In African urban areas, the price of maize products decreased about 1.34% between Jan ’09 & Jan ’10, while the same maize products increased by 6.94% in rural areas of the same countries. Also SA rural customers paid R3.75 MORE per 5 kg bag of maize meal in Jan ‘08, than people in SA urban areas. This increased to R 5.42 more per 5 kg bag in SA rural areas over SA urban areas, in Jan ’09. Prices for the preferred ‘super maize meal’ a pure white end product continued to rise, despite a reduction in raw material cost. If small-scale millers were situated in rural areas close to villages where the maize is actually grown, with access to the appropriate milling technology production and sale of super maize meal would be achievable. The high transport costs of taking their maize to the large town for milling coupled with paying a major premium for the super maize meal would be minimized or eradicated. Local beneficiation of maize and wheat within the rural areas themselves would both increase return to the farmers, and decrease food costs to the rural villages.
- Based on a case history presented by Jan Higgins of African Micro Mills in a conference paper before The Sept. ’10 conference on ‘Overcoming Inequality and Structural Poverty in South Africa,’ our business case for a small micro mill that could serve up to 10 villages of farmers and consumers requires a monthly production cost of $1,370.25, which will produce about $1,600 of revenue per month yielding $229.75 in net profit per month. The farmer would get back the market price of their grain plus half of this $229.75 monthly profit, the mill gets its costs back plus 50% of this $229.75 profit/mo.
- Based on the actual business plan for iMvubu Holdings, Ltd., Siavonga District, Zambia, our business case for a medium micro mill that could service up to 30 villages of farmers and consumes requires about $100,000 in startup costs, and will process 700 to 1,000 tons of maize into 28,000 to 36,400 bags of super maize meal annually. Each bag will cost $7.56 to produce and be sold for $8.63. The farmer again gets back the market price of his grain plus half of this $2,490.42 in profit per month, whereas GDV gets back its $17,646.92 in production / facility loans per month plus half of this $2,490.42 in monthly profit.
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