The Diary Project

The following is a summary of information including the dairy's past activities and future prospects, also Tabora's present situation. In
the light of this information TCFDT agreed to purchase and undertake the refurbishment of the Dairy.

BACKGROUND

The Tabora milk plant- was established in 1926, making it the oldest in Tanzania . The plant was later on nationalised in the mid 1970s
and handed over to a state owned parastatal, the Tanzania Dairies Ltd (TDL). In 1994 the plant was closed when TDL ceased trading.

Market situation analysis

Milk supply, demand and consumption

     Tabora town has a population of around 137,000 (Tabora Municipal Livestock Department 2001). Daily milk consumption is currently
     estimated at an average 15,000 litres per day with rural producers accounting for about 10,500 litres per day and urban producers the
     balance. Per head consumption is therefore about 40 litres per year, which is similar to other urban locations in Tanzania but very much
     lower than Kenya . Milk productions figures are in Tabora rural and urban are shown in table 1.

Table 1: Milk production by cattle type (liters per month)

Location	Wet season	Dry season	Average
Tabora rural
Dairy cows	160	80	120
Local cows	143922	71964	107943
Total	144082	72044	108063
Tabora urban
Dairy cows	787230	162835	475033
Local cows
Total	1075394	306923	691159
Production per day			23039

Source: Tabora Municipality ; Livestock Department, 2001

Annual milk production in Tabora rural and urban is estimated at around 23,000 litres of milk per day resulting in a surplus of some
7,000 litres per day.

     If urban consumption could be stimulated to the point that each person consumes a quarter of a litre of milk per day, the aggregate
     potential demand for milk is more than 30,000 litres of milk per day or a per capita potential consumption of 90 litres per annum. In this
     case, the potential demand would be higher than milk production in Tabora by almost 8,000 litres of milk per day. If this potential
     consumption figure could be achieved it implies an opportunity for dairy business in Tabora.

     The plant, which had originally had design capacity of 500 litres per shift, will be opened after a long period of closure. But no other
     plant was opened after the closure of the Tabora Milk Plant. The plant thus stands to be the only one in the region processing dairy
     products. As in other parts of Tanzania , however, many people do not attach special value to processed products probably owing to
     their low incomes, taste and preferences and inadequate knowledge of the benefits of consuming processed milk. This is reflected in
     the present low level of processed milk consumption in Tabora town. This suggests that if the plant wants to capture a significant
     market share it will have to promote its products.

     Differentiating the plant's products from raw milk, brand promotion and education on benefits of consuming processed milk is likely to
     give the plant the ability to effectively compete in the market. The plant is faced with an exciting opportunity of being the first mover in
     the Tabora market though a few processed product brands from nearby regions of Mara and Mwanza and others from South Africa and
     Zimbabwe are found in the market. Experience has shown in many areas that consumption of processed milk products increases with
     income, information, advertisement and education and the same results are expected also in Tabora.

Milk marketing system in Tabora

    The marketing system in Tabora involves a number of channels. Figure 1 shows some of the existing important market channels in
    Tabora. Milk from producers is delivered to consumers mainly through vendors who collect milk from producers using bicycles. A recent
    study indicates that some 300 vendors collect an average of 28 litres each per day. Other channels include direct sales to consumers or
    through intermediaries such as informal processors and retailers. Producers in the urban areas mainly use these channels.

    The major source of milk for Tabora market is the farmer in the rural areas. Raw milk from urban and rural producers is sold at Tshs.
    250/= and Tshs. 200/= per measure (approximately 1 litre) respectively through out the year. The farm gate price in the rural areas
    ranges from Tshs 100/= per litre to Tshs 120/= in the dry season and Tshs 80/= to 100/= in the wet season.

     With the establishment of the milk processing plant in Tabora, this marketing system is expected to change significantly. The plant will
     be one of the major customers for both the producers and the vendors and a major supplier to consumers, directly or through hawkers,
     retailers, wholesalers and institutions. In view of this the marketing system would be as indicated in figure 2.

