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Manufacture of Flour and Grain Mill Products
Despite the increase in the number of informal millers and micro mills throughout the country, the sector remains highly concentrated with 25 companies generating 75% of all maize milled. The leading four players, Pioneer, Premier Foods, Pride Milling and Tiger Brands, together mill approximately 75% of the maize meal produced in the country and dominate the wheat milling market with 97% market share.
The grain milling sector, which plays a vital role with regard to food security through its influence on the price of the country’s staple foods, maize meal and bread, was severely affected by the El Nino-triggered drought, which caused the 2016 maize harvest to decline to 7.5 million tons. The recent trading environment in the sector was described as one of the most challenging ever experienced because of the need for increased maize imports, unpredictable foreign exchange markets, the resultant high input costs, decreasing disposable income and weak consumer confidence. Although Grain SA expects a maize surplus for the 2017/18 season, stakeholders are concerned about the current Fall Armyworm infestation that poses a threat to grain farmers, millers and producers of grain mill products.
The Manufacture of Flour and Grain Mill Products describes current conditions and the attempt by stakeholders to revive the South African wheat industry. Other factors that influence the success of the sector are covered, including the increase in the wheat tariff in April 2016 which resulted in wheat prices rising by approximately 6% and bread prices by 2.5%. Profiles for 22 companies are provided. These include Blinkwater Mills which was fined R10m by the competition Tribunal in March 2017 after it was found guilty of colluding with the ‘Big Four’ and other role players including Progress Milling, Godrich, Brenner Mills and Carolina Roller Mills, all profiled in the report.