Diversified local manufacturer Davipel Holdings is set to commission an US$8 million milling plant which will see it significantly cutting down on its import costs as it aims to scale up investment in value addition and beneficiation.
Davipel manufactures snacks and soya chunks, among other things in its portfolio of investments.
The 120 tonnes per day agri milling plant which will be commissioned next week will be producing maize grit, the main raw material needed in making snacks and maize bran. Maize meal and corn flour will be the by-products.
Group managing director Davison Norupiri told businessdigest on Wednesday that new plant which is the first grit manufacturer in the country will see its capacity utilisation increase remarkably.
The plant is coming up with a stockfeed plant, which will enable value addition and beneficiation and its capacity is 80 tonnes per day
"We are looking at value addition and beneficiation. What it basically means is that the new plant will produce 200 tonnes of products per day. We will be then in a position to export our snacks and our corn flour which in on demand in countries like Angola where they buy it at US$200 per tonne," he said.
Norupiri said although some of the products could sell well before beneficiation, there is more benefit in value addition and beneficiation and it will enable it to make stockfeed. This comes as the calls for value beneficiation has increased as it has been losing millions of dollars through lack of value addition mechanisms.
Norupiri said the reason why they were failing to reach 100% capacity utilisation at the moment was also due to frequent power outages.
The company has been importing most of its raw materials which include maize grit and olive oil and flavours, costing the company a fortune.
Currently the company is producing 200 tonnes per monthly at 97% capacity utilisation.
Meanwhile, Norupiri said the new plant will see the company exporting 20% of the snacks into the region and 70% of corn flour into the same market.
"We have been importing 100% of our maize grit of which we are now cutting on, that's 35 tonnes a day. We have been compromised by taking local grit which was not up to standard and as a result we ended up costing us in terms of machinery breakdown.
"In terms of components supply, we've been importing 100% of our grit, 100 % on flavours, packaging is local 100%. On flavours, we use about 120 tonnes per month which is quite huge. We have plans to set our own plant. It's a long-term plan but it will save us about US$315000 per month," he said.