EC agency explores maize milling business

Silo construction is essential to growing the agriculture footprint in the former Trankei.

AsgiSA Eastern Cape (EC) has set aside R7 million for the construction of silos at strategic sites in the former Transkei, an investment it believes will up further opportunities like in the area of milling.

The milling plants which will be linked to the silos will produce maize meal and crushed maize as part of AsgiSA EC’s integrated dry-land cropping programme. AsgiSA EC, which expects its silo sites to be ready for its second maize harvest in 2010, completed its first harvest with almost 18,000 tons of maize being harvested in Butterworth, Matatiele, Mt Frere and Qumbu. This year, AsgiSA EC expects to double its harvest as the number of hectares has doubled from 6,700 ha to 12,000.

“Our first maize yield was harvested onto delivery trucks causing delays in the harvesting process. This method incurred additional costs and affected our monitoring of the exact tonnage of the harvest,” explains AsgiSA EC agriculture and agroprocessing project manager Thukela Mashologu.

“Silos and milling plants are important to the economy as these will ultimately lead to diversification for communities who are looking to the programme to help alleviate poverty and improve food security. The jobs to be created and the small business development are also significant benefits of the integrated cropping programme,” says Mashologu.

Mashologu explains that the building of the silos is a start of an ambitious plan of bringing much needed investments in the former Transkei.

Maize is the staple food for the province’s rural communities and accounts for nearly 95% of the crops planted in AsgiSA EC’s dry-land cropping programme. Other crops planted on a small scale are beans, soya beans and sunflowers.

Animal feed production is another viable downstream investment prospect being explored by AsgiSA EC. This will add value to the organisation’s livestock project.

Mashologu explains that AsgiSA EC has embarked on a request for proposals for grain milling and silo management, after which a community public-private partnership arrangement is likely to be formed for managing the grain silos and milling plants.

A report by the Grain Silo Industry shows most silo storage facilities are located in the Free State, Mpumalanga and North West, the leading maize producers in the country. The South African Grain Information Services (SAGIS) says there are more than 190 maize millers in the country with the Sasko Mill plant in Port Elizabeth being the only large-scale milling plant from the Eastern Cape.

“The current market conditions, particularly with maize production, create an opportunity to improve the competitiveness of our produce.”

“Storage facilities will also help us sell our produce in intervals and therefore ensure we get a fair price.”

Mashologu refers to last season’s maize yield where the organisation was forced to sell its harvest shortly after the harvest. This was a direct result of the lack of storage facilities in the area.

“As a result, we sold our harvest at a time when there was adequate supply to the market and hence we were unable to attract higher prices which would have been the case if we could have sold the crop at a time where there was high demand and low supply. Obviously this has impacted on the pricing and profit of the first harvest,” he says.

“The processing of our produce will boost the province’s market share in this area and create jobs for participating communities,” adds Mashologu.

Although initial plans are under review, AsgiSA EC plans to plant 100,000ha of different dry-land crops (mostly maize) in the rural Transkei over the next five years, expanding this to 500,000ha by 2032.