Al Ain Dairy is set to boost production with a Dh400 million investment in a new farm and factory in Al Ain.
With milk prices across the Emirates controlled by the Government, dairy producers are eager to focus on improving manufacturing efficiency to boost margins.
“The market is growing organically at about 8 per cent,” said Shashi Kumar Menon, the chief operating officer at Al Ain Dairy. “Therefore our profits can only grow at between 6 and 8 per cent. About 98 per cent of what we feed a cow in the UAE is imported and the prices for agri-feed increase every year.”
The new farm and factory will be operational by 2016, but the dairy producer does not expect to reap profits from the new facility until 2017 at the earliest.
Despite the absence of rolling fields and lush pastures, milk yields from the UAE’s industrial faming methods are almost double that of Europe’s pasture-fed animals.
Al Ain Dairy, Saudi Arabia’s Almarai and Dubai’s Al Rawabi Dairy control 85 per cent of the local market.
“Milk is a commodity so visibility, availability and timely deliveries in the morning is the only small edge that you can get” said Mr Menon. “Milk is always white, you cannot be whiter, so it is very hard to differentiate. Our brand is very strong in the UAE, we target the local market and women in particular to trust that what we deliver is good for the family,“
While the UAE can meet most its milk demand from local production, it is not 100 per cent self sufficient – with the summer months and Ramadan seeing the biggest shortages.
Al Ain Dairy’s new farm and factory intends to meet local demand before it turns its attention further afield to export markets.
ascott@thenational.ae
