Rwanda milk processors face stiff competition

Friday November 1 2013

The majority of Rwandans prefer unprocessed milk, which venders buy directly from farmers and sell to them in urban areas. Photo/FILE

The majority of Rwandans prefer unprocessed milk, which venders buy directly from farmers and sell to them in urban areas. Photo/FILE Nation Media Group


Local dairy processors have been asked to invest in aggressive marketing of their products in order to survive in the competitive market.

Milk processors are facing competition from sellers of unprocessed milk and fruit juice.

Figures released by the Rwanda Agriculture Board indicate that the four milk processors, Inyange, Nyabisindu, Dan Cheese and Rubirizi Dairy, are processing about 500,000 litres daily.

The shortage of processed milk in the country has created room for importation of dairy products.

According to experts, the industry has lost over 3.4 million Rwandan customers, who regard milk as a product for children due to poor advertising.

Studies by the East African Dairy Development Project show that some consumers shun processed milk because it is three times expensive.

A mini survey carried out by Rwanda Today in Kigali revealed that a litre of unprocessed milk costs Rwf600 while processed one retails at Rwf900.

High production costs

But industrial players blame high production costs and growing competition from imported dairy producers for their woes.

Ugandan fresh dairy processors like Highland are competing favourably with Inyange on pricing.

Foreign processors are taking advantage of the available market to sell their products at competitive prices.

The processors say high production costs and limited market for their products has forced them to produce below capacity.

“We buy fresh milk from farmers’ co-operatives at Rwf150 per litre. Transporting that milk from Nyagatare to Kigali, where the milk is processed, pushes the cost to Rwf200. Then the cost of processing a litre of milk is about Rwf120,” a processor said.

But stakeholders claim that processors are not doing enough to creat awareness their products on the market.

Agriculture and Animal Husbandry Minister Dr Agnes Kalibata said some processors have invested little in marketing their products.

She said whereas several beverages are available in the country, milk producers are concentrated in urban areas.

“In my entire life, I have not seen any single programme on TV promoting milk,” said Dr Kalibata.

Experts said aggressive marketing could trigger mass milk consumption.

As the processors grapple with low consumption of their products, milk production in the country has been boosted by importation of high-yielding animal breeds over the years by the government.

Government figures indicate that output has increased from 442,337 tonnes in 2011 to 503,130 tonnes last year despite the decrease in the livestock.

This has drastically reduced the dairy product imports in Rwanda.