Stepping Up Development of Local Dairy Industry
In renewing its Memorandum of Understanding, Precious Ugwuzor reports that
Outspan and Kano Dairy have stepped up development of local dairy industry
Extensive private sector participation in the agriculture sector is key to achieving faster growth. Hence, the federal government continues to encourage scaled engagement and investment in the sector by agribusinesses.
It is believed that by providing the right incentives for these players to pivot to backward integration programmes as part of their operating models, the heavy reliance on food imports, the consequent burden of food insecurity and FX scarcity can be addressed.
This is it. The private sector’s participation in the agriculture sector can help the smallholder farmers operating in the production segment of the value chain have access to a ready market for their produce.
They can also benefit from institutional training and support and mobilisation of finance, where necessary, through innovative support solutions. Activating these levels of contribution for the local agriculture value chain would serve as a timely game-changer.
Meanwhile, a segment of the agriculture industry that requires urgent private intervention is the dairy sector. It is reported that Nigeria has the fourth largest cattle population in Africa. Precisely, there are about 20 million cattle in the country; yet, the country has not been able to tap this huge cattle population advantage to raise its milk production level. Presently, local milk production output is 0.01 per cent of the overall global output. Considering the potential of the sector, this meagre output level is not acceptable.
The challenges hampering productivity in the local dairy sector are numerous. Highlighting these challenges, Dr Musa Suleiman, a dairy consultant who has worked on World Bank-assisted agriculture development projects, said, “When you look at the dairy industry in Nigeria there are about three to four key challenges confronting local dairy farmers. One is low milk yield associated with lack of access to affordable quality feed all year round and poor cow breeds. Two is poor pricing of fresh milk. Three is the perishable nature of the fresh milk due to lack of cold chain and transportation services.”
However, in line with the federal government’s dairy industry development agenda, one private firm which has taken the lead in addressing the challenges undermining the productivity of the industry in the past few years is Outspan Nigeria Limited, a subsidiary of ofi (olam food ingredients). The business continues to demonstrate its support for the government’s economic growth aspirations, as the government focuses on building the non-oil sector’s contribution to the GDP.
Through a partnership with the Kano Dairy and Livestock Husbandry Cooperative Union (KADALCU), Outspan has been able to establish four milk collection centres (MCCs) close to the smallholder dairy farmers in Kano State to address the challenges of milk collection locally.
The centers are equipped with adequate cooling systems powered by off-grid equipment to preserve the milk quality for off-takers. It has provided quality animal feed and carried out artificial insemination, vaccination exercises to improve the health of cows and their productivity level.
The business has also trained the smallholder dairy farmers, donated transportation and cooling systems to further optimize the milk quality for industrial use. These intervention efforts are impacting the local economy and livelihoods of farmers positively.
According to the chairman of the Kano Dairy and Livestock Husbandry Cooperative Union, Mr Usman Abdullahi Usman, “One of the goals of the union is to generate direct and indirect employment opportunities for the youth.
With the intervention of Outspan Nigeria Limited, we have been able to achieve this aim by securing motorbikes and tricycles, which have been issued out to the youth vendors to go to the Fulani clusters and collect the milk for processing at the milk
collection centres.”
Presently, the firm is extending its impact in the dairy sector. In December 2022, it renewed the Memorandum of Understanding with KADALCU to deepen the scale and impact of its backward integration programme in the sector. This renewed partnership will help develop the local dairy sector.
Speaking on the significance of the partnership framework, Praveen Paulsamy, the Vice President of ofi Dairy in Nigeria, said, “We are glad to have come this far in our local dairy value chain development journey. The Kano Dairy Union has proven to be an invaluable partner in this journey. It is only fitting to extend our partnership actions to keep scaling the development of the sector in line with the FG’s agriculture development and food security aspirations.”
Paulsamy explained that the renewed MoU would help Outspan sustain its investment in the dairy sector as well as move to the next phase of its multi-year sectoral development plan to help address the challenges around improving milk production in the country.
In addition to other efforts undertaken by various industry players, it is believed that the overall backward integration programmes embarked upon by Outspan will have a positive impact on the agricultural and economic development master plan of the government. Hopefully, smallholder dairy farmers will be able to increase their daily milk production level as more investments are likely to be channeled into the value chain.
Olam food ingredients (“ofi”) is a new operating group born out of Olam. ofi offers sustainable, natural, value-added food products and ingredients so that consumers can enjoy the healthy and indulgent products they love. It consists of industry-leading businesses of cocoa, coffee, dairy, nuts, and spices.
Ofi has built a unique global value chain presence including its own farming operations, farm-gate origination, and manufacturing facilities. ofi partners customers, leveraging its complementary and differentiated portfolio of ‘on-trend’ food products, to co-create solutions that anticipate and meet changing consumer preferences as demand increases for healthier food that’s traceable and sustainable.
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The renewed MoU would help Outspan sustain its investment in the dairy sector as well as move to the next phase of its multi-year sectoral development plan to help address the challenges around improving milk production in the country
MCC Photo 1: L-R: Mr Vipin Patel, National Sales Operations Manager, Dairy, Outspan Nigeria; Mrs Bilkisu Mahe Wali, Branch Controller, Central Bank of Nigeria, Kano; and Alhaji Ahmad Inuwa Kadani, Deputy Chairman Kura Local Government Area of Kano, during the opening of a new Milk Collection Centre (MCC), by Outspan Nigeria Limited in partnership with the Kano Dairy and Livestock Husbandry Cooperative Union (KADALCU) in Kura LGA, Kano
MCC Photo 2: L-R: Alhaji Usman Abdullahi Usman, Chairman Kano Dairy and Livestock Husbandry Cooperative Union (KADALCU); Mrs Bilkisu Mahe Wali, Branch Controller, Central Bank of Nigeria, Kano; Alhaji Ahmad Inuwa Kadani, Deputy Chairman, Kura Local Government Area, Kano, and Alhaji Balarabe Kura Muhammed, who represented the District Head of Kura, during a tour of one of the MCCs donated by Outspan Nigeria Limited to KADALCU in Kura LGA, Kano
MoU Renewal Signing Session: Alhaji Usman Abdullahi Usman, Chairman Kano Dairy and Livestock Husbandry Cooperative Union (KADALCU) (left) and Mr Praveen Paulsamy, the vice president of ofi Dairy in Nigeria (right), during the MoU renewal signing session with KADALCU, recently
