KENYA – The Kenyan state-owned dairy processor, New Kenya Co – Operative Creameries Ltd (New KCC) has increased its share of raw milk intake from 23% to 35%, inching closer to Kenya’s largest dairy company, Brookside Dairy with 40% market share, according to latest statistics from the Kenya Dairy Board 2017 data.
New KCC recorded a 2% growth compared to the same year something that has been embraced by both farmers and other stakeholders in the dairy industry, reported Capital Business.
According to the data, Githunguri Dairy Farmers Co-operative, maker of Fresha brand comes in the third position with a 10% market share but growth in the dairy sector has been foiled by insufficient milk from farmers in the better part of 2017 blamed on drought.
With the onset of heavy rains in most parts of the country, the sector is expected to bloom, attracting investments from both the public and private sector.
Brookside has been on a consolidation drive since 2007 having acquired other brands preparing its muscles in ceding the better part of the market share.
In February 2010, Brookside Dairy through private equity fund Aureos Capital, announced the acquisition of Spin Knit Dairy, with its Tuzo, Lea and Ever fresh milk brands and three years later acquired Buzeki Dairy Ltd, which owned the Molo Milk brand, then the leading brand in the market, ahead of New KCC and Brookside.
One of its latest deals include the US$34.79 million takeover of the Uganda business, Sameer Agriculture and Livestock and the recent acquisition of Delamere yoghurt brand causing a furore not only in Kenya but Uganda and Tanzania who decried of a possible monopoly.
The statistics show that Brookside had a market share of 44% in 2014 which has significantly dropped while that of New KCC’s has seen a steady rise since 2016 after expanding its plant to increase capacity.
The dairy sector is facing competition not only from big names but also small vendors who are said to be controlling 70% of the raw milk market.
To position itself at a better competitive edge, New KCC installed a US$695.5 million line for production of UHT milk with similar exercise at its Dandora plant in Nairobi.
Brookside recently increased producer prices to US$0.37 in escalating competition with other processors, according to Business Daily.