Achieving dairy self-sufficiency in Algeria

Who is importing all the milk powder? Turns out it’s Algeria, which is currently the world’s third-largest importer of milk powder, reflecting the high consumption of dairy products among its 47 million population. To address this heavy reliance on imports, the government has pursued a dual strategy: attracting foreign investment for large-scale dairy production projects while simultaneously strengthening local production capacities. 

At the heart of this approach lies the government’s National Investment Fund, a long-established development agency, which, in line with government directives, has partnered with Qatar’s Baladna Group, a Gulf dairy major, in a mega dairy production project with a planned value of US$3.5 billion. The project is viewed as a turning point for Algeria’s economic diversification. “This is the biggest investment project in the country since independence outside of hydrocarbons,” professor Mourad Kouachi, a member of the Algerian National Economic, Social and Environmental Council, told Dairy Industries International (DII). 

The Baladna project, for which initial construction work is under way, is based in Adrar Province, within the Algerian Sahara. It will run a major integrated dairy farm and milk powder production facility. The government has backed this ambitious plan with land access, financial support and tailored investment incentives. These include exemptions from customs duties and VAT on equipment, reductions in property and registration fees and tax holidays under Law No. 22-18 on investment in strategic sectors. To further ease operations, Algeria has set up one-stop shops and digital platforms for investors. 

Energy infrastructure has also been prioritised. The president and CEO of national energy utility Sonelgaz, Mourad Adjal, who became Algeria’s energy minister in September 2025, and for the time being remains in his old job as well, confirmed that the utility has taken proactive measures to supply electricity and gas to the facility, mobilising major technical and human resources. 

In mid-2025, Algeria signed contracts with Baladna and GEA, the food systems supplier, to begin the project’s first phase. According to the partners, the completed complex will produce up to 100,000 tons of milk powder annually, covering nearly 50 per cent of Algeria’s domestic demand. 

By 29 July 2025, Baladna Algeria had already signed an initial package of contracts worth over US$500 million, covering land reclamation, farm construction, irrigation systems and the first processing facilities. “The project is progressing rapidly, in cooperation with some of the best companies in their fields,” said Ramez El Khayat, board member and managing director of Baladna Company. He added that two of the project’s four farms, one of the two factories, and 700 of the 1,400 irrigation pivots would be included in the first phase, tapping underground aquifers. Algerian water resources company Eforhyd is drilling water wells, while Genie Hydrique and Star Filtre will supply casing pipes. 

Production is expected to begin before full construction is completed, with herd establishment scheduled for 2026.

Construction of the full facility will commence in early 2026, with milk powder production beginning in late 2027 and the capacity gradually expanding thereafter. 

While Baladna represents Algeria’s flagship foreign partnership, the government has also focused on boosting smaller-scale local dairy production. Over the last six years, the agriculture sector has been increasing in scale, now contributing around US$37 billion to the economy annually, or 15 per cent of GDP. “These amounts include dairy products,” Prof Kouachi notes. 

One notable driver is Giplait, the state dairy group. According to former agriculture minister Youcef Charfa, a new Giplait dairy plant in Rouiba, Algiers, has a capacity of one million litres of milk/day. Additional plants are scheduled for opening in Bouira (250,000 litres/day, 15 November 2025) and Bordj Badji Mokhtar (11,200 litres/day, November 1, 2025). 

Giplait claims that its subsidised milk programme has reduced Algeria’s milk powder import bill by over US$17 million. In May 2024, it launched sales of partially skimmed cow’s milk sachets at the regulated price of Algerian dinar DZD25 (US$0.19), generating significant savings for the public treasury. Since then, 68 million litres of subsidised cow’s milk have been produced nationwide. 

Earlier this year, Charfa (who lost his job in the September reshuffle bringing Mourad into government) announced that private dairies will also begin producing subsidised sachet powdered milk, expanding beyond the public sector. Current subsidised production stands at 56 million litres, entirely from publicly-owned dairies. 

Algeria’s dairy trade is undergoing notable shifts. In 2024, imports of butter and cheese fell, driven mainly by safeguard duties and the rise in global prices.

