October 2, 2019
Arla scales up commitment to develop sustainable dairy sector in Nigeria
In a new public-private partnership in Nigeria, farmer-owned Arla Foods is committing to further development of a long-term sustainable dairy industry and local dairy sector in Nigeria, the Scandinavian co-op announced in mid-September.
Arla will realise its effort by helping 1,000 small scale farmers create better livelihoods while also strengthening its business in the country.
Already active in existing development projects within the Nigerian dairy industry, Arla is now engaging further by signing a new Memorandum of Understanding with Kaduna State and the Nigerian government. While the state and government will offer 1,000 nomadic dairy farmers permanent farm lands with access to water, Arla will be the commercial partner that will purchase, collect, process and bring local milk to market.
Nigeria's population - set to reach close to 400 million people by 2050 - is among the fastest-growing of any nation in the world, and already there is a growing consumer demand for affordable nutrition in the country. The new public-private partnership entered into by Arla is the first of its kind in Nigeria and is part of Arla's business strategy to meet consumer demand in Nigeria through a balance between development of the local dairy sector and imported milk and dairy products, the co-op said.
"With demand for nutritional dairy products increasing amongst Nigeria's fast-growing population, there is a clear opportunity and need to support the development of the local dairy industry to help meet this demand. As a company with a history of successful collaboration on local dairy development projects and a long-term commitment to our Nigerian consumers, customers and partners, we are delighted about this new partnership, because it will make a real difference in many farmers' businesses and lives," said Tim Ørting Jørgensen, executive vice president and head of Arla Foods International.
Kaduna State and the Nigerian government are committing to improve the structural conditions for nomadic farmers. Instead of continuously moving in search of grazing areas and water, land will be set up for the farmers to permanently base themselves and enjoy opportunities to expand their farms. Securing the infrastructure such as roads, power and water, which are necessary to process and bring the milk to market, is also part of the public commitment.
The project will primarily be funded by loans provided by the Central Bank of Nigeria and guaranteed by the local state. As commercial partner, Arla will invest in establishing milk collection centers. These will be pivotal to Arla's role as a processor of the milk produced by the farmers.
Arla's commitment to this new public-private partnership in Nigeria builds on the success of a collaboration initiated in 2016 with not only Kaduna Sate and the government, but also NGO Care, Danish Agricultural and Food Council, local cooperative MILCOPAL and Nigerian pastoralist organisation Coret, Arla noted.
Supported by Danida, that partnership works on a five-year project called the Milky Way Partnership Nigeria to develop a socially, environmentally and economically sustainable dairy value chain. The partnership and project have demonstrated a viable scalable business model that has created both an increase in income and job opportunities for local farmers and employees in the dairy sector.
At Amana Dairy Cooperative in the outskirts of Kaduna, farmers see the benefits of being part of the Milky Way Partnership Nigeria. They now have steady access to water and a milking parlour has been installed to ensure that the milk is cooled down immediately after milking to preserve quality.
"Previously, the cows were drinking from the ponds. Now, they have fresh water and are well-fed. You can tell from their skin that they look healthy. We are very happy, and we are already starting to see the results," said Alhaji Sani Aliyu, one of the dairy farmers at Amana Dairy Cooperative.
The Nigerian dairy industry is currently able to supply less than 10% of the country's current demand for dairy products, a gap that is increasing exponentially as the population grows over the next decades.
Most Nigerian dairy farmers are small scale and most milk collection consists of milking the cows by hand into small open bowls or buckets. If the milk is not consumed in the farmer's own household, it usually doesn't travel farther than to the nearest town market. Preventing milk from spoiling in the heat is a big challenge.
Arla will contribute with experience from its pan-European supply chain and its cooperative farmer culture to deliver commercial success with the farmers in Nigeria, the co-op said.
"Bringing local milk into our product portfolio is part of the way we believe that our business will be long-term successful in Nigeria. We will only succeed in growing local farmers' incomes, Nigeria's dairy sector and achieving Arla's ambitions in West Africa if the project and its activities are commercially viable. This is a great example of business and development going hand in hand to ensure long-term sustainable solutions that are built to last," said Jørgensen.