MAIZE PRODUCTION AND PROCESSING AS A BUSINESS

A MINI MAIZE PROCESSING STATION

VALUE ADDITION BUSINESS PLAN

FOR

AKACIA KIA (U) LIMITED

Dated January 25, 2020

Adopted by the Directors:

Email:akaciakia@gmail.com
EXECUTIVE SUMMARY

For a variety of reasons, Maize in the Ruwenzori region, Kasese district

i n particular, has not fetched good prices since last three decades. This
is a shame to the communities living or working around Ruwenzori region
and the whole scenario shows some kind of back wordiness because the
region experiences all climatic advantages that favor production of
excellent quality maize, including other crops, which can compete in
the world market, if growing, harvesting, storage and processing
techniques could be improved.

Akacia Kia (U) Limited thus designs this business plan (MAIZE processing
and marketing plan) for the year 2020/22, with a view of addressing
issues that affect the quality of Maize in kasese

Maize Processing and marketing plan is getting impressive to very many

maize dealers all over the country because of demand for high quality
maize in the country. All institutions are looking for high quality maize
products and are at 80% per year. This shift of demand curve is
explained by the need for improvement in the quality o f posho
prepared a n d the proficient and value addition to maize.

500 maize farmers are required in the first year to produce the major
raw materials in the implementation of processing and marketing of
maize plan. 3 tonnes of maize are required per12 hrs per day. The
plan aim at increasing production and competitiveness by converting
about 500 maize farmers in Munkunyu, Lake Katwe and Kisinga sub
counties from selling their maize un processed which leads to poor
prices of about 300= or less in the first three years. In the same time,
this plan acts as the guiding tool which directs Lhukuka SACCO members
of the Board, management/technical staff and other maize stake
holders involved and in support with a number of interventions aimed
at increasing maize value chain through improved seeds selection,
trainings, growing, harvesting, processing, storage and marketing
techniques, all in maize processing plan.
78 tones required p e r season, assuming 26 working d a y s in a season.
 This implies that 500 maize farmers need to be in a radius of not more
than 3km, and each in a position to at least produce 156 kg of maize on
average.
In a d d i t i o n to the investment c o s t f o r maize m i l l i n g
station (45,403,750 a l o a n o f 15,000,000 and 15.000.00 as
owners equity and 5.000.000 from sales is needed for maize
purchase, Trainings, operating costs, investment loan interest and
working loan interest, summing up to a total of UG. Shs. 100,303,750
for this plan to become a success.

All efforts i n this plan aim at reducing constraints a l o n g the maize

chain and impress value addition as well.

MAIZE PROCESSING AND MARKETING BUSINESS PLAN FOR

AKACIA KIA (U) LTD AT KIBURARA TRADING CENTRE

INFORMATION
BACK GROUND:

THE COMPANY PROFILE: (BRIEF HISTORY)

Akacia Kia (U) limited was formerly a Acacia Cia group of farmers
association that had 210 members who used to deal in maize, beans,
cassava and cotton production and marketing, because of a serious need for
a business arm, then it was registered a company limited by shares under
Registration number 80020002923686 with a share capital of 5,000,000 by
the registrar of companies in Kampala in the republic of Uganda.

The company is located in Kiburara Trading center along Kikorongo-bwera

highway in Kagando parish, Kisinga Sub County, Bukonzo East Constituency

The company has 16 subscribers that form the shareholders of the company
with agriculture production and trade as the major objectives of the
company.
The company has 78 acres of land, 48 of which are under maize production
and 30 under Harvestable cassava multiplication. The company has 210
farmers linked to the company.

The total acreage of land used for maize production including the company
out growers is 250 tons per season.

The company records 150 tons maize production per season from the
company land and out growers The Company buys 100 tons from the
market.

The company has a bank account number 3100080487 in centenary bank –

Kasese Branch.

