profiles of ice cream makers include those of Froneri (Dairymaid), Gattis and Unique Dairy Products. Companies involved in recent corporate action including Ladismith Cheese Company, which was bought by Sea Harvest in August 2018 for R537m and Clover, which has received a buyout offer from Israeli-owned International Beer Breweries, valuing Clover at R4.8bn, are also profiled.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 3
2.2. Geographic Position 4
3. SIZE OF THE INDUSTRY 5
4. STATE OF THE INDUSTRY 11
4.1. Local 11
4.1.1. Corporate Actions 13
4.1.2. Regulations 14
4.1.3. Enterprise Development and Social Economic Development 17
4.2. Continental 19
4.3. International 23
5. INFLUENCING FACTORS 27
5.1. Government Intervention 27
5.2. Economic Environment 28
5.3. Rising Operating Costs 28
5.4. Consumer Trends 30
5.5. Labour 31
5.6. Technology, Research and Development (R&D) and Innovation 34
5.7. Cyclicality 37
5.8. Environmental Concerns 39
6. COMPETITION 41
6.1. Barriers to Entry 43
7. SWOT ANALYSIS 43
8. OUTLOOK 44
9. INDUSTRY ASSOCIATIONS 45
10. REFERENCES 45
10.1. Publications 45
10.2. Websites 46
APPENDIX 1 48
Summary of Notable Players 48
COMPANY PROFILES 52
BANDINI CHEESE (PTY) LTD 52
CLOVER SA (PTY) LTD 54
COEGA DAIRY (PTY) LTD 59
DANONE SOUTHERN AFRICA (PTY) LTD 61
DARLING ROMERY (PTY) LTD 63
DENMAR ESTATES (PTY) LTD 65
DEWFRESH (PTY) LTD 67
DOUGLASDALE DAIRY (PTY) LTD 69
DWR HERTZOG 72
FAIR CAPE DAIRIES (PTY) LTD 74
FAIRFIELD DAIRY (PTY) LTD 77
FAR END DAIRY (PTY) LTD 79
FARMGATE DAIRY (PTY) LTD 81
FRONERI SOUTH AFRICA (PTY) LTD 83
GATTIS ICE CREAM (PTY) LTD 85
LA MONTANARA MELKERY (PTY) LTD 87
LADISMITH CHEESE COMPANY (PTY) LTD 89
LIBSTAR OPERATIONS (PTY) LTD 91
MOOIVALLEI SUIWEL (PTY) LTD 97
MOUNTAINVIEW DAIRY CC 99
NESTLE (SOUTH AFRICA) (PTY) LTD 101
ORANGE GROVE DAIRY (PTY) LTD 105
PARMALAT SOUTH AFRICA (PTY) LTD 107
POLAR ICE CREAM COMPANY (PTY) LTD 109
RHODES FOOD GROUP (PTY) LTD 111
SUNDALE FREE RANGE DAIRY (PTY) LTD 116
TRADEMODEL SEVEN (PTY) LTD 118
TRANSEM (PTY) LTD 120
UNILEVER SOUTH AFRICA (PTY) LTD 122
UNIQUE DAIRY PRODUCTS (PTY) LTD 125
WESMELK MELKERY (PTY) LTD 127
WJ KHOURIE 129
WOODLANDS DAIRY (PTY) LTD 130
WYNN-WITH MILK FARM (PTY) LTD 134