What it takes to invest in yoghurt production
What you need to know:
- Yoghurt consumption is not only becoming a trendy thing in many Ugandan communities, but it is also emerging as an important business area where people can invest. Dorothy Nakaweesi shows us how.
At present Uganda produces more than 2.2 billion litres of milk but only consumes about 800 million litres annually.
This generates $50m (Shs180 billion) per year from milk sales, but with investments in processing the country can earn six times more than it currently gets.
Some companies have invested in the processing of milk into several products such as ice cream, ghee, powdered milk and yoghurt, among others.
With the growing middle class in Uganda who are sensitive about their nutrition, yoghurt is one of the dairy products which are highly demanded.
According to Mr John Musajjakawa, the Uganda Investment Authority (UIA) senior investment officer, investing in the processing of yoghurt is one investment idea which is very profitable.
“There is a ready market for yoghurt among the youth and children who cherish the product,” Mr Musajjakawa said.
Milk, which is the prime raw material for yoghurt making, can be supplied locally from milk collecting centres, especially in western and central parts of Uganda.
Required investment
According to UIA, a yoghurt processing plant can be established on the premise that it can at least produce more than 4,000 litres of yoghurt per day which translates into about 1,248,000 litres per year.
“For a plant with this capacity one requires about $38,440 (Shs138 million) and this is expected to yield an estimated revenue of about $4,992,000 (Shs17 billion) annually,” a UIA recent report notes.
Mr Paul Harera, director at Onfarm, sharing his experience in this business, said: “You need a lot of stuff to go into processing. In this case you need good quality milk enough from single stock.”
He shared that getting milk from a single source helps to maintain the quality and standard of the final product.
The major raw materials used to make yoghurt include: Milk, milk powder, stabilisers, sugar, flavour, colour, among others.
You also need equipment such as a packaging machine, milk tanks, transportation means and refrigerators.
Incentives
Mr Musajjakawa says government has tried to improve on the transport and communication network, especially in areas where milk is sourced.
“Also there is no tax levied on agricultural products in a bid to promote the agro-processing industry in Uganda,” he added.
