Support to Business Organisations and their Access to Markets (BOAM)

Value Chain - Milk and Milk Products

 Economic Background [top]                                                                                                                              

 Constraints [top]                                                                                                                  

Although milk and milk products plays an important role in the economy, the low productivity of local breeds, shortage of feeds, limited veterinary services and a general shortage and high cost of feed and exotic dairy breeds are some of the major constraints of the milk industry. Introduction of crossbreed cattle, improving feeding and management practice could bring remarkable positive impact in the future prospect of the sub sector. 

Sebeta Agro-Industry (Dairy Processing Enterprise) mentions the following general constraints:

• Quality control is made using physical and chemical laboratories and the company doesn’t have bacteriological laboratory.

• Lack of chilling and cooling centre at potential milk producing and supply area is non-existence.

• Milk suppliers need to have technical support and Milk collection centres with enough capacity and safety.

• Milk collecting utensils and buckets for up lifting the milk from the supply centres where many smallholders are doing their sells can improve the supply quality.

However the core problem of this value chain is shortage of raw milk supply, access to reach the raw milk and method and means of milk collection should be tackled. Lack of infrastructures that reaches the rural community has limited the production of milk to be at a reduced scale. Even if farmers have the capacity to produce more milk than they are doing today, they are not encouraged to make effort on milk production they can not sell. On top of inconvenient infrastructures the milk collection centres are not at the level of what they should be and needs special attention at different cites.
 

 Intervention Points [top]                                                                                                    

In Oromia and SNNP regions except farmers and small scale dairy farms there is no private investor both in production and processing of milk and milk products. Sebeta agro industry is the only private company involved in modern milk industry business in Addis Ababa sourcing farmers in Oromia as suppliers of raw milk. The low level of raw milk supply is critical for the company and at the same time many farmers cannot use the raw milk market opportunity. Therefore the objective of the value chain intervention should focus on resolving the gap that can bring mutual benefits for raw milk suppliers and the company.

Possible interventions on the supply side could be strengthening of raw milk supply, improving milk collection centres, feed security, logistics and breed improvement.  In the processing chain quality improvement, business linkages, training, and technology transfer are important activities to be considered. The value chain diagram indicated the intervention points marked with 8-point stars.

Raw milk supply has three possible sources the owner dairy farm, small farmers and milk collectors. The collected raw milk is transported to the processing centre and used as main raw material to end up to pasteurized milk and other milk products through various technological processes. In this value chain four intervention points are mapped the most critical and applicable can be finalised and get into plan of action. The possible intervention points are:

• Improving source of milk and get sustainable milk supply

• Supporting possible sources of raw milk such as small farmers who can able to work on through training and organization

• Introduce milk collection centres with the necessary facilities that can help to increase the volume of milk supply

• Improve the packing technology and quality of finished product during processing

 Suppliers and Equipment [top]                                                                                           

Tetra Pak - International Packaging Company www.tetrapak.com

Tetra Pak works for and with its customers to provide preferred processing and packaging solutions for food. Tetra Pak today supplies hundreds of different types of carton packaging formats. Tetra Laval is a private industrial group of Swedish origin headquartered in Switzerland. The industry groups´ activities focus on systems for processing, packaging and distributing food and accessories for dairy production and animal husbandry.

On the webpage www.tetrapak.com please find details on: Business relations, Products, Processing Packaging, Distribution, Business stories and Documents for download on Packaging and other fields of intervention.
 

TESSA I.E.C. GROUP LTD www.iec-il.com/dairy.html

EON Trading LLC

http://milkanalysers.com/

and other milk processing equipment.

DeLaval - Milking Equipment
http://www.delaval.com/Products/MilkingEquipment/default.htm

Automatic milking, Parlour milking systems, Tie stall milking systems, Sheep and goat, Milking equipment, Milk quality, Pulsators, Milk meters/indicators, Clusters, Liners, Tubing, Milk receivers, Milk filters, Milk line, acuum, Automation, Herd management, Cooling, Cleaning, Feeding, Barn stalling, Manure handling, Cow comfort, Udder hygiene, Service, Electric fencing.

