This category of milling is defined as milling which has a capacity of up to 5 tons per hour (micro) and 1 ton per hour (small).
There are growth opportunities within the milling industry, both locally and in relation to exports to neighbouring SADC countries. Due to relatively low start up and running costs, along with high returns and a market opening for niche milled products, small and micro milling is a viable and sustainable investment for any group of investors.
Micro milling is highly suited to farmers because they already have industry specific advantages of product, storage and labour. Similarly, people in rural environments where finished product often incurs large price additions due to transport and trader mark ups could offer a superior product at a lower cost whilst still retaining large margins.
Local business environment
There are some 180 small mills operating in the country. Products are usually cheaper than what is on the market since the mills are closer to places where the crops are actually grown, thus reducing logistics costs.
The following opportunities exist for local small and micro milling business:
- Localised Milling: Local production facilities throughout SADC
- Breweries and Snack Food industries: Specialised maize grits production and/or other maize products
- Baking Industry: Specialised biscuit wheat flours and biscuit/rusk production lines
- Specialised Continental Bakery and Pizza Market: Value-added “00” cake flour production for this burgeoning sector
- Infant Food and Breakfast Cereal Producers: Rice flour milling
- Beverage and Cereal Products: Barley flour milling
- Specialised Baking Market: Rye flour milling
- Specialised ‘Al-Dente’ Pasta Manufacture: Durum Wheat/Semolina for production of authentic, top-quality Italian-style pastas
- Organic Market: Wheat and maize flour milling
- Bread: Micro-bakeries
- Instant bread: Premixes
- Famine relief and feeding programmes: Vitamin enriched basic foods
- Prisons & mine workers: Extended shelf-life, non-refrigerated instant nutrition
The expected outcomes are the provision of local markets; competitive prices; job creation; poverty alleviation and enterprise development.
Source: Jane Higgins (African Micro Mills)
For the newcomer
Micro milling has been identified as an ideal BEE venture. In particular, it should be of particular interest to a large processor who seeks to earn BEE points for Enterprise Development.
Small milling can provide multiple benefits from end to end as the industry encourages new skills development and lends itself towards empowering communities to become self sufficient. Relatively low start up costs with high returns facilitates a swift, upward incorporation into the economy.
The wider range of training options and backup available to the small/micro milling industry provides entrants with further investment security. Other factors such as minimal infrastructure requirements, low running costs, transport savings amidst increasing fuel prices and the ability to easily diversify product range make the small milling industry a profitable, viable and sustainable business option.
One 3 ton/hour milling plant has the potential to provide a rural community with 330 tons/month of animal feed and 1300 tons per month of quality maize meal – enough to feed 150,000 people! The same project can potentially generate 25-30 direct employment opportunities and up to 150 indirectly. Food costs in the vicinity of the small milling project can be reduced by up to 25%.
National strategy and government contact
Small and micro milling has fitted into the Department of Trade & Industry’s Industrial Policy Action Plan (IPAP) Small-Scale Maize Milling Initiative, and also qualified under the New Business Manufacturing Scheme, a grant payable over two years post start-up and based on 20% to 25% of the total capital cost of the project. Find the latest dti incentives here.
Find the required fortification mixes for wheat flour and maize meal at www.gov.za/sites/www.gov.za/files/28012a_0.pdf.
CASE STUDY: FABCOS/HOME GROWN INVESTMENT HOLDINGS (PTY) LTD MICRO MAIZE MILLS
In April 2013, the Department of Trade & Industry (the dti) and the Foundation for African Business and Consumer Services (FABCOS) signed an MoU identifying strategic investment projects that would have a major impact on the transformation of the economy. FABCOS is a multi-sectorial national member-based business chamber that serves the interest of small black-owned businesses located in the townships and rural areas of South Africa. Its mission is to build an alternative food value chain within the agriculture and agro-processing sectors.
Under the MOU at least R1.74 bn worth of investment funding is set to be injected into the South African economy, with R526 million coming from the dti in permutations of grants and incentives. Thus far, the dti has disbursed R160 million of the earmarked amount.
