MAIZE PRODUCTION AND PROCESSING AS A BUSINESS

A MINI MAIZE PROCESSING STATION

VALUE ADDITION BUSINESS PLAN

FOR

Dated January 25, 2020

Adopted by Directors:
Email:[email protected]
EXECUTIVE SUMMARY

For a variety of reasons, Maize in the Rwenzori region, kasese district i n

particular, has not fetched good prices since the last three decades. This
is a shame to the communities living or working around Rwenzori 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 2020/25, 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 a n d marketing o f
maize plan. 3 tonnes o f 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 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 500 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 ( 414,800,000) a l o a n o f 118,600,000 and 26,000,000/=
as owners equity and 100,000,000 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 500
farmers linked to the company.
The total acreage of land used for maize production including the company
out growers is 200 tons per season.

The company records 100 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
super grade maize flour. The type of maize flour shall be locally known
as "KIA supa". and shall be packed in packs of 5kgs,10kgs,15kgs,20kgs,
25kgs, 50kgs and 100kgs respectively that can be affordable to local and
international buyers. other maize products of maize bran shall also be used
in fish, poultry, piggery and other livestock farms as feeds. 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 marke t 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 maize will be an
alternative source of income.

No Level Act Risk Mitigation

1. Harvesting Poor disposal of Pest  Proper disposal
maize husks habitation/spread of maize husks.
 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 Weakness
They have their own money to buy They pay low prices to the farmer as
produce from individual farmers even prevailing market cannot be
before we can buy in bulk from disclosed to them.
farmers
They move directly to the framers’ Middle men buy in small quantities
plantations/homes and try to and they tend to contaminate good
convince them into buying their maize by mixing bad maize or husks
produce in to increase on their quantity/kgs
hence reversing the quality of maize.
They have high bargaining power as They don’t have legal entity and use
they directly negotiate face to face 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 Mindless about 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 centered at value

addition and aims at converting 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 k n o w n 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 OF MAIZE GRAINS AT PRESENT

Most of the maize produced by the farmers’ group members is sun
dried on bear ground; hulled locally by beating of dried cobs 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 FOR CURRENT POST HARVEST HANDLING

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

1. Over the next 3 years farmers will be formed into total 10 groups
of average 50 members each total to 500 farmers who shall be
provided with tapelines and drying tables for proper drying of maize
and local modified hullers. This process of groups formation has
already started; led by AKACIA KIA (U) LTD staff. and currently
three groups of fifty members each have been 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 5, 10, 25, 50 and 100kgs; stored in
well ventilated stores and its moisture c o n t e n t d e t e r m i n e d and
ready to be sold or transported to the potential buyers.

4. 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 2,000
grade)
% value added by processing 80%

RAW MATERIALS (MAIZE GRAINS)

The raw materials f o r A mini maize processing plant shall be the well
dried maize grains. These maize grains s h a l l b e g o t from company
land and farmers from individual farmer groups a n d 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 i n 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 y e a r s 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 2021-2025

OUTCOME SPECIFICATIONS TIME

FRAME
Achieve at least 50% 1. Mobilize enough farmers to
provide at least
capacity utilization
78tons of maize year to the
i.e. produce over organization.
78 tons of maize every 2. Operate the machine as
year instructed b y 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 r i n g areas to provide maize
year of operation and
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.

Mobilize 5,501,000 as a 1. Akacia Kia (U) LTD has i n d e p e n d e n t

co-founding (in line with b o a r d and management organs
the business plan) that report to shareholders.
towards the investment 2. Akacia Kia (U) LTD members mobilize
capital requirements for over 24
the project.
million shillings (cash or in kind) in
additional operating funds to kick start
the MAIZE business

Establish and A board of director fully functional carries

strengthen relevant out its policy formulation and oversight
management and function effectively.
governance structure by Key policy manuals included operations,
putting in place human resource and accounting are
appropriate systems developed, approved by board and put to
and policies use.
Financial records in lin with internally
accepted financial regulations are put in
place.
Internal and external value for money
audits are conducted quarterly and
annually respectively.
Establishing and Installing the milling house, office, store,
commissioning the ,maize mill machine and fence according
factory its self. With to the specifications.
installed capacity of 200 Maintaining all buildings and materials on
tons of maize flour regular basis
processed per year Conduct all necessary preparations to the
infrastructure and machines.
Market and sell of 200 Sign a contract with a buyer to provide
tons of high quality them with the predicted 200 tons and
above of maize flour.

