A regional dairy industry stakeholders’ membership association Founded in October 2004 with the overall mandate of promoting trade of high quality dairy products within and outside the Eastern and Southern Africa Region ESADA currently represent ten (12) chapters/countries namely; Kenya, Uganda, Tanzania, Zambia, Malawi, Mauritius, Rwanda, Zimbabwe, Sudan, Mozambique, Madagascar and South Africa

1. Eastern and Southern
Africa Dairy Industry
Opportunities
Presented by
Peter M. Ngaruiya
Eastern and Southern Africa Dairy Association
At the
NABC – ESADA Trade and Exchange Mission

2. ESADA
 A regional dairy industry stakeholders’
membership association
 Founded in October 2004 with the overall
mandate of promoting trade of high quality
dairy products within and outside the
Eastern and Southern Africa Region
 ESADA currently represent ten (12)
chapters/countries namely; Kenya, Uganda,
Tanzania, Zambia, Malawi, Mauritius,
Rwanda, Zimbabwe, Sudan, Mozambique,
Madagascar and South Africa

3. Dairy Sector and Economic outlook
 Africa’s transition economies – including Ghana, Kenya & Senegal are growing
rapidly. Their agriculture & resource sectors together account 35% of GDP and
2/3rd of exports
 Expanding intra-African trade and creating larger regional markets will be one
key to the future growth of these economies
 Spending patterns will shift as more households gain discretionary spending
power. Food & beverage consumption is projected to increase more in absolute
terms than any other category over the next decade, rising by $175 bn to reach
$544 bn in 2020
 In the last 5 decades the global dairy sector has seen major expansions in small
scale dairy production in some developing countries bringing prosperity to
millions
 For every 1000 ltrs of milk produced daily, Dairy activities are estimated to
generate –
• About 77 farm jobs
• 3 jobs in the processing sector

4. The place of dairy in the region
Dairying in the region
 Dairy sector is among the critical sectors in sub-
Saharan Africa with very high potential for
improving food security and welfare
 Household-level data from 12 developing countries
primarily Africa in addition to Asia and Latin
America show that between 46 to 85 percent of
rural households keep some farm animals more
often than not a cow
 Many of them are poor, which implies that
increasing the contribution of livestock to their
livelihoods can directly contribute significantly to
the goal of reducing poverty worldwide
 Between 70% - 80% of milk production is by
smallholder farmers particularly in Eastern Africa
region

5. The Status of Dairy in the region
Here lays the opportunities (Market)
 The demand for dairy products in the Sub-Saharan
Africa is expected to grow with an average of 3.2%
due to improving purchasing power and middle
class, urbanization and population growth .
 EAC and COMESA market for dairy products is
approximated to be over US$150 million per year
 A study carried out in 2004 indicated that over 90%
of the COMESA and EAC market of dairy products
(in value) is serviced by extra regional imports
 80% of this is sourced from Denmark, South Africa,
Canada, USA, France, New Zealand, Australia, the
Netherlands and Poland
 Information deficiency

6. Here lays the opportunities (Production)
 Production growth lower than demand growth in
SSA
 Production growth driven substantially by growth in
herd rather than productivity (174Kg/cow/year in
TZ, the global lowest against global figure of
>12,000Kg/cow/year).
 Between 60% - 80% production is by smallholder
dairy farmers (2-5 cows)
 Low mechanization, inadequate infrastructure and
technology uptake – productivity and quality issues
 Inadequate extension and business support
services
The Status of Dairy in the region

7. Dairy products comprise a major components
of total food imports into Africa
The current level of Dairy production in Africa
is amongst the lowest in the world
Increased dairy production would make a
major contribution to food security in Africa
particularly protein
Africa contribute less than 3% of the global
trade of animal sourced foods and less than
10% between Africa states
Dairy has the capacity to increase economic
growth and create job opportunities using
existing natural resources and linkages through
the value chain
In sum…..

