When talking about value adding – a subject becoming more and more important to farmers in particular (especially when the maize price is entrenching itself well below the R1,000 per ton mark) – the conversation often starts and end at milling. It should really start with cleaning and storage, the minimum any farmer can do to add value to his crop. It need not however stop at milling as this business just sometimes does not work whether due to competition or other reasons. While milling is almost always a step in the value adding chain, the many other interesting conversions of maize lies in such areas as:
Starch, gluten, animal feeds, corn syrup, ethanol and other chemicals. What makes it great is that we import into South Africa thousands of tons of these products, they are all intermediate products used in further manufacture such as the textile and paper industries for instance, so marketing takes place on a different level, they are all international commodities and able to be exported easily, brand does not play much of a role as long as quality is assured etc.
Granted, these are all costly plants. The Europeans and Americans maintain that a viable plant capacity is the processing of 300 tons of maize per day at a plant cost of around Euro 20 million. Big bucks. But consider that unmodified yellow maize starch sells for around R4,400 and modified starches for well over R6,000 per ton on the local market. And keep in mind that there is primarily one game in town. Doesn’t it warrant a good research at least? We are of course
The value adding chain for maize would look something like this:
Herewith some tables showing the hectoliter mass of various grains and bulk materials. One of those pieces of information you often need but is not easy to find. We hope it will assist you some day, perhaps tomorrow.
Agro Processing – again…. This writeen October 2005 – in February 2005 maize hit an all time low of R483 per ton, wow!!!
Two years ago you had serious thoughts about maize milling or other value adding but then the prices improved & frankly, you’re glad you never went into this even though you’re in the same position again. Old So-and-So just couldn’t make it. At least the soy price improved and there seems to be a market for low fat soy now….. And next year it will be something else.
Very few people actually get any value adding done. And yes, it is risky, its starting a new business but with the difference that, as a farmer you actually know a great deal about it.
Take soy processing. There are a few ways to go about getting that oil out for low fat soy oil cake namely:
- Steam heating
- Chemical extraction
And each has its own peculiarities, advantages and disadvantages. Bottom line is that for a modest budget of less than R200,000 (today around R500,00) you could actually produce a low fat cake in small quantities of 2 – 10 tons per day. With a +- R600 per ton gross profit and R300 net profit, your equipment is paid for over only 660 tons or some 330 x 20 hour days at only 2 tons per day. A good return in anybody’s book.
And for a plant doing 1.5 tons per hour or 30 tons per day you can expect to pay around R3 million (today closer to R6 million) using the best equipment in the world – an exact same payback – 330 x 20 hour days.
While it is of course not the thing for everyone to do, there is merit in this business, as in many other areas of processing. We used to talk of import substitution and export promotion as ways for a country to grow its economy. Apply this to your own farm, town, province and country.