The Rwandan government sold its 98.3% stake in the struggling Burera Dairy in Cyanika for just Rwf270m ($280,000). The milk processor has been sold to African Solutions Private Ltd (AfriSol), a Zimbabwean investor.
Burera Dairy was established by the government in September 2015 with an initial investment Rwf488m ($510,000) to increase milk processing capacity in Rwanda’s Burera Province. It ceased operations in 2018, apparently.
Over the next five years AfriSol plans to invest at least Rwf1.6bn ($1.7m) in Burera Dairy to increase daily milk processing capacity to 10,000 litres. The company plans to make soft and hard cheese, yogurt, long-life milk, butter, ice cream as well as fermented milk. The company’s products will be marketed under the Burera Dairy brand.
There are over 100,000 households in Rwanda keeping dairy cattle. Although Rwanda has more than 100 milk collection centres, less than 5% of the milk sold in Rwanda is processed. Informal distribution channels account for 80% of total milk sold.
A consistent problem is an inability of dairy processors to process milk cost effectively and deliver it to retail markets at a competitive price. High packaging costs are a key factor in this – accounting for up to 20% of the price of the finished product. As a result, pasteurized milk sold through formal channels is typically 150% more expensive than boiled milk sold through informal channels. More recently, another factor is overcapacity: in 2018 milk production increased by 68% but consumption of processed milk only grew by 19%.
The dairy sector contributes around 6% to the Rwanda’s national GDP. Rwanda produces more than 2.2m litres of milk per day, of which only 10% gets processed in modern facilities, according to data from the Ministry of Agriculture and Animal Resources. In just a four year period between 2012 and 2016, per capita consumption rose from 40 litres to 59 litres. By contrast, in Kenya, consumption is around 100 litres per capita. Over the same period the number of milk collection centres in Rwanda also doubled. One challenge for processors is that some consumers still see milk and milk products as something for children, not adults.
Rwanda has a small number of dairy processors. The largest of which, Inyange Industries, processes 100,000 litres of milk daily. The second largest player is Mukamira Dairy, which has a daily processing capacity of 40,000 litres of milk. Other processors include Ingabo Dairy, Gishwati Farms, Nyanza Milk Industries, Zirakamwa Meza Nyanza Dairy, Masaka Creamery and Blessed Dairies.