Market target for the Tabora Dairy Plant

The market for the plant can be segmented based on the channels indicated in the above figure as follows:

Plant----------------------------------> Consumer;
Plant-----------> Hawker-------------> Consumer;
Plant-----------> Agent---------------> Consumer;
Plant-----------> Retailers------------> Consumer
Plant----------------------------------> Institutions

     The consumers to be targeted by the dairy plant should include consumers away from home; household consumers and institutions.
     Based on the assessment during the rapid market survey and the previous consumer studies the market target for the plant can be
     presented as in figure 3.

     The results of the previous consumer surveys show that more than 40% of consumer families would consume pasteurised milk from
     Tabora milk plant at. Tabora town has nearly 25,000 households with an average of 5.5 persons. Each household is estimated to
     consume on average 4.3 litres per week. Thus potential household demand for Tabora plant processed milk is estimated at around
     40,000 litres per week (5,700 litres per day). It is proposed that the plant should initially aspire to capture at least 20% of this potential
     demand increasing every year for five years.

Milk consumption in restaurants, hotels, milk bars, kiosks, streets, market places is gaining impetus in many urban areas. There is no study on “away from home” consumption patterns in Tabora but studies in other areas such as Dar es Salaam, Morogoro, Mwanza and Tanga have shown that consumers away from home consume a significant proportion of milk.

Institutions such as banks, religious organisations, schools and the army are potential customers for the products of the plant. This avenue should be investigated and used as an important outlet for the products of the plant.

Market Growth

The target market is expected to grow in the coming 5 years. With increased commercialisation, information and education, milk-marketing businesses (market agents) are expected to grow in number and size. Consumption of processed milk products by household and away from home consumers as well as institutions is expected to increase over time. The potential for increased milk consumption stems from the existing high potential aggregate demand and Tabora's competitive advantage in the economy as a result of its agricultural and agribusiness sector with its extensive livestock production system and low production costs.

The national railway system links Tabora with potential milk consumption centres of Dar es Salaam , Mwanza, Kigoma and Mpanda. Raw milk price in Tabora is currently lower than in many parts of Tanzania . This implies an opportunity for transporting both liquid milk and milk products to these milk deficit areas. There are also areas where a strong demand exists for fresh milk and processed products, for example the mining areas to the north of Tabora Region. This demand is currently only partially met by imported products which are subject to high import levies.

Product mix

The plant should provide its customers with full access to high quality, hygienic and affordable dairy products. The following products are proposed to begin with:

Fresh milk (bulk and packaged milk): The product is popularly called ‘Maziwa Fresh'. Since no special value is attached to industrially pasteurized milk in Tabora, like elsewhere in the country, this product is likely to receive high competition from sales of raw milk by producers, hawkers and vendors. Pasteurized packaged fresh milk will mainly be consumed by customers who are concerned about their health. For bulk pasteurised fresh milk, it may be difficult to guarantee hygiene and quality of the product as no quality assurance is equally guaranteed by the market agents who will buy and resell the milk

Cultured Fermented Milk: This is popularly known as “Maziwa Mtindi” or “Maziwa lala”. Fermented milk is a traditional food for Nyamwezi people in Tabora. This product has a high domestic demand. Some retailers are currently selling naturally fermented milk. However, naturally fermented milk is not widely consumed in the urban areas probably due to the likely health risks associated with naturally fermented milk. This situation provides competitive advantage for the plant's products in the market.

Butter: Butter is a product which was traditionally produced by Tabora Dairy before it was closed in 1994. The plant was well known for its high quality butter in those days. The newly opened plant should take advantage of this reputation in producing and selling butter not only in Tabora but also in other areas where Tabora butter was traded and consumed formerly.

