Power crisis hits dairy industry

via Power crisis hits dairy industry – DailyNews Live 14 July 2014 by Ndakaziva Majaka

HARARE –  Zimbabwe’s dairy industry is losing nearly $100 000 in potential revenue annually due to excessive power outages currently rocking the country, a recent study has revealed.

According to the Zimbabwe Economic Policy Analysis and Research Unit (Zeparu) report on Agro-Industries/Food and Beverages Value Chain, the country has been producing around 50 million litres per year against a combined capacity to produce about 400 million litres annually.

Zimbabwe’s national milk demand is estimated at 240 million litres. The land-locked country currently generates approximately 1 300 megawatts (MW) against peak demand of around 2 200 MW.

“The product losses resulting from the power outages are estimated at a maximum of 2,5 percent of total production,” Zeparu said in the report, adding that milk processors are “under capacitated”.

The think tank said a litre of milk is going for an average $1,45, which is more expensive than imported milk.

It said Zimbabwe’s dairy industry was fairly well developed with seven major processors and over 20 smaller processors. Major milk processors in the country include listed Dairibord Zimbabwe Holdings Limited, Alpha Omega Dairy and Dendairy.

They produce yoghurt, cheese, powdered milk, milk-based beverages, ice cream and liquid milk — pasteurised and UHT milk.

“The overall capacity utilisation is below 50 percent mainly due to low supplies of raw milk from the farms,” Zeparu said.

“Milk output from the farms has been declining over the years,” Zeperu said.

According to the study, this has led to decline in capacity utilisation and thus impacting negatively on production costs and price to the final consumer and the influx of imports from neighbouring countries, for example Zambia and South Africa.