 Markets ad Marketing [top]                                                                                                

Alibaba - Virtual Market Place
www.alibaba.com
Buying and Selling of milk and milk products

 Standards [top]                                                                                                                    

see also Links about International Standards

 Coordination Group of the Value Chain [top]                                                                   

The coordination group including the main stakeholders of each value chain
is the leading group for the value chain specific intervention.

See also Coordination Group workshop reports in the library.

Value Chain Leader: 

Election of the chain leader will be made after 3 months.

Value Chain Facilitator:  Tamne Hilegiorgis - TAM Consult

Consultant / Moderator

P.O.Box 19522 Code 1000, Addis Ababa

Tel: +251-91-123 5090,  E-mail: tamconsult@yahoo.com

Resource Persons

Gary Zeller - Tetra Pak, South Africa

Country Manager, Ethiopia, Awassa

P.O.Box Private Bagx2007 isando, 1600

Tel. +27824401244, Fax: +27115703148

E-mail: gary.zeller@tetrapak.com, Website:  www.tetrapak.com 

Coordination Group Members are the following:

• Ministries and implementing agencies:

  • Ministry of Trade and Industry

  • Ministry of Agriculture

  • Oromia Bureau of Finance and Economic Developmen (BoFED)

  • Oromia Cooperative Promotion Commission

  • Oromia Micro and Small Enterprise Development Agency

  • SNV-BOAM (Jürgen Koch, BOAM Coordinator

• National Support Institutions:

  • Quality and Standards Authority of Ethiopia

  • Ethiopian Chamber of Commerce

  • Adama Chamber of Commerce

  • Export Promotion Department

  • International Livestock Research Institute (ILRI)

• Private Milk Processing Firms:

  • Lema Milk

• Associations/Cooperatives:

  • Selale Farmers Cooperative Union

  • Adaa Milk Cooperative

  • Adama Milk Producers' Association

  • Adama Women Entrepreneurs' Association

• NGOs and Projects:

  • Growing Ethiopian Market (GEM)

• Finance:

  • Bank of Abyssinia

  • Oromia Cooperative Bank

• Consultancy:

  • Agonafir Consult Accessible Business Technology (ACABT)

  • TAM Consult

 Achievements [top]                                                                                                              

• SNV-BOAM achieved the participation of the world leader in packaging and milk processing equipment Tetra Pak in the value chain meetings. This led to a concrete Public Private Partnership perspective for the milk and milk products sector in Ethiopia: Consultancy and advice on market research (on a cost sharing basis for the study “Developing a Market led Strategy for the Ethiopian Diary Industry”), engagement on a school feeding programme, know how transfer and advice to optimising support to existent and newly to create milk collection centres.

• On request of various milk processing companies SNV-BOAM has successfully contributed to the creation of the Ethiopia first Milk Processors Association. By doing so, it is expected to deliver direct impact on the four results of actual operation plan (particular results 4 and 5). Processed milk can be better promoted by effective service delivery to processing companies and farmers, policy issues can be better tackled by effective advocacy and lobbying and the coordination of the whole milk value chain could considerably improved.   

• Leverage Fund (LF) contract signed with Ethiopian Milk and Milk Producer and Processors Association (EMMPPA). Promote Milk in the Motto of "Taste the full Cream, Enjoy Milk in 40 ways", on August 30-06; cost sharing of featuring in Addis Ababa Exhibition Centre.

• The members of EMMPPA have promoted their products in the Addis Ababa trade exhibition center for one week (September 2006) and BOAM programme has co-sponsored the promotion.

• Permanent CDS and advice is given for EMPAA and Ada Liben Dairy Cooperative: introduction of new milk processing equipment (milking machines, quality control equipment, chilling technology etc.); amendment of various training proposals.

• A visit to Adaa Liben / Debre Zeit revealed that the cooperative opened a L/C. They are ready to import dairy equipments.

• Sile Enat Dairy Farm Micro Enterprise Associations’ proposal for leverage fund entitled “Training to Improve the Quantity and Quality of Milk Supply and Processing” is approved and contract is signed on September 2006.

