The Sisonke District Municipality currently has a competitive advantage in terms of the domestic dairy industry: the district produces 10% of the milk consumed in South Africa -in Kwa-Sani Municipality alone, 400 000 litres of milk are produced a day – and 35% of Clover Milk is from this area. Moreover, the Ixopo Milk Procurement depot has a major capital expansion project which is set to result in a +/-4% increase in Clover’s total intake in the 2012/13 financial year. Moreover, the industry is expected to grow by approximate- ly 5% per annum for the next 5 years.
Current research suggests that imports of value added milks products ( import substitu- tion) in the district municipality mean that there are opportunities for value added milk products for local markets. This opportunity is further heightened by:
Well established markets and value chains
Local pasture based production is more efficient and
Growing demand for consumption in Kwazulu-Natal
There are however some challenges in the dairy industry, particularly with the shelf-life of milk forcing farmers to accept whatever price is offered to them by producers/proces- sors in order to dispose of their products. The market is also dominated by 4 major pro- cessors, making it extremely difficult for emerging markers to make inroads in the dairy processing industry.