A Dutch family office has made an investment of an undisclosed size in an integrated milk processing company in Kenya.
DOB Equity’s investment in Countryside Dairy, announced last week, will be used to support growth in processing capacity and distribution, and aligns with the DOB’s commitment to investments with positive social impact in the East African nation, according to a statement.
Countryside Dairy is based in the town of Nyahururu and processes raw milk from more than 20,000 small farmers across Kenya. Established in 2014, it is focused on the provision of pasteurized milk to low-income residents of Kenya through its flagship Countryside Dairy Fresh brand.
The company plans to use part of the investment from DOB to expand its presence in regional dairy operations, which already includes a stake in a dairy processor in neighboring Tanzania.
“The formal market for processed milk is still in its infancy and valued at only $570 million, with an estimated potential value of $2.8 billion annually as the dairy market matures. Currently, only 13 percent of total milk products are traded formally,” said DOB investment manager Saskia van der Mast in the statement.
Agriculture is responsible for a quarter of GDP in Kenya, which has been ranked as a lower-middle income country by the World Bank since 2014. The dairy sub-sector in Kenya is the single biggest contributor to agricultural GDP. Kenya’s overall economy grew at 5.6 percent last year and is projected by the International Monetary Fund to grow by 6 percent this year and 6.1 percent in 2017.
“In dairy, we see large opportunities for growth. It’s all about innovation and the ability to scale up. That’s really how we feel we can create impact to the economies,” DOB chief executive Brijit van Dijk-van de Reijit told Agri Investor sister publication Private Equity International in August.
DOB is a family office maintained by the de Rijcke family that is focused on investments in the food, agribusiness, natural resources, retail, waste, mobile technology and clean energy sectors in East Africa. The fund typically makes initial investments of between €250,000 and €2 million and seeks to acquire stakes of up to 49 percent in businesses. It maintains offices in Kenya, Tanzania and the Netherlands.
In August, DOB acquired a minority stake in Twiga Foods, a venture that allows vendors in Kenya’s capital city of Nairobi to purchase fruits and vegetables through their mobile phones.