Capwell Industries is one of the most diversified food processing enterprises in Kenya. The company has been a trendsetter in the Kenyan market and is setting its eyes on new products and new markets in the near future. FoodWorld Media had a discussion with the company’s directors about their business.
Nairobi Bottlers is Kenya’s largest bottler of Coca-Cola range of products. The company has recently invested aggressively in its processes, packaging and people, thereby improving its efficiency, competiveness and sustainability focus.
This feature appeared in the May 2016 issue of Food Business Africa magazine
FoodWorld Media had a discussion with Duncan Kimani, the company’s Country Manufacturing Manager – Kenya and his team.
Alpha Grain Millers is one of the fastest growing flour milling businesses in Kenya. Started just four years ago, the company recently inaugurated a new wheat milling plant that has nearly doubled its production capacity.
This feature appeared in the January 2015 issue of Food Business Africa magazine
FoodWorld Media sat down with Mr. Osman Maalim Mohammed, the General Manager, and Mr. Mohamednur Khalif, the Managing Director to discuss more about the company.
INDUSTRY FOCUS: DAIRY INDUSTRY IN UGANDA
This article appeared in the July 2014 issue of Food Business Africa magazine. You can access the original article here: http://issuu.com/foodworldmedia/docs/food_business_june_july_2014
The dairy processing industry in Uganda is one of the most promising on the continent. Nearly non-existent a few years ago due to political turmoil, the sector has over the year’s taken advantage of good weather and rising population to post one of the fastest growth rates in Africa.
The story of the dairy processing industry in Uganda is a recent one, but with a long history behind it. Having achieved its independence from the British in 1962, Uganda went through a long period of coups and counter-coups from the 1960s all the way to the mid-1980s, when the present regime swept to power in 1986 and started the job of rebuilding an economy that had been battered by decades of war.
These decades of war ravaged Uganda’s agriculture and economy, and the dairy industry was not spared.
Dairy Corporation, once the country’s leading dairy collapsed in the middle of the war having been formed in 1967 with the aim of dairy development, dairy products marketing and dairy regulation in the country.
Further, the country’s national cattle herd declined from 8 million in 1970 to 3.5 million by 1985, dealing a severe blow to the country’s dream of being a leader in milk and beef production and processing.
With good tropical weather and adequate rainfall nearly throughout the year, Uganda is a dairy paradise. The process of rebuilding of the herd and the general dairy industry has taken nearly 30 years but the process has brought the dairy sector in this East African country immense benefits.
It is important to note that less than 10 years ago, Uganda was a huge importer of dairy products from UHT milk and fermented products, mainly from Kenya, despite the abundance of milk in the country due to limited infrastructure to collect and process the milk in the country.
This has since changed, with the country becoming a net exporter not only of processed UHT milk but also of milk powder, ghee, butter and cream to Kenya and the region.
“Total national milk production has grown from 365 million litres in 1991 to over 1.4 billion by the end of 2006 with per capital milk consumption growing from 16 litres in 1985 to 50 litres by end of 2007”, according to Dairy Investment Opportunities in Uganda, a report by SNV released in 2008.
National milk production stood at 1.8 billion in July 2012, according to the Dairy Development Authority (DDA). Currently milk volumes stand at about 2.0-2.5 billion litres annually, according to our estimates.
The dairy industry in Uganda contributes about 9% of the country’s Gross Domestic Product (GDP). The sector is a significant contributor to the nutritional, economic and employment opportunities of the rural communities, with dairy farming being a major activity in the south western, central and north eastern part of the country.
Central (around Kampala) and south western (near the Rwanda border) milk sheds together contribute 50% of the total national production, and can be classified as milk secure. The rest of the country face a milk deficit at various times during the year, especially during the dry season, with yields plummeting accordingly during these lean times
The sector is dominated by traditional breeds of cattle, long used to the weather and husbandry practices as practiced by the herder communities, conditions that many exotic breeds would not manage to withstand.
Exotic breeds have been introduced but their adoption is still limited to a few farms, with the majority having mixed breeds, thereby affecting the productivity of a majority of the farms.
Challenges in the dairy value chain
The dairy industry in Uganda faces a number of constraints that have affected and will continue to negatively affect the ability of the sector to reach its full potential. The sector is further beset by legacy issues: the dairy keepers are not keepers of animals for business, but are culturally bound to their animals as part of their culture and lifestyle.
As long as the majority of the farmers continue to be ‘recreational’ farmers, the industry, despite the gains it has made in the last 30 years will struggle to find its place in world trade.
These constraints however continue to be tackled as the country gears up to play a major role in the regional milk market.
Infrastructural inadequacies – Uganda suffers from lack of adequate infrastructure capacity both at the farm and in processing. Most of the high producing areas lack good quality roads, electricity, cooling facilities and piped water that are critical in preserving milk quality at the farm.
Post-milking loss at the farm is therefore high especially in high production areas during the flush period, leading to loss of farmer’s income. Lack of cooling facilities and electricity to keep the milk in cold conditions after milking negatively affects milk quality and farmer’s capacity to use milk as a source of income
At the processing level, although installed capacity by dairy processors has been boosted by a number of key investments, dairy processors have to contend with lack of good adequate cooling facilities on the farms, with a majority having to construct their own cooling centers. Dairies are still grappling with high costs rising from inadequate and expensive electricity and costs of distribution of the processed milk
Seasonability of milk supply – The supply of milk can swing from a surplus to a drastic deficit in the space of one month, disrupting production plans and processor margin expectations, with milk prices more than doubling from the normal USh 450 per litre to USh 1200 per litre in the same period.
The country experiences its low period during the months of June to August and also around December to February, with the rest of the year having adequate supplies.
