This additional investment from DOB will help Tanga Fresh expand its production in the long-life milk market. There has been an increasing trend of East African consumers moving from fresh milk to long-life milk, presenting a major potential for market growth.
DOB Equity’s investment will also allow Tanga Fresh to expand its overall production capacity, providing access to a fair and reliable market for dairy farmers in the Tanga region.
DOB said the East African dairy market has great potential for growth. DOB Equity is also an investor in Countryside Dairy, a Kenyan dairy processor in Nyahururu.
One of the key issues hampering growth in the East African dairy sector is the supply and quality of milk from farmers. To address this problem, Tanga Fresh has partnered with Solidaridad, an international civil society organization. This partnership will enable Tanga Fresh to provide services and support to 6,000 farmers with the goal of improving quality, yields and sustainability throughout the supply chain.
Frederik Claasen, head of policy at Solidaridad, said, “We provide impact investors with practical solutions to create a meaningful impact. We believe our work in strengthening the supply chain complements DOB’s investment for the benefit of the market and Tanzanian people.”
Founded in 1996 in Tanga on the Northern coast of Tanzania, Tanga Fresh’s partnership with DOB Equity began in 2007.
DOB said it invested in Tanga Fresh both because of its growth potential and because Tanga Fresh is committed to providing a reliable market and fair pricing to small dairy farmers in the region.
Tanga Fresh produces a wide range of products such as mtindi (sour milk), yogurt, ghee, fresh and long-life milk. Its production facilities have expanded in recent years, from initially producing 15,000 liters of milk per day to today 80,000 liters per day in a modern plant.
Toine Huijbers, CFO at DOB, said, “Less than 7% of milk in Tanzania is processed, leaving a lot of room for growth in the market.”
“We expect to see increasing demand for higher-quality processed milk in the market. It’s likely this will be largely driven by regulation and consumer awareness around the risks of drinking unsafe, contaminated milk and Tanga Fresh is well positioned to meet this rising demand.”
Tanga Fresh has recently appointed Innocent Mushi as CEO. Mushi has senior management experience with some of East Africa’s leading telecom providers, as well as FMCG experience from Coca-Cola, where he started his career.
Mushi said, “The investment from DOB strengthens our working capital flows and production capacity. This will be key in supporting Tanga Fresh’s innovation and increasing its national market penetration.
“The development of Tanga Fresh will also be helped along by our collaboration with Solidaridad, which will provide farmers in the region with the capacity to supply the volumes of higher quality milk needed in a growing market.”