Pearl Dairy ventures into honey production injecting US$2.7m worth of investment

UGANDA – The largest dairy processor in Uganda, Pearl Dairy Farms is seeking to diversify into commercial honey production, investing more than Ush10 bn (US$2.7m) into the venture.

According to reports by Daily Monitor, the dairy processor will undertake the initiative in partnership with local dairy farmers as it seeks to diversify both the company and farmers’ incomes, given challenges that have faced the milk production and processing industry.

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More than 10,000 dairy farmers in the south western districts of Ntungamo, Kabale, Lyantonde, Mubende, Mbarara, Kiruhura, Bushenyi, Rukungiri and Sheema have been affected by an unprecedented increase in milk supply and plummeting prices amid a narrowing market, especially on the export side.

The project seeks to train women and youth in bee keeping to strengthen their capacity to produce more than 1,000 metric tonnes of verified and high-quality raw honey to be sold locally and exported.

Each participating family will be given at least 10 beehives and a dedicated team of apiculture development executives will be deployed to work with and train farmers to achieve maximum profitability.

The project, Mr Van den berg, Pearl Dairy project manager said will be done in phases with the first phase, which seeks to have the first batch of honey on the market by January 2021, already ongoing.  

He revealed that one of the key target markets will be Europe where Uganda’s honey is already accepted but has not been able to leverage on demand due to challenges associated with quality and quantity.

Globally, honey is accepted as one of the most nutritious, healthy and natural foods packed with minerals, enzymes, vitamins and proteins.

According to a report by Zion Market Research, the global honey market was approximately US$ 7,678 million in 2018 and is expected to generate around US$ 10,336 million by 2025, at a CAGR of around 4.8% between 2019 and 2025.

The Ush10b (US$2.7m) investment will be a major boost especially with the COVID-19 pandemic which has had adverse effects not only on the dairy industry but the economy at large.

Date by the Dairy Development Authority indicate that milk production in the country has increased from 2.08 billion litres in 2015 to about 2.5 billion in litres in 2020.

Despite the increase in production, per capita consumption in Uganda is low standing at 62 litres which falls below the 220 litres per annum recommended by the World Health Organization (WHO).

With the rise in supply and low local consumption, the sector has been venturing into the export market which has also been meet with hurdles.

Earlier this year Kenya locked out milk products from Pearl Diary trading under its flagship brand LATO on claims that they had been illegally imported in the country without paying taxes and was flooding the market.

Pearl Dairy has also not been able to re-enter the Rwandan market that was locked to a number of Ugandan products.

But to tackle the hiccups, the dairy company recently announced it has expanded its footprint to Ethiopia, Malawi and South Sudan underpinned by the ratification of the Africa Continental Free Trade Area (AfCFTA) agreement.

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