Effective cooperative model can make local dairy processing competitive

Local dairy processing sector has been facing a number of challenges including having too many processing units operating in isolation, leading many of them to struggle to meet standards or be competitive both locally and internationally as a result of limited resources, according to Rwanda Standards Board (RSB).
Exhibitors showcase cheese products. About 32 dairy products now have standardisation mark from the Rwanda Standards Board. File.
Exhibitors showcase cheese products. About 32 dairy products now have standardisation mark from the Rwanda Standards Board. File.

Local dairy processing sector has been facing a number of challenges including having too many processing units operating in isolation, leading many of them to struggle to meet standards or be competitive both locally and internationally as a result of limited resources, according to Rwanda Standards Board (RSB).

Some factories use rudimentary technologies, as they lack machines to heat or cool milk.

Products or services can only be competitive if they are of attractive quality. However, quality comes with a cost to which there is no short-cut, says Antoinette Mbabazi, Division Manager of National Certification at RSB.

In a recent interview with Sunday Times, Mbabazi said that factories are an expensive business, pointing out that if one wants to be competitive, it requires them to make significant investments, which local processors can achieve if they effectively work together in cooperatives.

Apart from being safe for consumption, she said, a product should have other quality features which make the consumer want to buy it again, citing taste and flavor of local cheese which should be improved.

“You cannot be able to compete with imported products, or even locally produced products from people which invested in expertise if you still struggle to meet minimum required standards,” she said.

“If you want to be competitive … which makes you have access to experts who have had experience from world renowned industries which you want to compete with so that they come and help you reformulate your product and put it to a standard where it can compete with theirs,” she said.

What can be good in line with addressing all those challenges, she said, is” to encourage people engaged in dairy processing come together, make considerable investments which can help them meet associated costs so that they make a business that can enable them to make a good product which can compete with others.”

Speaking to Sunday Times on Saturday, Milton Ngirente, Owner and Managing Director of Blessed Dairies Ltd, a milk processing firm in Gicumbi District, said that the Rwanda Standards Board’s proposal to work under cooperative model is informed by its assessment of the dairy processing business; and as it knows the efforts that are needed for the sector’s performance, it realises that the individually owned factories are not performing well.

“Dairy processing factories require huge investments. The idea [to work together] itself is good. For instance, instead of having 10 people owning factories making cheese, they should merge to have one factory that has more capacity,” he said.

However, he said, the issue that remains is on its implementation to make sure that it is successful.

“Some people have selfish interests and divergent views which can result in the loss of the company or cooperative. Bringing together financial means from people with divergent views cannot yield good results,” he said.

Blessed Dairies processes about 6,000 litres of milk per day, from which it makes products such as yoghurt and cheese. But, Ngirente says that if he has means, he can make more products because there is still gap to fill in the supply of dairy products vis-à-vis the available demand.

Blessed Dairies is in negotiations with dairy farmers under IAKIB – a cooperative for modern dairy farmers in Gicumbi District – so that they set up a processing factory to process more milk in the district. The cooperative collects some 35,000 litres of milk per day, of which 5,000 litres are supplied to Blessed Dairies.

At least 20 types of cheese can be made from milk, yet, according to information from the Ministry of Agriculture and Animal Resources (MINAGRI).

But, Ngirente says that only two types of cheese, and mozzarella, are largely produced in Rwanda, noting that there is no factory specialised in cheese production in Rwanda.

Dennis Karamuzi, a consultant in livestock sector says that bringing people together so that they invest in one factory necessitates that they share common business goal.

“If they understand the essence of having one factory under cooperative model, it can yield results. They might even start from the already existing factories and expand them through collaboration,” he said observing that quality assurance is a necessity.

Rwanda produces about 2 million litres of milk per day, but about 10 per cent of it is processed, according to figures from the ministry of Agriculture and Animal Resources.

According to information from Rwanda Development Board (RDB), the opportunities in dairy processing in Rwanda include fermented milk, yoghurt, cheese, butter, ice-cream, milk powder, ghee, flavoured milk, sweetened milk, among other products. The cost of a processing facility is $8.5 million (about Rwf7 billion).

editorial@newtimes.co.rw

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