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Manufacture Dairy Products South Africa

The Manufacture of Dairy Products in South Africa 2021

Natalie Bryden | South Africa | 25 January 2021

The Manufacture of Dairy Products in South Africa 2019

Marc Bosman | South Africa | 10 April 2019

The Manufacture of Dairy Products in South Africa 2017

Marc Bosman | South Africa | 20 October 2017

The Manufacture of Dairy Products in South Africa 2016

Marc Bosman | South Africa | 11 March 2016

The Manufacture of Dairy Products in South Africa 2014

Brenda Young | South Africa | 21 October 2014

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Report Coverage

This report focuses on the manufacture of dairy products in South Africa and includes information on the volume of products sold and market share per product, developments, trends and corporate actions, regulation and other influencing factors. There are profiles of 32 companies including dominant companies such as Clover, Woodlands and Lactalis and relatively small dairy processors that distribute regionally such as Douglasdale and Coega Dairy.

Introduction

This report focuses on the South African manufacture of dairy products, where there has been considerable consolidation at production level over the last 20 years and large farms account for 80% of South Africa’s total milk production. Rising production costs, imports, contraction in producer numbers, increasingly scarce natural resources due to climate change, changing consumer dietary preferences, increased regulation, and competition from international companies have caused challenges, especially for small producers.

Strengths

• An organised industry, with majority of the dairy players belonging to the Milk Producers Organisation and the South African Milk Processors’ Organisation.
• Growing middle class adopting western diets.
• High demand for dairy products, especially value-added products such as sour milk, yoghurt and cheese.

Weaknesses

• Low producer pricing squeezes farmers’ profits and forces many to exit the industry.
• No protection from global players.
• Political uncertainty and security of tenure related to the land reform process.
• Poor rural road infrastructure makes transport expensive.
• South Africa is a net importer of dairy products.

Opportunities

• Demand for flavoured milk.
• Expansion into African markets, especially for processed products that do not require refrigeration.
• Increased urbanisation leads to more demand for dairy products.
• Increasing demand for products with a long shelf life.
• Niche products such as artisanal cheese.

Threats

• Changing consumer preferences.
• Cheap imports from the EU.
• Climate change.
• Increasing input costs.
• Weak economy.

Outlook

Difficulties in the dairy farming sector are expected to continue due to the effect of rising input costs, weak economic growth, job losses and reduced consumer spending on dairy product demand in addition to competition from international players. The number of milk producers is likely to continue to decrease, and increased market consolidation is likely given the current economic conditions. Concerns over climate change and animal welfare are giving rise to long term trends and are driving the development of plant-based alternatives. Dairy companies have to respond to consumer demands and adapt to changing consumer demographics, behaviours and lifestyles. Product diversification, innovation and brand differentiation will be critical success factors to survival in an increasingly competitive global marketplace.

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The Manufacture of Dairy Products in South Africa
The Manufacture of Dairy Products in South Africa 2021

Full Report

R 1 900.00(ZAR) estimated $104.58 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 73.21 (USD)*

Industry Organogram

R 450.00(ZAR) estimated $ 24.77 (USD)*

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The Manufacture of Dairy Products in South Africa 2019-04-10

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The Manufacture of Dairy Products in South Africa 2017-10-20

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The Manufacture of Dairy Products in South Africa 2016-03-11

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The Manufacture of Dairy Products in South Africa 2014-10-21

