KENYA DAIRY BOARD

THE KENYA DAIRY BOARD & STATUS OF THE KENYAN DAIRY INDUSTRY

PART 1: PROFILE OF THE KENYA DAIRY BOARD

1. Establishment
The Kenya Dairy Board is a statutory body established in 1958 through an Act of Parliament, the
Dairy Industry Act Cap 336 of the Laws of Kenya.

2. Mandate
To Regulate, Develop and Promote the Kenyan Dairy Industry

3. Vision
To be a world class Dairy Developmental and Regulatory Authority

4. Mission
To regulate and direct a sustainable and competitive dairy industry that provides quality and safe
products

5. Functions
The functions of the board are described in the Dairy Industry Act Cap 336:

a) Organize, regulate and develop the efficient production marketing, distribution and supply of
dairy produce, having regard to the various types of dairy produce required by different classes
of consumers.
b) To improve the quality of dairy produce
c) Secure reasonable and stable prices to producers of dairy produce.
d) To promote market research in relation to dairy produce.
e) To permit the greatest possible degree of private enterprise in the production, processing and
sale of dairy produce consistent with the efficiency of the producers and the interest of other
producers and of consumers and
f) Generally to ensure, either by itself or in association with any government department or local
authority, the adoption of measures and practices designed to promote greater efficiency in the
dairy industry.

6. Strategic Objectives
As outlined in the Board’s our Strategic Plan (2012 – 2017), our strategic objectives are to;

a) Improve the quality of Kenyan dairy produce

b) Open up dairying in nontraditional areas.
c) Develop the capacity for service delivery and stakeholder support.
d) Provision of timely and accurate dairy information
e) Improve the financial sustainability of the Board
f) Enhance consumption of milk and milk products
g) Stabilize milk production and
h) Enhance the corporate image of the Board
Status: the Strategic plan is currently under review to cover the period 2017 - 2022
7. Branch Network
The Board has a countrywide presence (through 24 branch offices) in all the major milk production
and consumption areas of the country.

8. Organizational structure

 The Board of Directors is the top most management organ of the Board that is responsible
for the policy formulation and direction of the Board. This Board is appointed by the
Cabinet Secretary in charge of Agriculture, Livestock and Fisheries and represents the
various stakeholders including Government, Producers, Processors and Consumers. The
current Chairman of the Board is Mr. Anthony Mutugi
 The day to day running of the Board is under the Managing Director who serves as the
Secretary to Board of Directors. The current MD is Ms. Margaret Kibogy
 The Board has three main sections, headed by Departmental Managers. These are
Technical Services, Administration and Finance
 The Board has a staff complement of 124 serving in the Head office and in the branch
network.

9. Challenges faced by the Board

Include the following among others

 Inadequate regulatory framework to meet the present needs of the dairy industry
(Resource constraints to manage the intensive regulatory work required in the dairy
industry due to a large number of stakeholders across the value chain (formal and
informal)
 Lack of a strong and accredited regulatory laboratory to meet the work requirements of
the Board and the industry

PART II: STATUS OF THE KENYAN DAIRY INDUSTRY

(1) Milk Production

 Dairy cattle population in 2012 – estimated at 4.2million heads (MoAL&F, 2012)
 Annual milk production is currently estimated at 5.2 billion litres
 The milk production has currently gone down due to several factors;
(a) Cold weather
(b) Inadequate rains during the long rain season (Mar to Jul)
(c) Competition for land between livestock and crops (esp. in the Rift Valley)
 (d) Inefficient Land utilization practices
(e) Growing urbanization where arable land is under real estate development

(2) Milk Processing

 There has been increased investment in milk processing over the last three years – current
capacity has increased to 2 million litres per day.
 The country has faced prolonged drought since the later part of 2016 to date which has
affected processing capacity. Timely support from National Government through the
introduction of gazette notice on importation of duty and levy free for a limited period
has cushioned processors and enabled them to maintain optimum processing capacity.
 The number of active milk processors is currently 28 (small, medium and large scale)
 The number of milk processing companies are going down due to;
(a) Insolvency
(b) Mergers and acquisitions
 The current drop in milk production has affected milk intakes by processing companies
 The milk intakes for the last seventeen (17) years is summarized below;
Annual formal intakes in litres 2001-2017
700,000,000

