The Dairy Industry in Morocco

1. The Dairy industry

The dairy industry in Morocco is fragmented. In fact, according to the Moroccan Ministry of Agriculture, there are 400,000 dairy farms (including 100,000 seasonal producers), mainly located in coastal areas (Gharb, Doukkala, Chaouia, Souss Massa) with 82% of farms concentrated in irrigated areas. In those zones, the government has privileged a controlled growth through coops that have developed strongly, and the milk production in Morocco has seen strong changes in the past years. In 2013, it attained 2.3 billion liters of milk. Besides, there is a traditional dairy production coming from a network of thousands of small shops ‘mahlabat’ across Morocco. The government subsidies for animal feed (forage seeds) and for imported cattle (MAD 4000 for each imported dairy cow).

On the other hand, in 2009, there were 1,070 milk collection centers and 83 dairy plants in, where 70% are private businesses. The dairy sector allowed the creation of 465,000 permanent jobs in which 13,000 in the milk industry, and generated a turnover of 13 billion dirhams a year, even though the prices for dairy products are high, compared to prices paid to farmers.

The Moroccan dairy sector benefits from a steady growth in the country's demand and supply. The domestic dairy production is covering more the 90% of the national demand, and imports just under 10%. In consistency with the Green Morocco Plan, the government and the Moroccan Inter-professional Dairy Federation (Fimalait) signed a contract-program for the period 2014-2020 for the development and modernization of the dairy sector. The objective is to attain a production of 3 billion liters of milk in 2014 and 4.5 billion liters in 2020 increasing mass production at competitive costs. The total investment planned is 12 billion dirhams. In terms of consumption, the goal is to reach 350 to 400 grams of milk per person a day, bringing the sector's turnover to 18 billion dirhams in 2020 and generating 40,000 jobs.

Moreover, this sector is likely to grow due to the international interest, namely from the US that had successfully concluded negotiations with the Moroccan government in December 2014 to allow U.S. dairy exports (including butter, cheese, skim milk powder and dairy ingredients) to continue to enter the country keeping a $126 million market open for American dairy products. The strong demand from consumers induces such high level of imports. Still, Morocco wants to develop its own dairy sector by decreasing the value added tax for home production, and heavily taxing the imports.

Supply chain in the dairy Industry:

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The dairy exports are mainly focused on cheese products (BEL FROMAGERIE), and customers are multinational companies operating in Morocco.

Morocco import milk, cheese and butter mainly from France, Spain, USA, India, Brazil, Tunisia, Italy, Netherlands, Germany, UK, Egypt, Portugal and China. Morocco has imported 11,000 ton of cheese in 2011, it also imports on average 30,000 ton of milk per year, and 22,000 ton of butter a year.

1. The company “La Centrale Laitière”

La central Laitière is a pioneer in the dairy industry since 1940, it is the first Moroccan producer of packaged milk and fresh dairy products that meet food safety standards. It enjoys a market share of more than 60% and produces 933 tons of milk and fresh dairy products per year. It provides jobs to over 4000 workers. La Central Dairy is headquartered in Casablanca, its chairman is Jacques Ponty and it has four plants located in El Jadida, Fkih Ben Saleh, Meknès, Salé. There are 120,000 partners to whom the company is committed to collect all the milk produced and 70,000 points of sales visited each day.

La Central Laitière was listed on the Casablanca stock exchange after it went public in 1974. It has two major shareholders: Danone 67% and SNI to 25.62%. The remaining shares are held by institutional investors and other shareholders. In December 2014, Danone acquired an additional 21.75% interest in Centrale Laitiere from SNI for an amount of 278 million euros. The transaction will raise Danone’s equity stake in Centrale Laitiere to 90.86%.

La central laitière has a wide range of products: Yawmy, Activia, Danette and Jamila, Danino, Moufid, Blédina, and pasteurized milk Lben. La Centrale Laitiere sells its products through hypermarkets, supermarkets, distributors, and small retailers in Morocco.

The company’s main competitors are Copag cooperative (Jaouda) created in 1987 with about 25% of the market share, Safi lait (Jibal) in 2006 with 7% and smaller players including Best Milk in 2007, Domaine Douiet, Colainord, Colaimo. Moreover, the prices of La Central Laitière, Jaouda, and Jibal are almost aligned. The competition is especially stiff during periods of low production and for products derived from milk.

The Board of Directors comprises:

• Jacques Ponty: Chairman of the Board
• Cécile Cabanis: Director
• Gervais Danone company represented by Thomas Rondot: Director
• Danone company represented by Filip Kegels: Director

The Management Committee includes:

• Jacques Ponty: The chairman of the Board and CEO since March 18, 2013. He joined Danone Group in 1986, where he ever since has performed a number of different functions, notably including Managing Director of Danone Romania and of Eaux Minerales Division of Danone China.

• Abderrahmane Tarabi: Deputy Managing Director in charge of Purchases and Dairy Production since 2008. Until 2008, he was Deputy Managing Director and Director of Purchases and Dairy Production of the Company. Mr. Tarabi is also Co-Chairman of Coordination Board of Agriculture and Industry at FENAGRI. Mr. Tarabi obtained a degree from Ecole Nationale Superieure d'Arts et Metiers.
• Denis hermant: Deputy Managing Director and Industrial Director
• Philippe Joly: Deputy Managing Director in charge of Sales & CEO of Fromageries des Doukkala 
• Amine Benchekri: Deputy Managing Director in charge of Organization, Information Systems and Supply Chain Management since 2008. Until 2008, he was Director of Organization and Information Systems of the Company. Mr. Benchekri joined the Company in 2006 as Director of Information Systems. He co-chairs the Logistics Plan Commission of FENAGRI. Mr. Benchekri obtained a degree in Applied Mathematics from Universite Joseph Fourier, Grenoble and also received a Masters degree from Ecole Superieure de Commerce de Paris.
• Boujemaa Ihfa: Finance Director and Management Auditor
• Asmâa Belkeziz: Director of Institutional Relations and Communication
• Jamal Eddine Zryouil: Quality Director & HSE
• Guillaume Ollivier: Director of R&D Morocco and North Africa
• Françoise Temime : Integration Project Director (CLIP): Project Director of Inclusion
• Carlos Ramalho : Director of Marketing 
• Hicham Zouanat: Director of Human Resources

1. The risks facing the company

3.1 External and Internal Assessment of Risks