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Manufacture Dairy East Africa

Manufacture of Dairy in East Africa 2018

Alex Conradie | Burundi; Comoros; Djibouti; Eritrea; Ethiopia; Kenya; Madagascar; Malawi; Mauritius; Mayotte; Mozambique; Reunion; Rwanda; Seychelles; Somalia; South Sudan; Sudan; Tanzania; Uganda | 15 October 2018

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Report Coverage

This report covers the manufacture of dairy products in East Africa, including comprehensive country-specific information on dairy production and consumption and major players in the sector. It includes reports on 30 companies involved in processing and distributing milk including the region’s largest dairy processor Brookside Dairy, which has a market share of 40% in Kenya and the largest distribution and retail network in Uganda. The report profiles companies such as Inyange Industries, which accounts for 60% of Rwanda’s processed milk and Somalia’s Dayibat, the only yoghurt producer operating in the Somaliland state.

Introduction

According to the East and Southern Africa Dairy Association (ESADA), 12 billion litres of milk are produced in East Africa annually, which was 27.5% of the continent’s output during 2017. In 2017 East African countries exported dairy products worth US$83.8m, which is a year-on-year increase of 30.8%, according to the International Trade Centre’s (ITC) Trade Map. However, factors such as problems with securing adequate amounts of high-quality milk and rising input costs continue to have a significant impact on the performance of East African manufacturers of dairy products.

Strengths

• Dairy processors in East Africa have the capability to manufacture all the products generally produced by dairy processors.
• Most governments in East Africa consider the dairy industry an important sector, and therefore support it.
• Most processors have adequate processing capacity, and the capability to package their products.

Weaknesses

• Low prices paid for milk or delayed payments by dairy processors often push farmers to rather sell their milk in informal markets.
• No or inadequate cold chains for milk collection.
• Poor quality milk supplied by farmers.
• Processors often operate below full processing capacity due to the inadequate supply of milk, which leads to high processing costs per litre.
• Shortage of dairy scientists and technologists.

Opportunities

• Demand for dairy products is growing due to an expanding urban middle class that enjoys dairy products.
• EAC applies a 25% common external tariff to butter and whey imported from outside the EAC, and a 60% tariff to other dairy products.
• Economic growth makes it possible for more consumers to purchase packaged dairy products.
• Innovative ideas to overcome challenges.

Threats

• East Africa is experiencing high levels of dairy product imports from outside the region.
• Inadequate and unreliable electricity supply.
• Lack of access to potable water.
• Many dairy processors find it difficult to reach consumers, since informal channels typically control around 80% of the dairy market.
• Poor quality infrastructure in rural areas.
• Rising costs of electricity and transport.

Outlook

According to the OECD-FAO Agricultural Outlook report and OECD data, global milk production is forecast to rise by 21% to 993.6Mt by 2027. Global consumption of fresh dairy products is expected to increase by 2.3% per annum, from 414.7Mt in 2017 to 518.2Mt in 2027. Consumption of processed dairy products is forecast to rise 1.6% a year, from 47.2Mt in 2017 to 55.5Mt in 2027. These increases in consumption will largely be driven by population growth and higher per capita consumption, due to increasing prosperity and investments in product development. With the exception of butter, world prices of dairy products are projected to increase over the next decade, supported by growing demand. IFCN expects global annual consumption of dairy products per capita to increase by 16% to 135kg in 2030. The OECD and FAO expect Africa’s milk output to increase by 29% to 56.2Mt by 2027, while the production of dairy products is forecast to rise by 3.0% per year from 34.9Mt in 2017 to 47.2Mt in 2027. The continent’s consumption of fresh dairy products is expected to increase by 3.1% per annum, from 33.4Mt in 2017 to 45.4Mt in 2027. Consumption of processed dairy products is forecast to rise by 2.0% a year, from 2.8Mt in 2017 to 3.4Mt in 2027. These increases in consumption will largely be driven by population growth, urbanisation, and higher per capita consumption, due to increasing prosperity. In East Africa urbanisation and economic growth will enable more consumers to purchase packaged dairy products rather than unprocessed milk, which should lead to growth of the dairy processing sector. This expected growth has already attracted new players to the sector, which should lead to increased competition for market share.

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Manufacture of Dairy in East Africa 2018

Full Report

R 1 900.00(ZAR) estimated $99.18 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 69.43 (USD)*

Table of Contents

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PAGE
1. INTRODUCTION 1
2. REGION INFORMATION 1
3. DESCRIPTION OF THE INDUSTRY 3
3.1. Geographic Position 3
3.2. Industry Value Chain 6
4. SIZE OF THE INDUSTRY 10
5. STATE OF THE INDUSTRY 12
5.1. Local 12
5.1.1. Trade 17
5.1.2. Corporate Actions 21
5.1.3. Regulations 22
5.2. Continental 23
5.3. International 25
6. INFLUENCING FACTORS 29
6.1. State of Dairy Farming 29
6.2. Economic Environment 30
6.3. Rising Input Costs 31
6.4. Government Support 31
6.5. Technology, Research and Development (R&D) and Innovation 32
6.6. Labour 33
6.7. Environmental Concerns 33
7. COMPETITION 34
7.1. Barriers to Entry 34
8. SWOT ANALYSIS 34
9. OUTLOOK 35
10. INDUSTRY ASSOCIATIONS 36
11. REFERENCES 36
11.1. Publications 36
11.2. Websites 37
APPENDIX 1 39
Summary of Major Players 39
COMPANY PROFILES 45
AMOS DAIRIES UGANDA LTD 45
ASAS DAIRIES LTD 46
BAKHRESA FOOD PRODUCTS LTD 48
BIO FOOD PRODUCTS LTD 50
BLESSED DAIRIES LTD 52
BROOKSIDE DAIRY LTD 53
BROOKSIDE DAIRY UGANDA LTD 55
COUNTRYSIDE DAIRY LTD 56
DAL GROUP LTD 58
DAYIBAAT 61
ELDOVILLE DAIRIES LTD 62
G.B.K. DAIRY PRODUCTS (U) LTD 63
GITHUNGURI DAIRY FARMERS CO-OPERATIVE SOCIETY LTD 64
GLACIER PRODUCTS LTD 66
HOLLAND DAIRY PLC 68
INNODIS LTD 69
INTERNATIONAL DAIRY PRODUCTS (T) LTD 73
INYANGE INDUSTRIES LTD 74
IRMAN DAIRY 76
JESA FARM DAIRY LTD 77
MASAKA CREAMERY LTD 79
MB PLC 80
NESTLE KENYA LTD 82
NEW KENYA CO-OPERATIVE CREAMERIES LTD 84
PALMHOUSE DAIRIES LTD 87
PARAMOUNT DAIRIES LTD 88
PEARL DAIRY FARMS LTD 89
RAKA MILK PROCESSORS LTD 90
SAMEER AGRICULTURE AND LIVESTOCK LTD 92
SOM DAIRY 94
TANGA FRESH LTD 95
VITAL TOMOSI DAIRY LTD 97