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Manufacture of Flour and Grain Mill Products Industry in South Africa

Manufacture of Flour and Grain Mill Products Industry in South Africa 2021

Yasmin Mahomedy | South Africa | 20 January 2021

Manufacture of Flour and Grain Mill Products Industry in South Africa 2019

Yasmin Mahomedy | South Africa | 04 December 2019

Manufacture of Flour and Grain Mill Products Industry in South Africa 2017

Yasmin Mahomedy | South Africa | 24 April 2017

Manufacture of Flour and Grain Mill Products Industry in South Africa 2016

Yasmin Mahomedy | South Africa | 11 January 2016

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Report Coverage

This report focuses on the manufacture of flour and grain mill products, including the milling of maize and wheat. It includes information on the state of the sector, trade statistics and influencing factors including food prices and land reform. There are profiles of 18 companies in the sector including the large players such as Tiger Brands and RCL Foods and millers including Vaal Milling Company and Gideon Milling.

Introduction

This report focuses on the manufacture of flour and grain mill products, including the milling of maize and wheat. The grain milling sector is an important role player in food security as its products are the primary ingredients of South Africa’s staple foods – maize meal and bread. While South Africa produces enough food to feed its people, at least 20% of households have inadequate or severely inadequate access to food due to poverty and unemployment. This has been exacerbated by the increase in food costs, due to various factors including drought, electricity and fuel price hikes, exchange rate volatility and, most recently, the coronavirus pandemic. With millions of jobs lost in 2020 due to the impact of coronavirus lockdowns, more families are going to bed hungry. FoodForward SA, the country’s largest food bank, says over half of the population could be food insecure in the next few months. The agricultural sector, as a provider of essential goods, was able to operate during lockdown and according to the Bureau for Food and Agricultural Policy (BFAP), was expected to grow by 13% in 2020, partly due to a bumper maize crop of 15.5 million tons compared to 11.3 million tons in the previous season, which was affected by dry weather conditions.

Strengths

• The industry is predominantly maize, and wheat based. These are staple foodstuffs in South Africa.
• The major millers are well established and invest in technologically advanced mills, which produce a high-quality product.

Weaknesses

• Market dominance by major producers.
• Reliant on imports of some grains, especially wheat and therefore affected by the volatility of the rand. High wheat prices have an inflationary impact on bread and wheat flour prices and increase the price of basic food products.
• Small mills require financial help.

Opportunities

• The small milling industry encourages new skills development and can empower communities to become self-sufficient.

Threats

• Climate change.
• Government’s land reform policy.
• Infestation of pests especially on maize crops.
• Rising input costs.
• Shortage of experienced millers.

Outlook

The coronavirus lockdown, economic recession, and increasing unemployment has wreaked havoc on financially-strained consumers. This has placed pressure on the players in the sector, who need to find a balance between keeping the price of staple foods, especially maize meal affordable, while also managing rising input costs. As government pushes forward with its Land Reform plan, there is growing concern on its impact on farmers. Wandile Sihlobo, chief economist of the Agricultural Business Chamber of South Africa, and Johann Kirsten, professor and director of the Bureau for Economic Research at Stellenbosch University, both believe that “expropriation without compensation will have a negative impact, on both agricultural investment and financial institutions”.

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Manufacture of Flour and Grain Mill Products Industry in South Africa
Manufacture of Flour and Grain Mill Products Industry in South Africa 2021

Full Report

R 1 900.00(ZAR) estimated $104.58 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 73.21 (USD)*

