Posted on :Thursday , 8th August 2024

With over 72% of the workforce employed and contributing around 24.1% of Uganda's GDP, the agriculture sector remains the foundation of the country's economy. Just the dairy sector is valued at US$3.8 billion, with US$106.2 million coming from exports annually. Milk and dairy products have a crucial role in preventing hunger and preserving local food security.

The dairy industry has shown remarkable expansion. Ugandans consume very little milk in their households—roughly 0.5 litres (550 millilitres) per day—much less than the FAO and WHO's recommended daily intake.

In response, the Ugandan Dairy Development Authority (DDA) began working on the Dairy Policy Action Plan, which was adopted in August 2022. Stakeholders are participating in this multi-year strategy through the implementation of policy interventions aimed at improving quality, expanding production, boosting consumption, and opening up new markets.

A big step in the right direction towards overcoming these difficulties is the USD 35 million senior loan financing that Delphos obtained for Pearl Dairy Farms Ltd., a reputable dairy processor in East Africa. The International Finance Corporation (IFC) and Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO) will enable Pearl Dairy Farms Ltd. to acquire a packing plant in Kenya and increase the amount of powdered milk produced in Uganda.

This initiative is expected to increase the accessibility of the raw milk market for smallholder producers, thereby impacting Kenya and Uganda. Pearl Dairy Farms Ltd.'s comprehensive Dairy Development Program, supported by the IFC, will benefit over 15,000 local farmers. In order to boost output and profitability, it provides training on best practices and data access.

Amit Sagar, CEO of Pearl Dairy Farms Ltd., stated, "This facility is a critical milestone for Pearl Dairy Farms Ltd. and demonstrates our commitment to driving growth and excellence in the dairy sector." "With the help of IFC and FMO, we can increase the number of smallholder farmers we empower, improve food security, and promote sustainable growth.

Pearl Dairy Farms Ltd exemplifies how investment in modernising the dairy value chain creates significant economic returns for communities and countries," said Bart Turtelboom, Chairman and CEO of Delphos, emphasising the wider economic impact. With the support of IFC and FMO, Pearl Dairy Farms Ltd. will be able to spread throughout the continent, resulting in inclusive growth and significant economic advantages.

Delphos has secured funding for transactions throughout the African continent totalling more than US$4.7 billion. The funding will ultimately support sustainable agricultural development in East Africa by bolstering the region's food security and strengthening the dairy supply chain's resilience to macroeconomic shocks.

The corporation was given permission to engage in local dairy plants by Kenya in March of last year, and that was months before the proposed agreement. In order to jointly invest in regional dairy projects, Pearl Dairy Farms Ltd. and the state-owned financier Kenya Development Corporation inked a contract.