8.  Dairy marketing particularly in Eastern Africa region
is dominated by informal sector collecting raw milk
from the farmers and selling it directly to consumers
unprocessed
 Marketing through cold chain (formal sector)
account for less than 30% of marketed milk in
Eastern Africa region
 Increased interest by European and other continent
in the dairy sector
 Dairy sector clustering is growing in form of
cooperatives, dairy business hubs, milk sheds etc
 Co-operatives and other bulking centers some of
which are graduating to small-processors
What's happening in EAC

9. The Flow of Milk and Milk Products in Majority of
COMESA/EAC countries
Typical Milk Marketing Channels

10.  In the five countries of the
EAC Kenya is the largest
milk producer accounting
for 58% of total milk
production and 25% of the
total milk supply in the
region’s market
 Kenya and Uganda have the
capacity to produce a wide
range of dairy products for
local consumption and
export
 56% of EAC dairy exports
have been to other EAC
countries
 Tariffs and Non-Tarriff
barriers are still a challenge
Intra-regional trade; snippet

11. Selected countries milk processing utilization
capacity
Capacity utilization

12.  Production system – predominantly smallholder producers
posing;
 Raw milk quality issues
 Milk collection challenges and huge post harvest losses
 Over-reliance on rain fed fodder hence huge production fluctuations
 Low productivity – use of low productivity local breeds, poor animal
husbandry and unaffordable or inaccessible inputs and services
 Poor infrastructure; these include general infrastructure
e.g. roads and specific infrastructure e.g. cold chain
 Highly unregularized informal sector versus regularized
formal sector
 Low mechanization and technology uptake
 Uncoordinated and numerous regulations
 Tariffs and non-tariffs trade barriers
 Low local consumption of milk and milk products
 Lack of reliable industry information
Some of the Challenges we face

13.  Capacity building of small-holder farmers on;
 Fodder conservation
 Hygienic handling of milk in the farm
 Breeds improvement and animal husbandry
 Use of alternative animal feeds e.g. crop residue
 Clustering of smallholder farmers through cooperatives and
farmers based organizations – improvement in
 Milk collection
 Provision of services and infrastructure e.g. cooling tanks
 Capacity building
 Market access by smallholder farmers
 Harmonization of EAC/COMESA dairy standards and SPS protocol
 Country specific generic milk consumption campaigns
 Interventions by development partners in various levels
 Improving business environment
 Knowledge sharing and technology transfer platforms e.g. ADC&E
Some effort to address the
challenges

14.  Primary production;
 Provision of animal feeds at better prices or supplements for
use in alternative feeds
 Provision of AI services and breeds, vaccines and general
animal health and welfare – high demand of high quality
semen and superior breeds
 Provision of technology to farmers competitively e.g. milking
machines, milk coolers etc
 Farmers training and capacity building – emerging farmers
who appreciate education are willing to pay for it
 Provision of support services e.g. financial services, transport
services etc
 Dairy farms both large scale and small scale
 Value addition and market access
 Post harvest losses minimization
Countless opportunities

15.  Post primary production; processing and
marketing
 Investment in processing facilities e.g. milk drying plants,
specialized products
 Laboratory services, ingredients e.g. cultures, equipments,
distribution and marketing services
 Technicians and dairy scientists capacity building and
professional development e.g. provision of short courses
 Provision of market information and industry specific training
e.g. in product development, dairy products marketing
 Provision of infrastructure e.g. cold rooms, milk outlets etc
 General areas for public sector
 Improvement of general infrastructure e.g. access roads,
electivity etc
 Harmonization of standards, import/export regulations
 Provision of industry information to enhance investments
 Support local initiatives e.g. school milk programs
Countless opportunities

16. Register to be part of the largest convergence of dairy industry
stakeholders in Africa,
the African Dairy conference and Exhibition
Date; September 23rd
– 25th
2015
Venue: Nairobi, Kenya at Kenyatta International Conference
Center
Asante Sana and
Karibu Africa
11th
AfDa