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New KCC narrows gap with Brookside

New KCC managing director Nixon Sigey. FILE PHOTO | NMG
New KCC managing director Nixon Sigey. FILE PHOTO | NMG 

New KCC has sharply increased its share of the raw milk intake to narrow the gap on sector leader Brookside.

The Kenya Dairy Board 2017 data indicates State-owned dairy now commands 35 per cent of the raw milk market up from 23 per cent the previous year, cementing its position at number two.

Brookside is still the market leader with 40 per cent of the market, a position it has held for years now.

The Kenyatta family-linked Brookside has been ceding market share despite the acquisition of other milk processors between 2007 and 2013.

In 2014, Brookside had a market share of 44 per cent, which has gradually dropped.

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Githunguri Dairy Farmers Cooperative comes in third with a market share of 10 per cent, having shed off six percentage points in the last three years.

The acquisition of Buzeki Dairy, which was the last in the list of Brookside acquisitions in 2013, had pushed the Ruiru-based Brookside’s market share to 44 per cent.

Series of takeovers

Buzeki was fourth in a series of takeovers completed in a couple of years starting with Ilara in 2007, followed by Delamere and SpinKnit.

New KCC, whose market share has risen steadily since 2016, has been expanding its plant to accommodate more milk.

The oldest dairy has expanded its Eldoret plant by installing a Sh70 million line for the production of the UHT milk with a similar exercise currently underway at its Dandora plant in Nairobi.

Processors have been wooing farmers by offering incentives in order to maintain milk intake at a time the factories are faced with stiff competition from informal players like vendors, who control nearly 70 per cent of the raw milk market.

Brookside recently increased producer prices to Sh37 in escalating competition with other processors.

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