Sameer Agriculture & Livestock Limited (SALL), a company owned by billionaire businessman Naushad Merali, is set to open a Sh3 billion ($30 million) milk factory in Kenya this year in a move expected to raise competition in the fast-growing dairy sector.
The company, part of the Sameer Group, says the dairy processing plant being set up in Nakuru will employ an estimated 500 people and be operational by June next year.
“The plant that is under construction at Salgaa in Nakuru is a first of its kind in Africa with some of the most modern dairy production facilities,” said SALL CEO Sameer Merali in Nairobi.
Mr Merali spoke when the firm announced the rebranding of its milk products as it looks to catch customers’ eyes to drive sales and win more market share.
Milk processors have lately unlocked significant investments with billionaire investors queuing to pump big money into the dairy industry, attracted by a rapidly expanding market whose size is expected to more than double in the next 10 years.
They include Deepak Kamani, the chairman of conglomerate Zuri Group and the man at the centre of long-running Anglo-Leasing financial scam, who is the latest deep-pocketed investor to target the dairy market with plans to build a fresh and powder milk plant in Nyahururu.
Mr Kamani followed in the footsteps of Africa’s richest man, Aliko Dangote of Nigeria, who has announced plans to set up a dry milk factory in Kenya.
The upcoming ventures are expected to intensify competition in a sector that is dominated by Brookside Dairies, the country’s largest milk processor that is controlled by the Kenyatta family, which has been tightening its grip of the sector with a series of acquisitions in the past five years.
French food group Danone in 2014 acquired a 40 per cent stake in Brookside and announced plans to help the company expand its product portfolio and reach in East Africa.
Brookside, which produces fresh milk and yoghurt, has since built up an estimated 40 per cent market share after a string of acquisitions, becoming the largest dairy firm with annual sales of over Sh15 billion.
Other big players in the dairy market are Githunguri Dairy Farmers Co-operative which has announced plans to expand its product portfolio. Sameer Group acquired the Daima milk business from Adarsh Developers.