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Ethiopia - New Diary Product Joins Market


New milk and yogurt brand dubbed Selale Diary Cooperative Union (SDCU) has debuted to Ethiopia’s market after building a new factory at an outlay of 28 million Birr.

SDCU is already supplying pasteurized milk to the market and Yoghourt is expected to follow in the near future.

The Union has a milk processing plant in Sululta town. The plan took approximately three years to finalize the construction and installing the machinery, Hailu Tadesse, SDCU’s director, explained. According to the director the Union went to the construction of the plant after it made a feasibility study which took five months.

The total outlay of 28 million Birr was financed by the Union itself and by loan. The Union invested 13 million Birr of its own and borrowed 15 million Birr from Cooperative Bank of Ethiopia (CBO).

The plant in Sululta is said to have a capacity of processing 20,000 liters of milk per day. With regard to collection of milk, the Union secures from 10,000 liters to 12,000 liters of milk from its members every day. Hailu explained SDCU plans to fill the gap by increasing the supply from members and also by engaging new members.

According to the director the Union currently focuses on the capital city’s market and plans to penetrate the market via pricing. Currently the Union sells half a liter of milk to retailers for seven Birr and they in return sell it for 10 and 11 Birr.

It was back in 2001 Selale Dairy Cooperative Union (SDCU) was established with nine cooperatives and a total members of 512. It is situated at North Shewa Zone, Oromia Region. Currently the number of cooperatives has grown to 31 and its members have also increased to 3,000. According to Fortune every year out of the entire profit the Union makes 35 percent of it set aside and the rest is divided among the members.

Currently Ethiopia’s diary demand is met via local production and import. In 2014, around 2,544,579 Kilogram of dairy products that was worth 15,156,394 USD was imported by Ethiopia. This is a tremendous increase as compared to the previous budget year.

Study conducted by Precise Consult International, a local firm, attributes this to the diminishing amount of supply that fails to meet the existing demand. Amanuel Assefa (PhD), deputy chief of party at Precise Consult International, noted the growing population, expansion of urbanization and urbanized lifestyles, as well as the income growth in Ethiopia are expected to increase the demand for dairy products.

Currently there are 32 registered dairy processing companies in Ethiopia