November 6, 2009

Asgi SA Eastern Cape explores grain milling business

AsgiSA Eastern Cape (EC) has set aside ZAR7 million for the construction of silos at strategic sites in Eastern Cape, an investment it believes will increase opportunities in the area of milling.

The milling plants, which will be linked to the silos, will produce corn meal and crushed corn as part of AsgiSA EC's integrated dry-land cropping programme.

The building of the silos is part of an ambitious plan to bring much-needed investments in the Eastern Cape, said AsgiSA EC agriculture and agroprocessing project manager Thukela Mashologu.

The organisation is also exploring the prospect of investing in animal feed production, which will add value to its livestock project.

AsgiSA EC has embarked on a request for proposals on grain milling and silo management, after which a community public-private partnership arrangement is likely to be formed for managing the grain silos and milling plants.

The current market conditions create an opportunity to improve the competitiveness of the organisation's produce, said Mashologu, adding that the storage facilities will also help to sell their produce in intervals and ensure fair prices.

AsgiSA EC was forced to sell its produce shortly after the harvest last season, due to the lack of storage facilities in the area. Adequate supply in the market then impacted the pricing and profit of the produce.

Initial plans are under review, but AsgiSA EC plans to plant 100,000 hectares of different dry-land crops, mostly corn, in rural Transkei over the next five years, expanding this to 500,000 hectares by 2032.

AsgiSA Eastern Cape Pty Ltd is a South African government initiative that assists the provincial government in accelerating growth and development in the eastern part of the Eastern Cape.