Historical Reports

Manufacture of Flour and Grain Mill Products Industry in South Africa 2019-12-04

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

Manufacture of Flour and Grain Mill Products Industry in South Africa 2017-04-24

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

Manufacture of Flour and Grain Mill Products Industry in South Africa 2016-01-11

R 1 900.00(ZAR) estimated $104.58 (USD)*

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Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 4
2.2. Geographic Position 5
3. SIZE OF THE INDUSTRY 6
4. STATE OF THE INDUSTRY 6
4.1. Local 6
4.1.1. Trade 9
4.1.2. Corporate Actions 13
4.1.3. Regulations 13
4.1.4. Enterprise Development and Social Economic Development 14
4.2. Continental 15
4.3. International 17
5. INFLUENCING FACTORS 18
5.1. Coronavirus 18
5.2. Government Incentives and Support 19
5.3. Economic Environment 20
5.4. Rising Input Costs 20
5.5. Farm Murders 21
5.6. Land Reform Policy 21
5.7. Changing Consumer Preferences 22
5.8. Technology, Research and Development (R&D) and Innovation 22
5.9. Environmental Concerns 24
5.10. Labour 25
6. COMPETITION 26
6.1. Barriers to Entry 27
7. SWOT ANALYSIS 28
8. OUTLOOK 28
9. INDUSTRY ASSOCIATIONS 29
10. REFERENCES 29
10.1. Publications 29
10.2. Websites 30
APPENDIX 1 31
Summary of Notable Players 31
COMPANY PROFILES 34
AFGRI AGRI SERVICES (PTY) LTD 34
ALGOA ROLLER MILLS CC 38
BAKHRESA SA (PTY) LTD 40
BLINKWATER MEULE (PTY) LTD 42
BRENNER BRANDS (PTY) LTD 44
CAROLINA ROLLER MEULE (PTY) LTD 46
EPIC FOODS (PTY) LTD 48
GIDEON MILLING (PTY) LTD 51
GODRICH FLOUR MILLS (PTY) LTD 53
I L MOLINO CC 55
INGRAIN SA (PTY) LTD 57
PIONEER VOEDSEL (PTY) LTD 60
PREMIER FMCG (PTY) LTD 64
PRIDE MILLING COMPANY (PTY) LTD 70
RCL FOODS LTD 72
TIGER BRANDS LTD 77
VAAL MILLING COMPANY (PTY) LTD 82
VKB FLOUR MILLS (PTY) LTD 83

Introduction

This report focuses on the manufacture of flour and grain mill products, including the milling of maize and wheat. The grain milling sector plays a vital role in food security as its products are the primary ingredients of South Africa’s staple foods, and the sector is a major determinant of the price of maize meal and bread. Food security is a national crisis and according to Andy du Plessis, managing director of FoodForward South Africa, about 50% of the population is food insecure or at risk of food insecurity. The environmental organisation Worldwide Fund for Nature (WWF) stated that South Africa faces a food security crisis if there is no urgent action to correct unsustainable practices. The country will have to produce 50% more food by 2050 to feed an estimated population of 73 million people. Pest infestation, droughts and other effects of climate change pose a threat to grain production and in the 2018/19 production season, most summer crop harvests fell by double-digits because of dry weather conditions at the start of the season. Production of maize, the largest summer crop and a staple food, declined 12% year-on-year to 11.02 million tons.

Strengths

• The industry is predominantly maize and wheat based. These are staple foodstuffs in South Africa.
• The major millers are well established and invest in technologically advanced mills, which produce a high-quality product.

Weaknesses

• Market dominance by major producers.
• Reliant on imports of some grains, especially wheat and thus affected by the volatility of the rand.
• Small mills require financial help.

Opportunities

• Department of Trade and Industry’s model to support small-scale millers will allow more millers to enter the market.

Threats

• Climate change.
• Government’s land reform policy.
• Infestation of pests especially on maize crops.
• Rising input costs.
• Shortage of experienced millers.

Outlook

Low commodity prices, a weak and volatile rand, high fuel prices and low business and consumer confidence levels have placed pressure on all the major players in the sector and this pressure is expected to continue in the short-term. The fall armyworm infestation poses a threat to the production of grain crops, and in turn, on the manufacture of flour and grain mill products. According to the South African Institute of International Affairs, climate scientists have warned that an increase in temperature will lead to unsuitable conditions for growing traditional crops, which “poses a serious problem for subsistence farmers who depend on these crops and it will have a severe impact on developing nations around the world”.

Manufacture of Flour and Grain Mill Products Industry in South Africa
Manufacture of Flour and Grain Mill Products Industry in South Africa 2019

Full Report

R 1 900.00(ZAR) estimated $104.58 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 73.21 (USD)*