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Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 3
3. SIZE OF THE INDUSTRY 3
4. STATE OF THE INDUSTRY 8
4.1. Local 8
4.1.1. Trends 11
4.1.2. Developments 12
4.1.3. Corporate Actions 13
4.1.4. Regulations 13
4.1.5. Enterprise Development and Social Economic Development 16
4.2. Continental 17
4.3. International 21
5. INFLUENCING FACTORS 25
5.1. Coronavirus 25
5.2. Government Intervention 26
5.3. Economic Environment 28
5.4. Rising Operating Costs 29
5.5. Utilisation 29
5.6. Labour 30
5.7. Technology, Research and Development (R&D) and Innovation 32
5.8. Cyclicality 33
5.9. Environmental Concerns 34
6. COMPETITION 36
6.1. Barriers to Entry 36
7. SWOT ANALYSIS 37
8. OUTLOOK 38
9. INDUSTRY ASSOCIATIONS 38
10. REFERENCES 39
10.1. Publications 39
10.2. Websites 39
APPENDIX 1 41
Summary of Notable Players 41
COMPANY PROFILES 45
BANDINI CHEESE (PTY) LTD 45
CLOVER SA (PTY) LTD 47
COEGA DAIRY (PTY) LTD 52
DANONE SOUTHERN AFRICA (PTY) LTD 54
DARLING ROMERY (PTY) LTD 56
DENMAR ESTATES (PTY) LTD 58
DEWFRESH (PTY) LTD 60
DOUGLASDALE DAIRY (PTY) LTD 62
DWR HERTZOG 65
FAIR CAPE DAIRIES (PTY) LTD 67
FAIRFIELD DAIRY (PTY) LTD 70
FAR END DAIRY (PTY) LTD 72
FARMGATE DAIRY (PTY) LTD 74
FRONERI SOUTH AFRICA (PTY) LTD 76
GATTIS ICE CREAM (PTY) LTD 78
LA MONTANARA MELKERY (PTY) LTD 80
LACTALIS SOUTH AFRICA (PTY) LTD 82
LADISMITH CHEESE COMPANY (PTY) LTD 85
LIBSTAR OPERATIONS (PTY) LTD 87
MOOIVALLEI SUIWEL (PTY) LTD 92
MOUNTAINVIEW DAIRY CC 94
NESTLE (SOUTH AFRICA) (PTY) LTD 96
ORANGE GROVE DAIRY (PTY) LTD 100
POLAR ICE CREAM COMPANY (PTY) LTD 102
RHODES FOOD GROUP (PTY) LTD 104
SUNDALE FREE RANGE DAIRY (PTY) LTD 109
TRADEMODEL SEVEN (PTY) LTD 111
TRANSEM (PTY) LTD 113
UNILEVER SOUTH AFRICA (PTY) LTD 115
UNIQUE DAIRY PRODUCTS (PTY) LTD 118
WOODLANDS DAIRY (PTY) LTD 121
WYNN-WITH MILK FARM (PTY) LTD 125

Introduction

This report focuses on the South African manufacture of dairy products. The industry has experienced a return to growth in volumes of raw milk and other dairy products since 2017 after five years of challenges. These included continuous decline in demand, contraction in producer numbers and concentration of production, lower producer prices, shrinking margins, growing competition from within the sector and other beverage industries, and changing local industry dynamics which continue to cause economic hardship for many, especially small producers. Raw milk production increased by 2.7% in 2017 and almost 4% in 2018. UHT (long-life) milk, fermented milk product maas, or amasi, and packaged cheese sales grew strongly, but sales of butter and yoghurt declined due to high prices. High milk production and reduced demand resulted in increased exports and reduced imports. However in February 2019, Milk Producers’ Organisation (MPO) chief economist Bertus van Heerden reported that December 2018 and January 2019 milk production figures were lower than the year prior, indicating that low producer prices are starting to restrict milk production, which may lead to supply shortages and increased producer prices if supply tightens sufficiently. Rising UHT milk imports are a concern to the industry which is investigating the matter with a view to possibly approaching 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, and the MPO advises that supply may tighten and producer prices may improve. The Department of Agriculture, Forestry and Fisheries (DAFF) estimated that fresh milk sales totalled R16.46bn in 2016/2017. The annual market for dairy-based products is estimated at approximately R40bn.

Strengths

• An organised industry, with majority of the dairy players belonging to the Milk Producers Organisation and the South African Milk Processors' Organisation.
• There is a high demand for dairy products, especially value-added products such as sour milk, yoghurt and cheese.

