Famous Brands Cheese company and Coega Dairy empower communities with cash for cows

Famous Brands Cheese Company (FBCC) and Coega Dairy will collectively contribute R3 million to five black-owned community dairy farms in the Eastern Cape to finance the purchase of more than 300 dairy cows. The funds will be disbursed over a three year period, with FBCC and Coega Dairy each contributing R1.5 million.

In 2016, Amadlelo Agri, a black empowerment agricultural business which manages the five community owned farms, approached Coega Dairy and FBCC to assist local community farmers to attain ownership of their own dairy herds.

Andrew Mundell, Famous Brands’ COO Enterprise Development, says, “At present, a large number of the cows on the community farms are leased from commercial dairy farmers. By investing in this project we will assist the community farmers to gain increased access, participation and ownership in the value chain.”

He adds, “Ensuring security of supply of raw milk is critical to FBCC and Coega Dairy, and this investment will achieve that. The farms currently deliver approximately 25% of FBCC’s total milk intake. It is projected that the cows and their future offspring will produce in excess of 10 million litres of milk over a five year period.”

The five community farms which will benefit from the R3 million investment are: Fort Hare Dairy Trust, Middledrift Dairy Trust, Keiskammahoek Dairy, Shiloh Dairy Trust and Ncora Dairy Trust.

Coega Dairy was founded in 2011, and is a processor of dairy products and one of the largest long life milk producers in the country. This unique business was established through the partnership of existing commercial farmers with previously disadvantaged communities. The Dairy procures milk from producers in the Eastern Cape and processes UHT milk and butter at its modern facility in the Coega Industrial Development Zone in Port Elizabeth. The Dairy’s products are sold nationally through retailers and wholesalers.

FBCC was established in 2012 when Famous Brands entered into a ground-breaking joint-venture partnership with Coega Dairy, which is co-owned by local farmers, and factory and farm employees, to supply cheese products to the Group. FBCC is co-owned by Famous Brands (51%) and Coega Dairy (49%). The shareholders in Coega Dairy are milk producers (62%) and the Coega Empowerment Trust (38%). The beneficiaries of the Empowerment Trust are the five black-owned community farms (40%), factory workers (40%) and farm workers (20%).

 FBCC comprises a state-of-the-art cheese manufacturing plant, situated adjacent to Coega Dairy’s facility. FBCC procures its milk requirements from Coega Dairy which it then processes to produce Mozzarella, cheese slices, cheese spread and cream cheese for the Group’s franchise network. The plant processes nine million kilograms of cheese products per year. Together the businesses employ 275 people.

Mundell comments, “We established FBCC to further our strategy to build the Group’s manufacturing capability and leverage opportunities in the supply chain. The business has been a tremendous success. Over the past five years the intake of raw milk at Coega Dairy has increased by 14% per annum while milk intake for cheese at FBCC has increased by more than 20% over the past four years.”

Victor Korsten, Chief Executive of Coega Dairy, says, “Coega Dairy and FBCC are committed to the development of this primary production of milk from community farms and this locally focused empowerment investment will make an important difference in a particularly needy province.”

He adds, “All the necessary operational, technical and statutory support will be provided to ensure the sustainability and good governance of the project.”

Mundell concludes, “We are excited about the opportunities this investment will create for local community suppliers, while ensuring we continue to meet our franchise network’s growing demand for this strategic menu item.”

Written by Instinctif Partners Africa.

Find the Dairy (cattle) and Dairy processing chapters in the Agri Handbook.