Agribusiness: Betting on Senegal’s un-milked cows
Demand for dairy products was growing among Senegal’s middle class but consumer choice was limited to those made from imported milk and cheap milk powder. Others had failed to solve the riddle but Bathily decided to try.
It is very difficult to build commercial dairy marketing because the limited milk available is sold to neighbours
“If I could start a dairy industry that will buy milk from the local farmers and make products that consumers will like, we could create something sustainable,” he said.
Bathily’s idea touched on two questions central to Africa’s development: how to monetise subsistence livelihoods and how to kick-start production of consumer goods in a continent reliant on imports.
Africa’s dairy industry produced around 17 million tonnes of products in 2014, of which around 7 million were made from imported milk, according to the International Farm Comparison Network (IFCN), which promotes knowledge of global dairy.
Demand for milk in Africa is expected to grow sharply in the next decade due to population growth and rising incomes, leading to an increase both in production and imports, said Torsten Hemme, IFCN managing director.
The processing industry is dominated by companies including Brookside in Kenya, FrieslandCampina and Promasidor in Nigeria, and Fan Milk in Ghana, which has received investment from Dubai-based Abraaj Group.
When Bathily, now 39, launched La Laiterie du Berger (LDB) in 2006, it was – and it still is – the only dairy processing company in Senegal using milk from the local herd.
He raised around 1 million euros ($1.2 million) with help from family and an angel investor, France-based Investisseurs & Partenaires, to start the firm.
LDB has since increased its capital to give Danone and its social investment fund a stake.
Grameen Credit Agricole and Phitrust Partners also own shares.
‘We’re not in Switzerland’
The company markets pasteurised milk, yoghurt, fresh cream and sour milk under the brand name Dolima, which means “give me more” in Wolof, Senegal’s national language.
It does not publish results but Bathily says sales have climbed from 250 million CFA francs ($431,466) in 2007 to 2.2 billion CFA francs ($3.83 million) in 2013.
It is now the number two dairy producer in Senegal behind Saprolait, which uses imported powdered milk, but success has not come easy.
Pastoralists make up nearly a third of Senegal’s population but the average herd consists of only two or three cows producing a few litres of milk a day. Peuhl farmers migrate hundreds of kilometres in search of pastures.
To reach herders’ milk Bathily contends with bad roads, a lack of storage facilities and power cuts.
“We are not in Switzerland with green hills, clement weather and cows that produce 20 litres of milk per day,” he said.
For decades, businessmen and researchers have wrestled with how to make Africa’s cows more productive and the dairy business commercially viable. East Africa’s industry uses highly milk productive cattle such as Holstein Friesians crossed with local breeds, said Amos Omore, Tanzania country representative for the International Livestock Research Institute.
“It is very difficult to build commercial dairy marketing because the limited milk available is sold to neighbours and in local markets,” Omore said.
Bathily established LDB’s main plant in the town of Richard Toll, around 450 km (280 miles) north of the capital Dakar on the River Senegal and the Mauritanian border.
The town is an agro-industrial hub with a sugar manufacturer and rice farmers. It is also near the homesteads of nearly 1,000 pastoralists from whom LDB collects milk twice a day.
Before dawn, logistics manager Souleymane Ba dispatches five vehicles loaded with hundreds of numbered plastic containers.
Outside town the vehicles veer on to tracks through the scrubland, driving around 200 km (125 miles) between settlements to exchange empty containers for ones filled with milk.
Bathily is not the first to commercialise Senegal’s milk.
Between 1992 and 2003, food giant Nestle operated a processing business but it shut due to high collection costs and competition from cheap powdered milk imports, a Food and Agriculture Organization (FAO) report said.
LDB, however, makes an operating profit and Bathily aims to ensure farmers earn more by selling to him, giving them an incentive to keep their cattle in one place.
Even so, during this dry season production fell to about 1,500 litres per day from 6,000 litres during the rainy season – an indication of the financial challenges he faces.
“The social business model that we are practising is not a model to do things for free,” he said. “We are not in a hurry. We are here for the long term.”