Dairibord Malawi Limited managing director Theodora Nyamandi has said there are opportunities for growing exports in the dairy sector to support economic growth by bringing fresh capital into the economy.
She, however, said the country needs to focus on growing a competitive raw milk supply base to meaningfully achieve the feat.
“Supply of raw milk is inadequate to sustain the demand for export and the quality is not always consistent. As Dairibord, we have geared ourselves for the export market through quality improvement. We are now certified to SAZ ISO 22000:2005, an internationally recognised food safety and quality management system,” said Nyamandi.
She said the company has also developed quality brands that can compete favourably on the export market.
Nyamandi said the Southern African Development Community (Sadc) region is a net importer of milk and milk products and, so, there are opportunities to export these products.
She added that the scarcity of foreign currency in Malawi has motivated companies, including Dairibord to export.
“Our main market is Zimbabwe [and] exports to Zambia are through third parties. We will continue to pursue export opportunities in the region,” said Nyamandi.
Tete, a blossoming mining town in Mozambique, has presented business opportunities for Malawi businesses, and Dairibord has not been left behind.
Nyamandi said the company is looking for a partner who is willing and capable of carrying its brands in that market, adding that they have tested the market with some of their brands which have been well received.
Dairibord is exporting its long life milk, the UHT Ching’ombe brand. Yoghurts and cheese, on the other hand, are exported in small quantities because of limited supply of raw milk in the country.
Dairibord and other companies in the dairy industry buy their milk from, among others, Shire Highlands Milk Producers Association (Shmpa).
Shmpa adviser Brian Lewis said producers hope that soon exporters will start passing the benefits of the export market to the farmers.
“Malawian farmers are still the lowest paid in the region. The K78 per litre they get is only 33 percent of the K232 per litre that farmers get in Zambia and Zimbabwe. It is not surprising that they are struggling. Over the last few months, farmers have had a very hard time because costs of production have doubled, but the price they receive for their milk has only recently increased by 15 percent,” he said.
Lewis said consumers pay up to five times the farm price for milk, arguing that before privatisation in 1998, the farmer to consumer mark up was two times (100 percent)—about normal for a liberalised market.
For a long time, Shmpa has complained that the dairy companies have made good returns through exploiting the monopoly, but their profits are coming at a cost to a majority of Malawians who cannot consume milk because it is unaffordable.