MILLING BILLINGS: Trade and Industry Minister Rob Davies promises his department will tackle price-fixing issues in the milling industry in a systematic way. Picture: Gallo Images
Four more small maize meal mills are expected to be set up in various parts of KwaZulu-Natal within the next two years, following the first one’s opening in Durban last week.
The Department of Trade and Industry’s chief economist, Stephen Hanival, said yesterday the department was partnering Kuvusa Milling company to set up infrastructure for these mills which would be located in rural parts of the province.
Kuvusa Mills aims to revive the rural South African basic food production sector.
Through placement of smaller capacity, high technology milling plants in rural areas, it hopes to mitigate high food costs, food insecurity, unemployment, as well as lack of skills training.
“We are still assessing sites where these mills could be located. They are better suited to rural areas, where they can make use of the maize produced there.
“They can also be located near markets so the price of maize meal could be reduced by up to 20%,” said Hanival.
When these mill projects take off, it would increase the small-scale mills in the province to five after the opening of the first Kuvusa Mill in Durban on Thursday. Opening small mills is seen as the first step in the freeing up of the conglomerate-dominated milling industry, which was deregulated in 1997, to enable smaller players to come in.
Minister of Trade and Industry Rob Davis told the audience at the opening of the first small-scale mill in Durban last week that poor people who steal a bag of maize meal are sentenced to jail while executives who collude in price fixing, thus robbing consumers of millions of rands, are given a slap on the wrist and often allowed to continue serving in their positions.
More than two years ago, major bread companies Tiger Brands, Pioneer Foods and Premier Foods, were found guilty of price fixing and were given fines amounting to several hundreds of millions of rands but their executives escaped prosecution.
Davis said his department would do everything in its power to systematically transform milling and reduce the likelihood of price fixing and other anti-competitive activities in the industry.
“We need to introduce competition into the milling sector not only for competitive reasons but to spur innovation in the sector and encourage industry incumbents to rethink their business models.
“Our intention is to introduce a programme that would reduce the cost of basic food product upon which millions of South Africans depend,” he said.
Davis said his department was also aiming at spurring rural communities to start ploughing their land and his officials would offer the milling facilities to these rural communities so they would be able to generate income instead of relying on government hand outs and grants.
He said that about 60% of arable, fertile land is in sub-Saharan Africa and this country and the continent needs to make use of this land to promote employment by adding value to the agricultural products they produce.
“Small-scale farmers are losing out on job creation because they only grow for subsistence purposes.
“With the introduction of these mills they will be able to produce maize and add value to the local economy,” he said.
Davis said the machinery and technology needed to build these small scale mills can easily be built in South Africa, thus further increasing the benefits of such projects to the country.
Se Higgins, Ukusa Mills boss, said they planned to build other mills in various other parts of the country and reduce the price of maize by 20% within the next three to five years.
He said 27 jobs would be created directly by the Durban plant and another 150 jobs would be created indirectly.
“We will be creating thousands of other jobs in rural areas because we will be buying our maize directly from small-scale farmers,” Higgins said.