The land of milk and Oshikandela: How Namibia Dairies is transforming the dairy market in southern Africa

It ought not to be taken for granted, the benefits of dairy to one’s diet. In Namibia, tribal communities have long incorporated dairy into their traditional foods, products which Namibia Dairies are now bringing to the commercial market.

Namibia Dairies was formed in 1997 when the heads of Rietfontein Dairies and Bonmilk decided that the Namibian market would be better served by a single, unified dairy. The amalgamation of the two dairies into one produces an economy of scale that allows Namibia Dairies to better and consistently provide much-loved dairy products to Namibians.
Namibia Dairies has become a leading force in the Namibian dairy industry since its formation, now employing over 600 people at its main production plant in Windhoek. It is the major supplier of fresh and long-life milk for the country, and provides all the standard daily products such as butter, yogurt and cheese. The dairy also services the traditional tribal dairy products to the market, the only dairy in surrounding countries to do so.
Humbertus Hamm is the managing director of Namibia Dairies. “We have our bread and butter lines (so to speak), such as fresh milk, but we very much focus on commercialised traditional Namibian dairy products for the mass market,” he says.

Traditional products such as Oshikandela are particularly sought after. Namibians love Oshikandela (according to sales), which is like a sour drinking yogurt. It is the fastest growing dairy product in Namibia—Namibia Dairies cannot produce it quickly enough—and is increasingly recognised for its health benefits and its great taste. “Then we have a second big traditional product called Omaere,” continues Hamm, “which comes from a different tribe. It’s basically a thick milk, and is produced by Namibia Dairies with traditional style and methods.” Oshitaka is another drinking yogurt supplemented with maize, which the dairy markets as a meal replacement. “It’s food on-the-go, and a traditional product,” says Hamm.

Milk sourcing solution

With such popular and well received products, and a strong holding in the market, Namibia Dairies have found themselves not only prospering, but making real improvements for the Namibian dairy industry, which has long faced the challenges of producing mass quantities of milk in the semi-desert, where there is little to no free-range milk production. Because of this, one of the biggest challenges faced by Namibia Dairies was sourcing enough  milk. The other challenge was doing so cost effectively.

The solution came in the form of a N$120 million investment in 2009 in a rotary milking station in Mariental (one of the largest in southern Africa). The station has doubled the milk production, and producing the larger share of milk required for the market. “The full operation houses 2,000 milking cows, which produce 65,000 litres of milk a day,” explains Hamm, proudly. He elaborates that the new facility will not push small dairy products out of the industry. “The total herd compliment is 4,500 cattle. We are going to produce 65 per cent of our own milk requirements; the balance we still buy from small local farmers.”

Namibia Dairies brought in the latest and most modern technology for their production. It is the first major investment in the dairy sector for several years. Before the facility was built, Namibia Dairies was supplied by over a dozen different producers, and even now they welcome other local producers to participate with them. However, in order to maintain the highest international dairy standards, the facility was much needed.
In conjunction, Namibia Dairies has an agronomy division which produces their own fodder and grain for the cattle and produces in excess of 40-50,000 tonnes of feed every year for the cattle as well. The dairy is vertically integrating the business in terms of fodder, milk production and the dairy side of the business in order to be cost effective and secure supply on a continuous basis.

In only a few years, Namibia Dairies has propelled the dairy industry into a sustainable and profitable one. Hamm believes Namibia Dairies’ facility is beneficial for “the whole industry in Namibia.” Milk prices were 25 per cent high than those of the Western Cape of South Africa because of the massive overheads.

Building on tradition

With the success within the country well established, the company is looking to expand outside its borders. Its traditional, tribal dairy products are extremely popular in neighbouring countries and initiatives to cement its sales and distribution footprint in other markets are being planned. For example, the company is ready to collaborate with its Angolan partners to improve their distribution infrastructure thereby capitalising on untapped opportunities. “We are very much a southern African business, are strong in Angola and are looking to branch out in Botswana and Zambia and neighbouring countries,” says Hamm. Angola is at present the most important export market for Oshikandela, while Botswana is still being nurtured.

The company focus now is on driving the brands and driving the research and development to such a level where Namibia Dairies can venture into new markets on the brand and product side. The company is very grounded in its roots, and is flourishing by using modern technologies for traditional products.