Africa’s richest man Aliko Dangote plans to establish a dairy plant in Kenya in a move that will put him in a head-to-head battle with market leader Brookside, which is owned by the Kenyatta family.
Sani Dangote, the brother to Aliko and vice-president of the Dangote Group, said Thursday in Nairobi that the Nigerian conglomerate will in the coming weeks start feasibility studies that will inform the location, capacity and worth of the dairy plant.
The Nairobi unit will deal with powdered milk, commonly known as dry plant, to feed export markets, especially Nigeria that relies on foreign countries to meet its dairy needs.
This signals that the Dangote Group will be locked in a fight for raw milk with firms like Brookside, New KCC and Githunguri, which could trigger a price war that will ultimately benefit farmers.
Dangote’s entry could also help end the volatility in the milk market that has seen prices oscillate between Sh25 and Sh40 over the past three years on irregular supply.
“Nigerians consume a lot of powder milk more than any other milk product. It is because of this that we would like to start a drying plant here to tap the ready market back at home,” said Mr Dangote.
He said the firm is currently importing more than 4,000 tonnes of powder milk for the Nigerian market from Europe worth Sh105 million.
He was speaking during the signing of a trade partnership between Kenya and Nigeria under the umbrella of the Nigeria-Kenya Agribusiness Partnership that will see the two countries establish investment activities.
His brother is already working on setting up a Sh34 billion cement plant in Kitui and is also involved in Kenya’s mining sector.
Mr Dangote pointed out that the dairy sector in Nigeria is underdeveloped and the country uses a lot of money on milk importation.
The move highlights the growing foreign interest in Kenya’s dairy sector, which in July saw French multinational Danone acquire a 40 per cent stake in Brookside.
Last year, the Nigeria chamber of commerce had announced that Brookside Dairy was planning to open shop in the West Africa nation.
Brookside has a 45 per cent share of the market in Kenya following acquisition of a number of local processors.