Maziwa, the Mauritian holding company that owns the Ugandan milk processor Pearl Dairy Farms has been given permission by the Comesa Competition Commission to acquire a 100% stake in Kenyan dairy company Highland Creamers & Food.
Pearl Dairy Farms was founded in 2009 and owns the Lato milk brand, which has been present in Kenya for years but also suffered considerable anti-competition activity, ostensibly because it fails to meet Kenyan standards. Ugandan dairy products are typically cheaper than their equivalents in Kenya. Pearl Dairy Farms receives milk from 15,000 farmers, of whom two thirds are in Uganda and one third are in Kenya.
Highland Creamers & Food is based in Kisii and owns the Farmily Milk brand. It started operations in 2015 and already works with Pearl Dairy Farms to distribute its products in western Kenya.
The move opens the door for Pearl Farms to compete more effectively in the Kenyan market. In April 2023 the company secured a $35m loan from the International Finance Corporation, part of the World Bank that manages investments in the private sector, and the Dutch development bank FMO. The loan was designed to enable Pearl Dairy Farms to expand its powdered milk plant in Uganda and acquire a packing plant in Kenya, its major export market.
According to Uganda’s Dairy Development Authority, in 2022/2023 Kenya accounted for 83% of Ugandan dairy exports. Exported products included UHT and powdered milk, butter, ghee and yoghurt. The total value of dairy exports was UGX976.3bn ($250m), of which UGX810.5bn ($210m) were exported to Kenya.
