Can you tell us about the dairy industry in South Africa at present?
Rob Ward (RW), CEO at Douglasdale Dairy: “On a macro level, the industry in South Africa is challenging at the moment. On top of issues stemming from corruption, and skills shortage in local government which has resulted in a breakdown of basic service delivery, South Africa is still not able to produce sufficient electricity to meet our demand.
“This has resulted in continued load shedding (enforced black outs for certain areas to reduce the load on the grid). Due to the breakdown of basic service delivery, South African companies are having fill the void. To ensure continuity of operations we have invested in back-up generators and a water purification plant.
“These costs are not incurred by international dairy companies, in fact, many players in the international dairy industry receive government subsidies. While subsidies in Europe may seem miles away from the South African dairy industry, by exporting dairy products into South Africa, local dairies are having to compete with these international companies.
“At a micro level, SA has a very mature and developed primary dairy industry, but they are shackled by input costs (feed accounts for 50 percent of farmers costs) and with the huge maize and soya price increase seen over the last 18 months due to increased Chinese demand, margins and raw milk production have decreased. This has resulted in raw milk prices increasing substantially over the last six months and has put huge pressure on processing companies.
“These challenges are part and parcel of the dairy industry in South Africa. We have a fantastic team at Douglasdale Dairy where everyone plays an important role in ensuring our success. I could not think of another industry or place I would like to work.”