Historical Reports

Manufacture of Flour and Grain Mill Products Industry in South Africa 2021-01-20

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

Manufacture of Flour and Grain Mill Products Industry in South Africa 2017-04-24

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

Manufacture of Flour and Grain Mill Products Industry in South Africa 2016-01-11

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 3
2.2. Geographic Position 4
3. SIZE OF THE INDUSTRY 5
4. STATE OF THE INDUSTRY 6
4.1. Local 6
4.1.1. Corporate Actions 9
4.1.2. Regulations 9
4.1.3. Enterprise Development and Social Economic Development 11
4.2. Continental 12
4.3. International 13
5. INFLUENCING FACTORS 14
5.1. Government Intervention 14
5.2. Economic Environment 15
5.3. Rising Operating Costs 15
5.4. Labour 16
5.5. Land Reform Policy 17
5.6. Changing Consumer Preferences 18
5.7. Environmental Concerns 18
5.8. Technology, Research and Development (R&D) and Innovation 19
6. COMPETITION 21
6.1. Barriers to Entry 22
7. SWOT ANALYSIS 22
8. OUTLOOK 23
9. INDUSTRY ASSOCIATIONS 23
10. REFERENCES 24
10.1. Publications 24
10.2. Websites 24
APPENDIX 1 26
Summary of Notable Players 26
COMPANY PROFILES 29
AFGRI OPERATIONS (PTY) LTD 29
ALGOA ROLLER MILLS CC 33
BAKHRESA SA (PTY) LTD 34
BLINKWATER MEULE (PTY) LTD 36
BRENNER BRANDS (PTY) LTD 38
CAROLINA ROLLER MEULE (PTY) LTD 40
EPIC FOODS (PTY) LTD 42
GIDEON MILLING (PTY) LTD 44
GODRICH FLOUR MILLS (PTY) LTD 46
I L MOLINO CC 48
PIONEER VOEDSEL (PTY) LTD 50
PREMIER FMCG (PTY) LTD 54
PRIDE MILLING COMPANY (PTY) LTD 59
RCL FOODS LTD 61
TIGER BRANDS LTD 67
TONGAAT HULETT STARCH (PTY) LTD 72
VAAL MILLING COMPANY (PTY) LTD 75
VKB FLOUR MILLS (PTY) LTD 76

Report Coverage

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.

Introduction

This report focuses on the manufacture of flour and grain mill products, including the milling of maize and wheat, which accounts for an estimated 30% of the South Africa's total gross agricultural production. The grain milling sector, which plays a vital role with regard to food security through its influence on the country’s staple foods, namely the price of 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. While Grain SA expects a maize surplus for the 2017/18 season, the infestation of the Fall Armyworm could pose a threat for grain farmers if it spreads across the country.

Strengths

• The industry is predominantly maize and wheat-based. These are staple foodstuffs in South Africa.
• The major millers are well established and invest in technologically advanced mills, which produce a high quality product.

Weaknesses

• Market dominance by major producers.
• Reliant on imports of some grains, especially wheat and thus affected by the volatility of the Rand.
• Small mills require financial help.

Opportunities

• DTI’s model to support small-scale millers will allow more millers to enter the market.
• Increasing exports to sub-Saharan Africa.

Threats

• Climate change.
• Government’s land reform policy.
• Infestation of pests especially on maize crops.
• Rising input costs.
• Shortage of experienced millers.

Outlook

At the beginning of March 2017 the Chief Executive Officer of the Agricultural Business Chamber (Agbiz) John Purchase reported that a 79% increase in the 2017 maize harvest compared with 2016 will boost South Africa’s economic growth by 1%. However, stakeholders in the maize sector commented that if the Fall Armyworm infestation is not eradicated quickly, the production of maize, wheat and other grain crops could be severely affected, which will impact negatively on the manufacture of flour and grain mill products.

Read More..
Manufacture of Flour and Grain Mill Products Industry in South Africa
Manufacture of Flour and Grain Mill Products Industry in South Africa 2017

Full Report

R 1 900.00(ZAR) estimated $104.58 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 73.21 (USD)*

Historical Reports

Manufacture of Flour and Grain Mill Products Industry in South Africa 2021-01-20

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

Manufacture of Flour and Grain Mill Products Industry in South Africa 2019-12-04

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

Manufacture of Flour and Grain Mill Products Industry in South Africa 2016-01-11

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 3
3. SIZE OF THE INDUSTRY 4
4. STATE OF THE INDUSTRY 9
4.1. Local 9
4.1.1. Corporate Actions 12
4.1.2. Regulations 12
4.1.3. Enterprise Development and Social Economic Development 14
4.2. Continental 15
4.3. International 16
5. INFLUENCING FACTORS 17
5.1. Government Intervention 17
5.2. Economic Environment 18
5.3. Rising Operating Costs 18
5.4. Labour 19
5.5. Land Reform Policy 20
5.6. Changing Consumer Preferences 20
5.7. Environmental Concerns 21
5.8. Technology, Research and Development (R&D) and Innovation 23
6. COMPETITION 24
6.1. Barriers to Entry 24
7. SWOT ANALYSIS 25
8. OUTLOOK 26
9. INDUSTRY ASSOCIATIONS 26
10. REFERENCES 27
10.1. Publications 27
10.2. Websites 27
COMPANY PROFILE 28
A M ALBERTS (PTY) LTD 28
AFGRI OPERATIONS (PTY) LTD 30
AFRICAN STAR GRAIN AND MILLING (PTY) LTD 34
ALGOA ROLLER MILLS CC 36
BAKHRESA SA (PTY) LTD 37
BLINKWATER MEULE (PTY) LTD 39
BRENNER BRANDS (PTY) LTD 41
CAROLINA ROLLER MEULE (PTY) LTD 43
EPIC FOODS (PTY) LTD 44
GIDEON MILLING (PTY) LTD 46
GODRICH FLOUR MILLS (PTY) LTD 48
I L MOLINO CC 50
LETHABO MILLING (PTY) LTD 52
PIONEER VOEDSEL (PTY) LTD 53
PREMIER FMCG (PTY) LTD 57
PRIDE MILLING COMPANY (PTY) LTD 62
RCL FOODS LTD 64
S A RICE MILLS (PTY) LTD 69
TIGER BRANDS LTD 70
TONGAAT HULETT STARCH (PTY) LTD 75
VAAL MILLING COMPANY (PTY) LTD 78
VKB FLOUR MILLS (PTY) LTD 79