Milk quantities can fall by as much as 70% during the height of the lean period, seriously affecting factory operations
Poor milk quality – Poor husbandry and inadequate cooling facilities on the farm have contributed to milk of marginal quality getting to the dairies. Considering that dairies could be located 300 km away from the milk collection area, significant losses are experienced by processors and farmers alike when milk cannot be accepted by the dairy or the processor has to absorb losses that occur due to lack of storage once the milk has been received.
To add to this is the proliferation of milk sellers and vendors in the villages and towns, who provide cash payments to farmers but whose skills and honesty cannot be guaranteed, risking consumer health and safety.
Low productivity at the farm level – Despite the abundance of water and green all round, the reliance of the dairy community on the weather is a huge impediment to the growth of the industry in Uganda. Farmers, long used to feeding their animals on pasture, have found it difficult to adopt intensive farming which can lead to higher production. The use of animal feed to supplement pasture is rare and will take time to be practiced by a majority of farmers.
This is worrying, as the country has recently installed capacity that requires more milk to be sourced from the farms all year round, so that the country can take advantage of the rising local and regional opportunities. This can stall the country’s progress, with some of the processors exiting or losing money from their investments.
The industry in Uganda is regulated by the Dairy Development Authority, a body tasked with the development of the dairy sector as well. Under an Executive Director DDA started its operations in 2000 having been created in 1998, following the enactment of the Dairy Industry Act.
The Dairy Industry Act replaced the previous Dairy Master Plan of 1993. The Dairy Industry Act created the DDA and actualized the privatization of the Dairy Corporation, which was leased to the Sameer Agriculture & Livestock Ltd in 2006.
According to the East African Agribusiness magazine liberalisation encouraged private sector investment in milk collection, transportation processing, milk distribution and marketing – with the result that from 1993 to 2006, fifteen medium to large scale processing plants were setup which increased the total national installed capacity to about 400,000 litres per day, even though, most of them were operating at 45% capacity utilisation.
Sameer Agriculture & Livestock
SALL is Uganda’s leading and the most diversified dairy company, producing extended shelf life and UHT liquid milk, yoghurt, butter, cream, milk powder while also distributing ice cream products from its Kenyan sister company. The dairy leased the former Dairy Corporation of Uganda plant in Kampala, following the liberalization of the sector in 1996 and has invested further in the milk powder and juice plants plus other facilities including cooling centers around the country.
Jesa Dairy Farm
Located on a farm in Busunju near Kampala, Jesa Dairy Farm belongs is part of the Mulwana Group. The dairy has been in existence since the 1980s. The dairy produces fresh milk, ESL milk and flavoured and fruit yoghurt.
The dairy commenced operations in 2013, producing milk powder and butter milk mainly for export. The company has indicated on its website that they will produce other milk products in future.
The new kid on the block, Amos Dairy has an installed capacity of 400,000 litres per day according to press reports, with a goal of processing 2 million litres in a few years. The company is currently producing casein, and is planning to produce whey, anhydrous fat and ghee in future.
The company, located in Mbabara is the only major processor of cheese in Uganda.
The future prospects for the dairy industry is bright, driven by an increasing youthful population, positive outlook on production increase (driven by increased productivity and introduction of dairy farming in non-traditional dairy areas e.g. the North), and increasing incomes and increasing urbanization.
The sector is ripe for acquisitions though. Although Sameer Agriculture & Livestock has been a significant player, turning a once state-owned factory around, there are reports that the business has struggled somewhat in the market. Other players are fairly small to make a big move in the sector, and are better off being bought by bigger players that have the muscle to make aggressive in roads in the sector.
We foresee this sector either consolidating or having a new batch of foreign owners in the next few years.
Table: A matrix of what major dairy companies produce
|Sameer Livestock & Agriculture||Fresh Dairy, Daima||
Fresh milk, UHT milk, ESL milk, butter, ghee, yoghurt, milk powder, juice.
Ice cream (distributed from Kenya affiliate)
|Jesa Farm||Jesa||Fresh milk, ESL milk, yoghurt|
|GBK Dairy||Classic||UHT milk, yoghurt|
|Hillside||Hillside||UHT milk, yoghurt|
|Rainbow Industries||Rainbow||UHT milk, ice cream, yoghurt|
|Pearl dairy||Lato||Milk powder, butter oil|
|Kookee Enterprises||Kooksy||Ice cream, yoghurt|
SPECIAL REPORT: Can Africa sort out the Aflatoxin problem?
Africa faces many challenges on the food front. The continent is grappling with efforts to feed its increasing population, projected to reach 2 billion by 2050, by the African Union. The presence of aflatoxin in foods has adversely affected not only the grain milling sector of the economy but also the health of the population and the ability of the Continent to trade with the rest of the World.
Perhaps no issue straddles the cereals sector in Africa like the issue of aflatoxin. The problem of aflatoxin in many African diets has had a huge but, many a time, silent effect on the population of Africa.
The presence of aflatoxin in maize, peanuts and other cereals is extremely critical in a continent where there are many challenges; including low productivity of cereals due to poor agronomic practices, high levels of post-harvest losses, low levels of sophistication in processing and handling of grains, frequent shortages that often lead to famines, and high consumer prices of grain
The issue of aflatoxins in cereals is a huge impediment to the nutritional and economic well-being of Africa’s population. For the cereal handling and milling sector of the food industry, the economic and nutrition effects of aflatoxin in grains are huge.
This is an issue that worries Stephen Muchiri, the CEO of the Eastern African Farmers Federation (EAFF), Nairobi, Kenya, to no small extent.
Mr Muchiri, who heads this regional farmers association, contends that “national governments don’t seem to be doing enough to create awareness on this issue to farmers, traders, processors and consumers; establish and invest in data collection and enforce the regulations especially on standards of various products”.
