Lactalis has confirmed the closure of its factory in Zambia, as announced by the country’s government.
According to Chipoka Mulenga, Zambia’s Minister of Commerce, Trade, and Industry, the dairy group cited “market dynamics” as the primary reason for this decision.
The Daily Nation reported that Lactalis is shifting its strategy, opting to import products into Zambia from South Africa. This reflects a growing trend in the food manufacturing sector.
In a Facebook post, Zambia’s Ministry of Commerce, Trade, and Industry shared that Mulenga had met with Lactalis management on January 6 to discuss these veranderingen.
“The decision taken has been motivated by business considerations over the past years, which have been informed by market dynamics, influenced by new players in the milk sector,” the ministry highlighted.
“The decision is, therefore, purely based on competitiveness, following new entrants in the sector. The company has elected to undertake internal re-organization as part of its evolving business model,” Mulenga stated.
“Should Lactalis reconsider its decision, the Government is prepared to support them,” Mulenga added.
According to the Daily Nation, Lactalis intends to fully transition to an import model starting in April.
In its 2023 annual report, Lactalis indicated that 16% of its €29.5 billion revenues came from operations in Africa, Asia, and the Pacific region, while a significant 53% is derived from its European business.
In September, the group acquired the Cremora creamers business in South Africa from Nestlé.
The Cremora brand, a staple in South Africa for over 77 years, was produced at Nestlé’s plants in Babelegi and Potchefstroom, both of which were included in the acquisition.
Additionally, Cremora is manufactured in neighboring Zimbabwe; however, production at its Harare site will cease following the transaction with Lactalis.
