A tropical dairy

KwaZulu-Natal dairy farmer Stuart MacKenzie spotted a gap in the Mauritian milk market and investor support was immediate from an island importing almost 400 000 of milk daily. Robyn Joubert reports on efforts to kick-start this multi-million rand dairy project.
Issue date : 03 April 2009

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KwaZulu-Natal dairy farmer Stuart MacKenzie spotted a gap in the Mauritian milk market and investor support was immediate from an island importing almost 400 000  of milk daily. Robyn Joubert reports on efforts to kick-start this multi-million rand dairy project.

In 2005, Johannesburg investment banker Stuart MacKenzie decided  to return to the quiet of his family’s third-generation farm Loskop in Karkloof, Pietermaritzburg.
As the fourth generation to farm Loskop, Stuart immediately decided to look for ways to increase milk production from the 180-cow Holstein herd. He bought in more Holstein cows and then 200 Ayrshire cows.

His 600 cows increased milk production from 3 000â„“ a day to 11 000â„“ a day. Not satisfied, Stuart looked for more land to buy in the Karkloof area. But it proved exceedingly hard to come by. In August 2007 Stuart’s wife Sue dropped the seed of an idea onto fertile ground. “Sue joked about having a dairy farm on a tropical island somewhere,” says Stuart. “After searching the internet I realised there was a huge gap in the dairy market in Mauritius.”

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Milk production on the island is only about 2 000â„“ a day, produced mainly by small farmers with between one and five cows. Consumption is about 400 000â„“ a day, so the balance is imported. Stuart e-mailed the Mauritius Board of Investments with an idea to start a dairy. He got a swift response. “They gave me the names of potential investors,” explains Stuart. “I e-mailed a few of them and Suren Surat, the owner of a fresh fruit and vegetable distributor, the SKC Group, replied within 24 hours.”

Putting the plan in motion
Three months later, in October 2007, Stuart found himself presenting his dairying idea in Mauritius to a group of 40 people, among them government officials and Suren.
The SKC Group was perfect, offering infrastructure, a distribution network, marketing and expertise in cold chain management, as well as a chain of Freshland retail outlets. And Suren recognised the benefits of an experienced and technically-savvy partner running the dairy. “Nothing would be possible without a partner on the island. They don’t get the inflated prices foreigners are quoted and they know what to do and how to source things.”

A partner to assist
In May 2008 the two parties formed SKC Dairy Fresh & Co, a 50/50 joint partnership. Stuart’s cousin André Fox is a minority shareholder on Stuart’s side. A synergy of interests has also been established between Stuart and the government. It realised the dairy would help it reach its target of producing 10 000â„“ a day by 2015. Stuart didn’t want handouts or subsidies, despite the estimated cost of the project at about 75 million rupees (R22 million). What he wanted was access to land. “Acquiring land is a major issue in Mauritius,” says Stuart. “Much of it is owned by private sugar estates and I knew I would never get my hands on it without help.”

Cattle on an island
In June 2008 the minister of Agro-Industry and Fisheries, Dr Arvin Boolell, was at the signing of a 15-year lease between Rose Belle Sugar Estate and SKC Dairy Fresh. The lease is for 100ha of mountainous land at Le Val, renewable for two 15-year terms with the possibility of expanding to 300ha. “It is not flat, Rolls Royce land,” says Stuart. “But I’ll take my chances on the mountains.” The land had been planted to sugarcane at the time of signing the lease, which made it difficult to conceptualise where to build the dairy. The first time Stuart saw it properly was in August 2008 after the sugarcane had been harvested.

Setting up the dairy
Earthworks began in October when the site for the feed shed and dairy was levelled and construction began on 15 December. While the building phase progressed well, in spite of heavy rain, Stuart struggled to get his herd of 250 pregnant Holstein and Ayrshire heifers onto the island. “We needed to charter a ship, but were quoted the ridiculous amount of US0 000 (R4,9 million),” says Stuart. “The going rate was US0 000 (R1,3 million). We were then told a company shipping livestock to Mauritius for meat had booked the ship for five years to prevent us from using it.”
It turned out the company felt threatened by Stuart importing breeding animals onto the island. “It seemed the only way to get the animals onto the island was by plane,” says Stuart. “We were going to fly them over, 20 at a time, in the cargo hold of a passenger plane. The Mauritian government even organised an old plane for us. Then Stuart offered the company holding up the ship all his bull calves and they finally agreed to allow him access to it.

