The small and micro milling category 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.
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:
GRAIN MILLING
BASIC FOODS
The expected outcomes are the provision of local markets; competitive prices; job creation; poverty alleviation and enterprise development.
Source: Jane Higgins
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%.
Small and micro milling has fitted into the then 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 dtic incentives here.
Read about the required fortification mixes for wheat flour and maize meal at https://foodfacts.org.za/food-fortification/.
National Chamber of Milling (NCM) – www.grainmilling.org.za The National Chamber of Milling is a trade association which represents the interests of the South African wheat flour and maize milling industry.
Further reference:
Associations
Training and research
Visit the websites listed earlier on this page.
Sources for the page: previous notes written for this project by Jane Higgins; Farmer’s Weekly article “Maize micro mills stake their claim”