Ghee: Ghee is one of the products which has sold well for ages in Tabora. Ghee has continued to be processed locally even after the closure of TDL processing activities. Ghee is consumed in many households as it is a traditional cooking fat to many livestock keepers. It is cheap and sold in various quantities depending on the customer requirements. The newly opened plant should also take the advantage of this former reputation in producing ghee

This product mix will ensure risk distribution and may assist in commanding a wide range of customers. Engaging in many products may not be economically justified at the initial stages of the plant operations. More products will be included as the plant management gains experience and the products become known to customers. Future products should include yoghurt (plain and flavoured); cheese (kibuyu cheese); and ice cream.

NEW TABORA DAIRIES REPORT

BACKGROUND

In 1995 the Tabora Dairy was closed and put into receivership after struggling to maintain business for many years. After studying the situation a decision was made by TCFDT to purchase the dairy. The purchase transaction was completed in 1999 giving TCFDT the challenge to re-establish the dairy.

Due to Tabora having no milk processing facility for several years, milk was being sold around the streets from traders with bicycles. The milk is carried in plastic containers such as, buckets, 5 litre engine oil cans and cooking oil containers, these containers breed contamination as they are difficult to clean. Also during dry season the volume of milk is greatly reduced and water is added by many of the traders to increase the quantity. Water is usually taken from open water holes on the way to town from the farms. Water from this source can contain bacterial diseases like cholera and typhoid.

PREPARATION

After the handover of the factory was completed a more detailed assessment of the factory condition and facilities were made. In addition a survey was made of the milk supply and suppliers. When the assessments were completed and studied it was decided by the trustees of TCFDT to provide a facility capable of processing 5,000 litres of milk per day. For this to be possible the factory needed refurbishing, including extending the main factory building.

During the year 2001 plans were passed to extend the main building providing a new reception section and a larger process area. The construction work on the building was soon completed. The electricity supply was upgraded rewiring the whole factory. A new water supply was plumbed into the large overhead storage tank and distributed around the factory. Equipment had to be sourced in the UK and shipped out in order to establish adequate resources to process the milk.

PRODUCTION

In March 2002 the factory gates opened to allow milk in for processing. Two volunteers arrived from the UK to help the factory begin production. One was a milk processor who had pasteurised milk for many years on a farm dairy in England . He was able to train a local person to operate a pasteurising machine also training others with the different skills of milk processing. For the first few weeks production was quite small when the factory handled approximately 200 litres of milk per day. The dairy had 5 staff in the production area, an accountant (part time) and a manager. During May the milk intake increased slightly and a further person was employed mainly to process cheese. Selling the pasteurised milk was quite a challenge, the price had to be reasonable to try and gain a part of the market. Pint size glass bottles were used for packaging both fresh and cultured milk. The Coca Cola company have used glass bottles in Tanzania for years and people are familiar with this type of packaging. At the end of July the manager left and the dairy continued without a manager. Interviews were held with more than 10 applicants for the manager's post, most of the applicants had studied at the Morogoro Agricultural University in Tanzania . It was agreed to employ one of the interviewed applicants. A long time past and the chosen person failed to report for the post, leaving us still without a manager.

There was no large increase in the milk supply until the dry season ended (October / November). Also at this time two more people from South Africa arrived to help with the dairy. These people were funded from Bothar in Ireland and visited for a short time only. By December the milk intake was steadily rising but sales were still difficult to secure on a regular basis. Another one of the applicants for the manager's post turned up in Tabora asking to be considered for the position. We agreed to give an opportunity to this young man of proving he could manage the dairy. Again we were let down as the man returned home to collect his belongings and remained there. When he failed to show within a month we made contact with him and he stated that he was sorry but unable to work for that year (2003). The dairy still continued to operate without a manager. We pursued many avenues to fill the position but were unable to do so. February / March of 2003 saw the dairy handle an average of 900 litres of milk per day. Marketing that quantity was difficult, so an amount of cheese was being processed. Some milk was spoiled but not on a daily basis. Because of the difficulty in selling all the milk in Tabora the dairy sought customers in other areas. People in Kigoma started purchasing cultured milk. At first it was through an agent, later this lead to problems over payment and a large debt still remains there. Also at this time the dairy established it's first kiosk for selling milk in a prominent position close to the hospital. Another problems the dairy faced through this period was theft, some members of staff were stealing milk and ghee. One member of staff was dismissed, then a second at the beginning of 2004. In September 2003 a third attempt was made to fill the post of manager. A girl who again was one of the original group interviewed at Morogoro took up the challenge. We were disappointed during December when she also left.

