Senegalese entrepreneur Bagoré Bathily, with his company 'La laiterie du Berger', offers dairy products made with local milk. He even manages to cope with the fierce competition from 'false' milk powder from the EU. Among other things with the support of the Belgian Investment Company for Developing Countries (BIO).
Almost 90% of the milk sold in the formal sector in Senegal is imported, primarily in powder form. Nonetheless, 4 million people, predominantly Fulani, have traditionally made a living from livestock farming and are able to produce milk. The "milk" powder which floods the Senegalese market is generally a mixture of skimmed milk powder and vegetable oils (palm, coconut or copra depending on consumer preferences). It is sold at a price which makes competition very hard.
The beginnings of "La laiterie du Berger"
With a French mother and a Senegalese father, Bagoré Bathily grew up in Dakar until taking his baccalaureate. After studying veterinary medicine in Liege, Belgium, in 2006, Bagoré Bathily had the idea of setting up a local milk company in order to build a dairy industry with the aim of improving the living conditions of farmers. "Such a company had never been set up before, let alone in a secondary city, with young and local staff," he explains.
However, the owner of the dairy factory had a very clear idea of the purpose of his project, motivated by the development of livestock farming, as well as by the certainty of the positive impact it has on the living conditions of livestock farmers.
He raises funds thanks to Senegalese shareholders, but also thanks to international shareholders including Danone Communities, Crédit Agricole, and I&P. The support from the Belgian Investment Company for Developing Countries (BIO) has also been crucial. Indeed, the company has been able to survive thanks to these funds. Because- although the products are innovative and meet consumer demand and distribution methods- profitability was elusive at the outset. Despite this, Bagoré Bathily held on because he was "convinced that what he is doing was the best thing for his country.”
The support from the Belgian Investment Company for Developing Countries (BIO) has also been crucial. Indeed, the company has been able to survive thanks to these funds.
And rightly so, because since 2017, La Laiterie du Berger has finally been making a profit. It now achieves turnover of around €10 million, with growth of more than 20% every year. With 350 employees and 500 suppliers, plus a further 1200 people working in the background, Bagoré Bathily is already achieving some of his ambitions. He believes that the economic and development model he now incorporates in the company is safe, and makes it possible to sell accessible products, create jobs, develop livestock and the company in a sustainable, responsible and social way.
Women are the primary beneficiaries of this business model. Indeed, in Senegal, "milk is the woman's realm" says Bagoré Bathily. Milk was not valorised, unlike the sale of livestock, which is more the domain of men. Today, many women are the official suppliers of "La Laiterie du Berger".
Although the environment within the company was very masculine at the beginning, women have taken up important positions: financial management, quality control and even on the company's Board of Directors.
With 350 employees and 500 suppliers, plus a further 1200 people working in the background, Bagoré Bathily is already achieving some of his ambitions.
Doing business in Africa: difficulties and solutions
"I had a very good idea of the aim of my project, but I had no idea of the obstacles I would come up against," explains the owner of the dairy factory.
“First of all, you need to understand that the Senegalese environment is not conducive to developing SMEs. However, given that the State is the country's largest employer, increasing the number of SMEs could have a positive effect on Senegal's economy. Nonetheless, the government does not have enough resources to invest in infrastructure that would facilitate business development. Clearly, ‘La Laiterie du Berger’ has a good image and has been promoted, but the ability to listen and resolve the difficulties faced by entrepreneurs is lacking.”
The dairy sector is relatively new and there were very few professionals involved in collecting milk, the dairy processing industry or distribution and the cold chain. These two factors have also been a major issue. "I had to learn these trades on the job myself while developing my entrepreneurial skills". In this sense, in addition to the capital contributions to finance the company, Danone and Crédit Agricole provided invaluable assistance in providing the necessary technical assistance and training to increase the expertise of the team.
The dairy sector is relatively new and there were very few professionals involved in collecting milk, the dairy processing industry or distribution and the cold chain.
Powdered milk from the EU
Confronted with milk powder from the EU, it is indeed difficult to sustain competition. “To understand this, you need to take into account the Senegalese landscape.”, explains Bathily. “Urban Senegalese currently consume this imported powdered milk, whereas nomadic herders consume their own milk. Local milk needs to be processed before being sold in the city. This requires a lot of investment, without which local milk cannot reach the markets. Local producers therefore often prefer to base their supply on imported milk powder, which is cheaper.“
However, analyses show that not selling local milk leads to significant loss of income for the Senegalese economy. In this context, La Laiterie du Berger is looking for strategies to valorise local milk in the segments where it may be preferred to reconstituted milk. “The situation could therefore shift in favour of local milk. You have to bear in mind that various mini-businesses are developing in the country.”
In this context, La Laiterie du Berger is looking for strategies to valorise local milk in the segments where it may be preferred to reconstituted milk.
Small steps to boost entrepreneurship
It is by being aware of this reality on the ground that we understand why funds like I&P are needed. 'Investisseurs & Partenaires' (Investors & Partners) is an "impact investing" group which focuses entirely on the African continent, meeting the needs of SMEs and supporting them in their projects.
Thanks to I&P, Bathily understood the impact and power of supporting entrepreneurs. He therefore decided to get involved himself, in particular via Enablis in Senegal, of which he is president. This association can provide entrepreneurs with a methodology and help them build a network. It now represents a network of 300 entrepreneurs, and has consolidated 5000 jobs.
He also wants to show an open image of SMEs, by visiting universities, meeting young people, and hiring trainees. He believes that all of these people are necessary: they learn to work on the job and help society function, which is a source of motivation.
And in 10 years?
La laiterie du Berger needed 10 years to reach break-even. It has now laid down an economic model with social impact, and has reached a level of profitability that allows it to finance its growth. This has given him the opportunity to do everything possible to scale up on the same basis.
This will require succession planning within the management team, with the talented young professionals preparing to hand over the baton, which is essential to ensure the company's long-term survival. La Laiterie du Berger wishes to set out a "new" model, and propose an alternative to traditional business models, which clearly no longer correspond to the dynamics of the current era in West Africa.
In the long run, Bagoré Bathily would like to devote more time to rural development, which will provide stability to the agricultural populations of Senegal and the Sahel. He hopes to come back to the idea of "pilot farms", which he mentioned as far back as 2009.
Read more about Local milk: an enormous potential for West Africa