The Dairy Offering

Dairy Offering Teaser

Description
  • The dairy project is to establish 100 dairy cow pilot units to demonstrate improved milk production both in quality and quantity
  • EAL will also partner with small holder dairy farmers to establish dairy economic units that will demonstrate increased productivity for small holder farmers and create more value for the famer by supporting production and off taking milk.
  • It aims at establishing increase milk yield per cow from an average of 7 liters per day to at least 20 liters per day by providing quality silage and adopting best practice in animal husbandry dairy farming.
  • The project will also ensure good quality milk by automating the milking process, implementing industry best practice in production, and providing proper storage in each unit.
  • The units will be cost by employing efficient technology and energy saving mechanism in the biogas system that will power the whole unit
Business Model
  • The project will capture farmers aspirations of earning more value from their dairy cattle by adopting international best practice in animal husbandry, and providing quality feeds which will increase yield and milk quality
  • The project will off take the milk for processing and distribution to high value niche players
  • EAL has partnered with Pascha Dairy to be able to process there own line of products that would meet the processing quality standards. So as to be able to have oversight over the whole process from production to processing and distribution.
  • The marketing channels include; Home deliveries; Supermarkets and convenience stores; and Distributors and processors
The Livestock Value Chain Components
  • Qlix360 will participate across the value chain to increase production yield, quality and create a seamless market in the dairy value chain.
  • The Qlix360 investment offer cuts across the dairy value chain:
  • EAL considers this components as investable offers that will either be financed through debt/trade financing and equity for an attractive return in investment

Market Opportunity

Adoption of international best practice will increase yield and quality of milk
Deficit In Milk Supply In The Kenyan Market.
  • Qlix360 will participate across the value chain to increase production yield, quality and create a seamless market in the dairy value chain.
  • The Qlix360 investment offer cuts across the dairy value chain:
  • EAL considers this components as investable offers that will either be financed through debt/trade financing and equity for an attractive return in investment
livestock in Kenya is 40% underfed
Government And Not-forprofit Organization Incentives To Promote Agribusiness
  • Kenya government Big 4 agenda directly touches onensuring 100% food security by 2022. This agenda directly impacts the rural economy with incentives to increase yield across all the sub sectors including the dairy sector.
  • Through the ministry of Agriculture there initiatives and incentives to encourage investments in small holder farmer engagement and aggregation to increase efficiency in the sector
  • Not-for-profit institution engagement to increasing investment in food security across Africa targeting value chain efficiency to increase value to producers, increase yields and address climate change.
 
Excess Milk Processing Capacity
  • Milk processing is undertaken at small, medium, and large scale.
  • By end of 2019, Kenya Dairy Board, KDB had licensed 29 milk processors, and 67 mini dairies.
  • The total milk processing capacity is approximately 3.75 million liters per day; approximately 46% of this capacity was utilized.
  • Improvement in technology allows extended shelf life (ESL) processing and milk dispensing which makes it possible for a consistent milk processing cycle. Hence reducing milk losses in times of glut and ensure continued use of capacity in times of low milk production.
Most of the risk in the dairy value chain lies with the producers
Low Production And Productivity.
  • Smallholder milk producers dominate the industry most of these producers lack economies of scale and have low productivity coupled with seasonal fluctuations. They also lack the necessary resources to modernize and expand their enterprises.
  • Enhancing milk production and productivity requires support for farmers through enhancing dairy farming practices and farm enterprise management, supported by innovative business models to ensure reliable access to inputs, services and finance.
  • EAL will have community engagements to aggregate the farmers into economically viable units that will see standardized farm management and increased productivity.
Poor Quality Feeds And Feeding Regime.
  • Since most of the industry is dominated by small holder farmers who lack capacity to invest in the technical know how and efficient production.
  • Over reliance on fluctuating seasonal forage availability because of high dependence on rainfed agriculture also affect the productivity of the cattle,
  • Most of the dairy cattle are underfeed and therefore affect there production.
  • EAL will partner with input producers to ensure that the production units get the right feed ratio to increase production per cow.
Small holder farmers are the majority contributors of the milk in the Kenyan market
Reliable And Quality Market.
  • The market challenges include unstable milk supply with cycles of abundance and scarcity, high cost of milk processing, poor milk quality and safety, and the risk of unfair competition from oligopolies in milk processing.
  • Despite the challenges, the growth in demand for high quality milk and diverse dairy products in both the domestic and regional markets, are opening investment opportunities.
  • EAL will partner with key value chain actors to capture the growing demand for quality milk by investing in milk handling, bulking, chilling, processing and dispensing.
Risk Of Diseases
  • Lack of proper housing for the animals and investment in input and veterinary services increases vulnerability of the animals and generally reduces productivity in the industry
  • EAL will adopt international best practice across all the aggregated commercial units. This will ensure better housing for the animals, access to quality feeds and extension services.
  • Due to economies of scale EAL will be able to manage the costs associated with good animal husbandry through increased productivity per animal and per unit.

