Dairy Value Food Chain

OVERVIEW/OPPORTUNITY

STATEMENT
Nigeria’s dairy industry is cultivated on a subsistent basis and characterized by low productivity

. Despite the abundance of natural resources required for milk production, Nigeria’s milk production
estimated at 600,000 MT accounts for only 13% of West African production.

Currently, domestic production dwarfs local demand (estimated at 1.3MMT), leading to a shortfall that
has often been met by imports.

According to the CBN Governor, importation of milk gulps about US$1.2 billion-US$1.5 billion annually.

In 2019, the importation of dairy products were banned but as a result of the country’s inability to
meet up with the demand, the CBN restricted the number of companies involved in the importation of
milk, its derivatives and dairy products to six which still presents a great opportunity for local
production to thrive as we can now start to produce in order to meet up the 56% market gap.
Major Off-takers

 Friesland Campina WAMCO Nigeria

 Chi Limited
 TG Arla Dairy Products Limited
 Promasidor Nigeria Limited
 Nestle Nigeria plc
 Industry challenges

 Unfavorable genetic
composition of local
breeds for milk
production leading to
low yields of 0.5-1.5
liters per cow per day
 Use of archaic practices
 Limited access to
finance
Project summary
The proposed project is a mid-scale dairy farm making use of
crossed cows, indigenous cows and artificial insemination (A.I.)
model to multiply the number of cows and increase the milk
production over the years.

Furthermore, we would also propose a 30-40 hectares

commercial fodder plan on the farm which would prevent having
to herd the cows around for grazing and improve the nutrition of
the cows which would further improve the milk production of the
cows.

Project description
20 Crossbreeds and 40 Indigenous cows:

We propose beginning with 20 crossbreeds and 40 indigenous

cows. The 20 crossbreeds will start giving off milk right after
settling on the farm, an average of 8 to 15 liters per day while we
artificially inseminate the indigenous cows to give off more
Breeding Unit

The breeding unit of the dairy farm will comprise

of;
• Semen for the insemination
• AI kits
• Liquid nitrogen tank
• Disposables
• Crushes, etc.
•
• For this scale of production, it is estimated to
cost approximately N4,500,000.

Commercial fodder plan

The plan is to have a fodder plantation for the

cows such that there will be no need to graze
them around.

This would also ensure adequate nutrition

necessary to keep the cows producing at optimum
level.
For the 60 cows, a total of 30 hectares of fodder
would be adequate to feed them annually.
Set up cost range :
Cost of cross breeds is N650,000 each
Total cost is N13,000,000
indigenous cow is N150,000 each
Total cost = N9,000,000
Breeding unit – 4,500,000
Commercial fodder plan – 4,500,000
Total : N31,000,000

Average returns

For the crossbreeds, it is projected that they will give off an average of 10 liters per day at a
going rate of N150. This gives you an annual revenue of N10,000,000 annually for the 20
crossbreeds. This would g1t more after the third year when the new cross breeds born out of
A.I. start giving off milk as well. Furthermore, we would sell off the indigenous cows over the
years and this would generate more revenue for the farm as well.
Expansion opportunities
With a projection of over 200 cows by the end of Year 5, there is a growth opportunity of
starting a Yoghurt processing factory and collection center to aid optimum level performance
of the Yoghurt plant plant.