1. Developing and strengthening Dairy value chains in Tanzania:
What are critical success factors?
Kurwijila ,L.R.
Department of Animal, Aquaculture & Range Sciences
Sokoine University of Agriculture
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

2. Presentation Outline Introduction
Current status of dairy industry in Tanzania
Milk production
Seasonality
Milk marketing
Milk processing
Milk consumption and demand
Dairy Industry Development challenges
Opportunities for dairy Development
Key success factors and prioritisation of interventions
Conclusion
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

3. Introduction … Dairy Development efforts/initiatives (1980-1990s).
Dairy industry contribution:
30% of the livestock GDP or 1.2% of total national GDP) and
food and nutrition security (47 litres per capita) (TLMI, 2015, MALF, 2016).
Employment generation (farm production, marketing and trade; processing, retailing, inputs supply and advisory services)
Wealth creation ( 350, ,000 Tshs per milking cow per year
Industrialisation (185 MCC, 82 factories)
Dairy Development efforts/initiatives ( s).
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

4. Introduction Tanzania has a huge cattle population (28 Million).
782,995 dairy cattle (2016/2017); million 2018
Dairy cattle concentrated in the cool, highland regions (48%)
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

5. Cattle distribution
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

6. Status of dairy Industry
Milk production increasing slowly due mainly to increase in cattle numbers rather than productivity per cow
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

7. Milk production
milk production highly seasonal especially from traditional cattle herds
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

8. Milk marketing challenges
Milk marketing outlets (NBS, 2003)
Milk Buyer %
% milk Vol.
Neighbours
86.1
85.8
Local market
5.5
5.9
Secondary market
0.5
3.2
Processors
1.4
2.9
Large scale farms
0.2
0.9
Trader at farm
4.5
0.7
Other
1.7
0.6
TOTAL
100.0
Dominant direct milk sales to consumers by producers create diseconomies of scale
Challenge how do we convert the 97% “raw milk” consumers to processed milk consumers?
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

9. Milk marketing challenges- inadequate milk collection infrastructure
source :TDB data 2012; ( - )=+ incomplete data
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

10. Inadequate milk collection vis à vis processing investments
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

11. Milk processing
Challenge: many small scale processing units. A challenge or strength or opportunity?
Should we consolidate small units into bigger ones ; example of Klimanjaro??
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

12. Milk processing in Tanzania…
82 milk plants processing 154,100 liters per day out of 757,550 litres/day liters per day of installed capacity (2018).
Under capacity utilization is a challenge for local processors
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

13. Many processing plants.. but
Low capacity utilisation= high unit cost & uncompetitiveness
08/06/2019
Meatu Milk Factory Expansion Feasibility Report

14. Consumer demand analysis
Market for processed milk and milk products estimated at 112,771,374 litres per annum including imports (68,775,066 litres-ESRF/TAMPA 2016 study);
2014
Total Milk processed (l/day)
166,620
Less: Azam Dairies
45,000
Local milk processed (l/day)
121,620
Local milk processed (l/yr)
44,391,300
Add: total milk imports (l/yr)
68,775,066
Total Supply of marketable milk (l/yr)
113,166,366
Less: Exports
394,992
Total Domestic Consumption processed milk & Milk products(Demand)(l/yr)
112,771,374
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

15. Opportunity: Meeting the demand supply gap Projections indicate demand to 2020 outstrips supply
Source: SUA/MoAC/ILRI, 1998
Dairying in EA is the most important agric. sector commodity for GDP gains in the medium term (ASARECA/IFPRI report)
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

16. The competition Informal market: A competition?
Competition from imports is high (61%) of the domestic market)
Locally produced products command a very low share (<30%) of all value added products.
the leading 5 processing companies in terms of liters of milk processed per day, account for 57per cent of the total amount of milk processed per day
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

17. The Competition
Import source countries include regional leading countries such as KE, UG, ZA and European countries, Middle East Countries
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

18. Challenges to growing the dairy industry
Dairy heifers: 11,000 vs demand for 80,000 per annum
Inadequate feed supply in both quality and quantity
Inadequate and inefficient extension services
Inadequate milk collection infrastructure.
Inadequate technical capacities in human resources at various levels
Weak farmer and other stakeholder institutions
High cost of doing business /unfriendly policies/regulatory environment
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

19. Opportunities Increasing and urbanizing population
High economic growth of 6-7% in the last years
Large indigenous cattle population which provides a foundation for crossbreeding of dairy cattle
Available idle capacity in milk processing
Political stability and peace
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

20. Critical success factors
Critical success factors include having high number of dairy animals kept by a significant number of well skilled and dedicated farmers who have access to modern technologies, are well organised and supported by efficient extension service delivery , access to credit, inputs and output markets and a friendly policy and regulatory environment.
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

21. Conclusion
Dairy development in Tanzania is promising but facing a number of challenges that need to be addressed on the basis of critical success factors that include technical, organisational , policy and regulatory issues.
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania

22. Thank you for you attention
08/06/2019
Tanzania Dairy Development Conference, 30 May , Arusha Tanzania