Danone has today announced investment worth $25 million in its subsidiary in Ghana, adding three new production lines to its factory in the capital Accra.
The investment will allow Fan Milk ‘to sustain growing demand for dairy products’ in West Africa, Danone said. It is being made together with The Abraaj Group – the Dubai-based private equity investor that has owned a 51% stake in Fan Milk since the two companies’ joint buyout in 2013.
The factory expansion will be used to support the rollout of FanMaxx, a new ‘creamy drinkable yogurt’ that will be available to Ghanaian consumers in June. The yogurt is a source of calcium and enriched with vitamins, Danone said, with a creamy texture that makes it filling enough to be a light meal replacer. It can be consumed chilled or ambient and has a long-shelf life of four months.
Packed in 330ml bottles, the product is positioned as an ‘affordable and convenient’ offering for Ghanaian consumers, available in more than 5,500 outlets by the end of the year.
Fan Milk’s other dairy products include FanYogo frozen yogurt pouches and FanIce ice creams. It also produces the Fandango brand of fruit drinks.
The investment, Danone said, is proof of its ‘commitment to local manufacturing and to continue growing the Fan Milk brand in the region for the long-term’. It will create around 200 qualified jobs for the local economy.
Fan Milk Ghana managing director Stéphane Couste said: “The new FanMaxx is a product of Fan Milk, which has been a trusted brand in Ghana for 55 years. It is a new, healthy and nourishing yogurt experience that is particularly suited to local consumers. Fan Milk is famous for its frozen dairy [but] it will become a household name for its drinkable yogurt as well.”
Pierre-André Térisse, executive vice-president access, Africa for Danone and non-executive chairman of Fan Milk, added: “This is the result of two years’ work, combining Abraaj’s intimate knowledge of West Africa and Danone’s leading expertise of the dairy category in a highly cooperative and fruitful collaboration. Fan Milk’s growth has been strong for the past few years and we believe there is potential for dramatically expanding its footprint by exploring yet untapped sources of growth, including the drinkable yogurt category. We are today launching [this product] in Ghana, but this is only a first step towards West Africa.”
Ghana is a relatively small market for French companies – $500 million in exports in 2015, compared to a total of $500 billion – and accounts for just 1.6% of France’s total export trade with Africa.
Since 2011, the value of French exports on the continent has fallen significantly from $39 billion to $32.2 billion, as a slump in oil prices affected most of the continent’s strongest economies.
But the region is still worth €1.4 billion to Danone, which turned over €21.94 billion in 2016.
Fan Milk also operates in Nigeria, Côte d’Ivoire, Ghana, Burkina Faso, Togo and Benin.
For Abraaj, its investment in the local dairy company is one of a number of interests in the food and beverage industry; it also owns stakes in South African food group Libstar, Moroccan chocolate company Kool Food, and Turkish dairy Yörsan.
And it owns a minority stake in Kenya’s Brookside Dairy, along with Danone, and sold the company’s Tanzanian operations to the French dairy group in March.
Abraaj managing partner Wahid Hamid concluded: “We remain committed to accelerating the growth and penetration of Fan Milk’s portfolio of leading consumer food brands across West Africa. This new investment, in partnership with Danone, will further propel Fan Milk’s production capacity and ensure it is able to meet ever growing consumer demand for its high quality and nutritious products.”
© FoodBev Media Ltd 2019