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Parmalat pushing into Africa; powdered milk remains a challenge

Dairy producer Parmalat is experiencing an increase in demand for its products from the African continent.

“Producers of basic food items, such as Parmalat, will benefit from the rise in Africa’s basic income levels,” says Uwe Kessel, business manager of Parmalat South Africa’s exports and industrial contracts division.

Parmalat has manufacturing, sales and marketing operations in South Africa, Botswana, Zambia, Mozambique and Swaziland. Furthermore, the company also exports products to the rest of the continent, mostly from South Africa.

Kessel says that outside South Africa, Parmalat’s fruit juices are by far the most popular products. Long-life UHT milk is, however, less popular in the African market, largely because of a preference for powdered milk.

“In many African countries powdered milk is the predominant format of milk consumption. However, in some of the more developed African markets consumers have crossed over to the liquid format,” explains Kessel. “Having said that, you also need to consider that milk consumption varies from region to region. For example, East Africa is a high milk consumption area, while in West Africa it is not such a big part of the culture.”

In an interview with How we made it in Africa last year, Paul Retzlaff, one of the Zimbabwean farmers who in 2004 were invited to start with commercial agriculture in Nigeria, said that they are also struggling to sell their fresh milk in the west African country.

“Powdered milk is firmly established in the marketplace in Nigeria and has satisfied the market. There are a lot of cows and milk around, but all in the informal sector. This is sold as a fermented product by the herdsmen to the villagers. There is no milk as such,” he explained.

“The reconstituted milk is of a very high quality and has been modified to suit local tastes, which is slightly caramelised, so that milk in the natural form does not fit the people’s taste buds. We are now selling our milk to the powder importers who are replacing the powder with fresh milk, albeit on a very small scale at the moment but hopefully to grow quickly,” Retzlaff added.

Kessel says that pan-African supermarket chains such as Shoprite are having a positive impact on the continent’s retail industry because they expose consumers to new products that were previously unavailable.

According to him, one of the biggest challenges currently facing Africa’s agribusiness sector is finding international export markets for food products. “You can produce the most fantastic potatoes in Tanzania, for example, but if the processing plant and farming environment have not been EU approved, you will never find your product in the European market. If we can find the route to market, Africa will grow exponentially because we have the soil, we have plenty of water, and relatively cheap labour.”

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