Weaknesses

• Low producer pricing squeezes farmers’ profits and forces many to exit the industry.
• No protection from global players. Free market principles have led to many players exiting the industry.
• Political uncertainty and security of tenure related to the land reform process.
• The poor state of the country’s infrastructure makes it costly for farmers to transport their products.

Opportunities

• Expansion into African markets, especially for ambient products.
• Increased urbanisation leads to more demand for dairy products.
• Increasing demand for long-life milk which has a shelf life of up to nine months.
• Market growth and improved profitability from the introduction of new products such as flavoured milk.

Threats

• Cheaper imports from countries that receive subsidies.
• Climate change and ongoing drought conditions in the Eastern and Western Cape.
• Declining numbers of milk producers.
• The negative effect of increasing production and input costs and thus lower margins on farmers’ profits.
• Weakening economy with high food inflation and decreasing disposable income.

Outlook

The dairy industry is in transformation, facing challenges and opportunities arising from seasonal factors and changing consumer preferences. Stakeholders believe dairy companies have to respond to consumer demands and adapt to changing consumer demographics, behaviours and lifestyles. Product diversification, innovation and brand differentiation will be critical success factors. Difficulties in the dairy farming sector in the Eastern and Western Cape are expected because of the ongoing severe drought conditions. The number of milk producers is likely to continue to decrease and increased market consolidation is forecast given the current economic conditions. The industry expects its performance in 2019 to be influenced by:
• Declining producer prices, affecting the supply of raw milk and other dairy products;
• Climatic conditions in the summer rainfall areas;
• The effect of weak economic growth on dairy product demand;
• The effect of the exchange rate on imports, international prices and anticipated local production of raw milk and dairy products;
• Trade protection and tariff dispensation against UHT milk imports.

The Manufacture of Dairy Products in South Africa
The Manufacture of Dairy Products in South Africa 2019

Full Report

R 1 900.00(ZAR) estimated $104.58 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 73.21 (USD)*

Historical Reports

The Manufacture of Dairy Products in South Africa 2021-01-25

R 1 900.00(ZAR) estimated $104.58 (USD)*

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The Manufacture of Dairy Products in South Africa 2017-10-20

R 1 900.00(ZAR) estimated $104.58 (USD)*

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The Manufacture of Dairy Products in South Africa 2016-03-11

R 1 900.00(ZAR) estimated $104.58 (USD)*

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The Manufacture of Dairy Products in South Africa 2014-10-21

R 1 900.00(ZAR) estimated $104.58 (USD)*

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Table of Contents

[ Close ]
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

Report Coverage

The Manufacture of Dairy Products describes current conditions and the actions taken by role players to ensure sustainability in their operations. Detailed statistics regarding the size of the sector and profiles for 40 companies are provided. These include large dairy processor, Clover which has altered the low margin volume driven milk business through the creation of Dairy Farmers South Africa (DFSA), and Unilever South Africa (Pty) Ltd, which has had to deal with the impact of the global consumer move from margarine to butter. Also profiled are three dairies based in the Eastern Cape, which has become the top milk-producing province with 30.6% market share: Coega Dairy (Pty) Ltd; Sundale Free Range Dairy (Pty) Ltd; and Woodlands Dairy (Pty) Ltd. Between them these three dairies employ more than 2,000 people.

Introduction

The dairy market is divided into 63% liquid, that is milk in all its various forms and flavours, and 37% concentrated products produced by the secondary industry. The South African dairy sector has experienced a decline in most segments of the value chain over the last two years. Milk Producers earned R14bn in 2015/2016, which is 6.6% less than the previous year, and their numbers decreased from 1,683 in January 2016 to 1,593 in January 2017.

Strengths

• An organised industry, with majority of the dairy players belonging to the Producers’ Organisation and the Milk Processors’ Association.
• There is a high demand for dairy products, especially value-added products such as sour milk, yoghurt and cheese

Weaknesses

• Low producer pricing in the dairy industry squeezes farmers’ profits and forces many to exit the industry.
• No protection from global players. Free market principles have led to many players exiting the industry.
• Political uncertainty and security of tenure related to the land reform process.
• The poor state of the country’s infrastructure makes it costly for farmers, who are price-takers, to transport their products.