He also adds that farmers are “not at all equipped with the know-how or alternatives or tools for control of aflatoxin”.
Aflatoxins tend to affect Africa quite drastically as the entire continent falls within the 40 N and 40 S of the equator, where aflatoxin prevalence is most common.
In Africa, the problem is caused by various factors such as drought, poor agricultural practices, as well as improper storage and postharvest handling systems. It is further exacerbated due to heavy dietary reliance on staple foods such as maize and groundnuts which are highly susceptible to aflatoxin, according to Amare Ayalew, PhD., the Program Manager for Partnership for Aflatoxin Control in Africa (PACA), an Africa wide forum based at the African Union, based in Addis Ababa, Ethiopia.
What are aflatoxins?
Aflatoxins are toxic metabolites produced by certain fungi in/on foods and feeds. They are mainly caused by some strains of Aspergillus flavus, but also most if not all strains of A. parasiticus, A. niger and A. nomius.
The occurrence of aflatoxins iscommon inpeanuts, tree nuts, maize, and animal feeds while they are occasionally found in milk, cheese, cottonseed, nuts, almonds, figs, spices, and a variety of other foods and feeds. Milk, eggs, and meat products are sometimes contaminated because of the animal consumption of aflatoxin-contaminated feed
There are 4 main types of aflatoxins that are important as contaminants of food and feed: B1, B2, G1 and G2; and those that are metabolic products: M1 and M2
Aflatoxin B1 and B2 are so named because they exhibit blue fluorescence under UV light; G1 and G2 exhibit yellow-green fluorescence under the same conditions. M1 and M2 were first isolated from lactating cows fed aflatoxin feed, according to Cornell University College of Agriculture and Life Sciences
Aflatoxins have been associated with various diseases, such as aflatoxicosis, in livestock, domestic animals and humans.
It is critical to note that aflatoxin contamination starts at the farm, and that measures to control the menace should start when the produce from planting, harvesting, post-harvest handling, storage and distribution. While on the farm contamination is the least appreciated by many, further contamination can occur during drying, especially on the soil, and at storage or transport.
On the farm, aflatoxins contaminate the crop if harvesting is delayed and if the moisture content of the crop exceeds the required for crops stored at the farm after harvest. Bird and rodent attack of the crop at the farm is a great contributor to aflatoxin contamination.
Certain environmental factors influence the occurring of aflatoxin. The extent of contamination will vary with geographic location, agricultural and agronomic practices, and the susceptibility of commodities to fungal invasion during pre-harvest, storage, and/or processing periods
The fact that the toxin is invisible to the naked eye creates a problem for farmers (and traders and processors) who work on the principle of ‘seeing is believing’, according to Mr Muchiri of EAFF. There is also the common wisdom that visibly damaged and rotten grains find easy use in feeding of livestock at the farm, which transfers the problem to the animals
Mr Muchiri contends that predisposing factors, including high temperature related stresses and droughts, wet harvest, insect damage and high moisture post-harvest conditions, are common in most African farms, thereby making the aflatoxin problem have a huge burden on the continent.
Aflatoxins affect the population
The Food and Agriculture Organisation of the UN approximates that 25% of the world’s crop is affected by mycotoxins, the majority of which is aflatoxins, or about 4.5 billion of the current 7 billion population of the world. In sub-Saharan African alone, an estimated 26,000 people die annually of liver cancer associated with aflatoxin exposure, according to IFPRI
Aflatoxins and other mycotoxins affect trade, consumer safety and the economic health of the population and countries. Aflatoxins exhibit potent carcinogenic effect in susceptible laboratory animals and have acute toxicological effects in humans.
Kenya has faced some well-known challenges with aflatoxin, with the 2004 case of aflatoxicosis that led to the death of 125 in its Eastern Province, being the most publicized. According to the International Food Policy Research Institute, (IFPRI), Washington USA, investigations by the US Centres for Disease Control & Prevention (CDC) and the World Health Organisation (WHO) after the 2004 case showed that aflatoxicosis was the cause of these deaths.
The effect on trade is also enormous. Dr Ayalew of PACA confirms that it is estimated that Africa loses US$ 450 million a year from lost export trade due to aflatoxins.
With the CDC recently showing through a study that over 60% of the Kenyan population is chronically exposed to aflatoxin, Charity Mutegi, PhD., a researcher at the Kenya Agricultural Research Institute (KARI) and who is Kenya Country Coordinator for the Aflatoxin Biocontrol Project at International Institute of Tropical Agriculture (IITA), is concerned about the adverse effect of aflatoxin on the economy and health.
The award winning Dr Mutegi, was the 2013 recipient of the Norman Borlaug award for Field Research and Application for her work on aflatoxins.
Dr Mutegi, who spearheaded efforts to identify the cause of, and solution to, a deadly outbreak of aflatoxicosis in Kenya in 2004-05, says that aflatoxin leads to loss of livelihoods caused by poisoning; economic burden of treating aflatoxin related illnesses; loss of trade when food is condemned in markets with stringent regulatory and testing mechanisms; and nutritional effects that cause stunting in children and immune suppression that affect the lives of the children throughout their lifetime
“The devastating effects of maize grain contaminated with aflatoxins on many Kenyan households cannot be understated. Several lives have been lost, tons of staple food destroyed, millions of shillings worth from the livestock sector have been lost; and by extension, several livelihoods have been destroyed through death and/or economic disempowerment,” Dr Mutegi says
Research has shown that aflatoxins cause liver damage, decreased milk and egg production in birds and animals, recurrent infection as a result of immunity suppression, in addition to embryo toxicity in animals consuming low dietary concentrations.
