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Inspired By Our Desire To Succeed: Lethabo Milling's Journey to Success

Lethabo Milling shares their journey as small-scale millers and discusses the challenges they faced, support received, and their thoughts on developing a milling franchise model. They also highlight the importance of economic empowerment and their mission to increase market access for black farmers.

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Inspired By Our Desire To Succeed: Lethabo Milling's Journey to Success

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  1. Reg. No. 2013/112031/07 2A Cachet Street, Ventersburg 9050, Free State Province Inspired By Our Desire To Succeed

  2. Discussion issues • About Lethabo Milling • Company Resume • Our Reason to enter the Market • Our Vision and Mission • The Purpose of the session • Our Learning’s to date • Support we received as small scale millers • Milling Industry structure and dynamics • Our Road to success • Our thoughts on the development of a milling franchise model • Challenges faced by small scale millers Inspired By Our Desire To Succeed

  3. About Lethabo Milling…

  4. Our reason for Market Entry • To progress the economic liberation agenda post the apartheid era in South Africa, there is a need to access and own industries that are largely reliant on black consumption but lack black supply from the production value chain side • This in itself presented a business opportunity for us. • Our mission and objective of market entrance are • To increase the choice of company buyers for BEE suppliers in this industry • To broaden consumer choices for quality black produced products in this case South Africa’s favourite staple diet • With more varied players in the market, price points will be managed downwards which in turn will favour consumers • To increase route to market options to black farmers for better pricing terms and profitability Inspired By Our Desire To Succeed

  5. Vision & Mission Inspired By Our Desire To Succeed

  6. Our purpose in this session Lethabo Milling is invited to provide input on the following issues around : • Development and implementation of a small-scale maize milling programme embedded in a franchising business model. • Introduction of a support programme to facilitate the market entry of small-scale maize mills. • Development of a milling skills development programme in collaboration with the Food and Beverage Sector Education and Training Agency. Inspired By Our Desire To Succeed

  7. Support for small scale miller Inspired By Our Desire To Succeed

  8. The current industry value chain structure favours big established players • They control : • Market access • Value Chain price economics • Access to unprocessed produce 9. Business Systems and Job Creation Consumer Farmers Cooperatives Commodity Traders Retailers (Proprietary and House Brands ) Ideal Millers • Emerging farmers have tied agreements due to lack of resources • Value chain pricing and margins is dictated by the Cooperatives , Traders and Retailers • Emerging or small scale Millers are also subjected the industry structural dynamics Inspired By Our Desire To Succeed

  9. OUR ROAD TO SUCCESS • The road we have travelled so far has not been a bed of roses. • It was full of potholes and speed humps • However we were determined to reach our destination despite all the challenges we were facing • Challenges we had to overcome • There are barriers to entering such a competitive industry which has big and dominant players mainly white • The high cost of acquiring machinery • Lack of access to capital due to stringent requirements from the financial institutions which affect most start up businesses especially SME • Non availability of sales contracts from the big customers • Lack of trust or confidence in our idea from identified market and financiers • Finally the transaction was facilitated by Massmart in partnership with ABSA after we had signed an off-take agreement with Massmart • Through the SDF: • our business is able to enter the tough and competitive maize milling industry and deliver a quality product to our customers and consumers • We will be able to create 40 + new jobs in the next six months • Above all those challenges Lethabo Milling would like to take this opportunity to THANK Massmart and ABSA Bank for believing in our business idea and enabling us to MAKE IT HAPPEN Inspired By Our Desire To Succeed

  10. Development of a milling franchise business model Inspired By Our Desire To Succeed

  11. Small scale millers challenges • Access to Finance • Grain procurement • Price fluctuations ( SAFEX) • Access to credit • Transport costs • Access to established retailers • Reduced margins • Retailer’s set selling price points • Rebates • Competencies • Milling Skills • General and Basic business skills • Mentorship Inspired By Our Desire To Succeed

  12. Xolani Ndzaba Xolani Ndzaba and ABSA Board Members 27 June 2014 Inspired By Our Desire To Succeed

  13. Our Product Inspired By Our Desire To Succeed

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