Lactalis to close Zambia factory, transitioning to import model

ZAMBIA – French dairy giant Lactalis has announced the closure of its factory in Zambia, effective 31 March 2025. 

The company will transition to an import-only business model, sourcing its premium dairy products from South Africa. 

The decision marks the end of Lactalis’s local production in Zambia and reflects challenges stemming from increased competition in the country’s dairy sector.

Competition and market dynamics

Lactalis cited heightened competition as the key driver behind the factory closure. Zambia’s dairy market has seen a surge in new players, spurred by government policies aimed at boosting domestic milk production. 

These initiatives have introduced more value-oriented brands, intensifying competition and eroding the market share of premium brands like those offered by Lactalis.

The company also acknowledged the financial strain its Zambian operations have placed on its resources. 

In a statement, Lactalis noted the “persistent absorption of financial resources” over the past eight years as a contributing factor in its decision to exit local production.

Strategic shift to imports

From April 2025, Lactalis will focus on importing premium dairy products from its extensive South African operations. 

The group owns several leading brands in South Africa, including Parmalat, Président, Melrose, Steri Stumpie, and Bonnita. 

These brands will form the backbone of its Zambian product offerings under the new import model.

South Africa serves as a strong manufacturing hub for Lactalis, a position further solidified by its 2023 acquisition of the Cremora creamers business from Nestlé. This deal included Nestlé’s production facilities in Babelegi and Potchefstroom, enhancing Lactalis’s production capabilities in the region.

Industry and government responses

The announcement has drawn reactions from Zambia’s government and dairy industry stakeholders. 

Chipoka Mulenga, Zambia’s Minister of Commerce, Trade, and Industry, expressed hope that Lactalis might reconsider its decision, pledging government support if it resumes local production.

The Dairy Association of Zambia, however, remains critical of imported dairy products, which it argues undercut local producers. 

The association has called for increased import tariffs, proposing a hike from 5% to 25%, and has also lobbied for subsidies to support domestic dairy farmers. 

In the long term, the organization has advocated for reducing reliance on imported dairy products entirely.

Lactalis’s operations in Africa, Asia, and the Pacific accounted for 16% of its €29.5 billion (US$30.4B) revenues in 2023, with Europe contributing the majority at 53%.