How FrieslandCampina’s €23m investment will impact milk production

Royal FrieslandCampina recently announced plans to invest €23 million in Nigerian milk production as part of its Dairy Development Programme (DDP) in the country.

Hein Schumacher, the company’s global CEO, made the announcement in Abuja while leading FrieslandCampina’s delegation on a courtesy visit to Yemi Osinbajo, vice president, at the Presidential Villa.

Speaking to journalists at the State House afterwards, Schumacher said: “The Vice President asked us to continue to invest in local dairy farming to increase local production of milk and we are fully aligned with his request. We will take forward the programmes we have been running and expand them.

“We are investing around €23 million in our evaporated milk and ready-to-drink milk factory in order to provide fresh milk for the Nigerian consumer. FrieslandCampina WAMCO has been successful with dairy development in recent years and milk yield is improving.”

Highlighting the milestones of FrieslandCampina WAMCO’s DDP, Ben Langat, managing director, explained that “four model farms with crossbred cows have been established to improve local milk collection across its five milk collection centres. Our company is fully committed to working with local farmers to grow local milk production and ultimately ensure that Nigerians continue to benefit from the nutritious content of milk.

“Working with 3,500 dairy farmers in over 90 farming communities in Oyo State, we are already providing the required knowledge transfer and sustainable livelihoods for communities. We plan to transform additional 500 pastoralists to settled dairy farmers under the DDP model. Already over 100,000 people have been positively impacted around these communities.”

Numbers do not lie. Statistics published by Dairy Chain in 2014 put the annual demand of milk in Nigeria at 1.1 billion litres, with estimated annual production around 400 million litres. This, therefore, puts demand-supply gap at 700 million litres.

Official data from Nigeria’s Ministry of Agriculture show that the country imports dairy worth $1.3 billion annually. The dairy products come from different parts of the world, especially from the Netherlands, the UK, China, France and other countries.

Less than 10 percent of the raw milk is sourced local milk, meaning that much of raw material (raw milk) is imported.

Nigeria’s dairy industry needs deep-pocket investment to meet the yawning local demand. But meeting the local demand requires developing the backward integration segment to ensure local sourcing of raw milk. This has an advantage of cutting down currency and foreign exchange risks.

In Nigeria today, FrieslandCampinaWAMCO remains the only player that is changing the status quo in dairy production, especially in the backward integration segment. It started a programme called the Dairy Development Programme (DDP) in 2011, with a target to source more milk from Fulani farmers. The company brought Fulani herders together in five communities in Oyo State, supporting them with training, water, cross-breeding, new methodologies and infrastructure to boost milk production from cows. The company also provides a ready market for the Fulani farmers, buying as much milk as can be produced. One of the biggest advantages of this is that it prevents cows from roaming the farms, thereby curbing farmers-herders clashes and ensuring copious production of healthier milk. A cow that does not roam about produces much more milk than the other which moves from place to place, experts say.

This programme is already going on in Fasola, Maya, Saki, Iseyin and Akele, with a bulking centre ( a place the company pools all the milk into a truck and moves it to the factory).

As highlighted by Langat, the DDP has supported over 3,500 local dairy farmers (including women) to expand their investment opportunities as the milk collected from the dairy farmers is used in the local manufacturing of Peak evaporated milk.

Hence the proposed €23 million new investment by the dairy firm is expected to expand local milk production and include many more herders in the fold. This will not only reduce poverty and unemployment, but will also reduce unnecessary clashes and deaths resulting from farmers-herdsmen conflicts. More so, it will steer competition among herders and enable them to adopt global best practices. Again, such investment will equally help FrieslandCampina begin to consider extending DDP programme beyond Oyo State, which, if done, will make bigger impact in terms of job creation, GDP growth, conflict resolution between farmers and herdsmen, among others.

ODINAKA ANUDU