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starch industry south africa

The Starch Industry in South Africa 2023

Stephen Timm | South Africa | 19 April 2023

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Report Coverage

This report on the manufacture of starch and starch products in South Africa includes information on the size and state of the industry including potato and cassava starch, commodity prices and inputs, notable players, agents and distributors and competition and other issues and trends. There are profiles of 13 companies including dominant player Ingrain and other producers such as Top Products and Pro Corn Mills, and importers and distributors including Cell-Chem, Bragan Ingredients and Ingredon.

Introduction

• Demand for starches and modified starches, which are used in various industrial applications as well as in key ingredients in food and beverages, is growing.
• The manufacture of starches is dominated by Barloworld subsidiary Ingrain, which had a market share of almost 90% in 2021.
• Imports account for about 20% of starch demand by value.
• Industrial customers are concerned about significant price increases driven by record increases in commodities such as maize and wheat which are used to produce starch.
• There is also concern that the high price of commodities, machinery and research and development act as a barrier to competitors seeking to challenge Barloworld’s near monopoly.

Strengths

• South Africa has a significant maize crop, which is the key raw material for starches.
• The country has one of the oldest and biggest starch manufacturers in Africa.

Weaknesses

• Expensive equipment necessary for starch manufacturing makes it difficult for new competitors to enter the market.
• The industry is characterised by a near monopoly, with Barloworld’s Ingrain claiming it had an 89% market share in 2019.

Opportunities

• Starch exports to the rest of Africa are expected to grow under the African Continental Free Trade Agreement, which came into effect in January 2021.
• The development of cassava as a key starch input.
• The move to more green packaging solutions in the food industry will drive starch demand.
• There is strong demand from local manufacturers looking to replace imports with locally-sourced starches.

Threats

• Commodities prices.
• Droughts and climate change which affect the size of key crops like maize and wheat, which can affect the price of starch.
• Global events such as the Russia-Ukraine war could affect the supply and price of imported starches.
• High starch prices could drive some industrial users to look for chemical alternatives to starch.
• Increasing price of inputs such as water, electricity and key raw materials.
• Loadshedding, which adds to costs of production if alternative power sources must be sourced.
• The volatility of the rand, which affects the cost of imported starches.
• The weakening domestic economic environment, which threatens to reduce demand.

Outlook

• The deteriorating local economic outlook will likely result in lower domestic sales, as consumers cut back on starch products.
• This may be partially offset by a trend by industries to source locally-made ingredients.
• The outlook for exports is more positive, particularly as economic growth in the rest of Africa is expected to drive starch demand.
• Growing concerns by industrial customers over significant recent prices increases could drive consumer industries to source replacements to starches.
• Other challenges such as loadshedding, water availability and cost of maintaining equipment could also curtail profitable growth.
• In the long term, cassava may provide for the possible entry of new producers to the starch market.

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The Starch Industry in South Africa
The Starch Industry in South Africa 2023

Full Report

R 9 500.00(ZAR) estimated $522.91 (USD)*

Industry Landscape

R 6 650.00(ZAR) estimated $ 366.04 (USD)*

Industry Organogram

R 750.00(ZAR) estimated $ 41.28 (USD)*

Table of Contents

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PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 3
2.2. Geographic Position 4
2.3. Size of the Industry 5
3. LOCAL 7
3.1. State of the Industry 7
3.2. Key Trends 10
3.3. Key Issues 13
3.4. Notable Players 13
3.5. Trade 14
3.6. Corporate Actions 21
3.7. Regulations 21
3.8. Enterprise Development and Social Development 22
4. AFRICA 23
5. INTERNATIONAL 24
6. INFLUENCING FACTORS 26
6.1. Economic Environment 26
6.2. Labour 27
6.3. Environmental Issues 27
6.4. Technology, R&D, Innovation 28
6.5. Government Support 28
6.6. Input Costs 29
7. COMPETITIVE ENVIRONMENT 31
7.1. Competition 31
7.2. Ownership Structure of the Industry 32
7.3. Barriers to Entry 33
8. SWOT ANALYSIS 33
9. OUTLOOK 34
10. INDUSTRY ASSOCIATIONS 35
11. REFERENCES 35
11.1. Publications 35
11.2. Websites 35
APPENDIX 1 37
Summary of Notable Players 37
COMPANY PROFILES 41
Bragan Ingredients (Pty) Ltd 41
Cargill RSA (Pty) Ltd 43
Carst and Walker South Africa (Pty) Ltd 45
Cell-Chem (Pty) Ltd 47
CJP Chemicals (Pty) Ltd 49
Edila Twaalf (Pty) Ltd 52
Grange Hill Investments (Pty) Ltd 53
Ingrain SA (Pty) Ltd 55
Ingredion South Africa (Pty) Ltd 58
Marketing Works CC 59
Monteagle Consumer Group Ltd 60
Novawes Import (Pty) Ltd 62
Orkila South Africa (Pty) Ltd 63
Pro Corn Mills (Pty) Ltd 65
SAFire Charka (Pty) Ltd 66
Tate and Lyle South Africa (Pty) Ltd 68
WFM Starch Products (Pty) Ltd 70
Zemcor Marketing (Pty) Ltd 71