Danone is rumoured to be in talks with Libyan dairy market leader Al Naseem for Food Industries to set up a factory in the Misrata Free Zone (MFZ). As well as its own dairy brands, Al Naseem has co-owned the rights to Nestlé ice cream in Tunisia since 2008, in partnership with GIAS (General Industrial Food Slama).
News service Africa Intelligence has reported that Danone is looking to set up a factory in Misrata. At present, Danone’s Libyan products are supplied via its Egyptian factories, and the business is overseen by the Egypt office.
Before the 2011 revolution, brands such as Bey Group’s Al Rayhan, based in Benghazi, and Judi, based in Tripoli, accounted for about half of the milk market. Al-Naseem was the market leader in the yoghurt category. Nestlé, Greenland (Lactalis), Juhayna and Fromageries Bel all supply the Libyan market from factories in Egypt.
Libya is a high growth dairy market, with strong demand for milk, cheese, yoghurt and ice cream. Furthermore, products intended for the Libyan market are also re-exported into northern Chad and Niger. But because of instability to date none of the major international dairy have established facilities in the country – in contrast to Egypt, Tunisia and Morocco. For example in neighbouring Tunisia, both Savencia and Emmi increased their investments in local ventures. Libya’s 7m consumers present an attractive, but still risky proposition for investors.
There is also a political consideration. The French Army is deployed across the Sahel region and the French government maintains a keen interest in Libya: Along with the United Arab Emirates, Saudi Arabia, Egypt and Russia, France has supported the Libyan National Army since 2014 in the ongoing civil conflict.
France has bet on the success of general Khalifa Haftar’s so far unsuccessful attempts to control Tripoli since April this year. Certainly the status quo suggests that Haftar will continue to control eastern and southern Libya. But not Misrata, which remains under the control of the UN-backed Government of National Accord. In November 2019 US officials met with Haftar to discuss steps towards ending his offensive on Tripoli.
In that context, with Washington indirectly warning Russia and the LNA off further attempts to take Tripoli, Danone’s decision to invest in Misrata looks less viable. Danone executives will also have noticed that this month an air attack hit a biscuit factory in Wadi Rebea, 20 km south east of Tripoli and that Haftar’s forces have attacked sites in Misrata within the past few weeks. It is possible that Danone and Al Naseem may have had “what if” conversations but a major investment by a French company in Misrata seems fanciful just now.