600,000,000

500,000,000

400,000,000

300,000,000

200,000,000

100,000,000

-
20012002200320042005200620072008200920102011201220132014201520162017

Source: KDB Aug 2017

 The trends in milk intakes by the formal sector for the last seven (7) years is summarized below
 Trend Analysis 2010- 2017
80,000,000
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
-
1 2 3 4 5 6 7 8 9 10 11 12

2010 2011 2012 2013 2014 2015 2016 2017

• The market share is summarized below:

(3) Dairy Exports

 Major export products are UHT milk, milk powder, butter and ice cream
 Major export destinations are Tanzania (leading), Uganda, Southern Sudan, Rwanda, DRC,
among others
 Fluctuations in dairy exports have been observed. This is attributed to;
(a) Fluctuations in milk production due to climate change
(b) Increasing competition in the export markets
(c) Increasing production in the neighboring countries – form the largest of our export market
 Dairy Exports by value (Kshs) 2011-2017
1,800,000,000
1,600,000,000
1,400,000,000
1,200,000,000
1,000,000,000
KShs 800,000,000
600,000,000
400,000,000
200,000,000
-
Other
Fresh Cultur Milk
Chees Long Camel Yoghu Ice Produ
Butter Paste ed Ghee Powd
e Life Milk rt Cream cts -
urized Milk er
milk
2,011 13,15 7,269 514,7 12,40 9,962 92,01 403,1 - - - 123,8
2,012 - 5,323 409,3 - 12,29 - 30,00 306,0 3,906 - -
2,013 - 11,10 501,1 - 9,129 14,52 3,481 912,2 25,29 3,480 -
2,014 - 5,712 705,8 - 58,95 9,348 328,5 - 27,06 243,1 64,00
2,015 790,8 8,643 663,4 - 20,70 - - 9,293 20,22 1,575 -
2,016 - 7,332 136,8 - 17,74 38,09 - 508 6,927 90,49 -
2,017 - 1,367 117,1 - 22,61 971,2 - - 32,82 29,18 276,1

(4) LICENSING OF DAIRY BUSINESS UNITS

The Board through the Dairy Industry Act CAP 336 of the laws of Kenya provides licenses for the
following Dairy Business units as summarized below:
Below is a summary of Business units licensed by the Board as at July 2017:
Distribution by license type
Business Type Number
Processors 25
Producers 194
Mini Dairy 113
Milk Bars 884
Milk ATMs 275
Cottage 53
Cooling plants 345
Total 1889

The above can be further segmented as illustrated below:

1. Processing Units

Description: This type of license means a place, premises, or establishment where milk or milk
products are collected, handled, processed, stored, bottled, pasteurized, aseptically
processed, or prepared for distribution,

Processor Installed capacity Product portfolio

(Lts/day)
1. Brookside 500,000
2. New KCC 300,000
3. Githunguri DFCS 200,000
4. New Sameer A&L 220,000
5. Countryside Dairy 100,000
 6. Meru Central 85,000
7. Kinangop Dairy 50,000
8. Uplands Premium 30,000
9. Aspendos 50,000
10. Wakulima 200,00
11. Kabianga 120,000
12. Lattana 15000
13. Doinyo Lessos 10,000
14. Sunpower Products 10,000
15. Happycow Dairy 5,000
16. Afrodane Industry 30,000
17. Palmhouse Dairy 2,000
18. Bio Food Products 5,000
19. Raka Milk Processors 100,00
20. Stanley & Sons 2,000
21. Eldoville Farm 5,000
22. Glacier Products 1,000
23. Razco Limited 2,000
24. Super Highland Creameries 100,000
25. Egerton University 2,000