VISION

An economically transformed and enlightened community through

better p r o d u c t i o n a n d v a l u e a d d i t i o n of maize

MISSION

A leading company i n maize processing and collective marketing that over

laps middle men in business that provides l o w prices to farmers’ maize
through e s t a b l i s h m e n t of a central mini milling station and soliciting
for and providing encouraging prices to farmers

GOAL
Improving t h e value and competitiveness of maize in Bukonzo East
Constituency and surrounding areas through maize processing up to
60% and increasing the local farmers' incomes to 40% by 2023.
 SPECIFIC OBJECTIVES

1. To produce and market o v e r 200 tones of high quality processed

maize every year starting 2022.

2. To enhance capacity of 500 selected farmers to grow and supply

over 100 tonnes of maize every season in three (3) years to
AKACIA KIA (U) LTD.
3. To enhance efficiency and profitability of the maize processing
enterprise while at the same time paying rewarding prices to the
farmers from 20% to 40% by 2023.

PRODUCT
DESCRIPTION

AKACIA KIA (U) LTD will be dealing in the production and marketing of
processed maize. The type of maize is locally known as "Ebikusa
Ebiswere nerisusurwa". Maize has successfully been grown in the
area for long time now because it' with stands semi-arid conditions
that prevail in the area especially when it's well maintained. This is
evident f r o m t h e fact that i t yields every season.

Maize is staple food that most of the homesteads in Uganda enjoy. It

also adds nutritional value to the customers. Maize growing is intended
to check the food insecurity in the region.

The purpose of forming AKACIA KIA (U) LTD is to reduce poverty

amongst maize farmers and improve their standard of living.
Marketing of processed maize adds value to the product. It creates a
good impression of quality;

Cleanliness and well processed maize is a strategy laid to meet the

required m arket standards. Many maize farmers and buyers
concentrate i n the region because it is well known for maize
production.
 During the production and especially at harvesting, processing and
marketing process, there are number of benefits that community
enjoys. In the first place maize provides employment to the community
that is payable and at times receive commission as they become market
agents of maize.
Maize husks are used by community as feeds for poultry, fish and livestock
at the same time as mulches in the coffee and banana plantations. Thus
maize husks which are secondary products from will be an alternative
source of income.
No Level Act Risk Mitigation
1. Harvesting Poor disposal of Pest  Proper disposal
maize husks habitation/sprea of maize husks.
d  To recycle the
maize husks
into livestock
2. Harvesting Using fresh maize Production of Heaping the maize
husks as mulches much heat which husks and allow
causes crops to them to decay/dry
dry up.
3. Harvesting Lack of mulching, Drought & soil Mulching &
terraces, heavy erosion terracing
sunshine & rain
4. Storage Poor storage and Theft Construction of a
security facilities strong storage
house, fence and
recruitment of
security personnel
5. Marketing Poor quality maize Price fluctuations Maintain good
& poor market quality of maize &
update updated with
current market
prices

COMPETITIVE ANALYSIS
The competition of maize in Bukonzo East Constituency is so high. It
is composed of mainly of middle men/ buyers; who at same time
are indigenous and do buy maize from house to house from our
farmers and other mushrooming companies. These competitors have
managed to take the largest shares of the market i n our catchment
 a r e a because they are many and each person controls his own money
with limited bureaucracy.

These middle men have a number of factors/ strengths that has

intensified the competition .On the other hand we have tried to
analyze their weaknesses.
Strength
They have their own money to buy
produce from individual farmers even
before we can buy in bulk from
farmers
They move directly to the framers’
plantations/homes and try to
convince them into buying their
produce
They have high bargaining power as
they directly negotiate face to face
Weakness
They pay low prices to the farmer as
prevailing market cannot be
disclosed to them.
Middle men buy in small quantities
and they tend to contaminate good
maize by mixing bad maize or husks
in to increase on their quantity/kgs
hence reversing the quality of maize.
They don’t have legal entity and use
un just weighing scales.

