Small fontsize
Medium fontsize
Big fontsize
English |
Switch to English
Switch to French
Filter by Agriculture topics
Publication Type
Filter by date

Arla launches turnkey milk powder packaging facility in Côte d’Ivoire

26 October 2013

On 4 September 2013, the Danish dairy company Arla announced the establishment of a joint venture in Côte d’Ivoire for the packaging and sale of milk powder produced in Denmark. The joint venture partner, Mata Holdings, already packages single-portion sachets, and will use the same sachets in repackaging the Danish milk powder.

The operation will be undertaken at a “new, mobile packaging station”. This was developed by Arla and launched at the end of July 2013. The mobile facility operates “out of three 40-foot containers” which use solar cells to deliver a 12-hour production cycle, in temperature-controlled conditions. The facility has an annual capacity to process 2,000 tonnes of milk powder, repackaging it from 25-kg bags to 25-gram sachets which each deliver one glass of milk when reconstituted. The mobile packing facility is seen as a low-cost means of developing new markets: Arla indicated that the sachets produced would be “distributed to thousands of shops all over the country”.

Côte d’Ivoire is seen as “a gateway to neighbouring countries such as Ghana”, while the agreement with the partner in Côte d’Ivoire is seen as the first of five planned joint ventures. Arla sees Africa as an “exciting challenge”, since the continent has big multinationals such as Nestlé and FrieslandCampina already active alongside “the regional dairy company Promasidor”. Promasidor is based in South Africa, but has a major focus on the distribution of individual sachets of milk powder across Africa.

For Arla, the new joint venture in Côte d’Ivoire is in line with the company’s plans announced at the beginning of 2013, to “manufacture products for export to the growth markets outside the EU”. According to a company press release, the company’s ability to “improve profitability for Arla’s owners is dependent upon… increasing sales of quality products all over the world”. Arla is looking to “significantly increase its exports to the strategic growth markets of Russia, China and the Middle East and Africa up to and during 2017”. 

Editorial comment

As the USDA has highlighted, major West African dairy markets have “near total dependence on bulk milk imports”, while the local dairy sector is poorly placed to meet rapidly rising consumer demand (see Agritrade article ‘ Nigerian and Ghanaian markets offer further growth potential for EU dair...’, 2 February 2013). An FAO report published in 2009 noted that “except for the Peulh, most Ivoiriens do not consume milk or milk products”, but the Arla initiative can be seen as making an important contribution to meeting both immediate consumption needs and growing demand, delivering between 15.4 and 16 million litres of liquid milk-equivalent product through a single three-container processing unit.

Regional markets could, however, be of far greater interest. In Ghana, for example, per capita milk consumption is low compared to consumption in East Africa, but nevertheless some 80–100 million litres of milk-equivalent product per year on average – largely imported – are consumed.

Elsewhere in Africa, turnkey projects like the Arla one in Côte d’Ivoire may cause more concern. In East Africa, per capita milk consumption is much higher, competition is intense, and commercial sales of smallholder milk production have been expanding rapidly in recent years. In this context, the launch of similar turnkey projects, with joint venture partners outside the existing dairy operators, would be seen as potentially disruptive.

The engagement of foreign dairy players is much more likely to be focused on the supply of milk powder to address seasonal milk shortages, alongside longer-term engagement with the development of local milk powder production capacity to iron out seasonal supply variations. Currently, the shortage of milk powder processing facilities means that large volumes of milk go to waste during peak production periods (see Agritrade article ‘ Dairy processing and the East African regional market’, 7 May 2012).

This highlights the need for a disaggregated approach by European dairy companies in developing joint venture and cooperation relationships in Africa, if these are to contribute to the structural development of African dairy sectors. 


Terms and conditions