Total 1,872,000

2. Milk Bars per region

Description: Licensing allows traders to receive milk, pasteurize, add value and sell directly
to customers
County KDB Region Distribution
1. Nairobi Nairobi 82
2. Kiambu Thika 19
3. Machakos Athi River 14
4. Mombasa Mombasa 11
5. Taita Taveta Voi 41
6. Nakuru Nakuru 179
7. Nakuru Naivasha 68
8. Nyandarua Olkalou 8
9. Baringo Baringo 3
10. Uasin Gishu Eldoret 91
11. Trans Nzoia Kitale 15
12. Nyeri Nyeri 53
13. Embu Embu 46
14. Muranga Muranga 22
15. Meru Meru 17
16. Tharaka Nithi Tharaka Nithi 6
17. Kericho Kericho 39
18. Narok Narok 22
19. Kisumu Kisumu 48
20. Kisii Kisii 37
21. Kakamega Kakamega 27
22. Bungoma Bungoma 36
Total 884

3. Mini Dairies
Description: this type of license allows stakeholders to receive milk, pasteurize and sell
finished products directly to customers and dispensers.

County KDB Region Distribution

1. Nairobi Nairobi 32
2. Kiambu Thika 9
3. Machakos Athi River 2
4. Mombasa Mombasa 3
5. Taita Taveta Voi 1
6. Nakuru Nakuru 11
 7. Nakuru Naivasha 6
8. Nyandarua Olkalou 1
9. Baringo Baringo 0
10. Uasin Gishu Eldoret 5
11. Trans Nzoia Kitale 1
12. Nyeri Nyeri 6
13. Embu Embu 10
14. Muranga Muranga 7
15. Meru Meru 2
16. Tharaka Nithi Tharaka Nithi 0
17. Kericho Kericho 2
18. Narok Narok 0
19. Kisumu Kisumu 4
20. Kisii Kisii 3
21. Kakamega Kakamega 2
22. Bungoma Bungoma 6
Total 113

4. Cottage Industry
Description: this type of license allows dairy players to receive milk, pasteurize, add value
and sell finished products directly to customers
County KDB Region Distribution
1. Nairobi Nairobi 13
2. Kiambu Thika 2
3. Machakos Athi River 0
4. Mombasa Mombasa 16
5. Taita Taveta Voi 0
6. Nakuru Nakuru 1
7. Nakuru Naivasha 0
8. Nyandarua Olkalou 1
9. Baringo Baringo 0
10. Uasin Gishu Eldoret 0
11. Trans Nzoia Kitale 1
12. Nyeri Nyeri 9
13. Embu Embu 1
14. Muranga Muranga 2
15. Meru Meru 0
16. Tharaka Nithi Tharaka Nithi 0
17. Kericho Kericho 4
18. Narok Narok 1
19. Kisumu Kisumu 0
20. Kisii Kisii 0
21. Kakamega Kakamega 0
22. Bungoma Bungoma 2
Total 53

5. Primary Producers
Description: Primary farmers or organizations that operates a dairy farm and sells milk
directly to a milk processor

County KDB Region Number of Producers

1. Nairobi Nairobi 20
2. Kiambu Thika 12
3. Machakos Athi River 2
4. Mombasa Mombasa 44
5. Taita Taveta Voi 0
6. Nakuru Nakuru 5
7. Nakuru Naivasha 8
8. Nyandarua Olkalou 1
9. Baringo Baringo 0
10. Uasin Gishu Eldoret 3
11. Trans Nzoia Kitale 0
12. Nyeri Nyeri 16
13. Embu Embu 7
 14. Muranga Muranga 3
15. Meru Meru 29
16. Tharaka Nithi Tharaka Nithi 3
17. Kericho Kericho 0
18. Narok Narok 4
19. Kisumu Kisumu 26
20. Kisii Kisii 10
21. Kakamega Kakamega 1
22. Bungoma Bungoma 0
Total 194

