Dutch fund DOB Equity invests in Nyahururu based Countryside Dairy
Dutch family fund, DOB Equity, has invested in a Nyahururu-based dairy processor becoming the latest foreign investor in the over Sh100 billion local sub-sector.
The deal, sealed yesterday, will enable Countryside Dairy Ltd to scale up production and expand its reach across the lower-income market.
“DOB Equity’s investment has come at a crucial growth stage for Countryside Dairy and will allow us to create innovative marketing concepts for dairy products aimed at the low-income segment of the population stressing that low-cost, high-quality milk plays an essential role as a key part of a healthy diet,” said George Mwangi, Countryside Dairy managing director.
DOB Equity did not disclose the value of the investment. The firm has been receiving milk from more than 20,000 farmers drawn from Nyandarua and Laikipia counties and plans to expand its catchment. It has a daily processing capacity of 100,000 litres.
The investment will expand DOB Equity’s portfolio in a region where it already holds a stake in Tanzania Tanga Fresh.
Technical capabilities
DOB Equity chief executive, Brigit Van Dijk-van de Reijt, said the deal will allow Countryside Dairy to beef up the supply chain and offer better purchase prices to farmers, while guaranteeing product traceability.
Ralph Jansen, investment manager at DOB Equity, said: “The new partnership will further give Countryside Dairy access to the world-renowned dairy processing technical capabilities in the Netherlands.”
The formal market for processed milk is still in its infancy and valued at only Sh57 billion ($570 million), with an estimated potential annual value of Sh280 billion. Only 13 per cent of Kenyan milk products are traded formally.
Milk processors have lately unlocked significant investments with billionaire investors queuing to pump big money into the industry, attracted by a rapidly expanding market whose size is expected to more than double in the next 10 years.
Billionaire businessman Naushad Merali, proprietor of Sameer Agriculture and Livestock Limited (SALL) that is part of Sameer Group, is building a Sh3 billion milk factory in Nakuru set to start operations by June next year.
Zuri Group chairman Deepak Kamani plans to build a fresh and powder milk plant in Nyahururu, while Africa’s richest man, Aliko Dangote of Nigeria, wants to set up a dry milk factory in the country.
The market is dominated by Brookside Dairies, a Kenyatta family controlled venture which months back sold a stake to French Danone.
Other big players in the industry include Githunguri Dairy Farmers Co-operative and New KCC.