Investment Opportunity On The Dairy Offering

Description
  • The dairy project is to establish 100 dairy cow pilot units and partner with small holder dairy farmer in efficient economic units of at least 25 dairy cattle to demonstrate improved milk production both in quality and quantity
  • The project will also partner with group of farmers offering an initial infrastructure in chilling and collection points to recruit 100 smallholder farmers into the program
  • It aims at establishing increase milk yield per cow from an average of 7 liters per day to at least 20 liters per day by providing quality silage and good environment for the cattle
  • The project will also ensure good quality milk by automating the milking process, implementing industry best practice in production, and providing proper storage in each unit.
  • The units are meant to cost efficient thorough employing efficient technology and energy saving mechanism in the biogas system that will power the whole unit
Business Model
  • The project will capture farmers aspirations of earning more value from their dairy cattle by adopting international best practice in animal husbandry, and providing quality feeds which will increase yield and milk quality
  • EAL will off take the milk produced for processing and distribution.
  • EAL has partnered with Pascha Dairy to be able to process there own line of products that would meet the processing quality standards. So as to be able to have oversight over the whole process from production to processing and distribution
  • The marketing channels include; Home deliveries; Supermarkets and convenience stores; and Distributors and processors.

Investment Opportunities

(in The Dairy Offering Components)

Feed/fodder Investment Opportunity

Fodder invest is structured around the need for quality feeds that translate to the highest volume and quality products from the animals. The fodder will be provided to farmers in the established four pilot units with

25 cattle per unit, across four counties, Kericho, Bomet, Uasin Gishu and Nyandarua.

The fodder will be of the required total mixed ration, TMR to ensure an increase in milk yield per cow from an average of 7 liters per day to at least 20 liters per day.

Fodder will be purchased and provided to farmers on credit. EAL will make a commission on providing quality feed to the aggregated farmers. EAL will require an initial investment of USD 50,000 to sign of forward contract with fodder suppliers.

Cattle Investment Opportunity
  • EAL will partner and aggregate farmers in commercially viable units that will consolidate 25 cattle per unit.
  • The units will have a capacity to hold at least 50 units at any one time
  • The aggregated farmers will learn best international practice in dairy animal husbandry and be able to apply the same training in the pilot units
  • EAL intends to increase production f milk per cow from the average 7 liters to 20 liters per day
  • EAL will put an initial investment of USD 50,000 in aggregating farmers for each of the four pilot units
  • The total investment required USD 50,000
  • Qlix360 will off take the produce thus ensuring a market for the produce is always available
Infrastructure investment opportunity
  • The infrastructure will go to the establishment of four pilot units with 25 cattle per unit, across five counties, Kericho, Bomet, Uasin Gishu and Nyandarua.
  • Infrastructure will be set up will include
  • Shelter and feeding lots
  • Refrigeration facilities for products
  • Biogas unit for power generation for farm use.
  • This will also include the cost of leasing the land.
  • The units are meant to be cost efficient through employing efficient technology and energy saving mechanism in the biogas system that will power the whole unit.
  • This investment product will earn from the partner farmers paying for the infrastructure over time
  • EAL will require USD 100,000 as initial set up costs.
Distribution & Processing Investment Opportunity
  • This investment product will go into investment in the distribution and processing of milk
  • EAL will partner with PASCHA, one of the largest processors in Kenya with a 250,000 liter processing capacity
  • Processing investment will go into leasing of processing equipment as well as storage equipment and packaging equipment.
  • Distribution investment will go into facilitating distribution through leasing of transportation in partnership with logistic companies. Ensuring product reaches the focus markets efficiently and at the right price.
  • EAL intends to focus on the following market channels:
    • • Home deliveries
    • • Supermarkets and convenience stores
    • • Distributors and processors
  • EAL will require an initial investment of USD 450,000 to lease processing space and setup a robust distribution network that ensures product reach