6. Cooling Plants
Description: This license covers units that receive, bulk and cool milk

County KDB Region Distribution

1. Nairobi Nairobi 1
2. Kajiado Nairobi East 4
3. Kiambu Thika 14
4. Machakos Athi River 7
5. Mombasa Mombasa 5
6. Kilifi Mombasa 8
7. Taita Taveta Voi 2
8. Nakuru Nakuru 8
9. Nakuru Naivasha 2
10. Nyandarua Olkalou 18
11. Baringo Baringo 25
12. Uasin Gishu Eldoret 25
13. Trans Nzoia Kitale 8
14. Nyeri Nyeri 15
15. Embu Embu 2
16. Muranga Muranga 40
17. Meru Meru 42
18. Tharaka Nithi Tharaka Nithi 11
19. Kericho Kericho 16
20. Narok Narok 7
21. Kisumu Kisumu 3
22. Kisii Kisii 4
23. Kakamega Kakamega 10
24. Bungoma Bungoma 6
25. Bomet Kericho 16
26. Busia Bungoma 1
27. West Pokot Kitale 2
28. Kirinyaga Embu 5
29. Laikipia OlKalou 1
30. Makueni Nairobi East 8
31. Migori Kisii 3
32. Nandi Eldoret 15
33. Nyamira Kisii 3
34. Siaya Kisumu 6
35. Vihiga Kakamega 2
Total 345

7. Milk Vending Machines (ATMs)

Description: Milk vending machines

County Number of Licensed Milk ATMs

1. Bomet 4
2. Busia 1
3. Tharaka Nithi 1
4. Baringo 1
5. Uasin Gishu 11
 6. Embu 1
7. Nakuru 24
8. Nairobi 171
9. Elgeyo Marakwet 1
10. Nyeri 7
11. Kiambu 21
12. Kilifi 1
13. Kisii 2
14. Trans Nzoia 2
15. Machakos 3
16. Meru 1
17. Nyandarua 3
18. Mombasa 13
19. Bungoma 1
20. Muranga 3
21. Narok 1
22. Laikipia 1
23. Homa bay 1
Total 275

(5) Milk Quality

 Majority of the dairy standards harmonized in the EAC

 GMP standard developed to facilitate compliance by milk handling and processing enterprises
 Regular surveillance on quality and safety undertaken by KDB, KEBS and other stakeholders
 The major non compliances in milk quality and safety that has been observed by KDB is
summarized below;
Stage in the value chain Major non compliances

Raw milk (sampled from • High Total Viable Count (TVC)

transporters, collection
centers and milk bars)
Finished milk products
(samples from large, medium
and small-scale processors)
• High Coliform Counts(CC)
• Aflatoxins (in some samples)
• High Total Viable Counts (TVC)
• High Coliform counts (CC)
• Yeast and Molds in some fermented
products)
• Aflatoxins (in some samples)

(6) Key stakeholders associations in the Dairy industry

 Federation of Kenya Dairy Farmers – FKDF (representing dairy farmers)

 Kenya Dairy Processors Association - KDPA (Representing milk processors)
 Association of Kenya Feed Manufacturers – AKFEMA (Representing Animal Feed
Manufacturers)
 Dairy Traders Association – DTA (Representing Dairy traders)

(7) Key Challenges in the dairy industry

  Seasonality of production
 Low productivity
 High cost of milk production
 High cost of milk processing
 Informal milk marketing
 Competition in the local and export markets
 Poor infrastructure – roads, utilities, network of coolers etc.

(8) Next steps to enhance development of the Kenyan Dairy Industry

Include the following among others;

 Enhance milk quality, safety and traceability

 Promote organization of producers/bulking and cooling of milk
 Promote milk processing and value addition
 Improve productivity and manage costs
 Implement the School Milk Program
 Introduction of milk as a Strategic Food Reserve
 Establish Guaranteed minimum producer prices
 Improve infrastructure e.g. electricity, roads, water and milk cooling network
 Strategic networking with other Dairy Regulators worldwide

Margaret Kibogy
MANAGING DIRECTOR