KENYA – Uganda is targeting the Kenyan dairy market which expected to grow at 3.5% annual rate with a projected 12.6 billion in liters by 2030, reported the EastAfrican.
According to Mr Nixon Sigey, the chairman of Kenya Dairy Processors Association, increased inception of Ugandan milk in Kenya could be attributed to lower production costs in Uganda, which allows processors to sell their products at low prices.
Uganda is getting into the Kenyan market through exports including its brands Lato Milk and Fresh Dairy, which all have seen significant entry in the local market.
Lato Milk which has a shelf life of 90 days without refrigeration and is the dominant brand in particularly Kenya, Fresh Daily has also been making inroads.
Fresh dairy, a jointly owned company by Kenya’s Brookside Dairy and Ugandan government, is the country’s leading processor with a capacity of 560,000 litres per day and its exports have grown from US$13m in 2015 to US$18m last year.
Pearly Dairy, Uganda’s second largest processor owned by Midland Group of Dubai, has a daily capacity of 500,000 litres, and plans to invest in a processing plant in Kenya, according to report by the East African.
Development in the dairy sector coupled with a unique approach to dairy farming seems to be the factors cementing rivalry between Uganda and Kenya, making Uganda a key exporter of milk and milk products, with the value of exports rising from nearly zero 10 years ago to about US$80m.
To cut on costs, dairy farmers in Uganda have adopted the extended grazing system as opposed to the Kenyan zero grazing, pushing its milk production from about 500 million litres in 2015 to 2.2 billion litres, said Rinus van Klinken, the project manager of the Netherlands-funded Inclusive Dairy Enterprise project in Uganda.
Although inability to penetrate into the other East African countries like Rwanda has been blamed on low demand and purchasing power, tariff restrictions and unfavourable trading policies are said to have affected exports especially in Tanzania.
Mr Steven Aikiriza, a Ugandan research representative at International Farm Comparison Network, told Daily Monitor during an interview that whereas Ugandan milk products have been penetrating Kenya they are yet to make significant inroads in Tanzania and Rwanda.
Uganda currently produces 2.2 billion litres, according to Dairy Development Authority (DDA).