Opportunities

• Expansion into African markets, especially for ambient products.
• Increased urbanisation leads to more demand for dairy products.
• Increasing demand for UHT milk which has a shelf life of up to nine months.
• Market growth and improved profitability from the introduction of new products such as flavoured milk.

Threats

• Cheaper imports from countries that receive subsidies.
• Climate change and ongoing drought conditions in the Eastern and Western Cape.
• Declining numbers of milk producers.
• The negative effect of increasing production and input costs and thus lower margins on farmers’ profits.
• Weakening economy with high food inflation and decreasing disposable income.

Outlook

The dairy industry is in transformation, facing challenges and opportunities arising from increasing globalisation and changing consumer preferences. Stakeholders believe dairy companies have to respond to consumer demands and adapt to changing consumer demographics, behaviours and lifestyles. Product diversification, innovation and brand differentiation will be critical success factors. Difficulties in the dairy farming sector in the Eastern and Western Cape are expected because of the ongoing severe drought conditions, the number of Milk Producers is likely to continue to decrease and increased market consolidation is forecast given the current economic conditions.

Read More..
The Manufacture of Dairy Products in South Africa
The Manufacture of Dairy Products in South Africa 2017

Full Report

R 1 900.00(ZAR) estimated $104.58 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 73.21 (USD)*

Historical Reports

The Manufacture of Dairy Products in South Africa 2021-01-25

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

The Manufacture of Dairy Products in South Africa 2019-04-10

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

The Manufacture of Dairy Products in South Africa 2016-03-11

R 1 900.00(ZAR) estimated $104.58 (USD)*

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The Manufacture of Dairy Products in South Africa 2014-10-21

R 1 900.00(ZAR) estimated $104.58 (USD)*

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Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 3
3. SIZE OF THE INDUSTRY 4
4. STATE OF THE INDUSTRY 15
4.1. Local 15
4.1.1. Corporate Actions 17
4.1.2. Regulations 19
4.1.3. Enterprise Development and Social Economic Development 21
4.2. Continental 22
4.3. International 25
5. INFLUENCING FACTORS 27
5.1. Government Intervention 27
5.2. Economic Environment 28
5.3. Rising Operating Costs 28
5.4. Consumer Trends 29
5.5. Labour 30
5.6. Technology, Research and Development (R&D) and Innovation 33
5.7. Cyclicality 34
5.8. Environmental Concerns 35
6. COMPETITION 37
6.1. Barriers to Entry 38
7. SWOT ANALYSIS 38
8. OUTLOOK 39
9. INDUSTRY ASSOCIATIONS 39
10. REFERENCES 40
10.1. Publications 40
10.2. Websites 41
COMPANY PROFILES 43
BANDINI CHEESE (PTY) LTD 43
CLOVER MILKYWAY (PTY) LTD 45
CLOVER SA (PTY) LTD 47
COEGA DAIRY (PTY) LTD 51
Dairy Day (Pty) Ltd 53
DANONE SOUTHERN AFRICA (PTY) LTD 55
DARLING ROMERY (PTY) LTD 57
DENMAR ESTATES (PTY) LTD 59
DEWFRESH (PTY) LTD 61
DOUGLASDALE DAIRY (PTY) LTD 63
DWR HERTZOG 66
FAIR CAPE DAIRIES (PTY) LTD 68
FAIRFIELD DAIRY (PTY) LTD 70
FAR END DAIRY (PTY) LTD 72
FARMGATE DAIRY (PTY) LTD 74
FRONERI SOUTH AFRICA (PTY) LTD 76
GATTIS ICE CREAM (PTY) LTD 78
HOMSEK (PTY) LTD 80
HONEYDEW DAIRIES (PTY) LTD 82
LA MONTANARA MELKERY (PTY) LTD 84
LADISMITH CHEESE COMPANY (PTY) LTD 86
LAITCO DAIRIES (PTY) LTD 88
LIBSTAR OPERATIONS (PTY) LTD 89
MOOIVALLEI SUIWEL (PTY) LTD 94
MOUNTAINVIEW DAIRY CC 96
NESTLE (SOUTH AFRICA) (PTY) LTD 97
ORANGE GROVE DAIRY (PTY) LTD 101
PARMALAT SOUTH AFRICA (PTY) LTD 103
POLAR ICE CREAM COMPANY (PTY) LTD 106
RHODES FOOD GROUP (PTY) LTD 108
SONNENDAL DAIRIES (PTY) LTD 112
SUNDALE FREE RANGE DAIRY (PTY) LTD 114
TRADEMODEL SEVEN (PTY) LTD 116
TRANSEM (PTY) LTD 118
UNILEVER SOUTH AFRICA (PTY) LTD 119
UNIQUE DAIRY PRODUCTS (PTY) LTD 122
WESMELK MELKERY (PTY) LTD 124
WJ KHOURIE 126
WOODLANDS DAIRY (PTY) LTD 127
WYNN-WITH MILK FARM (PTY) LTD 131

