Nelson Gahadza Senior Business Reporter

Dendairy says it spent US$3,5 million in 2021 towards enhancing stockfeed production and new product development initiatives.

Dendairy currently produces Maas (fermented milk), UHT (ultra high temperature) milk, UHT flavoured milk, yoghurts, ice cream, and fruit juices. The company has been exporting mainly to Mozambique.

Company director, Daryl Archibald, told The Herald Finance and Business that Dendairy had developed  over 1 000 hectares of irrigated lands in Kwekwe with each hectare dedicated to lucerne capable of producing 25 tonnes of dry matter per year.

He said this beats all commercial crop yields and has a dissolvable protein comparable to stock feeds allowing for a high degree of substitution.

“Of the 1 000 ha, 650ha is available to grow to supply Dendairy farmers. This lucerne will start being supplied in the first half of 2022 to Dendairy farmers, giving them a very profitable conversion from feed to milk,” he said.

Mr Archibald added that by providing year round affordable feed, small holder farmers can focus on animal health, breeding and feed to milk conversion and become dairy experts rather than a jack of all trades.

Recently, the Government challenged players in the Dairy sector to complement its efforts aimed at reducing feed stock costs, which negatively impact viability as it accounts for over 65 percent of total milk production.

Lands, Agriculture, Fisheries, Water and Rural Resettlement Minister Dr Anxious Masuka, said the Government has robust plans for growing the dairy sector, anchored lower production costs.

He said the Government plans to increase farmers’ business viability through increased own farm feed production and feed formulation and providing support for irrigation, mechanisation and pasture development.

According to players in the sector, uncompetitive stock feed prices on the domestic market, cause Zimbabwe to have the highest cost of raw milk at US$0,66 per litre compared to regional counterparts.

The price of raw milk in South Africa ranges from US$0,35/l to US$0,37/l, while in Zambia milk costs between US$0,33/l and US$0,35/l.

The uncompetitive prices of stock feed have resulted in low milk yields per cow as farmers compromise on feed mixes in an effort to attain viability.

According to Mr Archibald, the biggest challenge for small holder dairy farmers is that Zimbabwe has a dry and wet season and dairy animals require a high consumption of food year round.

“That is even as a smallholder farmer, you need to grow maize and put it into silage pits for the winter. This is onerous and requires a small holder farmer to be an expert in both dairy and cropping,” he said.

In 2017, a Scandinavian backed sub-Saharan Africa focused private equity investment company SPEAR Capital acquired a 27 percent stake in Dendairy under a debt and equity transaction.

The transaction was valued at US$6 million and has seen Dendairy investing heavily in its factory and growing its raw milk supply since its establishment in 2004.

The company has continued to experience market penetration and growth within the Zimbabwean market and expanded its footprint into the region.