Home » Business » Dairibord Doubles Sterilised Milk Output

DAIRIBORD Zimbabwe has doubled the annual capacity of its sterilised milk plant following the refurbishment of its plant in Chipinge.

The company spent about $4 million on upgrading the 32-year-old plant, which now has the capacity to produce 24 million litres per year, double the previous capacity.

The plant was commissioned last Friday by Minister of State for Provincial Affairs in Manicaland Mandi Chimene.

“This investment together with other initiatives to stimulate milk production by our company and the Government of Zimbabwe in future will buttress and enhance product availability in both domestic and regional markets,” said CEO Mr Anthony Mandiwanza during the ceremony.

Mr Mandiwanza said after increasing the capacity of the plant, focus was now promoting raw milk production. Zimbabwe is producing 54 million litres per year against the required 180 million litres.

“Through this investment our focus now shifts to promoting milk production in this area which is natural region and presents best prospects for low-cost per litre.”

Since 2009, the company has invested about $30 million in plant refurbishments.

With increased output, sterilised milk will now contribute about 18 percent to the group’s bottom line. Sterimilk has a big market in Botswana, Mozambique and Zambia.

He said the decision to invest in the project had been made mainly because of the strategic positioning of Sterimilk and a credible cost benefit evaluation that weighed in favour of the Chipinge factory. The funds were obtained from PTA Bank for five years at 10,3 percent annual interest, all in cost.

“The PTA Bank looms large in our capital investment programme since 2010 which has seen the company refurbish and upgrade its processing plants across the country.”

DZHL managing director Mr Thompson Mabika said the company was now on a g footing to satisfy local demand at more than 1,5 million litres of milk per month.

“I estimate we will be able to sell 1,5 million litres per month and going forward Sterimilk production will contribute between 18 percent to 20 percent to the group’s revenue.”

Minister Chimene noted that the dairy industry is currently operating at 40 percent capacity utilisation from a processing capacity in excess of 400 million litres per year. Annual milk production increased from 150 million litres in 1980 to peak at 256 million litres in 1990 but has gone down to 55 million litres, a slight increase from the 2009 levels of 39 million litres.

In tandem with the decline in national milk production, the number of registered producers which had increased to 514 in 1990 from 364 in 1980 had plunged to 150 by 2012. The dairy herd also declined from 100 000 in 1990 to 26 000 currently. As a result, there is a mismatch between supply and potential demand.

To address the problem, Minister Chimene called for the creation of an all-inclusive national milk production programme that will ensure that investments that are being made do not become white elephants.

Source : The Herald

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