Assessing FG’s Intervention In National Milk Production

The dairy industry, which is in charge of the production, processing and  distribution of milk and milk products, has served as a vital source of nutrition for billions of people around the world and also present livelihood opportunities to farmers, processors, marketers and stakeholders in the dairy value chain.

The Food and Agriculture Organisation (FAO) of the United Nations has said that milk contains numerous nutrients and makes a significant contribution to meeting the body’s needs for calcium, magnesium, selenium, riboflavin, vitamin B12 and pantothenic acid.

In spite of the numerous nutrients derived from milk, the organisation stated that its consumption per capita in sub-Saharan Africa as at 2007 is 30.2kg, and 8.1 kg in Nigeria, per person per year, which is very low when compared to the current worldwide total milk consumption of 108kg per person, per year.

The organisation stated that while purchasing power and urbanisation explains much of the change in per capita consumption of milk, other factors include natural resource, social, and cultural factors. The devaluation of the naira and depleting foreign reserves due to the falling global oil prices has indeed affected the dairy industry in Nigeria. Nigerians who spoke with leadership said they no longer consume milk the way they used to due to the hike in the price of milk.

In spite of the nutritional value of milk, Mama Ikene, a 45-year-old woman said that her children take tea only when it is rainy in the morning.

“The price of milk has gone up; I used to buy a particular milk product for N750, but subsequently it has gone up to N950. So my family cannot afford to be taking milk every day. We only take milk when we know it is going to rain in the morning,” she said.

A banker, Mrs Onyinye Chibuchi, said that since she is on a fixed salary and has not been promoted in the past six years, she cannot afford to buy a carton of milk monthly as she used to.

She said, “I used to buy a carton of milk every month, but right now, I cannot afford that as I have reduced the one carton to half a carton.”

Others also attest to the fact that the price of the milk product they consume has gone up tremendously and as such they had to cut down on the consumption of the product.

In a bid to curb the situation, the federal government recently signed a memorandum of understanding with FrieslandCampina WAMCO Nigeria Plc to improve dairy production in the country. The minister of agriculture and rural development, Audu Ogbeh, said that government’s target was to ensure that each child in the country consumed three pints of milk a day. According to him, the business of dairy and cattle rearing are fundamental to the nation’s survival and as such government was taking its production seriously.

Ogbeh said, “The signing of this agreement is the beginning of a very long journey; whoever comes in the future, be it a civil servant or a politician, let them recognise that the country’s existence must continue and whenever there is the need for us to review or improve upon what we have signed, do let us know. Continue to grow and expand, the country is large, the market is huge as it will take a lot to satisfy the country’s demand.”

The minister urged unemployed graduates to venture into cattle rearing as five cattle could earn the keeper N500,000 a month. He said that the government was doing a lot to ensure that cattle rustling becomes a thing of the past in the country.

The managing director of Friesland Campina WAMCO Nigeria Plc, Rahul Colaco, said that the company had over 150 years of experience in dairy development, adding that the mission of the company was to nourish Nigerians with quality dairy products as many children below the age of five die of malnutrition annually. Colaco said that the company would invest N3 billion into the programme promising that it would also keep to the terms of the agreement.

Speaking on the effect of the harsh economy on the company, he further noted that the company, which is known for some of its iconic brands such as Peak Milk, Three Crowns Milk, Friso Milk, among others, sold N120.72 billon worth of milk products in the 2015 fiscal year.

He said, “The company’s business and financial performance was satisfactory in spite of the difficult operating environment in the country. However, revenue declined by 4.5 per cent to N120.72 billion, from N126.44 billion in 2014.”

Despite the decline in the top line, Colaco said that pre-tax profit rose 13.3 per cent to N18.60 billion from N16.50 billion the previous year.

According to him, “The company believes that the economy will improve in 2016 and the country’s gross domestic product will grow again, though rather modestly, if the right mix of fiscal and monetary policies is put in place to stimulate the economy and attract domestic and foreign investments.”

Speaking on the challenges of the company’s operation in Nigeria, Colaco said, “In Nigeria, the consumption of dairy products per capita per year is only 15 litres. One of the challenges is that dairy consumption is not naturally embedded in the culture of Nigeria. It is unlike what you find in some European countries where per capita dairy consumption is 150 litres a year. Because we’ve been able to find out that the challenge is a little bit more of a lifestyle thing, we’ve been working to make sure that we get through to the Nigerian consumers even more and find a way to integrate dairy into their daily lifestyles.”

Colaco is convinced that the company’s consistent focus on strategy is bearing fruit and that the dairy company is off to a good start for 2016, and on the road to achieving its quite ambitious goals.

“Growth is a key part of our business model and that comes with the combination of a few things which include bringing the goodness of dairy to Nigerians, activation, communications, and reaching out.

We’ve been working tirelessly with healthcare professionals by providing them with scientific insight into good nutrition. We work with government partners to make milk accessible to schools. We also try to engage with consumers through different channels to make sure that the product is available across the country because we found that there’s still a large part of Nigeria that does not have access to dairy products. One of our big initiatives is to reach out more directly and make sure that we cover many more outlets, especially in the rural areas.

“To be successful means that we have to work on the pricing of our products to make them more affordable and these are the factors that helped us to get to where we are. But more importantly, our unfailing focus on quality stands us out as the market leader,” he said.

 

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