What you need to know:
Maize milling is the cash cow in Ibanda district. Stephen Otage spoke to a farmer who has improved his fortunes from maize.
The French term Mise En Place, is a culinary term literally translated to “set in place”. It means before you start cooking, you must have everything needed for cooking.
Lucky Edison, the proprietor of New Kachinga Maize millers in Ibanda District has learnt that the rule of thumb for chefs is the same food processors need to apply if only to achieve results.
He has learnt that to produce good quality maize flour, the needs of a farmer should be satisfied first to provide good quality maize. This has glued him to the farmers for the last ten years.
In 2006, when he started milling maize in Ibanda District, he realised there was potential of establishing a maize milling business in the area. Most of the maize he was milling came from Kamwenge, Ibanda, Kyenjojo, Kibale and sometimes Mubende districts. In Mubende alone, he was producing between 50 and 100 bags a day but he did not know where the sold flour ended up.
Between 2006 and 2011, the company was the sole miller and seller of posho to an unknown market until 2011 when USAID’s Feed the Future Uganda Commodity Production and Marketing Activity programme picked interest in the company. They advised him to establish a company limited by shares to give room for other players in the maize value chain to feed their efforts into the company.
For instance, he did not know that during the formative stages, he was losing about 1,000kgs per 10,000kgs of maize grain he bought because of the poor handling of the maize after harvest.
The 1,000kgs comprised stones, bad grain, maize cobs, and other impurities that farmers carried alongside their grain as they sold to him the grain. But with the new support, he realized the importance of working with village agents who supplied him the maize so that they supervise the quality of maize farmers sold to them. The one-tonne loss the company was incurring was out negligence of both the farmers and village agents.
Village agents had to buy good quality grain in bulk from farmers. Previously, the agents who were middlemen would buy anything which resembled maize, including the one infected with aflotoxins and it would end up in the factory. The sad bit is the millers did not know the impact of such maize on human health.
The farmers were equally trained in selling good quality grain and handling maize after harvest. The village agents established stores where farmers would collect their grain in bulk and when the tonnage is sufficient enough, a truck goes to load it before it is transported to the factory for milling.
Since maize growing was the cash cow in that area, the farmers relied on village agents to provide farmers with seeds on loan. Upon harvest, the farmers should repay the loan.
Farmers also received tarpaulins to dry their maize as opposed to spreading it on bare ground.
According to Edison, it is cheaper to provide farmers with tarpaulins which they will use to dry the maize for over four seasons compared to paying for impurities worth Shs700,000 because that is the average cost of a tonne of maize which can fetch them 500 tarpaulins to distribute to farmers.
Edison’s journey to maize milling took time. He decided to add value to which he used to sell at only Shs2 million in 2006.
With the initial capital, he purchased two acres of land and machines which have grown into working capital of Shs18 million, money he recovered in one season.
Asked how much he made in that season, he is not sure. Why? He was not keeping records. This was complicated by the fact that he was doing all the work himself including cleaning, hulling and transporting the maize.
He says the criterion he uses to recruit the village agents is simple. He uses the turnover, frequency and quality of maize they deliver to the factory to assess their reliability and they must fulfill their conditions before the maize is bought.
Through this, they have fought mainly the aflotoxins which were very common with their maize. They can now tell good quality grains from the bad ones. Following support from CPMA, their posho is mainly exported to Rwanda, Burundi and DR. Congo.
Today, the company exports between 25 to 50 tons of posho weekly and they have developed an accounting system which shows them the company performance. When the season of maize is facing gluts, they send other maize flour to Kampala but the main product they sell to Kampala is maize bran which is used in animal feed production.
Their main challenge is high utility bills. In a month, they pay close to Shs20 million. They are also facing high water bills because unlike Kenya and Rwanda where millers do not remove maize husks, in Uganda husks have to be removed resulting in poor quality maize flour.
The company employs 60 permanent employees and a number of casual workers to handle the 40 tonnes of maize daily. Every worker is paid a wage based on a 50kg bag of posho produced.
How reliable maize grain supply has been established
According to Edison Akiiki the accountant, the factory needs 40 tonnes of maize daily. One of the ways they have managed to establish constant supply of maize grain is by teaching farmers how to plant the crop and advising them how to apply fertilisers. Where farmers are unable to acquire inputs such as seeds and fertiliser on their own, the company gives them the in-puts on credit and at the end of the season; they pay back the loaned inputs.
Today, the factory has an average of 200 agents who have verbal agreements with close to 3,000 although only 1,500 are currently active. Each agent has a store, the smallest handling five tonnes of grain. The idea of agents having stores, has enabled the management of distances from which the grain is collected which is most cases are spread over 100kms apart.
The company has purchased 400 acres of land at Shs500 million where they have established an animal ranch for Friesian cows.