Located in Iringa Region, ASAS DAIRIES LTD is a private dairy processing firm that was established in the year 2000 to provide high quality milk products to the local market. Currently, the company sources and procures 94% of its total raw milk supply from smallholder farmers through a working partnership with three contracted Farmers’ Cooperatives (engaging 1,415 farmers).
At the present, ASAS’ factory’s installed capacity is 50,000 liters per processing shift. However, the lack of capacity and the high capital outlay required in dairying by the farmers’ results in the company processing only 11,500 liters per processing shift. That means the operational plant utilization stands at 23% of the installed plant processing capacity. The 77% installed capacity deficit is therefore a huge market opportunity for farmers and offers them room for growth. Some of the identified gaps that triggers supply deficit includesThe company currently operates at 23% of its installed capacity of 50,000 Liters of milk against 11,500 Liters which they are able to source from smallholder producers. Some of the identified gaps that triggers supply deficit includes;
- Poor Hybrid Vigor.
- Lack of grazing land and quality animal feeds (ration).
- Insufficient extension services.
- Smallholder farmer’s Technology and Knowledge gap.
Reducing these smallholder farmer’s based constraints can have a positive advantage for farmers to access a market opportunity from 77% supply gap that offers them room for growth and profitability.
The project targets at addressing constraints which limit production, productivity, consistency and quality of milk produced by the farmers supplying milk to the company through;
- Improving the genetic potential of local herds by offering and promoting the use of Artificial Insemination (AI) with a target of 80% uptake of AI services; cows will be synchronized into heat and inseminated to improve and increase the breeding stock. Estrous detectors will be used to time insemination and reduce chances of repeat insemination
- Facilitating availability of low cost animal inputs such as feeds, water and minerals to double milk production per cow per day. Low cost input will reduce the cost of production, increase productivity and increase the farmers’ profit margins.
- Establishing a farmer led Enterprise Development Fund which will facilitate access to credit funds hence will reduce the difficulty in bearing risks, transaction costs of milk production and marketing; therefore increases investment potential of the target farmers.
- Improved smallholder farmer’s milk collection infrastructures and milk productivity.
- A total of 400 farmers from Rungwe, Busokelo and Njombe will be commercially linked to a permanently source of income and thereby lifting poverty.
- With USD 100,000 that is requested from SAGCOT CTF, will catalyze about 994,850 USD by 2016 and USD 2,345,805 by 2025 Asas private capital investments.
- Estimated 1,540 employment will be created along the value chain.