Examining Uganda’s potential areas of investment in Dairy production

by Christopher Kiiza
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Uganda’s dairy sector has grown exponentially over the years and its products continue to gain increased demand and consumption within and beyond the country’s borders.

The diary sector is developed and regulated by the Dairy Development Co-operation (DDA) – a statutory body under the Ministry of Agriculture.

The DDA Acting Executive Director, Samson Akankiza says that in the past five years (2018-2022), Uganda’s milk production has increased from 2.51 billion litres to currently 3.4 billion litres. 

“Our annual growth rate average is 11 percent, which is among the highest of any sector in the economy. Out of the 3.4 billion litres of milk currently produced, 80.2% (2,566,400,000 litres) is marketed, 19.8% (633,600,000 liters) is consumed at the farm, 66% of the marketed milk is sold unprocessed (1,693,824,000 litres) of which 10% (169,382,600 liters) is sold door-to-door (homes) and 56% (1,333,886,400 litres) is sold at sales outlets,” says Akankiza.

He adds, “34% of the marketed milk is processed (872,576 litres) into various milk and milk products including pasteurized milk, yoghurt, UHT milk, cream, ice cream butter, ghee, cheese, milk powder, casein, whey powder and butter oil.”

It is evident that Uganda provides one of the greatest potential for investment in dairy sector in the world today.

Some of the virgin areas potential for investment include: milk collection centers, and cold chain infrastructure to mitigate post-harvest losses.

Cold chain infrastructure ensures that the milk is kept at an optimum temperature that enables it retain its nutritional and palatable qualities. Uganda currently has 198 registered roadworthy milk tankers of different capacities mainly: 5,000, 10,000, 15,000, 20,000 litres operating countrywide. At farm level, milk handling containers from the farms include food grade milk cans.

Another area virgin for investment is dairy processing and value addition. Uganda currently has only 9 UHT processing plants and 3 milk powder processing plants.

At 6% annual increment in milk production, investments in milk and milk products processing for local, region and international market is very critical. Currently, 80.2% of the total milk produced is marketed, 34% of the marketed milk is processed; while 66% is sold raw.

There are 160 (Large, Medium, small scale and cottages) licensed entities processing milk.

Other areas potential for investment include milk transportation since milk road tankers are the recommended means of milk transportation for long distances, investment in cleaning in place (CIP) equipment for milk road tankers, and animal breeds and supply of stock.

“Opportunities still exist in areas of breed improvement such as embryo transfer, importation of improved stock and Artificial Insemination to further increase milk production,” Akankiza said.

Opportunities also exist in the provision of dairy related support services that include; farm input supplies, lab consumables and reagents, and provision of dairy equipment and maintenance services.

Other potential areas of investment include, animal waste/by-product conversion. There are still opportunities for conversion of animal waste into bio-fuels; hides and horns, as well as leather.

Export Markets

Uganda’s key export market for dairy products is comprised mainly of: EAC regional countries, COMESA, SADC, Malaysia, India, USA, Japan, Oman, UAE, Nepal, Syria and Bangladesh.

The top exporters include Vital Tomosis Dairy Limited, Jesa Farm Dairy Limited, GBK dairy Products Limited, Birunga Dairies (U) Limited, Brookside Limited, Amos Dairies limited, Pearl Dairy Farms Limited, Lakeside Dairy Limited and Rainbow Dairy (U).

The most exported products include: milk powder, yoghurt, cheese, butter, ghee, butter oil, UHT milk, casein and whey protein powder.

Boosting investments in the diary sector and adding value to milk exports aligns with President Museveni’s endless calls for value addition on products for export.

Akankiza attributes the growth of the dairy sector to various stakeholders who have invested heavily at various levels in the dairy chain and the exports of various products to countries that have stringent quality and safety control measures where Uganda’s dairy products have consistently met international standards.

As the sector grows, how safe are the products for human consumption.

Akankiza explains that DDA regularly inspects milk handling premises to ensure that they handle milk and milk products that is fit for human consumption.

“We also conduct frequent analysis and on-spot testing of milk and milk products to ensure they are fit for human consumption using our mobile laboratories that analyze antibiotic residues in milk and other chemical adulterants. Our laboratories are also equipped to handle microbiological analysis among other parameters,” he says.

“Our market surveillance verifies the quality and safety of milk sold in raw milk sales outlets as well as milk collection and bulking centers. Adulterated or contaminated milk is easily identified and action taken immediately. Surveillance is undertaken through supermarket visits and other dairy selling outlets. In addition to this is our constant enforcement of dairy standards in line with the dairy regulations and other related food laws,” he adds.


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