“Untapped potential.” “At a crossroads.” “Bright prospects.”
Those are just some of the phrases used to describe Pakistan’s dairy industry—and each euphemism hints at a decades-long, sector-wide challenge. Although Pakistan is the fourth-largest milk-producing country in the world, supply hasn’t been able to keep up with demand, and so for many years the dairy sector has fallen short of its promise.
Poor infrastructure is one culprit: more than 80 percent of the dairy production is still accounted for by subsistence farmers with limited resources and difficulties accessing markets. An outdated supply chain also interferes with distribution, and therefore informal milk collectors capture a disproportionate share of the dairy value—mostly at the expense of farmers. The combined result is that productivity is low and losses are high.
IFC’s $145 million financing package to FrieslandCampina, one of the largest dairy producers in the world, will help Pakistan's crucial dairy industry course-correct. The financing will enable the company to acquire 51 percent of Engro Foods, Pakistan’s leading dairy processor. FrieslandCampina, a Dutch cooperative, will share its global experience and international best practices with the smallholder farmers who supply Engro Foods and most dairy processors in Pakistan, helping them boost productivity and cut down on waste.
More than 200,000 farmers and 270,000 distributors are expected to benefit from the company's acquisition of Engro Foods, which will also create more than 1,000 new jobs in the dairy supply chain.
RELATED LINKS
