Dendairy bullish despite deal collapse
TINASHE MAKICHI
Food and milk processor, Dendairy, will continue charting its own course taking advantage of available opportunities despite the collapse of its proposed merger with listed Dairibord Zimbabwe Limited.
This comes after the proposed merger between the two dairy companies collapsed due to unclear circumstances.
The merger according to competition experts would have created a strong monopoly in the industry while creating a regional milk processing powerhouse in the country.
“We are charting our own course although there could have been great synergies if Dairibord and Dendairy merged. That was the reason for discussions,” Dendairy MD Daryl Archibald told Business Times.
Dairibord initially announced the planned merger talks in July last year. The collapse of the merger deal comes against a backdrop of last year’s 6% decline in raw milk intake, largely triggered by lower milk yields at farms due to rising costs of stockfeed.
Apart from the proposed merger, Dendairy has been aggressive in the expansion of its plant operations in Kwekwe which has also culminated in the setting up of new factories as the company seeks to expand its footprint on the export market.
The dairy company is already exporting to Zambia, Malawi and Mozambique and wants to become one of the biggest dairy producers in Zimbabwe due to the investments that the company has made.
Dendairy Limited produces dairy products that include full cream milk, low fat milk, Maas, long life milk, milk powder, flavoured milks, ice cream, butter, yogurts, and drinking yogurts. The company was founded in 2004 and is based in Kwekwe.
Dendairy commissioned its US$10m Kwekwe plant in 2016. At the commissioning, it was said that the plant will see the dairy company increasing milk production to five million litres a month against a national demand of eight million litres per month, making it the leading player in the dairy industry.
The company’s growth prospect was also boosted by the acquisition of its 30% stake by Scandinavian Private Equity firm, Spear Capital.
The company has consolidated its market share at a time when most of its competitors were busy retooling to meet best global practices.
Other notable players in the dairy industry include Prodairy and Kefalos, among others.
