PE firm makes further investment in Tanzania’s dairy sector

DOB Equity, a Dutch family-backed impact investor in East Africa, has made a further investment in Tanga Fresh, the biggest dairy processor in Tanzania.

This additional investment will help Tanga Fresh expand its production in the long-life milk market. There has been an increasing trend of East African consumers moving from fresh milk to long-life milk, presenting a major potential for market growth.

DOB Equity’s investment will also allow Tanga Fresh to expand its overall production capacity, providing access to a fair and reliable market for dairy farmers in the Tanga region.

DOB continues to support and invest in Tanga Fresh as it believes the East African dairy market has great potential for growth. DOB Equity is also an investor in Countryside Dairy, a Kenyan dairy processor in Nyahururu.

One of the key issues hampering growth in the East African dairy sector is the supply and quality of milk from farmers. To address this problem, Tanga Fresh has partnered with Solidaridad, an international civil society organisation. This partnership will enable Tanga Fresh to provide services and support to 6,000 farmers with the goal of improving quality, yields and sustainability throughout the supply chain.

Frederik Claasen, head of policy at Solidaridad comments, “We provide impact investors with practical solutions to create a meaningful impact. We believe our work in strengthening the supply chain complements DOB’s investment for the benefit of the market and Tanzanian people.”

Tanga Fresh produces a wide range of products such as mtindi (sour milk), yoghurt, ghee, fresh and long-life milk. Its production facilities have expanded significantly in recent years, from initially producing 15,000 litres of milk per day to today making 80,000 litres per day in a modern high-quality plant.

Toine Huijbers, CFO at DOB says, “Less than 7% of milk in Tanzania is processed, leaving a lot of room for growth in the market.”

“We expect to see increasing demand for higher-quality processed milk in the market. It’s likely this will be largely driven by regulation and consumer awareness around the risks of drinking unsafe, contaminated milk and Tanga Fresh is well positioned to meet this rising demand.”

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