Dairibord Holdings Limited Zimbabwe (DHL), which owns 60% of Malawi Dairy Industries, is set to exit by June 2019. The move follows growing losses reported in the unit, which increased by 17% to $700,000 in 2018. The company is in talks with a potential investor.

Dairibord is otherwise in good shape: After tax profit increased significantly to $6.48m, up from $1.94 million in the financial year ended December 31, 2018. Revenue for the period rose by 28% to $126.4m.

Dairibord Malawi is the country’s market leader in the dairy, foods and beverages industry in the country as a result of a joint venture between Dairibord Holdings and the Malawi government. Dairibord has been one of the top three dairy producers in the country since it was established in Blantyre after the privatization of Malawi Dairy Industries in 1997. In 2009, Dairibord had over 70% market share of the dairy processing sector, which includes pasteurised milk, yogurt and ice cream.

At present, Dairibord, Suncrest and Lilongwe Dairies account for over 90% of milk collections, most of which take place in the south. Because all three companies are operating and sourcing from this region, this is where local farmers charge the most. With a potential exit by Dairibord, both Suncrest and Lilongwe Dairies may be able to drive down the farm gate price for milk.