Young children and the young of animals are most susceptible, although all ages are affected but in different degrees for different species. Aflatoxin causes stunting in children which results to delayed development
Clinical signs of aflatoxicosis in animals include gastrointestinal dysfunction, reduced reproductivity, reduced feed utilization and efficiency, anaemia, and jaundice. Nursing animals may be affected as a result of the conversion of aflatoxin B1 to the metabolite aflatoxin M1 excreted in milk of dairy cattle,
Aflatoxins are also known to cause cancer in animals, with aflatoxin B1, M1 and G1 having been shown to cause various types of cancer in different animal species. However, only aflatoxin B1 is considered by the International Agency for Research on Cancer (IARC)as having produced sufficient evidence of carcinogenicity in experimental animals to be identified as a carcinogen.
Recent research that aflatoxin may hasten the spread of infectious diseases by suppressing the immune system.Pauline Jolly, PhD professor in the Department of Epidemiology at the University of Alabama, US, has produced work that suggests aflatoxin exposure is having particularly detrimental effects in areas with high HIV rates, according to theinformationdaily.com
In the study, 314 HIV-positive Ghanaians, who had not yet started taking antiretroviral medication, were tested both for their exposure to aflatoxin and their HIV ‘viral load’, which translates to likelihood of transmission from person to person. It was found that those with the highest exposure to aflatoxin were also 2.6 times more likely to have a higher than average viral load.
Control measures exist
The control of management of aflatoxins is a complex problem and requires an integrated approach, according to Dr Ayalew of PACA. A combination of technology solutions, effective regulations and standards, and enabling environment could bring about mitigation and control of aflatoxin on the continent, he adds
“It is important for producers to realize that good agricultural practices (GAP) represent the primary line of defense against contamination of cereals with mycotoxins, followed by the implementation of good manufacturing practices (GMP) during the handling, storage, processing, and distribution of cereals for human food and animal feed”. This statement, from the Codex Alimentarius, is perhaps the most critical in the possibility of the African continent on reducing the impact of aflatoxin in its food systems
Well tried and tested methods exist, including drying grains to the right moisture content (water activity); separation of grain using colour sorters, and fairly traditional ways, including the application of ash or decorticating of the grains, which have been found to be effective ways to reduce aflatoxin.
Bio-control at the farm
It is worth noting that Codex Alimentarius advices that good agricultural practices on the farm are the first line of defense in dealing with aflatoxin.
According to Dr Mutegi, the biocontrol product for aflatoxin management currently under testing in Kenya is Aflasafe KE01. Aflasafe KE01 is a mixture of spores of the bio-control atoxigenic strains (non-toxigenic indigenous Aspergillus flavus fungi) that are coated onto sterile grain (sorghum), which serves as carrier and food for the fungi. The atoxigenic strains grow and multiply on, and disperse from, the carrier to initiate displacement of aflatoxin-producers in the field. The product is applied 2–4 weeks prior to crop flowering.
The product is broadcast onto the crop and soil at an application rate of 10 kg/ha. In Kenya, field testing for an even lower rate of 5kg/ha is underway, translating to a direct cost benefit to the farmer through reduced pricing as a farm input.
Dr Mutegi contends that this method has several advantages including: Modifications to fungal communities caused by application of bio-control strains carry over through the value chain, discouraging contamination in storage and transport, even when conditions are very favorable to fungal growth; Positive influences of atoxigenic strain applications carry over between crops and provide multi-year benefits, with a single application of atoxigenic strains benefiting not only the treated crop but also rotation crops and second season crops that miss a treatment; and that because fungi can spread, as the safety of fungal communities within treated fields improves, so does the safety of fungal communities in areas neighboring treated fields.
The effect of this treatment is therefore carried over year into year and the net effect is that the crop is protected throughout the supply chain. If this can be applied to African farms, and these benefits realised, the effect of aflatoxin in Africa will surely reduce drastically
Manage the whole supply chain
Grain millers and other food handlers and processors are advised to “embrace Total Quality Management systems that ensure the quality and safety of material as well as processes”, advices Mr Mutegi. Through such systems, sources of raw material will be known, production lines will be checked for sources of contamination, storage will be monitored, including packaging and even transportation of finished products. All these steps are possible entry/contamination points for aflatoxin.
African efforts getting organized
For a problem that engulfs the whole continent and which as Dr Ayalew, the program manager of the pan-African Partnership for Aflatoxin Control in Africa (PACA), reckons requires a ‘comprehensive, systematic and multi-sectoral approach’, it is good to note that continent wide and regional approaches are beginning to be formed to combat aflatoxin
This is where the (PACA) comes into the fore. PACA has a vision of an “Africa free from the harmful effects of aflatoxins”.
PACA was formed as a “consortium that aims to coordinate aflatoxin mitigation and management across the most affected sectors of health, trade and agriculture in Africa. As a continental, inter-governmental body, PACA’s role is to provide leadership and coordination for Africa’s aflatoxin control efforts, acting primarily as catalyst, facilitator, partnership and knowledge broker, project developer and information clearing house as well as knowledge management hub related to aflatoxins”.
“PACA also advocates for the establishment of enabling policies and institutions by working with regional economic communities and countries, for increased investment and the mobilization of resources, and acts as a grant maker to support catalytic projects on aflatoxin control priority areas while simultaneously promoting capacity building through the grants”, according to Dr Ayalew, the program manager.
Quite a mouthful mandate, but Dr Ayalew believes that with PACA strategically located within the African Union Commission (AUC), this provides the forum with “the opportunity to utilize the convening power of the AUC and the array of organs, institutions, and mechanisms to facilitate integration, harmonization, and joint action”, and hence should find it easier to deliver on this mandate.
