Dangote ready to milk Kenya’s dairy sector - CNBC Africa

Dangote ready to milk Kenya’s dairy sector

East Africa

by Elayne Wangalwa 0

Nigeria’s Dangote Group is set to stir up Kenya’s dairy sector by setting up a dairy plant in the East African nation. PHOTO: Getty Images

According to one of Kenya’s local dailies, the group is seeking to establish a multi-billion Kenyan shilling powder milk plant to produce for export markets.

(READ MORE: Understanding dairy imports in Nigeria)

Nigeria, Africa largest economy is the largest importer of dairy products in West Africa this is because domestic milk production remains low. Imported milk powder accounts for over 75 per cent of the West African country’s dairy industry.

Last year, domestic supply in Nigeria was estimated at 591,470 tonnes and demand for milk was estimated at 1.7 million tonnes.

The conglomerate owned by Aliko Dangote - Africa’s richest man and the world's 23rd richest person according to Forbes - runs projects and operations in Nigeria and 14 other African countries.

The Nigerian corporation will carry out feasibility studies in the coming weeks. This move by the Dangote Group will shake up Kenya’s dairy sector which is largely spearheaded by Brookside, Kenya Co-operative Creameries, which is state owned among others.

According to research by Standard Investment Bank, Brookside, a dominant player in Kenya’s dairy market, had sales of an estimated 15.4 billion Kenya shillings in 2013.

The firm is said to be the largest milk collection network in East Africa with over 140,000 farmers and a distribution network of more than 200,000 outlets in East Africa.

Last year Brookside acquired a 20 per cent stake in an Ethiopian diary firm to further expand its reach beyond Kenya, Tanzania and Uganda where it already has operations.