Dairy Group: SA’s new dairy powerhouse

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Dairy Group is a new agribusiness that combines the Dairy Farmers of South Africa’s 120 years’ experience as a market leader in the procurement of raw milk (and the raw milk supplier of premium brands such as Clover) with Coega Dairy’s low-cost efficiency and house brand knowledge. The result is a powerhouse dairy brand with the potential to significantly strengthen the local dairy sector.

“Fewer and fewer dairy producers can go it alone, and collective action is often the key to long-term viability,” explains Drikus Lubbe, the Dairy Group’s CEO. “The establishment of Dairy Group means the industry has a better, clearer future growth path, which is crucial for all stakeholders.”

Local dairy businesses compete against sophisticated international players within a volatile local economy. To stay competitive, dairy brands must achieve better efficiencies and economies of scale, with capital-intensive process technologies key to transforming high volumes into better margins and sustainable business.

Dairy Farmers of South Africa and Coega Dairy’s combined infrastructure and experience rise to these challenges, creating a highly efficient, optimised value chain for members’ raw milk produce.

Dairy Group is the leading UHT milk supplier

“The new formation immediately positions Dairy Group as the leading ultra-high temperature (UHT) milk supplier to consumers in South Africa,” says Lubbe. “It also can expand its footprint into Africa by facilitating mergers and acquisitions in competitive dairy categories across its infrastructure network.”

Watch an interview with Drikus Lubbe here:

Dairy Group’s ability to expand into Africa – which features 500 million consumers with low exposure to South African dairy brands – is an important part of the logic behind the venture’s creation. Success in African markets will, in turn, strengthen the dairy value chain in South Africa. New business opportunities will be created for hard-pressed South African dairy producers, including emerging black farmers, who are central to Dairy Group’s future growth plans.

“We take a broad view of sustainability, which we see as being as much about achieving viable business growth as maintaining excellent environmental standards,” says Lubbe.

“In South Africa, commercial growth has to include a strong focus on black empowerment. This is especially true in the agri sector, where we need to bring new players in to augment the strength of established entities. Consequently, nurturing new entrants is a central part of Dairy Group’s growth strategy. We’re looking forward to taking advantage of our new scale and structure to bring that vision to life.” – Press release, Dairy Group