PACA also works with Regional Economic Communities as well as other stakeholders such as technical organization, farmers’ organizations and the private sector. This is where the goals of farmers (as represented by Mr Muchiri’s EAFF, the Governments, researchers, food companies and other stakeholders meet
To add to these efforts, several regional bdies have been formed in the recent years including the Capacity and Action for Aflatoxin Reduction in Eastern Africa (CAAREA), which aims to reduce aflatoxin in Kenyan and Tanzanian maize.
The CAAREA project “will contribute to aspects of the PACA overall aims for Africa, bringing together a multi-disciplinary, multi-national team of scientists to help address the spectre of aflatoxins in eastern Africa” according to its website.
The project includes several partners including KARI, BecA-ILRI Hub, Tanzanian Agricultural Research Institute (ARI), The Commonwealth Scientific and Industrial Research Organisation (CSIRO) of Australia, the Tanzania Ministry of Agriculture and Food Security, Cornell University, among others
The project team is working to establish a regional mycotoxin analytical shared platform at the Biosciences eastern and central Africa - International Livestock Research Institute Hub (BecA-ILRI Hub). The platform will include a range of technologies including novel diagnostics well suited to the African context.
These include state-of-the-art, commonly accepted aflatoxin diagnostics and sample preparation and diagnostics technologies (Romer Mills, ultra high performance liquid chromatography mass spectrometry (UHPLC), enzyme-linked immunosorbent assay (ELISA) and immunocapture-fluorometry); as well as new technologies suited to the African research and crop improvement context (near infrared spectroscopy (NIR)), it adds
Other efforts include the Aflatoxin Policy and Program for the East Africa Region (APPEAR) which aims to ‘provide a comprehensive package of training, technical assistance and pilot operational research activities relevant’ to aflatoxin.
To add to these efforts, the East African Community (EAC) recently formulated the Regional Working Experts Group on Aflatoxins (REWGA) in March 2014 in Burundi. REWGA’s mandate is to provide technical and advisory guidance to EAC Sectoral Council on Agriculture and Food Security and key stakeholders in the region on prevention and control of aflatoxin in the region.
Aflatoxins are not alone
Aflatoxins are not the only mycotoxin groups to worry about, for there are many types of mycotoxins present in our food chain.
Mycotoxins are toxic metabolises produced by fungi, specifically moulds growing on foodstuffs or animal feeds. Mycotoxins, though part of the food chain for centuries, were just discovered in the 1960s and 1970s, with the conclusion that they in fact had been responsible for several cases of animal disease and death. In the decade following 1970 it became clear that mycotoxins have been the cause of human illness and death as well, according to the FAO
It has been established that mycotoxins had been responsible for ergotism, which killed thousands of people in Europe in the last thousand years, alimentary toxic aleukia (ATA) which was responsible for the death of many thousands of people in the USSR in the 1940s; stachybotryotoxicosis, which killed tens of thousands of horses and cattle in the USSR in the 1930s; and aflatoxicosis, which killed 100,000 young turkeys in England in 1960 and has caused death and disease in many other animals, and perhaps man as well, according to Wikipedia
The fact that studies report that 75-100% of the samples contain more than one mycotoxin is an important consideration in the management of mycotoxins.
Multiple occurrences of mycotoxins occur due to the fact that (i) mostfungiare able to simultaneously produce a number ofmycotoxins, (ii) commodities can be contaminated by several fungi, and (iii) completed feed is made from various commodities, according to a paper, Current situation of mycotoxin contamination and co-occurrence in animal feed--focus on Europe by Streit et al.
There are five major groups of mycotoxins that occur in food products: aflatoxins, Zearalenone, ochratoxin, fumonisins, and Deoxynivalenol
Interview with ICRISAT Director General, William D Dar, PhD
AFRICA MUST RISE UP
Dr William Dollente Dar is the Director General of the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT). Dr Dar insists that the growth of African agribusiness relies on research on some of the crops that are well adapted to the continent, and that Africa must rise up to the challenge to feed its growing population.
Q: What is the role of ICRISAT on food security?
A: ICRISAT is the global institute dedicated to look at the issues on food security and poverty reduction in the dry lands tropics of the world, with a focus on Asia and Africa. We work on five crops: sorghum, pearl millet, groundnut, chick pea and pigeon pea. These are the nutritious crops for the people in the dry tropics areas of Asia and Africa
We are elevating the game in many respects in terms of these crops being given attention by countries and by Govts.
If you compare today there is a policy distortion in terms of attention given to corn, wheat and rice to the disadvantage of these crops, which are very nutritious and resilient for Asia and Africa.
Our purpose to have the countries in dry land areas become prosperous and see to it that these crops are given the kind of attention they deserve
Q: How is ICRISAT encouraging the planting and consumption of these crops?
A: Let me give you an example. Pigeon pea was not a commercial crop 10 years ago, whether in Asia or Africa. But because of our work and our partnership with some governments, from a negligible hectarage now the crop is grown on 1 million hectares.
It is becoming a cash crop because most of the produce is exported to India – the farmers are therefore more food secure and they also have more money to take care of their daily needs. This is an example with an impact we have done in sub Saharan Africa
The other example is chick pea. Chick pea is as important as pigeon pea. From a negligible hectarage as well, now it is increasing now to almost 1 million hectares in Eastern Africa. It is research for development that we want to do
That was the case 5 years ago, now we are beginning to ask ourselves: how can we add more value to these raw products? We therefore now incubate businesses, together with our partners FARA and UniBRAIN.
In Kenya, we are starting with the sorghum value chain. Same goes for bananas in Uganda and many more crops in other countries
We are pursuing inclusive value chain, and I stress inclusive value chain, so that it is not only big business that gains, but the small holders benefit as well.