After the market was established outside of Tabora the dairy had to consider other means of packaging the cultured milk, as it was complicated and expensive for customers to return the glass bottles. During November 2003 a design for plastic pouches was created and submitted to Simba Plastics Dar es Salaam. In February 2004 a delivery of pouches was received and now the dairy supply both bottles and pouches. Many people in Tabora prefer milk in the glass bottles rather than the plastic pouch but the pouch does help with transportation to other districts outside Tabora.

The Tabora rainy season of 2004 ended very early in April bringing about a shortage of grasses and other fodder feeding for the cattle. Many people had to move their herds away from the Tabora district seeking food and water. This has given an even bigger shortage of milk this year. The daily intake of the dairy has dropped to an average of 150 litres. Another reason for this being so low is the fact that many people are able to sell their watered milk on the streets of Tabora. The traders have a lot more profit from the watered milk rather than bringing it to the dairy. At the dairy it is tested and rejected if it contains water. The law states that it cannot be sold or even moved around if it contains water. At present the dairy is receiving most of it's milk from the recently built collection station at Ndevelwa farm. This has helped considerably maintain some supply of milk for the dairy. This collection station was set up to monitor the viability of using this means for collecting milk. Establishing it on the Ndevelwa farm which is another project of TCFDT has given great insight into the problems and benefits of such a facility.

SUMMARY

The dairy has been operational for 2 years and has faced many difficult situations. Difficulties range from milk supply to marketing, staff theft, unpaid debts and the enforcing of laws. Some of the difficulties are due to lake of education, others are cultural. During the 2 years people have been employed and trained within the dairy. Products were developed to meet people's requirements. The dairy has gained a market for their products which are in demand throughout Tabora and the surrounding districts.

FUTURE

If the dairy is to be a viable business it firstly needs a suitable manager. Someone who can build the business on the foundation that is now laid, improving productivity and maintaining a better supply to the market gained. Only a manager is capable of the decision making required daily to develop and sustain a business. It may be necessary to recruit a person from outside Tanzania , possibly Kenya to meet this pressing need.

People must be educated to the importance of using pasteurised milk and the danger of continuing to consume the untested and untreated milk. The government health people need to work together with the dairy seeking to find ways to inform people about the laws which are there concerning milk and to try enforcing them. Work is required on increasing the milk supply to the dairy building better relationships with the farmers and the traders who bring milk to the dairy.

A school milk program supplying free milk to P1 & P2 children is planned and ready to begin when the milk supply is available. 32 Primary schools are included in this project each school will receive milk for a month on this scheme. Giving free milk to the children will help their health and educate them about milk as the schools can use the milk as a teaching aid to the young children.

More collection stations should be established for collecting milk outside Tabora, this would strengthen the supply, also giving opportunity for more farmers to sell milk and gain a regular income. Milk collected in this way would arrive to the dairy in better condition allowing more holding time before processing.

An increase should be considered in the number of kiosks established for milk distribution in Tabora which would give people a permanent location to purchase milk in their area. These kiosks being owned and supervised by the dairy give more control over the condition of the product sold to the customer.

All these situations listed above will provide more employment to a community that are struggling to gain an opportunity to earn an income. Also more people will consume quality milk and milk products giving health and reducing illness.

CLICK HERE FOR INFORMATION ON COLLECTING STATIONS


Accepted as a charity by the Inland Revenue under reference XR35927