FG set to ban milk import as manufacturers invest to boost local production
The Central Bank of Nigeria (CBN) has said it will place foreign exchange (forex) restrictions on milk importers into the country.
Addressing reporters at the end of the bi-monthly Monetary Policy Committee (MPC) meeting in Abuja recently, CBN Governor, Godwin Emefiele lamented that between $1.2 billion and $1.5 billion are spent yearly to import milk into the country.
“We can no longer continue to spend close to $1.2 billion to $1.5 billion, importing milk into the country, a product we can produce. To some extent, they (milk importers) should help us also to reduce the rate of herders’/farmers’ conflict,” he said.
CBN Director of Development Finance Department, Bademosi Tinuola, recently made the promise at the official commissioning of a garment company, “Xirea Apparels” by Buphalo Company in Port Harcourt, Rivers State.
“The present administration and the Governor of Central Bank are in support of local manufacturers. We believe in growing the economy of the country; we don’t want our country to become a dumping ground for all kinds of imported goods. Most of our industries are collapsing now because of indiscipline.”
This is coming at a time when several of the major indigenous milk manufacturers have made significant investment into boosting production capacity to meet growing domestic demand.
Recall that last year; FrieslandCampina WAMCO, Nigeria’s leading dairy producer announced an injection of 23 million Euros into its operations in Nigeria as part of its sustainable Dairy Development Programme.
The dairy company which produces Peak Milk and Three Crowns Milk has been at the epicentre of Nigeria’s dairy market revolution. Upon the announcement of this investment, the company is consolidating on its previous efforts to address the deficit in milk production in Nigeria.
“We are investing around €23 million in our evaporated milk and ready-to-drink milk factory in order to provide fresh milk for the Nigerian consumer. FrieslandCampina WAMCO has been successful with dairy development in recent years and milk yield is improving,” said global CEO, Hein Schumacher.
Besides boosting production capacity, FrieslandCampina WAMCO has also been deploying various sales/marketing initiatives to drive milk consumption and market share growth. Initiatives like Pekadomo, Three Crowns Mother of The Year campaigns have successfully introduce the brand to new segment of the consumers.
Another competition that is actively striving to close the supply gap is Arla Foods, which a few years ago commissioned an ultramodern production plan in Lagos as part of an African expansion strategy. As at 2015, Arla recorded sales in the sub-Saharan African market was €90 million, with €80 million coming from Nigerian market alone, but its targeting sales of €460 million by 2020 through the concentrated increase in sales of liquid milk, its Dano brand powdered milk, and in the future, the sale of cheese and butter.
“Nigeria is one of the biggest markets for dairy products in Africa,” said Hadsbjerg. “For Arla to succeed in Africa we must succeed in Nigeria. The population is growing at a rate of two to three percent per year, and people are young, ambitious, and increasingly well educated. This makes Nigeria a perfect market for Arla’s Africa strategy.”
In order to achieve its target, Arla signed joint venture agreement with Tolaram. Leveraging on Tolaram’s strong distribution network, Arla expects its Nigerian revenue to increase to €240 million by 2020, and following the establishment of its venture with Attieh, the cooperative expects its revenues in Senegal to increase to €32 million over the same time period.
Similarly, Promasidor, makers of Cowbell and Loya Milk has in recent times also focused on enhancing productivity. In 2016, the multinational company said it planned to inject a $25 million loan (over N8 billion) into its production with a view to increasing efficiency and to produce more products for the benefit of Nigerian populace.
Meanwhile, there has been a number of new entrant into the market, including Irish Dairy Milk Company International, which recently disclosed that it was going to build a multimillion naira production plant in Ogun State to serve the Nigerian market.
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