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Dairy Companies Look to Expand in Africa

26 July 2016

GLOBAL - The world's dairy market shrank last year, with the Top 20 dairy companies taking slices of a smaller pie, highlights The Rabobank Global Dairy Top 20 2016.

2015 proved to be a difficult year for most, with the strong US dollar and currency volatility, together with low commodity prices, reducing turnovers for most companies.

Mergers and acquisitions continued apace, as companies continued to seek additional value from domestic markets and new opportunities elsewhere.

According to Rabobank’s Global Dairy Strategist Kevin Bellamy: “The big story in this year’s top 20 list of dairy companies - based on turnover - is the shrinkage of the overall size of the pie.

"Low dairy commodity prices and currency movements have had a dramatic downward effect on company sales values.”

In US dollar terms, the top 20 posted combined dairy sales of USD 194bn in 2015, down 13 per cent year-on-year.

It is indicative of how much the euro has weakened against the US dollar in 2015 that the same collective turnover of the top 20 improved 4 per cent year-on-year in euro terms.

As growth in China slowed, the world’s largest dairy companies started to look for new horizons to develop. Africa is now definitely on the dairy map. In total, there were 14 deals in Africa, with four more year-to-date in 2016. This compares with only three deals recorded in Africa in the whole of 2014.

TheCattleSite News Desk



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