Sefalana faces milk supply deficit

The production has been negatively impacted by covid- 19

Sefalana Holdings Group Managing Director, Chandra Chauhan said shortage of raw materials continues to affect the group’s beverage division as dairy cows reduced during the Covid - 19 pandemic.

He said raw materials shortage in the Region have resulted in a slowdown in production volumes and they are expecting shortages to continue for some time as local farmer production volumes is well below requirement, and reliance on importation is still strong.

“We are in constant discussions with our suppliers in South Africa in an attempt to increase procurement, but due to a reduced herd of dairy cows during the Pandemic, where focus was placed by farmers on meat production rather than dairy, there is a catch- up underway to reinstate the dairy cow population.”

He said they have embarked on a project to enhance local production of raw milk, and this is expected to reduce reliance on imported milk in the ensuing year.

For his comment on Sefalana 2021 annual report, Chauhan pointed out that in June 2021 there was once again, an outbreak of Foot and Mouth Disease in South Africa and this has resulted in further milk shortages. Currently, annual milk demand in Botswana stands at about 60 million litres but the local dairy producers can only supply 10 million litters.

Sefalana beverage division is largely dependent on the production and supply of milk to government for the children’s feeding scheme. Chauhan said they have submitted tenders to local authorities and await their allocations whilst there are also attempts to secure additional raw milk as soon as restrictions are lifted.

Chauhan said their focus also continues on building the Delta Fresh brand which has increased by over 30 percent year on year, and ensuring their distribution is maximised. “Delta Fresh milk has been available throughout Botswana in most retailers but again, raw material shortages in the Region is impacting our current ability to service the increased demand in the market,” said Chauhan adding that despite these challenges, this sector has performed very well with an 82 percent growth in profit before tax year on year.