Zim spends $6m on milk imports

via Zim spends $6m on milk imports – DailyNews Live by Kudzai Chawafambira  4 DECEMBER 2013 

Zimbabwe is spending approximately $6 million per month on South African milk imports, says local market player Dendairy.

Daryl Archibald, the company’s director, said dairy producers were engaged with government to ensure that a level playing field is created between foreign and locally-produced milk.

“Zimbabwe is currently importing five million litres of boxed milk from South Africa leading to over $6 million leaving the country.

Government has a duty to create an enabling environment for dairy industry’s revival and curb the flooding of imported milk on our local market,” he said.

This comes as Dendairy is targeting more than 30 percent of the market share of boxed ultra-high temperature (UHT) processed milk in the country after installing a $7 million Tetrapak processing plant.

Major milk producers in Zimbabwe include Dairibord and Alpha and Omega.

Archibald added that milk supply in the country is growing through the importation of heifers.

“Support of the dairy industry still needs to be complemented by measures to stimulate expansion and protect local interests by imposing surtax on imports.”

Dendairy has capacity to supply about 3,5 million litres of milk per month against a market demand of 10 million litres.

“The new plant has capacity to process 3 500 boxes of 500ml and 7 000 boxes of one litre packs per hour,” said Archibald, adding that packaging material was partly local, coming from Hunyani Packaging while some was imported from France.

He said the company sourced milk mainly from dairy farmers, and receives at least 100 litres after every three days with the milk having to be processed within 48 hours to become a finished product.

Archibald said the company pays $1,25 for a litre which was $0,25 more than what South African farmers were being paid.

He cited the high input and production costs as some of the reasons local dairy products are failing to compete with imported foreign product.

The dairy industry is currently operating at 45 percent capacity, producing 51 million litres of milk annually against a national demand of around 120 million litres.

The deficit has been covered by imports mainly from South Africa and other neighbouring countries.

National milk production increased from 150 million litres in 1980, peaking at 256 million litres in 1990 before plummeting to an all-time low of 36 million litres in 2009.

Government has also moved in to halt the continued and disruptive acquisition of dairy farms to save the industry from collapse.

The country has a potential to process 400 million litres of milk per year.

Milk consumption per capita in Zimbabwe is still very low and is estimated to be between seven to eight litres per person per annum, indicative of the potential the industry has, compared to other regional countries like Botswana and South Africa who consume between 37 and 79 litres per person per annum.

Dendairy workers in the company’s milk production plant.