BUSINESS OUTPUTS AND COMMUNITY BENEFITS

The business of buying maize will lead to socia-economic

transformation 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 shall be realizing cash flow balances part of it
shall be used to improve community infrastructure like
schools and renovate and construct protected water sources.
 The company shall establish piggery, poultry, dairy farms for
 demonstration purposes for the community since there shall be
regular and constant supply of feeds from the maize processing
plant(front linkage chain).
 Local farmers shall easily access quality maize flour and feeds
for domestic use.
 The business will also lead to improved standards of living to
farmers since their income will definitely increase.
 The farmers will get maize husks as mulches for their coffee
and banana gardens and feeds for livestock.
 The farmers will also be provided with training on good
maize management through Company's trainers of
trainees.
MARKET PLAN
At this stage, the marketing plan s h a l l b e e x a m i n e d i n g r e a t d e t a i l
u s i n g t h e b l u e & r e d o ce a n s t r a te g i e s d e pe n d i n g o n t h e
p r e v a i l i n g c i r c u m s t a n c e s . Activities will fall into four stages;
1-Establishing a market presence
This involves development of web site, design and printing of a
brochure, attending national trade fairs annually and visiting buyers
especially in Kampala East Africa even in USA and EU.
2-Sending samples and negotiating business contracts

This will be done when maize samples are available. The number of
samples sent out will depend on the volume of maize and number of
potential buyers in circulation.

3-Negotiating prices and contracts

When it comes to negotiating deals AKACIA KIA (U) LTD depending on

the prices on the world market and putting in mind the variables, fixed
(over head) costs and profits the prices of Maize shall be determined.

4-Executing Contracts

This is done once deals have been closed and is a technical process to
make sure the buyer receives the maize flour he/she has ordered at the
quality specified and the time expected.
TARGET MARKET
The Company t a r g e t s St. Johns, Saad memorial SS, Vision
community school and other institutions and local communities
all found i n and around k ase se , western U g a n d a and countries like
DRC, Rwanda, Burundi, South Sudan etc. The total market demand
is approximately 234 tones and we intend to offer
approximately 230tones of high quality maize flour during the
f i r s t t w o y e a r s o f t h e business period.

MINI STATION COSTING

Project Area Qty Unit price Total Remarks

Works
Construction of machine 1 20,000,000 20,000,000
shelter
Procurement of maize mill 1 100,000,000 100,000,000
machine
Construction of an office 1 60,000,000 60,000,000
and store
Construction of fence 1 10,000,000 10,000,000
Drying shade & Tables 4,000,000
Three phase power 12,000,000
installation
206,000,000
Supplies
Procurement of maize 200tons 500 100,000,000
grains
Transport for maize grains 1 14,400,000 14,400,000
Procurement of 200 kg 1 2,000,000 2,000,000
Salter scale
Procurement of a sign post 1 500,000 500,000
packaging machine 1 700,000 700,000
Packaging materials 1 1,000,000 1,000,000
Water tank & accessories 1 6,000,000 6,000,000
124,600,000
Wages
Manager 1 500,000 500,000x12
Cashier 1 250,000 250,000x12
Askari 2 200,000 400,000x12
Secretary 1 200,000 200,000x12
Porter 2 100,000 200,000x12
Machine operators 2 300,000 600,000x12
 25,800,000
Services
Power bills 180 100,000 18,000,000
Maintenance services 20,600,000
Taxes (fixed) 19,800,000
Depreciation costs 0
58,400,000
Total Startup Capital 414,800,000
CASH FLOW

CASH IN 2021 2022 2023 2024 2025

(RECEIPTS)

Cash at hand 5,000,000 151,600,000 89,594,764.8 67,789,529.6 55,784,294

(Opening
Balance/shares
)

Grant 300,000,000 0 0 0 0
Loan 109,800,000 0 0 0 0
Sales 102,500,000 205,000,000 205,000,000 205,000,000 205,000,000
Total Receipts 517,300,000 356,600,000 294,594,764.8 272,789,529.6 260,784,294
CASH OUT (Payments/Expenses)
Variable costs
Works 206,000,000 0 0
Supplies 74,600,000 115,400,000 115,400,000 115,400,000 115,400,000
Wages 25,800,000 25,800,000 25,800,000 25,800,000 25,800,000
Services 38,600,000 63,521,920 63,521,920 63,521,920 63,521,920
Fixed 0 0 0 0 0
Taxes 20,700,000 12,283,315.2 12,283,315.2 12,283,315.2 12,283,315.2
Loan repayment 50,00,000 50,000,000 9,800,000 0 0

365,700,050 267,005,235.2 226,805,235.2 217,005,235.2 217,005,235.2

Closing 151,600,000 89,594,764.8 67,789,529.6 55,784,294 43,779,058.8
balance
EXECUTIVE
Akacia Kia (U) Ltd has a strong effective executive that clearly
defines, articulate and maintain the company values, which are also
shared with other stake holders, as well as providing visionary
leadership that contribute to the achievement of the cooperative's
objectives.

In this sense, the executive does not execute but it employs strong
management team, to whom it delegates its responsibilities and
obligations.

The executive reviews and approves management’s strategic and annual

plans and budgets and supervises to ensure effective implementation.

The executive ensures that the company has adequate up to date

written policies such as; personnel policies, financial policies and
procedures, operations policies and procedures and ensuring that such
policies are applied.

In addition to above, the executive also initiates and maintains public

and donor relations as well as lobbying and advocating to
government, donors and other stake holders for effective policy
development or reforms.

AKACIA KIA (U) LTD executive includes; Kibaba Pusu, Bwambale Charles,
Masika Davia Christine, Muhindo Longino, Masereka Paul & Mbusa Eric.