Dutch Private Equity invests in Kenya-based dairy company

NAIROBI (Capital Markets in Africa) – DOB Equity has announced today that it has taken up a stake in Countryside Dairy Ltd at a publicly undisclosed value as part of a commitment to increase social impact investment deals in Kenya.

By investing in Countryside Dairy Ltd, the Private Equity fund with offices in Kenya, Tanzania and the Netherlands will be seeking a slice of the KES100bn Kenya Dairy sub-sector. According to the Kenya National Dairy Master Plan 2010 estimates, the Kenya dairy sub-sector is valued at more than KES100bn and is the single largest contributor to Kenya’s agricultural GDP-higher than Tea and horticulture.

Established in 2014 and located in the dairy-producing heartland in Kenya, Countryside Dairy is an integrated milk processing company with a high-quality processing plant and an installed processing capacity of 100,000 litres daily. Countryside Dairy delivers high-quality pasteurized fresh milk to low-income areas, including Nairobi slums. Its strategic focus and business model is based on serving the underserved low-income segment of the population, which has an estimated market demand of over 100kg per capita.

DOB Equity explains that those individuals on lower incomes suffer from a chronically high prevalence of unsafe, often raw and contaminated milk products that pose a serious health risk. Countryside Dairy currently distributes its flagship Countryside Dairy Fresh milk product to markets in Nairobi, Eldoret, and Nakuru. It also has plans for retail milk products that would guarantee low-income consumers access to high-quality, fresh milk products at lower prices.

This latest investment will expand DOB Equity’s current equity portfolio in the regional dairy sector, where it already holds a stake in Tanga Fresh, the Tanzania-based dairy processor.

Brigit van Dijk-van de Reijt, CEO of DOB Equity, comments: “Our latest deal in the East African dairy sector will allow Countryside Dairy to beef up its supply chain and offer better purchase prices to farmers while guaranteeing product traceability.”

Countryside Dairy Managing Director, George Mwangi, who is also a former East African Cables Managing Director, said the entry of DOB Equity will help to further boost the firm’s efforts to enhance value for Kenyan Dairy farmers. Currently receiving raw milk from more than 20,000 farmers drawn from Nyandarua and Laikipia Counties, Countryside Dairy plans to expand its catchment area.

“DOB Equity’s investment has come at a crucial growth stage for Countryside Dairy and will allow us to create innovative marketing concepts for dairy products aimed at the low-income segment of the population stressing that low-cost, high-quality milk plays an essential role as a key part of a healthy diet. We have found in DOB Equity a committed partner who shares our vision to foster social development by delivering high quality, pasteurized, and affordable dairy products to the lower income market.”

Ralph Jansen, investment manager at DOB Equity, says: “The new partnership with DOB Equity will further give Countryside Dairy access to the world-renowned dairy processing technical capabilities in the Netherlands.”

Saskia van der Mast, investment manager at DOB Equity adds: “We have undertaken extensive feasibility studies that point to a latent demand for affordable, fresh, and pasteurized milk products. The formal market for processed milk is still in its infancy and valued at only US$570mn, with an estimated potential value of US$2.8bn annually as the dairy market matures. Currently, only 13% of total milk products are traded formally. DOB Equity remains firmly committed to making social impact investments in Kenya and other East African countries to accelerate development in the region.”