Report Coverage

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.

Introduction

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. Four large millers produce 60% of maize meal while an estimated 296 informal mills operate countrywide. 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. However, the current drought in most parts of the country means that more grain will have to be imported in an attempt to ensure food security.

Strengths

• The industry is predominantly maize and wheat-based. These are staple foodstuffs in South Africa.
• The major millers are well established and invest in technologically advanced mills, which produce a high quality product.

Weaknesses

• Market dominance by major producers.
• Reliant on imports of some grains, especially wheat and thus affected by the volatility of the Rand.
• Small mills require more financial help

Opportunities

• DTI’s model to support small-scale millers will allow more millers to enter the market.
• Increasing economic growth in the rest of Africa.

Threats

• Government’s land reform policy.
• Increasing production of bio-fuels.
• Rising input costs.
• Shortage of experienced millers.
• The current drought, which is expected to continue in the short to medium-term.
• The expected shortage of grain for the manufacture of flour products.

Outlook

Stakeholders believe it will cost at least R20bn to import the 5 million or 6 million tons of maize needed to supply the country’s needs and ensure food security. Added to this is the 2 million tons of wheat usually imported, and the increased import of soya beans, a crop that has also been negatively affected by the current drought. According to NAMC CEO Tshililo Ramabulana, increased maize imports will result in higher prices for the population’s staple foods, with spending on a food basket for a family of four likely to increase by 25% during the course of 2016.

Read More..
Manufacture of Flour and Grain Mill Products Industry in South Africa
Manufacture of Flour and Grain Mill Products Industry in South Africa 2016

Full Report

R 1 900.00(ZAR) estimated $104.58 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 73.21 (USD)*

Historical Reports

Manufacture of Flour and Grain Mill Products Industry in South Africa 2021-01-20

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

Manufacture of Flour and Grain Mill Products Industry in South Africa 2019-12-04

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

Manufacture of Flour and Grain Mill Products Industry in South Africa 2017-04-24

R 1 900.00(ZAR) estimated $104.58 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 4
3. SIZE OF THE INDUSTRY 5
4. STATE OF THE INDUSTRY 9
4.1. Local 9
4.1.1. Corporate Actions 12
4.1.2. Regulations 12
4.1.3. Enterprise Development and Social Economic Development 14
4.2. Continental 15
4.3. International 16
5. INFLUENCING FACTORS 17
5.1. Government Intervention 17
5.2. Labour 18
5.3. Economic Environment 19
5.4. Rising Input Costs 19
5.5. Genetically Modified (GM) Maize 20
5.6. Increasing Production of Bio-Fuels 21
5.7. Land Reform Policy 21
5.8. Changing Consumer Preferences 22
5.9. Environmental Concerns 22
5.10. Technology, Research and Development (R&D) and Innovation 22
6. COMPETITION 24
6.1. Barriers to Entry 24
7. SWOT ANALYSIS 25
8. OUTLOOK 26
9. INDUSTRY ASSOCIATIONS 26
10. REFERENCES 26
10.1. Publications 26
10.2. Websites 27
COMPANY PROFILES 28
AFGRI OPERATIONS LTD 28
African Star Grain and Milling (Pty) Ltd 33
AM Alberts (Pty) Ltd 34
Bakhresa SA (Pty) Ltd 36
Blinkwater Mills (Pty) Ltd 38
Brenner Brands (Pty) Ltd 40
Epic Foods (Pty) Ltd 42
Foodcorp (Pty) Ltd 44
Godrich Flour Mills (Pty) Ltd 48
I L Molino CC 50
Kapitan Trading CC 51
Kromdraai's Best Milling (Pty) Ltd 53
Lethabo Milling (Pty) Ltd 55
Pioneer Voedsel (Pty) Ltd 56
Premier FMCG (Pty) Ltd 60
Pride Milling Company (Pty) Ltd 64
Tiger Brands Ltd 67
Tongaat Hulett Starch (Pty) Ltd 75