Kiruhura- Rushere-based dairy company - Vital-Tomosi - the producers of Milkman yoghurt, has asked government to protect them against local competition, especially against well-established companies.
Speaking at the commissioning of the company’s dairy plant in Rushere, Kiruhura District, Mr Odrek Rwabwogo, a partner in Vital-Tomosi, said government must put in place a policy, which ensures productive capabilities of new entrepreneurs are not constrained.
“The cost of infrastructure [and] supplies to this plant … is coming from at least four hours away. So you have a high cost of entry and then you have to compete with someone who has 100 years in the market. It is extremely important that a plant like this that does 100,000 litres of milk from farmers gets some … protection,” he said.
Mr Rwabwogo said they had invested about $15m in the plant, 60 per cent of which was from private equity.
According to Dairy Development Authority (DDA), Uganda currently produces 2.2 billion litres of milk, mainly from the central and western regions, which account for about 50 per cent of national production.
Uganda, according to DDA, currently has a milk per capita consumption of 62 litres, which has grown from 25 litres in 1986. Much of this, which represents 85 per cent, according to available data, is consumed in raw form representing about $100m in real value. Fifteen per cent, which represents $160m is processed.
Over the years, Uganda has seen tremendous growth in dairy processing. However, this has created stiff competition, creating a challenge for some dealers.
The growth has also, according to farmers seen an improvement in farm-gate prices, which has improved livelihoods.
“Factories help us a lot. They have broken the monopoly. We see a difference in prices now. A few years ago, a litre would never go beyond Shs600 but now it is Shs800,” Mr Moses Musimenta, a herdsman said.