Milk shortages Hits Sefalana's Delta fresh Production
Pauline Dikuelo | Monday February 1, 2021 15:15
The listed retailer produces milk in 500ml and one litre cartons under the Delta Fresh brand.
Therefore, the group bemoanded that insufficient milk supply has affected the production of milk for local manufacturers. In his comments on the retail group’s financial results for the six months ended October 31, 2020, managing director, Chandra Chauhan said the situation is worsened by their suppliers going into beef production.
“We are in constant discussions with our suppliers in South Africa in an attempt to increase procurement, but due to a reduced number of dairy cows during the pandemic, where focus was placed by farmers on meat production rather than diary,” he said.
He said even though there appears to be a catch-up underway to reinstate the dairy cow production population, this will take some time as he anticipates shortages to continue into early 2021. The local dairy sub-sector is still at an infancy stage, with the annual local milk production accounting for only 15% of the national demand, allowing the country an opportunity to develop. As of 2019, local milk production stood at eight million litres of the 60 million litres of national demand per annum. This is a slight improvement from 6.2 million litres produced in 2017 representing a significant 55% increase from the four million litres produced Sefalana was awarded the 24-month supply tender to government which it is currently fulfilling since March 2019. “Our division is heavily dependent on the manufacture and supply of milk to government for the childrens feeding scheme,” Chauhan explained.
According to the MD, their focus is also on building the Delta Fresh brand which has increased by over 30% year-on-year and ensuring distribution is maximised.
Delta milk can be accessed in most retailers across the country. Chauhan added that the group’s beverages plant will come onstream later i n the year.
“Our bottled water and fruit juice plants were expected to be in operation by September 2020, but had to put on hold on all non essential capital expenditure for atleast a nine month period. As a result these plants are only expected to be in place in late 2021,” he said.