There are unexploited opportunities for producing milk powder and UHT milk in Ethiopia, according to a report from Manufacturing Africa, a UK government-funded programme supporting investment in the manufacturing sector.
The country currently imports US$15-25 million in dairy products a year, with 80% of that being milk powder and condensed milk. Whey, a liquid byproduct of cheese production, accounts for approximately 9% of dairy imports in Ethiopia. Cheese and curd contribute about 6% of imports, while other milk products such as butter, cream, buttermilk, and yogurt make up a smaller portion of imports at less than 5%. This presents an opportunity for import substitution in milk powder in the short term and potential export to neighbouring countries.
However, the dairy industry in Ethiopia faces several challenges, including low productivity due to a lack of access to knowledge and technology, poor milk quality caused by inadequate hygiene practices and insufficient quality checks, and a limited supply of milk because of a lack of cold chain facilities. These issues have impacted local dairy production and have been exacerbated by the quality and volume of dairy cows in the country.
There are also emerging trends in Ethiopia’s dairy sector, such as initiatives to improve animal health through the introduction of high-performing crossbreed cattle and the regular supply of quality animal feed. Additionally, there is a 10 -year plan in place to increase the number and breed of dairy cows, with the goal of enhancing productivity and quality.
The government has also established integrated agro industrial parks (IAIPs), which are regional agro-processing zones designed to attract investment and support the growth of the sector. These parks include Bulbula, Bure, Baeker, and Yirgalem, and range in size from 214 ha to 263 ha. Investors are provided with serviced or ready-to-use land with common infrastructure and utilities, and there are one-stop-shop services available to facilitate quality checks, permit renewals, site visits, site management, and aftercare support.