Isigayo to bring new players into agro sector

"This is a game-changer. It will introduce new technology to bring new players into the sector," said Garth Strachan, acting deputy director general of the Industrial Development Policy Development division in the Department of Trade and Industry (dti).

He was speaking at the launch of the compact mill on Friday, 12 April 2013.

The mobile technology maize mill is a two-ton per hour compact mill designed by the Buhler Group - which is a specialist and technology partner for plant, equipment and services for processing of basic foods and for manufacturing advanced materials - for quick and easy installation. It requires minimal training before operation.

The Isigayo Compact Mill has a low start-up cost and is targeted at SME millers, commercial maize farmers, small farming communities, as well as entrepreneurs, government and NGOs. It is fitted with standard Buhler equipment and is pre-assembled in two containers, and pre-engineered as a complete milling plant.

The conception of the technology by the Swiss company comes at a time when government is looking to establish a commercially viable small scale maize milling sector that will infuse competition into the milling industry as is envisaged in the Industrial Policy Action Plan [IPAP] of which a fifth iteration was recently unveiled. The IPAP has a focus on the country's manufacturing sector to create jobs.

Strachan expressed government's appreciation to the company for having expanded their operations in South Africa, saying that this is an expression by the Buhler group of its confidence in South Africa.

"This will contribute to job creation and transformation among others," he said, adding that other policy goals such as bringing the rural economy into the mainstream could be helped along.

"The production sector in the South African economy is a priority for this government," said the acting deputy director general, adding that foreign direct investment into the manufacturing sector was robust.

A large proportion of the dti's R12.5 billion tax incentive has gone to the agro processing sector in the last two years.

The high costs involved in transporting food to the market would now be reduced with such technology. This would also help to reduce the high cost of maize.

Bulher chief executive officer Calvin Grieder said that the mill was affordable and easy to transport, adding that it will create jobs, develop skills while also improving nutrition. "I am aware that the South African government has placed importance on agro processing, many opportunities exist in agro processing," he said agreeing with Strachan.

The launch also saw the signing of a framework to purchase 24 Isigayo from the Group to Fabcos (which represents business in townships and rural areas).

Speaking following the signing process, Fabcos [Foundation for African Business and Consumer Services] deputy president Phillip Usiba said the new company Homegrown will ensure that millers get constant supply of the grain and that Homegrown will be the buyer of the miller's production.

Fabcos facilitates access to funding for business among others and is a member of the Black Business Council (BBC).

South Africa's maize milling industry was deregulated over 10 years ago. Maize is the most important crop in South Africa, as it is both the major feed grain and staple food for the majority of the population.

According to the dti, up to 37% of the consumer price of maize-meal is accounted for by transport and logistics costs.

Maize is grown in rural areas and transported to urban and peri-urban areas for milling before being transported back to rural consumers.