Q: Tell us about sorghum
A: Sorghum is regaining attention because of drought. If you compare farmers who plant corn with those who plant sorghum, more often than not their crop fails because of drought. Sorghum is a very hardy crop.
Q: How does ICRISAT connect Africa to India?
We triangulate collaboration between India and Africa. As part of UniBRAIN we are setting up a number of incubation centres in Africa. We are also setting up 5 food testing laboratories. We are investing and technically assisting and implementing these projects. The laboratories will be in Kenya, Uganda and other countries, in partnership of the ministries of industrialisation
What advice can you give Africa, even as it dreams of its Green Revolution?
Africa must take ownership, but you do need partners. You need partners who can help, work with you together. You need partners that have resources and technologies. You should bring in strategic partners. The vision to rise from poverty and hunger has to be there to hav your own Green Revolution. Africa must rise up.
ICRISAT is a non-profit, non-political organization that conducts agricultural research for development in Asia and sub-Saharan Africa. ICRISAT is headquartered in Hyderabad, Andhra Pradesh, India, with two regional hubs and four country offices in sub-Saharan Africa. It is a member of the CGIAR Consortium. CGIAR is a global agriculture research partnership for a food secure future.
ICRISAT research work is centered on five key crops: sorghum, pearl millet, chick pea, and pea (ground) nuts
The dairy industry in Kenya
The dairy industry in Kenya is one of the largest and sophisticated in Africa. With an estimated 5 billion litres of milk produced in the country, the dairy industry is an important player in the economic and nutritional aspects of the Kenyan population. Despite the huge opportunities ahead, the sector however, faces a number of challenges.
The hullabaloo that has been generated by the recent introduction of VAT on processed liquid milk products in Kenya is an indication of the importance of the dairy sector to Kenya’s economy.
Although the Government later retracted its intended imposition of VAT on this important item following the hue and cry from consumers, Kenya Dairy Board and other stakeholders, milk had already become the ‘poster product’ for all those who had raised objections to the VAT Act.
Rather than face a ‘milk revolution’ and have the Government’s well intended purpose to streamline the VAT tax muddled with controversy, the National Treasury removed liquid processed milk from its original list
The dairy industry in Kenya has been and continuously plays an important role in not only in the economy but also the general well-being of the Kenyan population. Nutritionally, many consumers appreciate that milk is a good source of nutrition.
According to a report, Consumer Milk Quality Perception, by USAID’s Kenya Dairy Sector Competitiveness Program released in 2010, a majority of Kenyans have a high degree of positive perception of milk, with 62% of respondents associating milk with high protein content. Many consumers like milk as a balanced snack and for its good taste
The positive perception and the fact that Kenya is one of the highest consumers of milk in developing countries provide the dairy industry with a huge opportunity to grow further.
The importance of the sector
The dairy industry accounts for 14% of agricultural GDP and 6-8% of the country’s GDP. According to USAID the industry generates an estimated 1 million jobs at farm level and an additional 500,000 in direct waged employment and another 750,000 jobs in support services.
Dairy sector is a vital sector in poverty alleviation in both the rural and urban areas as it contributes to food and nutritional security and increased household incomes.
Kenya’s 1 million stockholders keep the largest dairy herd in Africa (larger than South Africa) according to Jimmy Smith, Director of ILRI. The industry contributes about USD 2 billion to the country’s GDP, according to USAID, considering the sector includes farmers, traders and vendors, collection centres, processors, and retailers.
Kenya’s dairy production sector is characterised by a huge number of small-scale farmers, who make up 70-80% of the total production. The co-operative system contributed significantly to the development of the dairy sector in the country with the emergence of the Kenya Co-operative Creameries.
The Rift Valley and Central regions produce the bulk of the milk in the country. However, other regions, including Eastern, Nyanza and Western regions also produce significant quantities of milk.
Kenya has an estimated herd of 3.5 million improved dairy animals, 9 million zebus, 12 million goats, and 900,000 camels. Cattle account for 88% of the milk produced whereas camels and goats account for the rest. The country is unique in Africa, producing enough milk for local consumption and exporting some products to a number of countries.
Of the total milk produced, about 60% is marketed through traders, cooperatives, hotels and kiosks. An estimated 84% of the milk produced is sold in raw form to consumers ranging from rural to urban dwellers, according to the Regional Dairy Centre of Excellence (RDCoE).
Kenya’s total milk production is estimated to be about 5 billion litres annually.
Table 1: Milk sold through the formal channels in Kenya
Quantities, mln ltrs
Kenya’s volume of milk processed per year through the formal channels has grown more than 150% in the decade to 2013. Source: KDB
Kenya exports substantial quantities milk products to the region and internationally into Asia and North Africa. These products include long life milk, milk powder and ghee. The quantity of milk and milk products exported rose from 100,000kg in 2001 to 10.9 million kilogrammes in 2008, according to KDB.
Dairy imports, specifically from New Zealand and the European Union have gone down over time as Kenya becomes increasingly more self-sufficient in milk and milk products. Imported products include butter, cheese, milk powder, ice cream and cream
Challenges in the sector
- Seasonal fluctuation of production – The yield per cow and by extension the amount of milk produced in Kenya fluctuates greatly during the year. This has a great effect on the processors’ ability to absorb all the milk availed to them at any time during the year, with a period of surplus followed shortly by that of low milk volumes.
The sector therefore has excess capacity during some months in the year that lie idle waiting for the flush period in times of drought.
The Feb/March to May/June months are usually periods of low production. During periods of excess, milk wastage is commonly reported, with farmers experiencing loss of incomes, with the processors sometimes being forced to turn away farmers who deliver their milk to them
Table 2: Monthly deliveries of milk to dairies in 2012
Quantity, mln ltrs
Milk production can fall by as much as half during the dry season, affecting milk available for sale. Source: KDB
- High costs of production – The very nature of the dairy industry in Kenya, which is 70% in the hands of small-scale producers, and a highly fragmented processing side, makes the cost of production at the farm and at the dairy plants to be higher than that in more formal markets.
