consumption campaigns in an effort to have every Ugandan consume at least 200 litres of milk annually, per the WHO. INVESTMENTS THRIVE According to the DDA, Uganda offers a compelling case for new investments and product diversification for local, regional and international markets, better than any other country in Eastern Africa due to the increasing quantities of milk and the opportunity to export milk products into potential markets in the EAC and COMESA, to which the country is a member, and into Southern and Western Africa and internationally. The authority reveals that the substantial increase in milk production and productivity in the country are calling for more investments in cold chain infrastructure, milk collection and bulking centres, milk transportation and processing facilities to reduce post-harvest losses and boost incomes and economy of the country. With about 80% of the total milk produced marketed but only 33 % of the marketed milk processed into value added products, the DDA is seeking investors to pump in the cash to improve this figure to at least 50% - and the investments are flowing in. Following the liberalization of the dairy sector, which began with the privatisation of the once governmentowned monopoly Uganda Dairy Corporation in 2004, when Agriculture & Livestock bought a stake in the dairy processor, the dairy industry in Uganda has seen frenetic growth, with the decade starting 2010 being the most dramatic. Over the space of only a decade, Uganda came from a country dependent on imported milk from mainly Kenya, to a surplus, as the decade ushered in a surge in local, regional and international players into the sector. Most of the leading dairy companies in Uganda – including Pearl (of the Lato brand), Jesa, Brookside Uganda, Amos, GBK, Paramount, Lakeside and Vital Tomosi have been in existence for less than 10 years, and yet they continue to invest aggressively to improve capacity and boost efficiencies. The dairy sector has seen two key entrants in the last few years, with leading Kenyan dairy Brookside acquiring the stake previously held by Sameer Agriculture and Livestock to create Brookside Uganda and Vital Tomosi, which produces the Milkman brand and is a joint venture by the founding Tomosi family and the Vital Capital Fund, a US$350 million private equity fund that makes impact investments in developing nations, primarily in Sub-Saharan Africa. Two major players, Amos dairies, which processes more than 300,000 litres of milk per day to produce high value casein for the export market and Pearl Dairy, with a capacity of 800,000 litres per day, and which produces milk powder, yoghurt, butter, ghee and UHT milk, have revolutionised the dairy sector in Uganda, and have been largely responsible for the surge in export volumes into the regional and international markets.
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And it is not only the Vital Capital Fund that has invested in the sector. The Rise Fund, a global impact investment fund managed by American private equity firm, TPG Capital acquired a reported 34% stake in Pearl Dairy in 2019 to enable the dairy processor expand and enhance its operations, in addition to an earlier investment by the IFC in the firm. Jesa Dairy, one of the pioneer dairy processors in the country, is building a new, bigger 2,700m2 plant that will be ready in 2021 near Kampala, to boost its production capacity. As older players continue to invest in the sector, smaller ones including the likes of Rainbow Industries, GBK Dairy,
KEY NUMBERS
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ESTIMATED MILK CONSUMPTION PER CAPITA PER YEAR IN UGANDA, WAY BELOW THE RECOMMENDED 200 LITRES PER YEAR
Kooky Enterprises, Paramount Dairies, Mama Omulungi Dairy Limited and scores of others are also contributing to the country’s quest to be self reliant and to supply the regional markets with its milk products. PRODUCT INNOVATIONS INTENSIFY As investments surge, the pace of new product innovations has also increased in tandem, to meet changing consumer needs and aspirations. In the fermented milk category, the Ugandan consumer was very comfortable with traditionally fermented milk packaged in loose plastic bags for a long time, but this is changing, albeit slowly. Flavoured and fruit yoghurt variants, with the latest cup packaging and branding are increasingly hogging the shelves in the country’s informal and formal retail shops as consumer wants and experiences move up the scale. Brookside Uganda, Jesa, Vital Tomosi and Pearl Dairy are leading the charge, introducing an array of flavor options that the Ugandan consumer was used to finding in Kenyan shelves, whenever they travelled to their neighbouring country. In the packaged milk category, UHT milk products have increasingly become the norm, considering the huge infrastructural challenges and the need to access markets far away from the processing plants within the country and in the regional markets of Eastern Africa. Higher value products such as cheese and ice cream, although increasing in popularity, are still small in comparison with packaged milk and fermented products. However,
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