The projected total number of new jobs expected over the next three years is 7,007 – of which 697 will be direct and 6,310 indirect. To date 255 effective jobs have been created. The average cost per targeted job (based on the total investment value of the projects (R 1.73 bn) is R1,001. The star performer to date, in both domestic and SADC markets, has been the “Home-Grown” brand.
Source Department of Trade & Industry’s 2017/18-2019/2020 Industrial Policy Action Plan (IPAP)
The National Chamber of Milling (NCM) is an option that is open to all millers, including small and micro sectors. The NCM has a representative who looks after small/micro millers’ interests. Find NCM details in the “Milling” chapter.
Training and research
Some of the companies involved (see heading 7) offer concise introductory courses to basic milling practices. Visit their websites.
- Small milling has featured as a priority in AgriSETA planning. Call 012 301 5600 or visit www.agriseta.co.za.
- FoodBev is responsible for facilitating education and training in the food and beverages manufacturing sector. Call 011 253 7300 or visit www.foodbev.co.za.
- Training has historically been restricted to the theoretical courses which culminated in trade tests carried out by the Grain Milling Federation. This is predominantly aimed at people already in the traditional milling sectors. (See “Milling” chapter for details, or visit www.grainmilling.org.za).
- MLG (trainers, facilitators & mentors) are AgriSETA and FoodBev SETA approved trainers. They offer National NQF and SAQA accredited milling qualifications. The credentials are practically and theoretically orientated. (Take a look at www.mlg.co.za).
- Southern African Grain Laboratory (SAGL) Tel: 012 807 4019 www.sagl.co.za The SAGL provide courses in laboratory training for both wheat (flour) and maize (meal) analyses. They offer a one-day hands-on course for the most imported analyses and a four-day practical course for all the different analyses done for quality control including a lecture on Good Laboratory Practices and Accreditation. Special course requests will be gladly accommodated.
- ABC Africa Group Tel: 012 803 0036 www.abchansenafrica.co.za and www.millingsupply.com
- Almaz Agro SA Tel: 078 298 4114 www.almazsa.co.za
- Bag Closer Tel: 011 768 2289 / 072 306 1136 www.bagcloser.co.za
- Buckle Packaging (Pty) Ltd Tel: 011 613 8024 www.bucklepackaging.co.za
- Buhler Tel: 011 801 3500 www.buhlergroup.com The Isigayo compact maize mill
- Drotsky Tel: 011 864 1601 www.drotsky.co.za
- Maize Master Roller Mills Tel: 056 215 1660 www.maizemaster.co.za
- Plantkor Tel: 036 468 1309 www.plantkor.co.za
- ROFF Industries Tel: 056 212 2696 / 7 www.roff.co.za
- Southern African Grain Laboratory (SAGL) Tel: 012 807 4019 www.sagl.co.za SAGL is a quality analyses laboratory and has ISO/IEC 17025 accreditation. They offer a variety of quality analyses on grains and oilseeds. National information is published on the website. They provide ring tests and give laboratory training and are being recognised as the grain analyses reference laboratory in Southern Africa. They are also responsible for a national crop quality survey for wheat and maize.
- SA Milling Tel: 016 365 0034 www.samilling.com
- Stargate Scientific Tel: 011 675 7433 www.stargatescientific.co.za Equipment and consumables supplied to grain laboratories
Websites and publications
Visit the websites listed earlier in this chapter.
- Find the publication Small-Scale Milling by Lars-Ove Jonsson at http://developmentbookshop.com/food-processing-and-packaging.
- Phillips, L. 2018, August 18. “Zambia: independent maize miller a lifeline for smallholders”. Farmer’s Weekly. Available at www.farmersweekly.co.za/agri-business/zambia-independent-maize-miller-lifeline-smallholders/
- Find articles like “New technology gives milling industry a boost” and “Maize micro mills stake their claim” on the internet.
Sources for the chapter : previous notes written for this project by Jane Higgins (Agrex SA) Farmer’s Weekly article “Maize micro mills stake their claim”