The Managing Director of FrieslandCampina WAMCO Nigeria, Ben Langat, chats with Vanessa Obioha on the success of a dairy development programme developed a decade ago to promote local sourcing of dairy products as well as develop local economies.
Ben Langat pored over his notes as he waited for the virtual interview to commence. By the time the media chat kicked off, he was already in his element, speaking with admirable confidence as he fielded questions.
The way Langat, who joined FrieslandCampina WAMCO Nigeria in 2017, spoke passionately about the company’s Dairy Development Programme (DDP) – an inclusive business model for local sourcing of milk in Nigeria – one would think that he was with the company when the programme was launched 10 years ago.
But in the three years that he has spent with the company as the Managing Director, the Harvard Business School Management Program alumnus has achieved towering feats. It was under his watch that the DDP launched the Bobi Grazing Reserve in Niger state – its first foray into the northern region – and built a new factory last year for the production of yoghurt sourced from local milk.
“We are not only collecting some raw milk, it’s a full business strategy. It is adequate to run a full production and manufacturing process,” he says.
The success of that programme is a testament to the company’s forward-thinking business approach. Long before the Central Bank of Nigeria initiated backward integration to support and promote local dairy content, FrieslandCampina WAMCO was already at the forefront, working with the Federal Ministry of Agriculture and Rural Development for the local sourcing of milk.
The company started DDP as part of its commitment to creating shared value by encouraging local milk production and improving local economies. Its first base of operation was in Shonga farms in Kwara state where they supported the farm to meet their quality standards. The company fetched its first fresh milk for production from the farm.
By 2011, the company moved to Oyo where they built milk collection centres to serve over 90 communities. Over the years, more milk collection centres were built in other south-western states such as Ogun, Osun, and Kwara.
Today, the company boasts 16 milk collection centres.
“Ten new ones are being constructed as we speak, with one bulking centre in Iseyin, Oyo state, where the raw milk goes into big cooling trucks and moved to Lagos,” Langat explains.
He added that the company presently collects 40,000 litres a day against its storage capacity of 85,000 litres. Its annual milk volume from 2011 to 2020 has increased significantly; from one million to seven million with new targets set for the years ahead.
“We have achieved and surpassed the target we set in 2016 on dairy development, which were 10 percent local raw materials sourcing level. We have even moved beyond just surpassing our target to set up a complete business line with the Peak Yoghurt. We are committed to helping to grow the economy as the clear leader in the dairy sector; we are training dairy farmers in line with international best practices, improving their livelihood and quality of life, and improving the quality of livestock and pasture for better milk yield.
“We are building and sustaining new ecosystems. The DDP model has proven to be sustainable. We have a factory that is producing yoghurt and is going to need a lot of fresh milk. We still need more and that is why we are building more capacity. Perhaps over the next 12 months, the factory can run at full capacity.”
Perhaps, the most significant achievement the company has recorded since it began the DDP is the number of lives it has impacted in the communities where it operates.
Take, for instance, Moyosore Rafiu, a dairy farmer from Iseyin. Prior to the launch of DDP in the state, Rafiu limited his trade to rearing and breeding of cows. He, however, stumbled on the DDP in 2014 and has not looked back since then.
“Milk production was an angle we didn’t pay attention to but with DDP, we produce milk and we have the markets available that we can sell it to, thus increasing our livelihood with the turnover we get from milk production,” says Rafiu.
Langat elaborated on the various ways local farmers and SMEs have benefitted from the programme.
“To produce a litre of milk from any cow, a lot of processes are involved. In all our DDP locations, there are a lot of small and medium businesses that have developed different things around those areas. They sell feeds and animal nutrition boosters to the farmers, they offer veterinary and consultancy services, even pasture cultivation, fertilizers, herbicides, drugs, etc. Others offer logistics – trucks, farm equipment, tools, etc.
“At every DDP location, we have a laboratory that requires suppliers of lab equipment, chemicals and disposables. Even the motorcycle riders transporting milk from farmers to the milk collection centres are part of the value chain. We also have institutional partners – organizations, universities and government ministries. It is an ecosystem that is developing just like in other countries where we have DDP.
“Farmers are giving up their nomadic lifestyle and they are settling around FrieslandCampina WAMCO DDP locations, where their wives have also set up cooperatives and established various businesses. The women have more time for themselves now because of having an income source; they don’t have to walk long distances to hawk items or fetch water anymore.”
Out of the 7,000 farmers the company has in its employment, 950 are women working across the over 90 DDP communities. Furthermore, Langat said that small traders in these communities earn substantially from the programme.
He explains, “We pay the farmers and they spend their income on diverse things. So you can imagine an economy that never had any income or much income from raw milk before, but now they have a regular income that runs into substantial sums every month. Such income stimulates a lot in the economy. Even in the housing sector, the DDP has provided a better living for the farmers; they are now building better houses instead of living in temporary mud structures. Suppliers of housing materials also enjoy the multiplier effect of the DDP.”
Despite the commendable accomplishments, Langat bemoaned the various challenges hindering their activities.
“We don’t have quality dairy breeds in the country and have to build stock from very low mother stock. A key part of the DDP effort is in the crossbreeding programme to ensure we build enough dairy stock for farmers. There is the challenge of poor infrastructure. There are also normal challenges of cow diseases, water supply to farms, nomadic lifestyle of pastoralists, etc.
“So there was a need to educate the farmers on how to improve their feeds, get veterinary support for the cows, all in a bid to improve the milk yield. The challenge around animal husbandry is really getting the right animal that can give the right yield. The cows that are in Nigeria are largely beef cattle. Over time, they have to be improved. Progress is slow and that is one big challenge.”
He added that the company experienced some hiccups during the lockdown such as transportation. “Our capacity to move was reduced by half; our trucks could only move during the day.”
A major concern of the visionary leader is the level of insecurity in the country. He opined that insecurity and infrastructure are the major challenges government needs to tackle to boost the dairy sector.
“To accelerate backward integration, the big challenges that must be tackled head-on are insecurity and infrastructure. To get products out of the ports is a nightmare, and the cost of clearing goods is rapidly increasing. It has been like this over the last year or two because of port congestion and poor infrastructure. In terms of power supply, we have been here for many decades, but still trying to get into the national grid.
“Supporting companies to bring down the cost of doing business is a very essential thing for the government to do. When you ask farmers to go and produce milk, cereal, rice, wheat or whatever, they need to know that once the process of farming starts, all the required infrastructure will be put in place and will work all the way to the point of sale and you will get value for what you produce. That way, the cycle remains sustainable and profitable.”
Notwithstanding, he reiterated that the company is committed to supporting government policies that will improve dairy production in the country.
“I think the intention behind backward integration in any country is always good, and policies are best formulated in a manner that is consultative and allows input from stakeholders so that policies don’t create more pain or difficulty in the country. All things considered, backward integration policy-making will continue and we are committed to it. We want to be part of the consultation process because our company is a big knowledge base for dairy development,” he says.