To counterbalance these pressures and sustain the sector, the government introduced a package of subsidies, including DZD12 (US$ 0.09) per litre for breeders, DZD5 (US$0.04) per litre for collectors, and DZD4 (US$0.03) per litre for processors, in addition to DZD60,000 (US$462) for each new dairy cow born, accompanied by veterinary care and vaccination support. 

That same year, Algerian milk powder consumption was estimated at 260,000 tonnes of full-fat powder and 176,000 tonnes of non-fat powder.

From January to August 2024, whole milk powder imports totalled 152,600 tonnes, marking an 8.3 per cent decline compared to the same period in 2023, while non-fat milk powder imports reached 127,439 tonnes, down three per cent, yet still higher than the five-year average. 

Trade dynamics have also shifted in butter, with New Zealand increasing its exports to Algeria by 13 per cent, whereas shipments from the European Union (EU) dropped by nearly 60 per cent. 

Speaking on the growing competition posed by foreign exports and mega projects such as Baladna, a senior Giplait official told DII that the group is not concerned. “Giplait produces a wide variety of products such as yogurt, cheese and camembert, and is not focused on milk alone.” 

However, Oussama Abdelmalek, communication officer for Walid Cheese, a private dairy company founded in 2003, told DII that despite Giplait’s strong position, competition has always existed with other cheese brands, both local and foreign, notably La Vache qui Rit (made by France-based Fromageries Bel) and Le Berbère, made by pan-African dairy-focused agri-food group Promasidor. “The company addresses this by improving quality through the use of real cheese, banning gluten and additives in most of its products and offering a variety of products to meet customers’ different tastes,” he explained, adding that Bordj Bou Arreridj-based Walid Cheese’s best-selling items are the small-sized real cheese and the children’s cheese Loumdjati. 

Despite strong growth prospects, Algeria’s dairy sector faces several structural challenges. “Climate change, particularly drought, reduces feed production and raises prices,” said Prof Kouachi. He also pointed out that traditional breeding methods still dominate in remote areas, limiting small farmers’ productivity.

For his part, Abdelmalek told DII that although Walid Cheese produces between 35 and 45 tonnes of various cheeses per day, the main challenges remain the heavy reliance on imported milk powder and logistical inefficiencies, which the company will need to overcome facilitate plans to begin exporting soon, starting with neighbouring countries such as Tunisia, Libya and Mauritania. This is before expanding into central and west Africa, as well as Qatar and Oman.

However, the local market is not solely defined by industrial production. Artisanal and family-run fromageries have begun to attract the attention of both locals and foreigners in Algeria. With the growing success of Algerian handmade cheeses abroad, especially Jben El Kfas (a soft cheese coated with herbs and originally from the region around the town of Bou-Saada, south of Algiers, which was honoured at the Mondial du Fromage, in Tours, France, in 2023), a new trend is emerging in Algeria. “Many fine grocery stores have started opening across the country to bring artisanal cheeses closer to customers,” said the owner of Le Cellier specialist food retailer, based in Hydra, Algiers. 

He added that several Algerian artisanal fromageries he collaborates with, such as Fromazo, Bourourou, Family Cheese, Melouane and Horizon Fromagère, produce a wide variety of locally made cheeses. Among their most popular lines are Le Figou, a goat cheese with fig jam, and Tadj, a washed-rind hard cheese, while Jben El Kfas remains the top choice among customers. 

While these small artisanal producers rely heavily on traditional methods and local knowhow, many are now looking to integrate modern technology to improve quality, efficiency, and distribution.

The appointment of new agriculture minister Yacine El-Mahdi Oualid on 15 September 2025 has sparked optimism. His record as minister of knowledge economy, startups and micro-enterprises is seen as proof of his ability to modernise the dairy sector and equip small breeders with new technologies. 

Algeria’s government insists it will continue to attract both domestic and foreign investors to this strategic sector. “In dairy, Algeria makes no distinction between national and foreign investors,” said Prof Mourad Kouachi, underlining the government’s openness to global partnerships in achieving dairy self-sufficiency.