Context and investment rationale
The Kiruhura District in western Uganda has long been the country’s primary milk-producing area, where for centuries cattle farming has been a key cultural and economic way of life. Building on this tradition, Vital Capital, together with a Ugandan dairy expert, established a joint venture to build the first dairy processing center in western Uganda, Vital-Tomosi’s Dairy (VTD).
The investment thesis leveraged smallholder farmers high production rates of milk, processing according to the best international standards, coupled with the rising demand for dairy products. In addition, Uganda offers very competitive units economics in relation to milk production and processing in the East African context, making it highly competitive.
Value creation
VTD built and established a fully modern dairy processing operation, with highest quality standards, including a high-tech lab, and production facilities with the capacity to process up to 100k liters of milk per day. In 2019, VTD further solidified its commitment towards affordability and acquired a new long-life milk packaging line, that can pack under the latest most affordable packaging solution. This investment increased the outreach of VTD’s products, in an environment where cold chain is often impeditive of quality assurance.
Sourcing 100% of its milk directly from thousands of local smallholder farmers, VTD works with its community of farmers to strengthen local processing capabilities by increasing yields and improving food safety.
VTD hinges on local partnerships, local know-how, and high-quality infrastructure, thus making it one of Vital’s signature investments.
Tangible results
Sold under the MilkMan brand, the resulting output supplies the local and regional markets with high-quality, affordable milk (UHT and fresh) and yogurt, all sourced from local smallholder farmers.
VTD’s dairy processing, sales and distribution team have created over 100 jobs, of whom, more than 50% are women. VTD is contributing most significantly to SDG 8 Decent Work and Economic Growth and SDG 12 Responsible Consumption and Production.