Similarities with Competitors

 We both target the same farmers to buy the maize

produce. Thus we face monopolistic competition whereby we are
many buyers against few maize sellers.
 We all buy maize and sell it to big companies.
 We are all in the same geographical region.
Akacia Kia (U) LTD Competitors’ Business
It is a registered company owned by It is owned by one person and is
16 directors answerable to himself
Working capital is from shares of One person raises local competitor’s
directors capital
Its business is implemented by Its operated by one person with local
technical staff with approved equipment
equipments
They are quality agitators Mind lessabout quality of maize
Deal in processed maize Deal in unprocessed maize
Its owned by natives While other companies exist in
Kiburara, they are faking to be
natives of Kiburara
BUSINESS PROPOSAL

The proposal under discussion in this business plan is to covert 10

maize farmers groups each containing
50 members (500) over the next 3 years to produce centrally
processed maize whose quality will be high.

The maize grains supplied by farmers w i l l be processed in a central

processing facility known as MINI STATION. The farmers will bring
their grains to the mini station where its quality will be checked
.After buying it will be processed to produce a uniformly high
and consistent quality packed in sacks of 10kgs, 25kgs, 50kgs and
1OOkgs. Besides processing the a l r e a d y purchased maize
g r a i n s , it w i l l also p r o c e s s individuals maize grains for their
home consumption at low prices. This will attract rewarding prices
over and above the international and local markets.

POST HARVEST HANDLING AT PRESENT

Most of the maize produced by the farmers’ group members is sun
dried on bear ground; hulled locally by private hullers and sold by
farmers to the company and other local buyers as unprocessed maize.

The quality of the current maize is low harvested mixed with soil and
other debris and at the same time sold unprocessed to middle men
PROPOSED SYSTEMS

AKACIA KIA (U) LTD proposes several changes to the to the post
harvest and marketing arrangement;

1-0ver the next 3 years farmers will be formed into a total 10 groups of
average 50 members each. This process has already started; led by
AKACIA KIA (U) LTD staff. There is currently 1group formed.

2-The farmers groups will operate at a collecting centre bringing their

maize while AKACIA KIA (U) LTD staff will do a rigorous grain
selection; buy and transport the thoroughly selected grain to the
central processing mini station using trucks and pickups with in a period
of 12 hours.

3-The thoroughly processed grains at the mini station shall be packed

in branded sacks of 10, 25, 50 and 100kgs; stored in well ventilated
stores and its moisture content determined and ready to be sold or
transported to the potential buyers.

Its therefore estimated that this combination of interventions will

increase the final selling prices of maize by at least 85% and of this
increase between 50% and 60% is expected to reach the pockets of the
farmers; increasing their own incomes. It's also expected that this
will encourage farmers to invest in their maize and produce more
and hence have an effect of encouraging non-members to join
company groups and at the same time process maize for
individual framers for their own consumption at low price
MARKET FOR PROCESSED MAIZE
The prices of unprocessed maize ranges from 300/= to 500/= meaning
that a 100kg sack of maize grains is rated at 30,000/= to 50,000/=

Now when a 100kg sack is processed to SUPER GRADE it produces

50kg of processed maize flour and 50kg of maize brand and when
m a i z e f l o u r i s sold, 1kg realizes a price ranging from 1600/= to
2000/= and meaning 50kg will be sold between 80,000= and
100,000/=, whereas 1 kg of maize bran is sold at 500/= to 700/=
meaning 50kgs realizes 25,000/= to 35,000/= this will depend on where
you have got the market from around and outside Uganda
PROCESSED VS UNPROCESSED MAIZE
VALUE ADDITION BY PROCESSED MAIZE
Product Price
Unprocessed maize 500
Processed maize 1600
%value added by processing 70%
Prices in Kasese Town by December, 2020
Unprocessed Maize 500
Processed maize(maize flour super grade) 2,000
% value added by processing 80%