• A joint workshop was organized by Land O' Lakes and SNV-BOAM to promote a study on "Consumer Research" in October 2006. 53 stakeholders and most of the members of EMPPA who are working in the dairy business attended the meeting. The outcome of the study was that the best way to promote processed milk & milk products is to focus on quality, diversification of the product range and branding (even of traditional products like Ayib).

• A market research and dairy value chain study “Developing a Market Led Approach for the Ethiopian Dairy Industry” by Technoserve, Kenya was completed and promoted in December 2006. Main findings of the study focused on: Production system,  animal diseases and detection, transport, producers (cooperatives), processors, investment opportunities. The study recommends that Ethiopian Dairy Cooperatives should transform into business hubs in which farmers are able to access services such as education, credit facilities, AI and extension services, access to inputs including feed, transport and testing services. In addition, it was recommended that a dire need to revamp the current dairy cooperatives by separating the management from policy issues, mobilize and recruit producers based on improved access to services that will result in tangible commercial gains for members and shareholders.

• A milk collection centre improvement system via the creation of several models of milk collection centers for the Addis Ababa milk shed (Holetta and Debrezeit) was developed. The models will be implemented by using capital grants (FIF window 2) as tools for working with innovative partners (Fantu supermarket, Adaa Liben cooperative, etc.). Current activities include contracting of a GIS mapping (using GPS technology) of the milk collection system by location, proximity to infrastructure (roads, electricity), quantity supplied and quality supplied. SNV-BOAM team members went on various morning collections to observe current practices and in process of collecting full price information of technology to be purchased as part of the scheme.

• A joint workshop was organized by Land O' Lakes and the programme to promote a study on "Consumer Research". 53 stakeholders and most of the members of EMPPA who are working in the dairy business attended the meeting. The outcome of the study was that the best way to promote processed milk and milk products is to focus on quality, diversification of the product range and branding (even of traditional products like Ayib).

• Advice was given to a private investor assisting him to understand the UHT milk market in Ethiopia and to encourage him to invest in this technology.

• Selale Dairy Farmers' Cooperative Union requested fund to provide Training on Dairy Processing & Marketing for its members and training is on going.

• Cheese coating research is going on (Evaluation of Imported & Locally Available Beeswax for Cheese Processing).

• 46 women participated in training course entitled “Training to Improve the Quantity and Quality of Milk Supply & Processing “ from Oct.23 -November 3, 2006 and they acquainted knowledge & technical skills regarding the management of milk & milk products (including animal feeding, milk quality control and  milk technology)

• At present, they are planning to open milk collection centers with processing facilities (butter, yoghurt)

   

Outcome

• Improved knowledge and understanding concerning factors that are driving the market and linkages between producers and processors of the dairy sector in Ethiopia and improved information concerning market potential, value added in the chain and technological potentials has been granted on a permanent basis.

• Registration of EMMPPA and its role as service provider for its members and advocate and lobbyist.

• Expansion of services offered (e.g. by cooperatives to members, processors to farmers and equipment suppliers to processors) via qualified BDS providers.

• Increased measurable interest of private investors in the dairy sector (value addition in milk processing, e.g. Ultra High Temperature (UHT) technology.

Impact Indicators of the Programme Objective (impact according to the milk value chain):

• Impact in terms of increased production capacity and increased turnover and sales:Private investors showed interest for investments into value-addition (e.g. milk processing). EMPPA, together with partners, is actively promoting efforts to establish school milk feeding systems; and the organization has taken a leading role in promotional campaigns for milk and milk products. These activities will have the expected result on increased production, turnover, sales and income.

• Impact in terms of improved product quality: Town Milk Supply (TMS) technology is initiated and technologies with the result of better milk quality are introduced for milk stakeholders. Collection improvement system is on the way (mapping).

• Impact in terms of increased employment: MB Plc (milk value chain) is in the process of establishing dairy processing plant in Addis Alem. The total employees needed for the operation of the project is about 67 permanent and a number of casual laborers during peak seasons as indicated in the business plan.

• Impact in terms of networking: Networking activities are functionning on the basis of concrete value chain interventions and bring concrete benefit to the network members.

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