Market studyon Dairy Investment

Opportunities in ZambiaFeb 2017

Chali Nyirenda

Business and Partnership Coordinator

AgriProFocus Zambia,

CONTENT

• Introduction

• Overview

• Investments at farm level

• Investment in milk collection

• Investment in milk processing and distribution

• Conclusions

Map of Africa

Zambia is a landlocked country in Southern Africa located between latitudes 8° and 18° south and longitudes 22° and 34° east and covers a total area of 752,612 squarekilometers.

MAP OF ZAMBIA

Table 1: Zambia’s General Economic Overview

Capital City Lusaka

Other main cities Ndola, Kitwe, Livingstone

Area 752,612 sq. km.

Population (growth) 13.1 million, 40% urban (CSO,2010), 2.8% growth/year

Official Language English

Monetary Unit, exchange rate

Zambian Kwacha, 1 US$ = ZK9.8(Feb 2017)

Annual Rate of Inflation 7.78% ( Dec. 2014) 8.7% Dec 2016

No of Cattle 3, 038, 000 (2010)

Zambia’s neighbours DR Congo, Tanzania, Malawi, Mozambique, Botswana, Namibia,Zimbabwe and Angola

Main industries Mining, agriculture, tourism and manufacturing

The Dairy Value Chain

Farmers

•Commercial

•Small and Medium scale

Milk Collection Centre

•Mapepe MCC

•Fisenge MCC

•Chinjala MCC

•Coma Dairy Cooperative

•Magoye MCC

Processors

•Parmalat Zambia Ltd

•Varun Beverages Zambia Ltd

•Vineyard Estates

•Zamilk Zambia Ltd

Distributors Consumers

Government Institutions

Ministry of Fisheries and Livestock

Zambia Bureau of Standards

Ministry of Commerce Trade

and Industries

Support Services

Service providers

Breeding Impulse- AI Services

Vet 24- Extension Services

Financial Institutions

Commercial Banks

Micro Finance Institutions

Non Governmental Organisations

Raw milk prices (2013) at different levels in four African countries x US $

0.338

0.221

0.325

0.479

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Kenya Uganda Tanzania Zambia

Factory gate

To MCC

To farmer

Investment at farmers level

• Forage production and conservationInvestment in pastures and forage conservation for the dry period

• Water (boreholes)Milk = 85-87% water and cows require 80 to 120 l/water/day

• Provision of concentrates 1 kg good concentrates -> 1.5 to 2 kg milk

Investment at Milk Collection Centre

Investment at milk storage and transportation• Milk cans• Solar hot water boiler• Solar can cooling• Motor Bikes for milk transport to the

MCC• Mobile milk cooling tank• Bicycles for milk transport to the MCC

Investment in milk processing and distribution

• Batch pasteurisation of milk

• Mini milk processing

SUMMARY OF INVESTMENT OPPORTUNITIES

Level Item

Farm • Forage production & conservation• Water boreholes• Feed Concentrates• Grinding/crushing of grain• Improved cattle• More cattle

Milk quality • SS milking cans• solar hot water boiler

Milk collection • Can cooling• Bicycles and motor bikes • Mobile milk cooling• Milk cooling tanks• Solar hot water boiler• Can platform tipper• Digital milk intake and testing unit• Refrigerated 20ft containers• Milk collection pick-up truck

CHALLENGES OF THE ZAMBIAN DAIRY SECTOR

• Low level of extension services

• High input costs of fuel, energy and major stock feed ingredients such as maize and soybeans leading to increase in feed price

• Threat of cheap illegally imported products entering the domestic market

• Marketing of Dairy products is a big challenge especially for small scale farmers due to their perishability in nature

• Diseases such as foot and Mouth Disease(FMD), Contagious Bovine Plural Pneumonia (CBPP) and East Cost Fever (ECF) if not managed lead to loss of livestock

THANK YOU FOR YOUR ATTENTION!!