Chinese top milk producer Mengniu sees 'lots of opportunities' in Africa

China's dairy giant Mengniu sees significant potential in the African market and intends to develop its business there in the future, a top executive said on Thursday.

Wei Wei, Vice President of Mengniu Dairy, emphasized the strategic importance of the continent for the company's long-term growth ambitions.

"We see Africa as a very important market right now," Wei Wei told The Standard in Beijing, on the sidelines of its factory tour, without elaborating on specific entry strategies or investment plans.

She added, "For now we don't have a very specific timeline, but we really value this market…we see a lot of opportunities there and we will develop more business there in the future."

Founded in Inner Mongolia in 1999, Mengniu has grown rapidly to become a major player in the global dairy industry, exporting its diverse range of products, including liquid milk, ice cream, milk powder, and yogurt, to 14 countries and regions.

The Hong Kong-listed company has also established its first overseas liquid milk production base in Indonesia, signaling its intent to expand its international footprint.

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Mengniu's interest in Africa aligns with a growing trend of global dairy players looking to the continent for higher growth margins.

India's Dodla Dairy, a top-three private dairy firm in the world's largest milk-producing nation, has also reportedly been lured to Africa, particularly milk-deficit East African countries like Kenya and Rwanda, as well as import-reliant West African nations.

The African dairy market has already attracted significant investment.

French food group Danone previously acquired a substantial 40 per cent stake in Brookside, a leading Kenyan dairy processor with a dominant market share in the country and operations across East Africa.

Brookside itself has been actively expanding in the region and is currently working to establish a dairy plant in Nigeria. Danone previously held a 9.8 per cent stake in Mengniu Dairy.

Mengniu's established strengths in intelligent manufacturing, exemplified by its fully digitalized Ningxia factory, could provide a competitive edge as it explores the African market.

The company emphasizes research and development, brand building, and digital transformation as key drivers for its future growth.  

Analysts see Kenya and other African countries with their significant milk deficit, as a particularly attractive market.