Dorothy Nakaweesi
7 October 2008
Kampala — Sameer Agriculture and Livestock has extended its exploits in the powder milk market to West Africa as the company seeks to become a leader in an industry dominated by foreign brands.
After a successful launch of powder milk and subsequent exports in the East African region, Syria, Egypt, and Yemen, Sameer Agriculture and Livestock Limited, a company which took over former Dairy Corporation Limited almost two years ago, sees the West African market as being critical in boosting the company's sales.
In an interview with Business Power, Sameer Head of Sales and Distribution Rajiv Joshi said: "We are in the final stages of discussion to start exporting powder milk to Nigeria and this will be our base to the rest of the region".
Uganda started production of powder milk in January and the product has since performed well in the pioneer foreign markets of Syria, Egypt, and Yemen. "These countries don't produce milk, so they approach us to supply them with the product," Mr Joshi said.
Sameer currently produces about 20 tonnes per day most of which is consumed within the East African region. This comes from close to 250,000 litres of raw milk supplied by 50,000 farmers' chain countrywide. Sameer produces both skimmed and cream powder milk products in the 25 Kg bags which is mainly for factory and confectionary use.
Nigeria presents a huge potential for milk market in Uganda since it is the largest importer of dairy products in West Africa. The company has started supplying milk powder to local supermarkets in packs of 400 grams to compete with renowned import brands like Nido.
"On a monthly basis we supply about 14 to 20 tonnes to local supermarkets," he said. Each 400g-pack costs Shs7,000. This same product size is also exported to Rwanda, Burundi and DR Congo but it is still on a small scale. Mr Joshi said on average the company has earned close to $2 million in export revenue from all the countries. "Our annual target $15 million," he said.
Uchumi Manager Eric Korir said: "We have had Sameer powder milk on our shelves for the last one and half months and I must say the sales are gradually picking up". He however advised that Sameer needs to improve on its packaging to compete favourably with other brands which are packed in Tins if it were to win more customers. "Some consumers would be buying Sameer but because of the packaging they tend to choose the other brands instead," Mr Korir said.
A tin of Nido weighing 400 grams costs Shs11, 000 at Uchumi and others Supermarkets sell it at Shs12,000. Hajji Jamil Ssegujja proprietor of Saduna Wholesalers one of the importers of Nido distributed to Supermarkets said: "The reason why we import Nido is because of the local demand and the country is not producing enough".
The company also produces a range of other products like fresh dairy pasteurised milk and Ultra Heat Treated (UHT), yoghurts in different flavours like vanilla and straw berry and ghee. The company has also expanded milk collection network. Mr Joshi said having a big network of suppliers will help them meet and increase production of all their products.
The company's future plan is hit a daily processing capacity of up to 400,000 litres up from from the current 120,000 litres. Sameer's introduction of powder milk product is in line with the government's call to investors to add value on exports such coffee, cotton, fish, fruits, and vegetables among others. However, challenges like the delays at the Mombasa Port brings about the high cost of doing business and sometime losing confidence from the importers.
"We sent a consignment to Yemen on June 29 and it departed Mombasa port on August 9. International clients who are dealing in manufacturing don't wait when the products delays," Mr Joshi said.
"In the long run they are losing confidence, quality of the product and the plan of the exporter and importer. If I am not paid then this will affect the production of other products." He said if there was an alternative they would have blacklisted the port, but this the only port the country uses.
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