Egyptian company, Dina Farms has secured funding of 92 million Egyptian Pounds ($15 million) in order to boost expansion as it hopes to see milk production rise to 80,000 tonnes per year.
The company, which is Egypt’s largest milk producer, has been seeking to expand its production facilities in response to a supply shortfall of milk in the country. Since its launch two years ago, the company has gone from strength-to-strength achieving market dominance through its 60,000 tonnes per year production capacity; which it claims still does not meet supply demands in the country.
The syndicated loan facility agreed this week, sees Al-Ahli United Bank, Egyptian Arab Land Bank and the United Bank agreeing to provide funds to Dina Farms for use for immediate expansion. Expansion will consist of two important phases: securing 2,000 new cows, to be imported from the United States; and building new milking stations to accommodate the increase in livestock- stations billed to host state-of the art agricultural technology.
With Dina already owning more than 13,000 cows, the additional 2,000 to be shipped from the US are to arrive in two shipments; the first shipment arriving as soon as October 2012, and the remaining livestock set for importation in the second half of 2013.
In a push to see rapid expansion, the company’s ownership, Gozour – which in turn is private-equity firm Citadel Capital’s multi-category agriculture and consumer foods platform – has announced that it will be fast-tracking the current project, putting all resources into the construction of the new modern milking facilities with scheduled completion by mid-2013, in time for the second shipment of cows.
Announcing the new funding and expansion, Hanee Afia, CEO of Gozour’s Integrated Dairy Business said: “This loan to finance the expansion of our dairy facilities comes at a crucial time. We are currently witnessing a market that is suffering from an under supply of milk, which has led to a recent increase in factory prices. The country as a whole needs new investments in dairy farms. An increase in our dairy capacity will help to offset the imbalance and close the import gap”.
Dina Farms not only produces its own brand of fresh pasteurised milk, but also provides milk for use by local manufacturers of dairy-based products. The company has also seen a boom in its yoghurt industry, hugely scaling up production from the initial figure of 300 cups of yoghurt per day to 40,000 cups per day currently.