European dairy cooperative Arla Foods has entered a commitment to help further develop a sustainable dairy industry in Nigeria under a public-private partnership.
Arla said it is already engaged in existing development projects within the Nigerian dairy sector but has now signed a new memorandum of understanding with Kaduna State and the Nigerian government where the co-op will act as a commercial partner to collect, process and bring local milk to the market, according to a statement.
In return, Kaduna State and the Nigerian government will offer 1,000 nomadic dairy farmers permanent land with access to water, giving them the opportunity to expand their farms. Securing infrastructure such as roads, power and water is also part of the public commitment.
“The new public-private partnership entered into by Arla is the first of its size in Nigeria and is part of Arla’s business strategy to meet consumer demand in Nigeria through a balance between development of the local dairy sector and imported milk and dairy products,” the statement read.
Arla said the project will primarily be funded by loans provided by the Central Bank of Nigeria and guaranteed by the local state. As the commercial partner, the co-op will also invest in establishing milk-collection centres.
Tim Jørgensen, executive vice president and head of Arla Foods International, said: “With demand for nutritional dairy products increasing amongst Nigeria’s fast-growing population, there is a clear opportunity and need to support the development of the local dairy industry to help meet this demand.
“As a company with a history of successful collaboration on local dairy development projects and a long-term commitment to our Nigerian consumers, customers and partners, we are delighted about this new partnership because it will make a real difference in many farmers’ businesses and lives.”
Arla said Nigeria’s dairy industry can currently only supply less than 10% of the demand, which is “increasing exponentially as the population grows over the next decades”. The co-op joins Dutch counterpart FrieslandCampina, which also formed a partnership in Nigeria earlier this year to transform milk production and make dairy products more affordable and accessible.
Jørgensen added: “Bringing local milk into our product portfolio is part of the way we believe that our business will be long-term successful in Nigeria. We will only succeed in growing local farmers’ incomes, Nigeria’s dairy sector and achieving Arla’s ambitions in West Africa if the project and its activities are commercially viable.”