Introduction

This report focuses on the manufacture of dairy products in South Africa. Annual fresh milk production generates revenue in excess of R10bn and the annual market for dairy-based products exceeds R40bn. The number of milk producers has decreased from 4,184 in 2006 to 1,728 in August 2015, a decline of 59% over nine years while at the same time output and efficiencies have improved. Milk producers employ about 30,000 farm workers and indirectly provide jobs to some 15,000 people.

Strengths

• An organised industry, with majority of the dairy players belonging to the Producers’ Organisation and the Milk Processors’ Association.
• There is a high demand for dairy products, especially value-added products such as sour milk, yoghurt and cheese.

Weaknesses

• Low producer pricing in the dairy industry squeezes farmers’ profits and forces many to exit the industry
• No protection from global players. Free market principles have led to many players exiting the industry.
• Political uncertainty and security of tenure related to the land reform process.
• The poor state of the country’s infrastructure makes it costly for farmers, who are price takers, to transport their products.

Opportunities

• Expansion into African markets, especially for ambient products.
• Increased urbanisation leads to more demand for dairy products.
• Increasing demand for UHT milk which has a shelf life of up to nine months.
• Market growth and improved profitability from the introduction of new products such as flavoured milk.

Threats

• Cheaper imports from countries that receive subsidies.
• Climate change and the worsening of drought conditions.
• The negative effect of increasing production and input costs and thus lower margins on farmers’ profits.
• Weakening economy with high food inflation and decreasing disposable income.

Outlook

Industry commentators and players concur the industry will remain volatile and under pressure until 2017, due to local and global industry factors. These include an unpredictable climate, the removal of production quotas in Europe, the slowdown in China and the Russian sanctions. Industry body the MPO, financial services company ABSA through its AGRI Trends research and the major global and local industry producers and processors concur that the dairy industry is in transformation, facing challenges and opportunities arising from increasing globalisation. Responding to the increase in demand for milk will be an unprecedented challenge given the population growth and environmental challenges. Stakeholders believe that dairy companies have to respond to consumer demands and adapt to changing consumer demographics, behaviours and lifestyles. Product diversification, innovation and brand differentiation will be critical success factors. In developing markets securing a sustainable high quality milk supply is paramount as is investing in domestic dairy farming and securing reliable and dependable partners. Increased market consolidation can be expected given the prevailing conditions and a decline in the number of Milk Producers is expected. Agriculture remains profitable from an investment and operational perspective despite lower commodity prices, driven by productivity improvements gained through the adoption of new technologies. The agricultural sector is the only sector which has seen sustained growth over the last ten years and which continues to attract investment. The sector is therefore forecast to continue to deliver good returns despite the drought.

