The Manufacture of Flour and Grain Mill Products discusses the milling industry in South Africa, highlighting current conditions and factors influencing the success of the sector. Eighteen industry players are profiled, ranging from the “Big Four” millers to SMME Bakhresa SA (Pty) Ltd, a mill situated in KwaZulu-Natal, which employs eight people and mills white and brown bread flour, cake flour and biscuit flour. Also profiled are Lethabo Milling, a new entrant that was only able to enter the competitive maize milling industry with assistance from Massmart in partnership with ABSA, and Gauteng-based African Star Grain and Milling (Pty) Ltd, which is due to start operating as a grain milling operator during 2016.
The Manufacture of Flour and Grain Mill Products
This report focuses on the grain industry, including the milling of maize and wheat, which accounts for an estimated 30% of the country's total gross agricultural production. The industry is highly concentrated and controlled by a handful of farmers, silo owners and manufacturers. Although approximately 290 informal mills operate countrywide, the milling sector is dominated by four large millers that produce 60% of the country’s maize meal. These millers, Pioneer Foods (Sasko Milling), Tiger Milling, Premier Foods and Ruto Mills, a division of Foodcorp also dominate the wheat milling market with 97% market share and are vertically integrated in baking and production of other foods such as pasta and cereals.
In an attempt to improve food security, address high basic food prices and increase competition in the milling sector, the Department of Trade and Industry (Dti) earmarked the small-scale milling industry as an Industrial Policy Action Plan (IPAP) priority intervention. Financial investments and support from Government programmes have helped this sector and approximately 290 informal mills operate throughout the country. However, the current drought in most parts of the country means there is a shortage of grain to be milled and maize imports of between 5 million and 6 million tons are expected.