How to start producing powdered milk for local and international market

The dairy industry in Nigeria holds untapped potential, and setting up a milk powder production business is an excellent way to tap into this lucrative market. This business idea revolves around producing and marketing powdered milk.

Nigeria imports over 95 percent of finished and raw milk. The country spends an average of $481 million (N173bn) on milk importation yearly, accounting for six percent of total food import in 2016, according to the country’s livestock policy document. Nigeria’s national dairy output per annum is 700, 000 metric tons while the national demand is put at 1.3 million metric ton annually, leaving a gap of 600,000MT, according to the Federal Ministry of Agriculture.

 With a production capacity of 52,000 kg per month, translating to 624,000 kg annually, the revenue potential is significant, with projections of $208,000 per month, or $2,496,000 per year. The initial project cost range from $1,700,000 – $3,000,000 and the business promises impressive profitability and a robust market presence.

Production Process: The production of powdered milk is a fascinating blend of science and precision, making sure that the nutritional integrity of the milk is preserved. The process begins with fresh milk, which is first pasteurized to eliminate any harmful bacteria. The pasteurized milk is then concentrated to reduce its water content.

The core of the milk powder production process is spray drying. Here’s a detailed breakdown of this process: Pasteurization: Fresh milk is heated to eliminate pathogens.

Concentration: The milk undergoes partial evaporation to reduce water content.

Spray Drying: The concentrated milk is sprayed into a chamber with hot air (ranging from 150°C to 300°C). This rapid drying process ensures that the milk droplets dry almost instantly, preserving the milk’s nutritional value.

Cooling and Packaging: The powdered milk is then cooled and packed in airtight containers to prevent moisture absorption and ensure a long shelf life.

This process, which lasts only a few seconds, ensures that the essential nutrients in the milk are retained, making the end product both healthy and long-lasting.

Market Overview

Milk products are a staple in the diets of many Africans, making the demand for milk powder consistent and widespread. In Nigeria and other African countries, powdered milk is especially popular due to its convenience, long shelf life, and versatility. It is used in homes, schools, and industries, making it a highly sought-after commodity.

How small investors can tap into this opportunity: Some companies in Nigeria are currently selling powdered milk in 25kg bags. Lactorich – N41,000,Cowbell – N40,500,Miksi - N 39,500,Ornua – N37,000, Micalac – N33,000.  As a small investors you can package and sell in small packs of 10grams to 500 grams and start making 30/40 % return on investment

Major players in the Nigerian dairy market include established brands like CHI Limited, HEALTHYLIFE HERBAL SOLUTIONS, Melting Moments Dairy Limited, and Promasidor. However, there is still ample room for new entrants due to the ever-growing demand for dairy products. The market extends beyond national borders, providing opportunities for export and regional trade.

Required Tools and Equipment: Starting a milk powder production business requires significant investment in specialized equipment to ensure efficient and high-quality production. Here is a list of essential tools and equipment:

Auto Miser, Lactoscan, Packaging Machine, Storage Containers, Milk Sampler, Milk Reception Unit

Delivery Vans: These tools are important for various stages of production, from initial milk reception to the final packaging and distribution of the powdered milk.

Additional Operational Costs: Apart from the machinery, operational costs include direct materials like milk and packaging materials, utilities (power and water), fuel, salaries, and rent. These costs are essential for maintaining smooth operations and ensuring that the production process is uninterrupted.

Source of Supply of Equipment and Raw Materials

For a successful milk powder production business, sourcing high-quality equipment and raw materials is crucial. In Nigeria, for example, equipment can be readily sourced from Netherland, China, or India. Local dairy farmers are reliable suppliers of fresh milk, ensuring a steady supply of raw materials necessary for production.

We are not globally competitive in dairy production. It cost about N300 to produce a litre of milk in Nigeria as against imported powdered milk which is about N150 per litre

The production of powdered milk is not only a profitable venture but also a business that meets a critical need in the Nigerian and broader African market. The demand for powdered milk is strong, and with the right investment in quality equipment and adherence to efficient production processes, this business can yield substantial financial returns.

Get our training guide,, this guide reveals key insights on profitability in setting up your own Powdered Milk Production Business, you will learn the step-by-step guide to starting your own  business, and tips on how to succeed. Most especially, you will learn the exact costs of the materials and equipment you need for your Powdered Milk business. The body of this work is formed from consulting experienced and relevant people running the Powdered Milk business to get first-hand information about the success secrets and marketing strategies deployed to achieve business success.

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