Dairibord seeks to replace outdated milk machine

Published: 10 June 2013

Dairibord will spend $600 000 to procure a new ultra-high temperature (UHT) milk machine from Finland, which is expected to boost production capacity.

Dairibord COO Themba Mutsvairo told an investors tour of the milk processing plant that the company was using an outdated UHT milk machine, which has a lower capacity of around 2.5 million litres per month compared to the 3 million litres produced by other companies.

Mutsvairo said Dairibord was facing stiff competition from other processing companies both from within and outside borders in the milk segment due to the continued use of the outdated machine.

"UHT milk machine used at Dendairy is far more effective and better than the one we have here so we are facing much intense competition," he said.

At the Imara Investment Conference, Dairibord CE Anthony Mandiwanza said the influx of cheap dairy products mainly from South Africa, saying the development would hurt local companies.

Mandiwanza said the milk supply development programmed to build the supply base was on course and expected to contribute 10% of milk supply in the current year. He said it was important the group mitigates the costs of the producer as the high producer prices the group paid of around 62c/l compared to the below 40c price paid by SA producers eroded their competitive advantage.

Mutsvairo also said that they are having challenges in meeting raw milk demand due to a dwindling national herd hence the group has resorted to importing milk powder.

The group is currently importing powdered milk from World Auction in Denmark which amounts to 25% of the total milk production. The powder is then mixed with water to produce liquid milk which is used for value added products such as yoghurt and ice cream.

In the first quarter, national milk production marginally increased by 0.5% to 13.3 million litres compared to the same period last year. Statistics by the Dairy Services Department in the Agriculture Ministry show that production is picking up.

There are currently 223 registered dairy operators and an estimated dairy herd of between 24 000 and 26 000. Production is expected to top 70 million litres this year up from last year's 55.9 million litres. Annual national demand stands at 120 million litres.

At its peak, Zimbabwe produced over 150 million litres of milk annually, with the surplus being exported into the region and beyond

On the other lines at the plants, Mutsvairo noted the ice cream plants and the yoghurt plant were fairly new having been imported in 2010 and 2011 respectively.

The ice cream plant produces 10 000 sticks per hour while the yoghurt plant has an output of 25 000l per day. Mutsvairo said the group had substantial market share in these segments.
- Financial Express

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