The cost of production is affected by high prices for animal feeds, inputs and electricity and due to poor infrastructure, poor animal husbandry practices, lack of formal milk markets in some areas and lack of credit to farmers and processors
- Poor quality of milk – The quality of milk delivered to the dairies is a big challenge for the dairy processors. Poor milking practices, a fragmented small-scale dairy farming system and lack of cooling and storage facilities at the farm provide huge challenges to the farmers’ ability to meet the specifications of the dairies, resulting in poor quality milk to the dairies.
The poor quality milk reduces the acceptability, shelf life of the processed milk and has affected the ability of the dairies to export to some export markets. Tied to this is the problem of adulteration of milk by unscrupulous farmers and traders who add various chemicals and water to increase quantities delivered to dairies.
The cost of testing and associate quality control infrastructure is a costly undertaking taken by dairies to ensure they can receive milk they can process
- Poor infrastructure – Generally, milk producing areas tend to have poor infrastructure in terms of roads, electricity especially during the rainy season. The infrastructure challenge extends to the lack of milk handling and storage facilities at the farm level, leading to milk spoilage and loss at the farm. On the processing side, despite recent investments by the major dairies and co-operatives, infrastructural challenges remain, with limited capacities of dairies to convert excess milk into long life products and limited storage at the dairies
- Informal milk trade – According to RDCoE, 60% of the milk is marketed through traders, cooperatives, hotels and kiosks. An estimated 84% of the milk produced is sold in raw form to consumers, providing instant cash or higher prices to the farmer. This compromises product quality while offering direct competition to the dairy processing industry. Despite the Government actively discouraging selling of ‘hawked’ milk, the sector continues to grow with grave consequences to the processing sector
Despite these challenges the dairy industry in Kenya is the most sophisticated in sub-Sahara Africa, with a robust processing sector that continues to grow year by year, thereby providing a fertile ground for investors, consumers and the Kenyan economy
The dairy processing industry in Kenya is dominated by a few big processors and a high number of smaller and medium operators. Though the number of licensed dairies is higher, about 40 dairies are actively producing and availing their products through the normal retail channels in a significant manner.
Latest figures show that there are 4 big dairies processing above 100,000 litres per day. These dairies include Brookside, New KCC, Sameer Agriculture & Livestock and Githunguri Dairy Co-operative Society.
Other medium level dairies processing less than this amount but with a significant intake include Kinangop, Meru Dairy Cooperative Society, and Kabianga Dairy. Smaller specialist dairies include Bio Food Products, Razco Ltd, Raka Cheese, Brown’s Cheese and Alpha Dairy.
Fresh liquid white milk is the predominant milk product produced in Kenya, accounting for the 60-70% of the total production. Ambient temperature long shelf life products are also widely produced by the big dairies, especially in their attempt to mop out excess milk during the flush periods.
High value products including flavoured milk, yoghurt, cultured milk (known locally as Maziwa lala), butter, ghee and cream are produced by a majority of the medium to large scale dairies. Most of the smaller specialist dairies produce yoghurt, cheese and ice cream, exclusively or with a few other products
The dairy sector in Kenya is increasingly moving towards consolidation, with Brookside Dairy leading the way with several buy-outs in the last few years.
The push towards consolidation is led by the increasing need for processors to own the process of milk sourcing from the farm to the factory and the challenge of procuring, distributing and accessing retail space in the major outlets.
It should also be mentioned that the dairy sector is progressively becoming a heavy investment industry, with the smaller players getting crowded out by the bigger players who have access to internal and external sources of funds.
Our projection is that the sector will, in the next 5 years, erect barriers to entry that new entrants will find hard to crack, and which will lead to more of the medium players being bought out as the sector consolidates further.
There is also the lurking possibility of one or two international brands coming into the sector through a buy-out of the existing dairies to tap into the Eastern African market.
Profile of the major dairies in Kenya
The dairy industry in Kenya is highly competitive, with a huge potential to grow even more. The following dairies are the most important players in the market, mostly by volume of milk processed but also for one of them, the pioneer with a history of innovation, though a small player in the sector.
An interesting angle is the focus on regional growth by Brookside and Sameer Agriculture, which leaves one with the question, “Who, between Brookside and Sameer Agriculture, will prevail in the regional expansion drive?”
The biggest dairy in the region by market share and volume of milk processed, the 20 year old dairy came into being following the liberalization of the dairy sector in the early 1990s.
It is fair to say that Brookside, and its Executive Chairman Muhoho Kenyatta, have played a huge role in getting the dairy sector in Kenya and by extension the East African region on its feet, after many years of state control.
The dairy can be appreciated for putting in place a milk extension and procurement system that showed farmers that dairy farming could be a source of income for them, reinvigorating the sector after the near collapse of KCC, and with it dairy farming in Kenya
Brookside is largely owned by the family of Kenya’s first president Jomo Kenyatta. With a daily processing capacity of 750,000 litres, Brookside has grown from a small dairy in 1993 through organic growth and by acquisition of Ilara Dairy, Delamere Dairy, Spin Knit Dairy and Buzeki Dairy over the years.
The company produces a range of products including fresh and UHT milk, flavoured milk, Maziwa lala, flavoured and fruit yoghurt, butter, cream and ghee
Brookside is currently building a milk powder plant at its Ruiru location, with further capacity increases in its fresh, UHT and fermented products. These projects are projected to enable the dairy process over 1 million litres of milk per day when finished.
