Goods like butter and ghee are in high demand in oil-rich countries like Dubai and Qatar, which, however, do not produce their own owing to their desert climate.
New KCC products are Halal certified, meaning that they meet all the conditions required to be sold to consumers of the Muslim faith.
New Kenya Co-operative Creameries (KCC) chief executive Nixon Sigei is targeting dairy exports to Middle East countries in a bid to grow its sales.
The new managing director of the State-owned milk processor says there is a huge, untapped potential for the company, which relies mainly on East African markets.
“From the market survey that we have conducted, some of our products are very competitive in the Arab world and we want to utilise this opportunity to increase our income,” said Mr Sigei in an interview.
Goods like butter and ghee are in high demand in oil-rich countries like Dubai and Qatar, which, however, do not produce their own owing to their desert climate. New KCC products are Halal certified, meaning that they meet all the conditions required to be sold to consumers of the Muslim faith.
Exports of New KCC products to South Sudan were disrupted by civil unrest in the country, ending a promising growth opportunity. The dairy firm has also faced stiff competition from Uganda, which has shrank its market on the long-life products, due to a well-established dairy industry in the land locked country.
Uganda used to import dairy products from Kenya before new investments in the sector which have increased domestic output. The South Sudan market accounted for 20 per cent of the processor’s long-life product sales while 15 per cent of the goods were being exported to Uganda.
New KCC commands 20.8 per cent of the processed milk market in the country.
On the sale of the plant to a private investor, the new managing director said there was a need for new capital injection through private participation to give the processor financial muscle to effectively compete with rivals in the milk market.
“We must develop strategies that will enable us to compete with our competitors, especially in the wake of mergers and acquisitions that we have witnessed in the recent past,” said Mr Sigei.
Last year, Brookside acquired Buzeki Dairy at a cost of Sh1 billion as the fourth processor in a series of takeovers that the Kenyatta family-owned firm has completed over the past six years starting with Ilara in 2007, Delamere and SpinKnit (makers of Tuzo milk brand).
The New KCC also plans to invest in new technology to improve on its production and efficiency through embracing cost-effective machinery.
As the new boss, Mr Sigei says that his objective is to ensure that the quantity of milk New KCC receives from farmers increases to provide enough supplies throughout the year. He said New KCC would be working closely with financial institutions to help the farmers acquire quality dairy cows that cost between Sh100,000 and Sh150,000.
“Most framers have challenges in getting these high-yielding breeds and it will be important for us to ensure that they get finances that will help them purchase these breeds,” he noted.
