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 Edgar Vhera-Agriculture Specialist Writer

THE Government’s import substitution policy through increased local production and uptake of raw products by local processing companies is bearing fruit for Dairibord Zimbabwe, with its raw milk intake rising 10 percent to 31,4 million litres.

The Zimbabwe Stock Exchange-listed milk processing giant’s financial report for the year ended December 31 2023 revealed that raw milk intake by the group had increased to 31,429 million litres compared to the previous year. 

This represents 34 percent of a total milk intake of 91,8 million litres by all processors.

“The milk supply development unit continues to invest in technology and training programmes to support our producers, promoting best practices and sustainable agricultural methods. These initiatives ensure consistent and high-quality raw milk supply and support the empowerment of the local farming community,” Dairibord chairman Mr Josphat Sachikonye said recently.     

In spite of the volatile trading environment and a general downturn in consumer spending, the group achieved positive volume growth with sales volume at 108 million litres, a 11 percent increase above the comparative period last year, the report added.

“In the outlook, raw milk supply growth and capital investment drive will underpin the overall volume trajectory, with focus being deployed on expanding plant capacities, optimising manufacturing capabilities, maintaining financial discipline and investing in technology and innovation to enhance product offerings,” continued the report.

Statistics released by the Dairy Services Unit (DSU) showed that national milk production increased nine percent from 91, 4 million litres in 2022 to 99, 8 last year.

For the first two months of the year, national milk production has risen 21 percent from 15 097 814 to 18 337 826 litres.

Meanwhile, in the 2022 budget, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube extended duty suspension on minimum quantities of milk powder and as a quid pro quo, dairy processors were expected to increase support to out-grower schemes with a view to build the stock of dairy herd, in order to increase raw milk production. 

He followed this in the 2023 budget with a proposal to gradually reduce, on a sliding scale, milk powder imports starting at 75 percent in 2023 to 50 percent in 2024 before further slashing it to 25 percent in 2025.

“In line with the objectives of National Development Strategy 1 , there is need to gradually substitute imports through increased production, coupled with simultaneous increase in the uptake of raw milk by processing companies from the current level of 70 million litres to 1å30 million per annum by 2025,” Prof Ncube said.

The effects of these fiscal measures are beginning to bear fruit as milk products imports dropped 16 percent from US$37  million in 2021 to US$31 million in 2022. It declined a further 15 percent to US$27 million in 2023.