“It was a nightmare to organise because the charter company kept changing the departure date,” says Stuart. “Timing was a hassle because we were dealing with inoculations and pregnant animals. We finally got a departure date in January 2009, only to experience hassles from South African officials about taking the animals out of the country.”

Stuart’s newly appointed South African farm manager Keith Hutton went with the cattle on the seven-day voyage. “Keith has all the right experience,” says Stuart. “He does a lot of veterinary work, which is important as there’s only one vet on the island. There’s no support system in terms of research and information into large animals and the new hired staff have no experience working on a dairy farm.”

As with his Karkloof farm, Stuart initially focused on macro aspects of the business, such as getting proper infrastructure in place, including the dairy, roads and pasture as well as staff management and animal husbandry. From there he moved onto micro aspects such as feeding systems and getting the best output from his resources.”
The climate is hot and wet, so Stuart plans to keep the cows in a shed in the heat of the day and let them graze at night. Stuart timed heifer conceptions so they would calve at a rate of about 30 a month, and he’s hoping to get an average milk yield of about 20â„“/day/cow. Milk production is expected to start in April 2009 when the dairy should be complete, and it will be officially launched in May or June.

Limited competition
Another group of Mauritian investors are also setting up a dairy on the island to produce milk and cheese. But their cows are kept permanently in a shed and fed a total mixed ration. Stuart is unfazed by the competition. “We’ll stick to producing fresh milk and cream,” says Stuart. “We don’t want to compete with big companies exporting long-life products to the island. As it is, interest in our milk is so fierce some of the SKC Group’s fresh produce customers are already placing orders.” Stuart says the new venture has been very exciting, but exhausting. “I’ve had four months away from my family since August 2008 and over that period my third daughter was born,” says Stuart. Contact Stuart Mackenzie on 082 495 5172 or e-mail [email protected]    |fw

Doubling up for guaranteed cream
Stuart Mackenzie milks about 400 Holstein and 230 Ayrshire cows on 400ha in Karkloof. Although both the Holstein and Ayrshire milk goes to Fairfield Dairy, it’s kept strictly separate. Each group is milked in its own parlour and has its own milk tank. Fairfield processes the Ayrshire milk for Woolworths, and the Holstein milk for Pick ’n Pay. Stuart will replicate the design of his 30 swing-over dairy parlour in Mauritius, and is using the same DeLaval equipment. “If Keith has a problem with the equipment in Mauritius, we can both stand in front of the same equipment and I can telephonically talk him through problems from Karkloof,” says Stuart.

He decided to ship heifers from both breeds to Mauritius. “Ayrshires have good traits for overall health,” says Stuart. “Holsteins milk well, but I expect the Ayrshires to cope better with the heat. We have bred all the Holstein heifers with Ayrshire semen and the Ayrshires with red Holstein semen, to get the best of both breeds. The second generation will be bred to Swedish Reds because I feel it’s the right cow for the environment. Our investment is in heifer progeny. They will grow up in the environment their mothers had to adapt to.”

Getting to grips with a tropical climate
How does one produce milk and maintain the health of a herd in the hot Mauritius climate? During the cyclone season it can rain as much as between 300ml and 400ml a day. “When it’s hot, the cows don’t eat,” explains Stuart. Their respiration increases and they loose energy instead of converting it into milk. Some people think the answer is to stick the cows in a shed and feed them a total mixed ration, but that’s not what our dairy is about.

The challenge is to take the pasture system and adapt it to work in a hot climate.
My cows will graze on pastures at night when it’s cooler and during the day they will be kept in the shed and eat a mixed ration and concentrate at milking time.”  Stuart will feed the cows properly to compensate for the environmental limitations. However, growing the food poses a set of challenges. “Maize silage isn’t possible because of the steep, rocky land and there are no contractors to cut maize silage,” says Stuart. ”Machinery is too expensive to import for just 10ha or 20ha and even if we did, it might not be able to cope with the steep terrain.”

Stuart’s solution is to plant 60% under kikuyu for night grazing and the balance to sugarcane. Growing teff for hay and ryegrass for grazing will also be explored. He’ll send the cows up the mountain and let them do the harvesting themselves.