Ethiopia aims learning from Kenya to improve its dairy sector

With aim of transforming Ethiopia’s dairy products using Kenyan experience, Schulze Global Investment (SGI), the United States based private equity firm, acquired 45% of share in Family Milk, one of the top diary producing firm in the country.

“We believe that through implementing international best practices, and investing substantial growth capital, Family Milk is well positioned to help transform the dairy sector in Ethiopia,” said Greg Metro, Schulze Global investments Managing Director.

Family Milk is SGI’s sixth investment in Ethiopia.Since 2013 SGI has invested in six sectors in Ethiopia buying 20% up to 49% shares in existing local companies.

“After we started operation in Ethiopia in 2008 and raised funds in 2013, we have been investing in food, pharmaceuticals, cement, coffee, education and agro processing,” he said, at the joint-venture launching press conference this morning.

Mr.  Robert Kariuki from Kenya who is newly appointed as CEO of Family Milk, on his part stated that he plans to replicate his Kenyan best practices to Ethiopia’s dairy sector.

“…Through provision of better feed to milk cows and improving related infrastructures with other relevant partners, I hope we can increase dairy production of the company,” he said indicating that a milk cows in Kenya gives 5 liters per day while in Ethiopia a cow gives only one and half liters.

Established in 2001, Family Milk produces dairy products such as, butter, pasteurized milk, yogurt, and cheese. In addition to the general public, Family Milk’s major consumers at the moment includes Ethiopia Airlines, hospitals and government institutions.

Ethiopia’s State Minister of Industry, Dr. Mebratu Meles, who attended the event, stated that though Ethiopia is top in Africa by the number of its livestock population with around 100 million livestock, the country has not been able to benefit much by adding value to the resource.

The country exports some 800,000 livestock while equivalent to that is also estimated to leave the country through contraband, according to Dr. Mebratu. “…Instead of exporting the live animals we need to add value in order to get more and create additional jobs,” he said.

In milk production and consumption, Ethiopia is far less than its neighbor Kenya. Annual per capita milk consumption in Kenya,which a total of five million milk cows is 99 liters per.  While for Ethiopia the number is less than 20 liters per capita, even though the country has a total of ten million milk cows.

Currently a total of 17 milk processing factories are operational in Ethiopia producing various dairy products for the nation with close to 100 million population. The government aims to double the number of factories in the coming five years and double the current 4.1 million liters of total milk production.

Through artificial insemination, in the coming years the government plans to increase productivity of five million cows in order to get up to 20 liters per day from one cow.