Posted on :Tuesday , 1st February 2022

DOB Equity, one of the leading Dutch family-backed impact investors in East Africa, has announced an additional investment in Tanga Fresh, a Tanzanian dairy processor.

DOB's additional investment is expected to assist Tanga Fresh in expanding its production in the long-life milk market. East African consumers are increasingly shifting away from fresh milk and toward long-life milk, presenting a significant opportunity for market growth.

Tanga Fresh intends to expand its overall production capacity with DOB Equity investment, providing dairy farmers in the Tanga region with access to a fair and reliable market.

According to DOB, the East African dairy market has significant growth potential. Countryside Dairy, a Kenyan dairy processor in Nyahururu, is an investor in the company.

The supply and quality of milk from farmers is one of the major issues impeding growth in the East African dairy sector. Tanga Fresh has partnered with Solidaridad, an international civil society organisation, to address this issue. Tanga Fresh expects to be able to provide services and support to 6,000 farmers as part of this partnership, with the goal of improving quality, yields, and sustainability throughout the supply chain.

Tanga Fresh manufactures a variety of products including mtindi (sour milk), yoghurt, ghee, fresh and long-life milk. Its production facilities have grown significantly in recent years, from 15,000 litres of milk per day to 80,000 litres per day in a modern, high-quality plant. DOB explained that it invested in Tanga Fresh in order to provide a reliable market and fair pricing to the region's small dairy farmers.

'Less than 7% of milk in Tanzania is processed, leaving a lot of room for growth in the market,' said Toine Huijbers, chief financial officer at DOB.

'We anticipate an increase in market demand for higher-quality processed milk.' This is likely to be driven primarily by regulation and consumer awareness of the dangers of drinking contaminated milk, and Tanga Fresh is in a good position to supply this growing demand.'

'The investment from DOB increases our working capital flows and production capabilities,' said Tanga Fresh CEO Innocent Mushi. This will be critical in bolstering Tanga Fresh's innovation and expanding its national market share.