RAW MATERIALS

The raw materials f o r maize processing and marketing p l a n are the

well dried maize grains. These maize grains shall be got from
company land and farmers from individual farmers groups and
individual farmers in the constituency of Bukonzo East, 1,110kg of
maize grains are required per hour, from potential maize farmers,
whereas 13 tones are required in 12 working hrs per day and 100
tones are required per season, assuming 90 working days in a season.
It's on this basis that Akacia Kia (U) LTD wishes to convert most of
the maize farmers in Bukonzo East Constituency in this plan for the
last three years, so that the above mentioned scenario is translated
into an increase of the farmers income of about 40%
COVERAGE AREA

In the first three years of the implementation of this plan, (maize

processing and marketing plan) the coverage area for maize grains is
still limited in a radius of not more than 4 sub counties from the
location of the processing plant at Kiburara trading centre. This is done
like that because in three years the company will not have acquired
funds to purchase Lorries to transport maize grains from distant
farmers' collection centers to the processing plant. The company w i l l
in three years still be relying on simple means of transporting maize
grains from the farmer's collection centers to the processing plant. For
that matter, the coverage area is situated in the three sub counties
(Munkunyu, Lake Katwe, Nyakatonzi, kinyamaseke Town Council and
Kisinga) Bukonzo county, kasese District, in the villages as mentioned
below;, kanyampara,musomoro , Bwanika and Rwenganju in
Munkunyu sub county and Kamuruli, Rwembyo, Kisanga, Kirembo,
Kanyughunyu and Rwesororo in Kisinga sub county then Busunga,
Kabirizi and Kighenge in Lake Katwe sub county.

In this coverage area, prominent maize farmers' groups/Companys are

the target suppliers of raw materials for the maize processing
plant/station.
Groups are; Kabirizi Growers company society, Kiburara women group.
Each Member group has on average of 50 and is provided w i t h a code
in the data base as well as a tagger for the group attached on the
maize sacks.
In order to ensure efficient r u n n i n g of the plant, 10 groups of maize
farmers are necessary in the initial stages, each group with a t least 50
members. This implies that 500 maize farmers need to be realized and
each member in a position to at list produce 356 kg of well dried good
quality maize.
STRATEGIC PLAN 2021-2023

OUTCOME SPECIFICATIONS TIME

FRAME
Achieve at least 50% 1. Mobilize enough farmers to
provide at least
capacity utilization
i.e. produce over 78tons of maize year to the
organization.
78 tons of maize every
year 2. Operate the machine as
instructed by t h e manufacturer to
minimize time loss due to defects.

3. Anticipate break downs by

doing regular servicing o f the
machine a s instructed by the
manufacturer.

4. Make sure funds are available for any

repairs that are necessary during the
seasons.
5. Assure enough laborers are
contracted to operate the factory
during peak season.

6. Make available the necessary funds to

cover all operating costs.

Recruit 350 out grower 1. Contract 3 5 0 farmers f r o m the

farmers within the first n e i g h b o u r i n g areas to provide
year of operation and
maize grains to the maize processing
build their capacity to
consistently supply factory.
maize to the factory
2. Provide t h e r e c r u i t e d farmers with
t e c h n i c a l a d v i c e to improve yields
and grain quality.

1. Akacia Kia (U) LTD has i n d e p e n d e n t

b o a r d and management organs
that report to shareholders.
2. Akacia Kia (U) LTD members mobilize
 over 24
million shillings (cash or in kind) in
additional operating funds to kick start
the MAIZE business

COMMUNITY IMPACT AND BENEFITS

The business of buying maize will lead to social, economic and financial
impacts not only to its directors but also to the entire community.
Some community impacts will be:
 Creation of employment opportunities like machine operators,
watchman.
 As the Company is a profit making institution part of its
profit shall be used to improve infrastructure like schools
and construction of protected water sources.
 Some Company resources like furniture will also be used in the
community functions.
 The business will also lead to improved standards of living to
farmers since their income will definitely increase.
 The farmers will get mulches for their coffee and banana gardens
and feeds for livestock from maize husks.
 The farmers will also be provided with training on good
maize management through Company's trainers of
trainees.