Malawi’s Mach Milk Company set to open milk powder plant

Malawian dairy processor Mach Milk is set to open a milk powder processing plant in Blantyre. The new plant is forecast to process 144,000kg of milk powder annually and employ 200 people. It will potentially service 5,000 smallholding dairy farmers.

The company’s aim is to provide a providing a farm-to-market pipeline for Malawian smallholder farmers, and to better enable Malawian products to compete with imported milk powder brands. The new plant is expected to be running by the end of August 2021.

In June 2019, Dairibord Holdings Limited Zimbabwe (DHL), which owned 60% of Malawi Dairy exited the market after losses. At the time it had over 70% market share of the dairy processing sector, which includes pasteurised milk, yogurt and ice cream. Dairibord, Suncrest and Lilongwe Dairies accounted for over 90% of milk collections, most of which take place in the south of the country.

Although Malawi could potentially have a thriving dairy sector, milk output has been declining because of the cost and complexity of collecting smallholder farmers’ raw milk. It is a familiar issue across Africa, where a large number of small, fragmented farms, poor infrastructure a lack of regional collection, storage and processing capacity means farmers cannot easily sell their milk.

In November 2019 Mzuzu Dairy, a start-up dairy processor, launched its operations after having received a long-term loan facility of $50,000 from the National Bank of Malawi. The company says it aims to empower the smallholder farmers of Malawi by reinforcing and growing the value chain of dairy production throughout the region. As of November 2020 it started working with Shoprite. In February 2021, it  invested K75m ($97,200) in new machinery to increase processing capacity to 5,000 litres per day, up from 2,500 litres.