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Forex, Power, Biggest Challenges To Our Company’s Survival – MD Integrated Dairies

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Sheyin Roy Shekarri is the managing director of Integrated Dairies Limited. In this interview with GODDIE OFOSE, he stated that the Nigerian market is currently flooded with over 80 per cent of non-fresh milk yoghurt and that besides power, the new foreign exchange policy of the federal government is another major challenge for manufacturers in Nigeria.

How did Integrated Dairies start?

The company started in 2003. At that time we had three ranges of products; butter, yoghurt and milk. Over the years, we have found that yoghurt was in high demand and a lot of milk was being channelled towards cheese, meanwhile butter did not allow us to cope with the demands for yoghurt. So we took a decision to stop the production of cheese and butter and channelled all the milk towards the production of yoghurt and fresh milk.

We have been doing that since 2003 up till date. Around 2010, we added about six new flavours to our range of yoghurt. Initially we were doing strawberry, vanilla, but now we have mango, banana, and apple. The same goes for yoghurt.

What does your new packaging mean to this brand?

What we have today is more internationally acceptable in terms of presentation. It is better in terms of hygiene, shelf life and presentation. In terms of ingredients, it is now 100 per cent natural. It is now pure natural colouring and flavour.

Tetrapack has been in Nigerian market for long, would you say Farmfresh is late in the market in terms of that innovation?

There are two different things. What other companies are doing is UHT yoghurt (Ultra High Temperature). Anything you produce under this condition has nothing living inside; everything has been killed and that is why that product is able to last six months. But with what we have now, it is possible to have yoghurt with a six months shelf life. That is the difference between our own packaging and others.

What are the challenges in making Farmfresh Yoghurt?

The number one problem in the present day Nigeria is foreign exchange and the second major challenge is power.  For instance, nobody is bringing in stabilisers that we use; we source it locally now because those who import it are having challenges in sourcing foreign exchange, we have to share that pain with them.  Another area is packaging. There is no company in Nigeria that manufactures the type of packaging materials we use for our product; so as it is now we rely on foreign exchange to import it. We are being forced to buy dollars at the black market rate. As regards power, we have to run on generator for 24 hours operation. We recently upgraded our factory to high tech production plant and we can’t afford to be on epileptic power supply because once there is fluctuation, we are likely going to experience damage to our panel. So, we are forced to stay on generator for 24 hours like every other serious operator. The power situation in the country also affect demand. For instance, a customer who wishes to buy about five bottles can decide to buy only one bottle or two when he realizes that he cannot adequately preserve the yoghourt in his refrigerator due to epileptic power supply in his area. This attitude affects demand and production has to be reduced as well.

What is the level of local content in your production?

We have 600 cattle that provide us with our milk. And for you to sustain that, it means you have to farm the feeds for those animals. The more you give them, the more milk you get. The number one feed for these animals is silage. Silages are produced from maize. We take part in the activity of producing the silage. We also have our herdsmen who monitor the health of these animals.

If all yoghurt manufacturers in Nigeria follow your model, what will be the impact on the economy?

We just need more farmers to invest in animals and production of milk. If we can get more people to do that, we would gradually get over the dependency on imported powder. If you go to a country like Kenya, nobody there knows what is called powder. In fact if you want to bring in powdered milk in Kenya, you pay 60 per cent duty. So it’s all fresh, nobody drinks reconstituted powdered milk. If we can get more people to get involved in milk production and provide an easy process of getting the milk to producers, then I think we would be on the right path.

Going by your insight, how safe is the market from unwholesome yoghurt?

There’s no figure to put on that, but I’m basing it on the actual number of people that produce fresh dairy milk in Nigeria compared to the quantity UHT products that is being sold. I think the 80 per cent is actually an understatement because fresh milk products only cover 10 per cent of dairy products in Nigeria.

Going by what you are saying, it means consumers are on the receiving end. What are fresh milk producers doing to let the consumer know about this?

For now, we have been able to establish an association called Commercial Diary Ranchers Association of Nigeria. We are now working together with government to educate them and the people on the advantages of buying fresh and UHT. We are also trying to get other individual farmers into the association and work with them to increase their production and consequently their standard of living. We are inviting people to join us and also providing them a market to sell their milk because we would buy their milk. Initially, we were buying milk from villages around Bauchi and Jos, unfortunately, we had to stop because our plant at that time could not remove the odour from the milk of the local animals. But now we have upgraded the plant and we plan to resume buying from the local farmers.

With ranch and grazing issue gathering momentum in Nigeria, what is your association doing on this?

The association is making suggestion to government. Let’s not go into politics.

What is your message to consumers of Farmfresh products as regards the new package?

My message to consumers is that we are launching a product that has been improved in terms of recipe, 100 per cent natural with no preservatives, and healthy in all sense of the word. We are also doing a slight increase due to the current economic situation but that slight increase doesn’t come with any reduction in quality. Instead, we have increased the quality of our product. A lot of people buy yoghurt but they don’t get the quality they should be getting because it is not fresh.

What’s the local content level of your product?

The level of local content in our product is 80 per ent because majority of it is milk and we produce our milk. We buy some of all other little inputs locally an also import a few. But that input we buy is just about five per cent of our product. Our milk is 100 per cent local. Nothing goes into the milk; just fresh milk.

 

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