DETAILS OF THE LETTER.
We wish to express our appreciation for the support that we have been receiving from your Ministry through the facilitation of the local and export trade which has led to a significant growth in the Ugandan Livestock and Dairy Sector.
It is through the support from your Ministry and the Government of Uganda that we have managed to establish a stable and sustainable demand for the Ugandan dairy products both in the Local and the Regional market. This has enabled us to not only support our Ugandan farmers to improve their means of livelihood and financial wellbeing but has also provided the opportunity to positively contribute to and strengthen regional integration and economic growth of Uganda and East Africa in general.
Despite the 5 consecutive years of drought experienced in the region as reported by IGAD, Uganda milk supplies have played a critical role in the stabilization of the region’s dairy requirements and the enhancement of the region’s food security without having to import dairy products from the rest of the World (Mainly from Europe and New Zealand) as has historically been the case in the period of extended drought in the region.
We however wish to bring your attention to a particular challenge that we are currently facing through non-tariffbarriers that have been imposed in Kenya by the Kenyan regulator, namely Kenya Dairy Board.
Effective l,9th March 2023, the Kenyan government, through Kenya Dairy Board, stopped issuing permits for our Dairy products in their Kentrade system, affecting our factory output significantly. This is after a notice banning dairy imports, issued by the same regulator (Kenya Dairy Board) was rescinded by the Principal Secretary, State Department for Livestock Development, Ministry of Agriculture and Livestock Development vide his letter dated
Despite rescinding of the suspension by the Principal Secretary, it is apparent that this has been ignored and the permits are still being denied by the same regulator (Kenya Dairy Board). As at the date of this letter, there are 36 permits awaiting approval by the Regulator.
It is on the basis of these sales as well as the potential for growth in local and other markets that this Company has been planning for a UGX 38 Billion investment to finance the refurbishment, upgrade and expansion of our factory facilities in Kampala.
This investment is in addition to UGX 226 Billion which the Company has so far invested in the Dairy sector. We believe that this is aligned to your Ministry’s mission of “developing and promoting a competitive and export-led Private Sector through industrial development for economic growth” .
As a Company, we continue working on the expansion of domestic consumption and diversification of our export markets. We also appreciate the initiative that you have been providing in this area including sourcing for alternative export markets such as Algeria.
We are however aware that these are long term initiatives which may not replace the Kenyan market in the short term. ln this context and in view of the current uncertainties with the Kenyan regulator, we will have no choice but to put on hold the planned investments in the factory until the situation improves.
It is also worth noting that, the current situation is likely to result in a significant reduction in our raw milk purchases, depressed raw. milk prices to the farmers and job losses in addition to other adverse long-term effects on the Dairy sector as some of the stakeholders divest from the industry.
We are therefore seeking your urgent intervention in unlocking the current blockade from the Kenyan government so that we can restore the normal flow of the Region’s dairy trade’
It is our hope that by achieving this we can jointly scale greater heights.