The Botswana Development Corporation (BDC) has parted ways with US investors who had acquired a 26% equity stake in the Milk Afric project
Last year, BDC took full control of Milk Afric, paying zero thebe for the transaction but assuming the obligations of the troubled Lobatse dairy project.
To date, the corporation has spent P48 million on the project, which has carried the costs of roads, boreholes, electricity connections, rotary, fencing and working capital.
This week, BDC’s Head of Corporate Affairs and Strategy Boitshwarelo Lebang said the US technical partner had expressed a desire to exit the investment and focus on other business interests. “We had a technical partner in line with our investment strategy of growing Botswana’s local dairy production to enhance national food security platforms,” she said.
Launched amidst much pomp and fanfare in 2016, Milk Afric was set to revolutionise the country’s dairy sector, erasing the dependence on South African products and resuscitating Lobatse. Local students were also sent to Florida in the US for training at a tune of P300,000 in tuition fees for each student.
The venture has struggled to take off despite donations of machines and land from stakeholders, BusinessWeek
Lebang, however, said it was expected operations at Milk Afric would begin in June 2021. The BDC recently floated an invitation for new bidders in the project and Lebang said the revised business plan by the new technical partners would assist in determining the investment required to bring the project to commercial operation. Milk Afric was earmarked to milk 2,000 herd of cattle at full production capacity. The project is seen as an opportunity to transform Botswana’s dairy sector and enhance national food security. It further presents an opportunity to substitute the importation of milk and milk products, thereby reducing heavy reliance on imports – a key lesson from the disruption in supply brought about by the coronavirus (COVID-19) pandemic.
“The project has prospects in the medium to long term to meet local demand with vertical integration on milk products,” Lebang said.
“Milk Afric is also geared to create sustainable economic diversification, create jobs for Batswana and promote real growth of the dairy sector of the economy.”