The Manufacture of Dairy Products in South Africa
The Manufacture of Dairy Products in South Africa 2016

Full Report

R 1 900.00(ZAR) estimated $104.58 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 73.21 (USD)*

Historical Reports

The Manufacture of Dairy Products in South Africa 2021-01-25

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

The Manufacture of Dairy Products in South Africa 2019-04-10

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

The Manufacture of Dairy Products in South Africa 2017-10-20

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

The Manufacture of Dairy Products in South Africa 2014-10-21

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 3
3. SIZE OF THE INDUSTRY 4
4. STATE OF THE INDUSTRY 12
4.1. Local 12
4.1.1. Corporate Actions 16
4.1.2. Regulations 17
4.1.3. Enterprise Development and Social Economic Development 18
4.2. Continental 19
4.3. International 24
5. INFLUENCING FACTORS 26
5.1. Government Intervention 26
5.2. Labour 27
5.3. Economic Environment 29
5.4. Rising Input Costs 30
5.5. Cyclicality 32
5.6. Consumer Trends 33
5.7. Technology, Research and Development (R&D) and Innovation 33
5.8. Environmental Concerns 35
6. COMPETITION 36
6.1. Barriers to Entry 38
7. SWOT ANALYSIS 38
8. OUTLOOK 39
9. INDUSTRY ASSOCIATIONS 40
10. REFERENCES 40
10.1. Publications 40
10.2. Websites 42
COMPANY PROFILES 44
Bandini Cheese (Pty) Ltd 44
Clover Milkyway (Pty) Ltd 46
Clover SA (Pty) Ltd 48
Coega Dairy (Pty) Ltd 52
DairyBelle (Pty) Ltd 54
Danone Southern Africa (Pty) Ltd 56
Darling Romery (Pty) Ltd 59
Denmar Estates (Pty) Ltd 61
Dewfresh (Pty) Ltd 63
Douglasdale Dairy (Pty) Ltd 65
DWR Hertzog 67
Fair Cape Dairies (Pty) Ltd 69
Fairfield Dairy (Pty) Ltd 71
Farmgate Dairy (Pty) Ltd 73
Gattis Ice Cream (Pty) Ltd 75
Homsek (Pty) Ltd 77
Homsek Ultra (Pty) Ltd 79
Honeydew Dairies (Pty) Ltd 81
La Montanara Melkery (Pty) Ltd 83
Ladismith Cheese Company (Pty) Ltd 85
Laitco Dairies (Pty) Ltd 87
Libstar Operations (Pty) Ltd 89
Montic Dairy (Pty) Ltd 92
Mooivallei Suiwel (Pty) Ltd 94
Mountainview Dairy CC 96
Nestle (South Africa) (Pty) Ltd 98
Orange Grove Dairy (Pty) Ltd 101
Parmalat South Africa (Pty) Ltd 103
Polar Ice Cream Company (Pty) Ltd 106
Rhodes Food Group (Pty) Ltd 108
Sonnendal Dairies (Pty) Ltd 111
Sundale Free Range Dairy (Pty) Ltd 113
Trademodel Seven (Pty) Ltd 115
Transem (Pty) Ltd 117
Unilever South Africa (Pty) Ltd 119
Unique Dairy Products (Pty) Ltd 122
Wesmelk Melkery (Pty) Ltd 124
Woodlands Dairy (Pty) Ltd 125
Wynn-With Milk Farm (Pty) Ltd 128

Introduction

This report focuses on the manufacture of dairy products. The production of fresh milk generates R10bn in revenue each year and the annual market for dairy-based products is approximately R40bn. Over the years the number of milk producers in South Africa has decreased by 53% from 4,184 in 2006 to 1,961 in 2014. At the same time efficiencies have improved, with South African national dairy production for 2013 at 2.817 billion litres, up 2.2% on 2012. Demand for dairy products shows positive growth with the exception being fresh milk where there is a shift to UHT milk. Milk producers employ about 30,000 farm workers and indirectly provide jobs to some 15,000 people.

