Arla partners with Kaduna state government to develop dairy sector

Arla Foods has signed a memorandum of understanding with Nigeria’s Kaduna state government to develop dairy farming in the state. The scheme involves the state offering land to farmers while Arla Foods will buy, collect, process and market the milk products.

1,000 small scale farmers with 12,000 heads of cattle will be involved in the scheme. It comes as Nigeria presses ahead with developing its domestic agricultural sector, which also includes protectionist measures such as the recent directive by Nigeria’s Central Bank to commercial banks to stop providing loan facilities to milk importers in the country (effectively restricting the use of foreign currency to buy imported milk products).

Nigeria imports dairy products to the value of $1.2bn per year. Nigeria’s annual dairy output is estamted at 700,000 tonnes, while demand is 1,300,000 tonnes – leaving a supply gap of about 600,000 tonnes. The Central Bank plans to extend a low interest loan offer to domestic milk producers to increase domestic production.

In Nigeria Arla Foods owns the Dano powdered milk brand. It also imports Lurpak butter. This new public-private partnership follows on from a successful pilot project initiatted in 2018 and is part of a collaboration started in 2016 between Kaduna state, Nigeria;s federal government, Arla, local dairy cooperative MILCOPAL and NGOs. The collaboration is called the Milky Way Partnership, is scheduled to run for five years and to help develop a sustainable dairy value chain.

It is not the only initiative of its type: FrieslandCampina WAMCO, which owns the Peak Milk and Three Crowns, implemented its pilot Dairy Development Programme (DDP) across 90 communities in Fashola, Iseyin, Oyo State, and in Ogun and Osun states. In july 2019 the company signed a partnership extension agreement on the DDP, which aims to increase dairy production capacity and help farmers modernise production.