It is the most aggressive dairy in this market, with intentions to establish or buy other dairies in the surrounding East African countries of Uganda, Tanzania, Ethiopia and Rwanda. Recent reports have it that the dairy is also interested in the Nigerian market in the near future.
New Kenya Co-operative Creameries
New KCC, a Government parastatal, is the oldest and biggest dairy by assets in Kenya, with operations in Nairobi, Kiganjo, Sotik, Nyahururu, Eldoret, Kitale, Mombasa and other parts of the country. The dairy started as a creamery co-operative in 1925, growing to be one of the most iconic brands and companies before and after independence of Kenya.
The value of the New KCC assets was estimated at KSh5.7 billion in 2012, according to the Business Daily. The Government has listed the company as one of the key parastatals that are meant to be sold off, either through the stock market or to a strategic investor. The details of this sale are under review by the Privatisation Commission.
The company produces a broad range of products including fresh and UHT milk, flavoured milk, Maziwa lala, flavoured yoghurt, butter, cheese, cream and ghee; it is also the only dairy that produces milk powder in Kenya.
New KCC has strong brand awareness due to its many years in the market. Some of the company’s products e.g. cheese and mala are well appreciated for their quality in the market
Sameer Agriculture & Livestock Ltd (SALL)
The latest big entrant in the Kenyan market, SALL is owned by the Sameer Group, one of Kenya’s conglomerates and RJ Corp, one of India’s largest investment groups. SALL bought out Adarsh Developers Ltd in 2009, and from then on significant investments in the factory and their brand has catapulted their DAIMA brand into one of the best known brands in Kenya
The Sameer Group’s partnership with RJ Corp extends into Uganda where they have a dairy. According to RJ Corp’s website, the group is aggressively working on an ambitious growth plan to set up factories in Tanzania, Rwanda, and has bottling rights for Zambia, Zimbabwe and Malawi
SALL has proved itself to be one of the most vibrant dairies in Kenya, introducing a range of products, including juices and fruit yoghurts in a fairly short time. The company has just launched its ice cream into the market
SALL presently produces fresh and UHT milk, yoghurts, Maziwa lala, cream, butter, ice cream, flavoured milk, juices and water
Githunguri Dairy Co-operative
Githunguri Dairy is one of the successful co-operative societies that came up after the liberalization of the sector. The co-operative is a stellar example to the co-operative movement in Kenya and the region, from its establishment in 1961.
The co-operative built a processing plant in 2004 and has grown to annual turnover of more than KSh 3 billion, processing 170,000 litres of milk per day, according to their website
Sold under their FRESHA brand, the company presently produces fresh and UHT milk, yoghurts, Maziwa lala, cream, butter and ghee
Bio Food Products
Bio Food Products is the pioneer in the premium yoghurt category in the Kenyan market. The company is associated with niche, high value products that target the high income earner, and therefore their products are only widely available in the up-market malls and supermarkets.
The company manufactures fruit yoghurt, and a range of unique products including lactose free milk, probiotic yoghurt drink, and skimmed flavoured milk, among others.
The recent introduction of its Refresh fortified drinking yoghurt, with a fairly affordable price, could be a sign the dairy is looking at getting a piece of the mass market
Trends and opportunities in the sector
Affordability – With a population that still has a majority living below the poverty line, but which appreciates the value of milk, the dairy sector in Kenya has aggressively embraced technologies and products that can deliver value to the customers.
In the liquid milk line, a majority of dairies have introduced lower priced packaging formats including plastic pouches, Extended Shelf Life (ESL) for fresh milk products, and Tetra Fino Aseptic from Tetra Pak instead of the normal Tetra Pak packaging to deliver lower cost to customers
The latest entrant, ESL, with 30 days shelf life, is an interesting addition to a market where cold chains are limited or not existent at all. The fact that the ESL packaged milk is priced at the same price as the plastic pouches is a reason to watch out for this format in future in this market
The affordability need is also being met by manufacturers reducing the pack size of high value products, below the 200 ml mark
Premiumisation & healthy indulgence – The middle class is projected to grow aggressively in the region. There has been an emergence of products targeting this demographic. These include low fat, probiotic, fruit yoghurts, yoghurts with cereals, and low fat ice creams.
The consumption of cheese, which has been a niche product in Kenya, is growing aggressively, boosted in part by the high number of expatriates in the country.
The Kenyan dairy market has been dominated by traditional flavours, strawberry and vanilla. However, there is an increasing appreciation for more flavours and fruits, including tropical mix, wild berry, chocolate, apricot, mango, peach, blends and many more.
Bio Food recently introduced a fortified yoghurt drink that adds to the healthy indulgence offering in the market.
An emerging trend in the market is the rise in imported high value products from Europe that fit in the premium category to serve the sophisticated palettes of the consumers, including butter, whipped cream and ice cream.
Convenience – The on-the-go market, in a market where out of the home consumption of milk products as a quick snack or lunch time drink is increasing, has provided the dairy sector with an opportunity to extend the formats available for their products.
The packaging of yoghurts and cultured milk in plastic bottles and carton packaging with screw-cap have ensured that yoghurt can be eaten or drunk anytime, anywhere.
School milk program – Widely responsible for improving the school attendance during the 1980s the school milk program was a huge volume mover for the only dairy then, KCC.
Figures from KDB show that in the late 1980s to about 1993, the volume of milk processed in the country was consistently above 350 million per annum, but falling drastically to about 150 million litres per annum at the end of the 1990s, when the program was discontinued
A major pillar of the Jubilee Government’s promise, the revival of the School Milk programme, if implemented as envisioned, shall change the face of the dairy industry in Kenya.
Raka Milk Processors has carved a niche for itself in the growing cheese market in Kenya, with impressive results.