Ethiopia’s dairy company Lame Dairy invests US$14.5m in new processing facility

ETHIOPIA – Lame Dairy, subsidiary of Midroc Ethiopia Technology Group has opened a new dairy facility in Addis Ababa, constructed at a cost of Br 600 million (US$14.5m).

The new factory more than doubles the dairy processors capacity from 70,000 litres of milk a day to 160,000 litres, and will produce the long-life Shola Milk brand that can stay fresh for three weeks under refrigeration.

The new bottled product will enable distribution to far-off and remote areas, as well as reduce wastage. It will also produce other by-products such as cheese and yogurt.

Lame’s new facility started to be constructed in 2019 and the machinery installed were imported from Italy.  

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The processing is automated thus minimizes manual handling, ensuring production of high quality and safe products.

Lame Dairy was established in 2007 after MIDROC acquired Dairy Products Development Enterprise from the government for US$2.15 million (62 million Br.)

The company is one of around 40 milk processing companies in Ethiopia, producing over 200,000lt a day.

Packaged milk products are a relatively new phenomenon for the country, growing in tandem with the urban population, though not fast enough according to industry insiders.

Ethiopia has the largest inventory of livestock in Africa at 10 million. However, its productivity and commercialization remain low.

Ethiopian dairy processing companies produce over 200,000 litres a day

This is attributed to a poor supply chain, shortages of nutritious animal feed that helps cows produce better-quality milk in greater quantities and difficulty in getting support services.

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Also lack of regulatory policy and unfair competition from the informal sector, coupled with cheaper imports, pose a challenge for the growth of Ethiopia’s dairy industry.

Recent figures indicate that the livestock sector contributes about 12-16% of national GDP, 30-35% of agricultural GDP, 15% of export earnings and 30% of agricultural employment. Smallholder farmers represent about 85% of the population and are responsible for 98% of the milk production.

Another leading player in Ethiopia’s dairy market, MB Plc recently installed the company’s automatic UHT milk processing plant in Addis Ababa.

The new plant having a processing capacity of 40,000 litres per day, enables the dairy processor to produce the long-life milk with up to six months shelf life.

With the new investment, the company trading under the name Family Milk is seeking to venture into the export market in a bid to expand its base and increase earnings.

MB Plc is eyeing the Sudan, Djibouti and Somaliland markets, among others, reports New Business Ethiopia.

Other than producing both fresh and UHT milk, the company’s product lines include yoghurts, butters and cheeses.

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