Why Arla Foods is partnering Nigerian Government to improve local dairy sector – Steen Hadsbjerg

Recently, a high-powered Nigerian government delegation visited Denmark as part of the efforts to seek international partnership to support the development of the agriculture sector and especially the dairy sub-sector in Nigeria. In this interview, Steen Hadsbjerg, Vice President for Sub-Saharan Africa, Arla Foods speaks on the company’s efforts at helping Nigeria not only achieve self-sufficiency in dairy foods, but food production. Excerpts:

Why is Arla Foods moving into the Nigerian market? And why now?

Arla has been present in the Nigerian market for more than 30 years with the DANO milk brand and has been operating through a local distributor (Kneipe Ltd) until 2015. Arla has decided that Africa is a strategic market to Arla and within Africa, Nigeria is the most important market due to a large milk deficit. Arla intends to play a substantial role in developing the dairy market and the dairy sector in the Nigeria. Dairy consumption per capita in Nigeria is very low when comparing to world average and as Arla believes that dairy products plays a major role in providing a balanced, healthy and nutritious diet. Arla believes that we can improve on product offerings and meet the consumers’ needs in a much better way in the future.

Are there lessons learnt from other markets that can inform your strategy in Nigeria?

Of course we will use information and lessons learned from other markets but to a large extent Africa and Nigeria are like no other markets. That is also why we have tailor-made our strategy to meet demands from customers in each individual market including tailor-made products that we will offer in these markets.

Is Arla Foods planning to expand into any other markets in Africa?

Yes – Arla sees Africa as a strategic market that is developing rapidly and we will also expand to other countries in the continent.

Arla has committed to creating a better balance between imported and locally produced dairy products in the market and to creating a local dairy value chain – how do you plan to do this?

Correct. We have carried out a comprehensive study of the dairy sector in the markets where we are and we will do so for every new market that we enter. In each market, we are working closely with all local stakeholders to ensure that we participate in improving the local dairy sector and also work on a nutritional improvement agenda. Our first pilot project is being discussed with the Federal Ministry of Agriculture and we expect to have a plan ready by the end of June. We have already made our commitment in a Letter of Intent in February to the Federal Government of Nigeria. This commitment will be replaced by an actual strategy and list of actions and be included in a MoU.

Furthermore, Arla is bringing the “Milky Way to Development” project to Nigeria. This project is sponsored by Arla and CARE International and focuses on improving the dairy sector in the West African countries.

When is Arla Foods starting local production in Nigeria? How are you preparing for this?

Arla has already built its first new factory in Lekki, Lagos. The factory employs more than 200 Nigerians. We will expand our capacity this year and more expansions are planned for 2017 and beyond.

Nigeria’s Minister of Agriculture has projected that Nigeria should be able to produce enough dairy in the next 3-4 years for both its own consumption and for export purposes. How does Arla Foods intend to support Nigeria in achieving this objective?

As mentioned earlier we are in discussions with the Federal Ministry of Agriculture on how this can be achieved. For Nigeria to export dairy products to other markets end to end process improvements have to be looked at and improved where necessary.

How do you plan to support local farmers in Nigeria and assist them in developing their capacities to produce dairy? How will local farmers benefit?

This is described in Arla Foods Letter of Intent and will be detailed in the plan to be confirmed and signed by Arla and Ministry of Agriculture end of May / early June 2016. Arla has suggested a plan but we want to align this with the Nigerian Government

Nigeria is said to have the potential to be a major milk producer in Africa. It has also been suggested that if existing methods of storing, processing, packaging, and transporting are improved, output can be raised substantially for internal use, as well as for export. Do you agree with this and how does Arla intend to boost the growth potentials in the Nigerian market?

Nigeria has plenty of opportunities in the agriculture and dairy sector but investments in infrastructure, cold chain and education are required. Arla will participate in this, which is why we work closely with the Ministry of Agriculture and other stakeholders towards ensuring that this objective is achieved.

A high-powered Nigerian government delegation is visited Denmark as part of the efforts of the present administration in Nigeria to seek International partnership to support development of the agriculture sector and especially the dairy sub-sector in Nigeria. How does Arla Foods intend to take advantage of the possible partnership opportunities with Nigeria?

Arla is a cooperative and owned by farmers. We believe that the cooperative model might be an opportunity for the Nigerian farmers and we have presented the cooperative governance model, the “Arlagaarden” quality management program, etc. to the Nigerian Government during the visits in Denmark. We see this visit as a journey and hope that Arla can contribute to the development of the dairy market and industry in Nigeria.

Working in partnership with local farmers will be essential to the successful development of dairy. Are there any other partnerships that you will be involved in to help achieve success?

Arla is looking at the end-to-end value chain with the support of external companies. This includes looking at opportunities for improving grass, forage, genetics, water, cold chain, quality management, etc. To increase yield per cow, we need to look at better grass, water and forage and on the genetics of the cows. Milk collection requires proper working cold chains and the ability to convert raw milk into finished products that the consumers like. Looking across the system better quality management systems for both the farmers, food processors and in the retail market is required. This is where Arla is offering the “Arlagaarden” quality management concept and access to Arla technical know-how.