Dairy farming in Malawi: Let's talk about milk

DAIRIBORD MALAWI LIMITED


RESPONSE TO QUESTIONS FROM DAILY TIMES NEWSPAPER, BUSINESS REPORTER

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Provided by : Mrs. Theodora Nyamandi

Position : Managing Director

Organization : Dairibord Malawi Limited
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Questions 1 to 6 are with respect to Mulanje Peak Foods only

1. Have you reached the 50% market share target, now?

Some products such as jams and tomato products have done very well. Mulanje Peak Foods Mixed Fruit Jam and Tomato Puree have attained leadership status in their respective market segments although their market share is still below 50%.

2. What have been the challenges?

 Domestic market for canned products is fairly small and so cost of production is high due to low economies of scale
 Opportunities for export exist but we have not been able to accept huge orders due to the limitation on raw material supply
 The seasonality and inadequate supply of raw material has affected consistent supply of products such as tomato sauce, mixed fruit jam and pineapple products on the local market
 High unit cost of production leading to uncompetitive pricing.

3. The opportunities?

 Mulanje Peak foods products have huge potential for export if the raw material supply situation is improved to enable production of large consignments to meet export orders timely.


4. What are your targets/plans now, in terms of market development?

 Eyeing regional export markets to widen market size

5. How have you contributed towards national economic development?

 Mulanje Peak Foods has improved livelihoods for more than 300 farmers currently supplying fruit and vegetable to Mulanje Peak Foods. It implies that employment for at least 1000 people was created at farm level and there is still opportunity to grow
 It has created downstream employment for sellers and marketers of the finished goods
 The business has also created a market for other goods eg packaging material and services such as advertising, telecommunications thus increasing business for existing suppliers of these goods and services
 Mulanje Peak Foods directly employs over 50 people during peak production
 The products have already broken though the export markets of Mozambique and Zimbabwe earning the country much needed foreign currency and there are opportunities to grow export volumes


6. What sort of incentives would you love to have in place (set up by policy makers/responsible ministries) for the fruit industry to contribute positively towards the national economy?

 Absence of long term financing at concessionary rates is a major impediment to agriculture related development projects that have long gestation periods. Growing a fruit tree can take as long as 3 to 5 years before any fruit can be harvested. Not many farmers would invest in planting long maturing fruit trees eg mangoes, oranges in order to grow adequate volumes required to satisfy the market.
 Rebates to encourage exports and improve competitiveness


7. How many members of staff do you have, currently?

 180

8. How do you rate the market now, in terms of demand for dairy andfruit products?
 There are vast opportunities for growth in both the dairy and fruit markets.


9. It has been said by your company that you target the middle class; have you tried to break through the low income groups in this country?

 At Dairibord Malawi, we market nutritious foods and beverages that are tailor made to meet the needs of our diverse customer base. As such, we have products that suit the pocket of different customers including low income groups. Some of the products that we market with low income consumers in mind include 300g jam in a plastic jar, tomato sauce in a 375ml bottle, drinking yogi in 100 ml sachet, fresh milk and Chambiko in 250ml pack sizes amongst others. Dairibord will continue to develop new products to meet the emerging needs of our consumers

10. What could be the reason for their not being able to buy from the fruit and dairy market? Is it purchasing power or lack of awareness about the nutrition value of these goods?

 Customers do not buy fruit and dairy products due to various personal reasons some of which could be lack of awareness and financial constraints.

11. Talking about the dairy industry: Malawi produces very little milk to meet domestic demand. What are you doing, in terms of incentives, to tackle this problem and encourage dairy farmers to increase milk production?

 We work hand in hand with the government and farmers in offering technical and where apropriate financial assistance to enable farmers increase productivity per cow. Over the years, we have experienced a steady growth in raw milk supply.

12. How many litres of milk do you need per day, and how many is the market able to produce?

 We require at least 30 000 litres of raw milk per day and currently we are receiving about half of our requirements.

13. Does this have any economic, nutritious consequences on the nation?

 Per capita consumption of milk in Malawi is among the lowest in the world at 6L per person; WHO recommended is 200L per person while the average for Africa is 50L. Studies have shown that there is a direct relationship between milk consumption and nutritious status of populations.
 Local traders and wholesalers are importing processed milk to bridge the gap between supply and demand. As such, demand for scarce foreign currency increases to service imports.

14. Talking about fruits (for which we have the Mulanje Peak Foods): Who supplies you with fruits?

 Our fruits are supplied by local farmers mainly from Dedza, Mulanje, Thyolo and Chiradzulu districts.

15. How many tonnage of fruit do you need per day, month and year? Are these fruit farmers able to supply these or you have your own orchards?

• We do not have our own farm. Our intention is to develop and empower local farmers who are prepared to do commercial farming.
• Farmers are not able to supply throughout the year. Supply is seasonal and quantities are inadequate to meet the requirements for the season and to preserve for off peak season.
• Average fruit requirement is 4-10 tons/day depending on fruit type


16. Are their any incentives to farmers/suppliers?

• Provision of free extension service
• Provision of quality seed/ seedlings
• Linkage to financing institutions
• Readily available market

17. Any other comment/words/suggestions?appeal

 Competition has become global regardless of whether you target to sell your product on the domestic market or on the export market. As such quality has become very important in order to satisfy customers. The culture of quality needs to be embraced throughout the value chain from the level of the farmer, suppliers of packaging and other materials through processing to delivery to the final consumer. Malawi is endowed with good soils and ample water to support the agro business, but is yet to realize its full potential because of the different levels of quality awareness at each stage of the value chain.