Dairy and juice manufacturing opportunities test Libya’s ability to compete with imports
LIBYA – An economic report published by Egypt’s English-language Ahram Online has examined food manufacturing opportunities in Libya in dairy products and juices, as the domestic market relies on large volumes of imports.
The report, which Al-Marsad followed and summarised, said new manufacturing capacity expected to begin production in Benghazi will test how far a larger share of domestic demand for these products can be met from within Libya.
Imports worth millions of dollars in 2024
According to the report, New Zealand exported about $47.9 million worth of whole milk powder to Libya in 2024, while the European Union exported skimmed milk powder worth nearly $54.4 million and Egypt supplied $6.2 million of low-fat liquid milk.
It added that Egypt also supplied high-fat milk and cream worth $6.5 million, while juices formed another significant category, with Egypt exporting $5.2 million worth of single-fruit juices to Libya in the same year.
EU exports of grape juice to Libya were worth nearly $4.9 million, plus just over $2 million of unfrozen orange juice. The report stressed that these figures cover specific customs categories and are not a comprehensive estimate of the dairy and juice market.
Room for local competition, but cost and quality challenges
The report said the figures reflect existing demand for these products in Libya, leaving local manufacturers significant room to compete. The biggest challenge, however, is whether they can match imports on cost and quality, given the limited attention paid to the manufacturing sector.
It noted that the sector’s importance depends on the volume of raw or intermediate products that can be turned into finished goods within the country. Dairy requires testing, processing and packaging, while fruit can be turned into juices or concentrates, alongside other products that need milling, storage, quality control and distribution.
It added that Libyan manufacturers do not need local inputs for every product: they can continue to import milk powder, concentrates and other ingredients while carrying out more manufacturing, packaging, storage and distribution locally, moving part of the value chain into Libya.
Economic viability and infrastructure will decide success
The report said the success of this approach depends on the economic viability of each product category, given the differences in Libya’s agricultural base, financial situation and infrastructure, while the core idea remains that food security and supply resilience can be strengthened in the stages after agricultural production.
It noted that fresh dairy, meat and many other foods still require a cold chain, while ultra-high-temperature (UHT) processing for some products and drinks could make storage outside Benghazi easier, provided production and distribution costs remain competitive.
Local production does not automatically mean profitability
The report stressed that trade figures do not necessarily mean that producing these goods locally would be profitable, as manufacturers may still need to import milk powder, concentrates, packaging materials, machinery and spare parts, while energy, maintenance, operating and distribution costs all affect unit costs.
It concluded that imported goods come from established producers with larger factories and more advanced supply chains, meaning that replacing imports requires local production to compete on all these fronts together rather than piecemeal.