Strengths

• An organised industry, with majority of the dairy players belonging to the Producers’ Organisation and the Milk Processors’ Association.
• There is a high demand for dairy products, especially value added products such as sour milk, yoghurt and cheese.

Weaknesses

• Low producer pricing in the dairy industry squeezes farmer’s profits and forces many to exit the industry.
• No protection from global players. Free market principles have led to many players exiting the industry.
• Political uncertainty and security of tenure related to the land reform process.
• The poor state of the country’s infrastructure makes it costly for farmers to transport their products.

Opportunities

• Expansion into African markets, especially for ambient products
• Increased urbanisation leads to more demand for dairy products.
• Increasing demand for UHT milk which has a shelf life of up to nine months.
• Market growth and improved profitability from the introduction of new products such as flavoured milk.

Threats

• Cheaper imports from countries that receive subsidies.
• The negative effect of increasing production and input costs and thus lower margins on farmers’ profits.
• Weakening economy with high food inflation and decreasing disposable income.

Outlook

Consumer demand for dairy continues to grow at about 4% per year and higher dairy product consumption is expected as a result of increased urbanisation and electrification. However, the number of farmers producing dairy is expected to continue its downward trend due to the lack of protection measures for farmers who struggle with low margins. Low milk producer prices will not sufficiently cover cost price increases and will not be enough to encourage growth in production which has slowed. The dominance of the three major processors is expected to continue and African markets hold promise. Emerging markets have fast rates of urbanisation, rising incomes, population growth changes in diet and economic growth and this leads to higher global dairy demand. Africa is expected to see an increase in liquid dairy product (LDP) consumption of more than 50%, climbing to almost 25 billion litres in 2020. The Tetra Pak Dairy Index 2014 says that Africa will see the biggest change in the flavoured milk category, with 7.1% growth across the continent. However, investments will need to be made in infrastructure to promote the sale of ambient products because of the current lack of refrigeration in most African countries.

The Manufacture of Dairy Products in South Africa
The Manufacture of Dairy Products in South Africa 2014

Full Report

R 1 900.00(ZAR) estimated $104.58 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 73.21 (USD)*

Industry Organogram

R 450.00(ZAR) estimated $ 24.77 (USD)*

Historical Reports

The Manufacture of Dairy Products in South Africa 2021-01-25

R 1 900.00(ZAR) estimated $104.58 (USD)*

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The Manufacture of Dairy Products in South Africa 2019-04-10

R 1 900.00(ZAR) estimated $104.58 (USD)*

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The Manufacture of Dairy Products in South Africa 2017-10-20

R 1 900.00(ZAR) estimated $104.58 (USD)*

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The Manufacture of Dairy Products in South Africa 2016-03-11

R 1 900.00(ZAR) estimated $104.58 (USD)*

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Table of Contents

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PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Supply Chain 2
2.2. Geographic Position 3
3. SIZE OF THE INDUSTRY 4
4. STATE OF THE INDUSTRY 7
4.1. Local 7
4.1.1. Corporate Actions 10
4.1.2. Regulations & Government Trade Agreements 11
4.1.3. Enterprise Development and Social Economic Development 12
4.2. Continental 14
4.3. International 15
5. INFLUENCING FACTORS 16
5.1. Economic Environment 16
5.2. Rising Input Costs 17
5.3. Supply Chain Optimisation 17
5.4. Consumer Trends 17
5.5. Labour 18
5.6. Land Reform Policy 19
5.7. Cyclicality 19
5.8. Information Technology 19
5.9. Technology 20
5.10. Environmental Concerns 20
6. COMPETITION 21
6.1. Barriers to Entry 21
6.2. Research and Development (R&D) and Innovation 22
7. SWOT ANALYSIS 22
8. OUTLOOK 23
9. INDUSTRY ASSOCIATIONS 23
10. REFERENCES 24
10.1. Publications 24
10.2. Websites 24
APPENDIX 1 26
Summary of Major Players in the Industry 26