It’s time to revolutionise the milling industry, says Sé Higgins, the director of Durban-Based Agrex Milling SA. His company’s 1,5t/hour micro-milling cereal plants are just what the doctor ordered.
“The South African milling industry was built in the regulated environment of the late 1980s and 1990s,” says Sé. “Huge plants achieve greater economies of scale and profitability. But today, rising costs of distribution, procurement and logistics are eroding the benefits and profitability of bigger plants.”
After 60 years of regulation, the milling market is now open, but it’s still dominated by 20 bigger automated plants owned by the three big millers, Tiger Brands, Premier Food and Sasko. “Our region never got the chance to develop the industry on a smaller scale the way Europe did.” explains Sé. “New entrants were prevented from succeeding in this R20 billion a year industry by high start-up capital, high-volume/low-margin manufacturing, a lack of skills, and competition from well-established companies.”
A return to traditional values
Sé, with over 27-years experience in the South African food, milling and baking industries, says his micro-mills offer a way around the old system.
“The time is ripe to develop a new, parallel track of smaller, localised milling operations,” continues Sé. “We’re thinking along the lines of the Ubuntu belief system and recreating the old axiom of the ‘village mill, village baker and candle stick maker’, while at the same time maximising profitability, rural skills development and sustainability.”
Government has earmarked agro-processing as a sector with immense potential to stimulate economic growth and skills development. The harsh economic climate is forcing most of the 247 million population of the Southern African Democratic Community, of which up to 70% live in rural areas, to return to basic foods such as maize meal and bread.
Agrex Milling’s target market for its milling plants includes farmers, co-ops and rural communities looking at adding value to their crops.
Other players could be provincial governments, equity-participation investors and entrepreneurs wanting to break into the growing staple-food industry. Another key group is the food and beverage sector, which requires specially milled products for snack food, pasta, biscuit making, and bread-baking production lines.
“The ideal scenario is to place the mill at the crop source,” says Sé. “This cuts out expensive logistics, raises profit margins and reduces the costs of staple foods. At the same time it will help insulate rural communities from the vagaries of the world grain market. It would also create jobs in agriculture and milling.”
Designed to meet the market
Sé says high food prices can be offset by rural grain processing. “Our food-price crisis is aggravated by a logistics crisis,” he explains. “Half of the 50 million people in South Africa are rural. These people pay more for their food because of transport costs.” For example, Sé says a maize farmer in Mthatha has to sell his maize on the SAFEX at a discount of R400/t. A consumer in Mthatha buying a bag of Ace Mealie Meal, milled by Tiger in Randfontein, pays a portion of the R500/t logistics cost of getting the finished product delivered back to Mthatha.
By installing a mico-mill in Mthatha, the farmer could mill his maize to the same quality for less than R350/t.
Plant manufacture and ideal instillation
Agrex’s micro-mills come from Agrex Spa in Padova, Italy. For over 25 years the company has been manufacturing and supplying mills with a capacity of between 1t/hour and 3t/hour maize and wheat. Agrex has installed more than 500 plants in developing countries worldwide.
Since its inception in 2004, Agrex Milling South Africa has installed 10 plants in Durban, Pretoria, Johannesburg and the Democratic Republic of Congo. A further six are expected this year. The 1,5t/hour capacity mills are used to process maize – super, special, and specialised maize flours and grits for breweries and the snack food industry – and wheat – bread flour, cake flour, and specialised industrial niche flour products. Other cereal-milling plants in the range produce end-products from rice flour, rye, barley, soya and cassava.
Agrex mills offer a compact alternative to cumbersome vertical mills and can be installed in existing buildings without costly modifications. The mills are also different from the hammer mills commonly used by farmers. “The Agrex plants are roller mills,” says Sé. “They’re specifically designed to operate in developing markets with a low skills base and are easy to operate and maintain.”
The mills can run 24/7 depending on the application and the grain milled. Most projects in South Africa could achieve a 50% return on investment in the first year, after loan repayment and depreciation. In southern Africa, returns can be as high as 100% in the first year, depending on the location and application. Thereafter, one could anticipate a further 15 to 20 years of continuous milling if the plant is properly maintained
The Italian plants have been adapted to perform in South African conditions. Maize in South Africa is different from that grown in Europe and other parts of Africa, and the milling plants have been modified for stock feed. End product requirements also differ from country to country, so modifications have to be made to achieve the best extraction possible.
The premium maize end product in South Africa is super maize meal, while in Zimbabwe it’s breakfast meal, in Angola, fuba, and in Italy polenta, an Italian version of cornmeal mush.
“It’s more than just the technological prowess of the Agrex plants that excites us,” says Sé. “With financial backing and training, micro-milling really can be accessible to anyone.”
Contact Agrex Milling SA on (031) 584 6250,
e-mail [email protected]
or visit www.agrexmilling.co.za. |fw
