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French milk firm - Danone Milk comes to Kenya

By Standard Reporter | October 10th 2015

NAIROBI: French food group Danone is using Kenya as a launch pad to enter the East Africa market. The firm, which holds 40 per cent stake in Brookside, stated its commitment to using the Kenyan market to further embed its presence in the region, following past successful entries in north, west and South Africa.

Besides Danone, 10 per cent is owned by equity firm Abraaj and the rest is held by the Kenyatta family. The firm, which operates in 140 countries, has investments in Africa worth 1 billion Euros (Sh116 billion). It has a presence in Morocco, Algeria, Egypt and South Africa. Danone’s approach appears to be targeting mainly smallholder dairy farmers, who stand to benefit from the French firm’s investment in capacity building. Brookside has some 160,000 contracted dairy farmers in Kenya.

“We are looking at making investments in the dairy farming ecosystem with special attention to capacity building of smallholder farmers. For example, raw milk suppliers in selected Brookside’s key collection sheds will soon start benefiting from credits from reforestation and adoption of green energy from the carbon fund created by Danone,” the French conglomerate’s CEO, Emmanuel Faber, said. He revealed that Danone had, as part of its promotion of green energy initiatives, distributed more than 50,000 energy saving stoves to farmers in several parts of the country.

On whether Danone’s dairy products might soon find their way onto Kenyan shop shelves, Faber said the French processor would pursue inclusivity by investing in products that ‘already resonate with locals’. He said it was up to Brookside Dairy to decide whether to have Danone’s products in Kenya or not.

Strategic partnership

“We decided to develop a strategic partnership with Brookside due to the Kenyan company’s operational successes. Africa is the next frontier for growth and development,” Faber, who was accompanied by Danone’s executive president for Africa Division Pierre-Andre Terisse, said at Brookside’s Ruiru offices.

John Gethi, Brookside’s director of milk procurement, who hosted the Danone officials, said the processor stood to benefit from Danone’s expertise in the dairy enterprise. “We are delighted to be associated with a world leader in dairy, and we hope to benefit from Danone’s operational synergies to drive forward our business,” Gethi said.

He reaffirmed Brookside’s business focus of working with smallholder farmers in driving the enterprise. He said the partnership with Danone had opened new opportunities for Kenya’s dairy farmers, who stood to benefit not only in the French firm’s capacity building initiatives, but also in increased market for local dairy products.

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