Admarc to set up a new flour mill to boost profitability, strengthen grain markets

MALAWI – The Malawian Agricultural Development and Marketing Corporation (Admarc) is set to establish a maize flour milling plant, a move that industry experts believe could significantly boost the State-owned grain trader’s profitability while stabilizing Malawi’s grain markets.

Admarc recently extended the bidding deadline for the supply, installation, and commissioning of the plant to October 22, 2024, as it seeks international partners for the project.

This venture marks Admarc’s return to flour milling after nearly two decades, following the sale of its previous mill, Grain and Milling Company Limited, to the Bakhresa Group in 2003 as part of Malawi’s privatisation efforts.

Theresa Chapulapula, Admarc’s spokesperson, confirmed the corporation’s plan to establish the new flour mill but declined to comment on the scale of investment or the business model.

However, experts in agriculture and policy see the project as a timely step towards reviving the parastatal’s fortunes.

Tamani Nkhono-Mvula, a board member at Admarc and a policy expert in agriculture, emphasized that the decision makes solid business sense.

 “Given Admarc’s past financial struggles, private sector partners might be cautious at first. But if the milling plant in Lilongwe succeeds, it could encourage similar ventures in other regions,” he explained.

This strategic shift towards value addition comes at a time when Admarc is undergoing structural reforms aimed at making it more competitive and sustainable. The flour mill is expected to play a critical role in supporting these reforms.

Leonard Chimwaza, an expert in agricultural extension services, lauded Admarc’s decision to re-enter the flour milling business, noting that the corporation’s prior focus on social services limited its profitability.

“Admarc’s involvement in value addition is essential for its sustainability and contributes to the broader economy. For too long, the corporation has been providing services that didn’t generate sufficient revenue,” Chimwaza said.

He also highlighted that Admarc’s move aligns with Malawi’s market liberalization policies, where competitive market forces determine pricing and production. By expanding its role in value addition, Admarc can strengthen its financial position and make a meaningful contribution to the agricultural sector.

Agricultural economist Zachary Kasomekera believes that Admarc’s new flour mill could serve as a stabilizing force for grain prices in Malawi, a key factor in ensuring food security.

“A balance between parastatal and private sector participation is crucial. Admarc’s presence in the flour market could help control price volatility, as it did in the past,” Kasomekera said.

He added that the re-entry of Admarc into flour production could lead to more affordable flour prices for Malawians, especially during periods of market disruption. Admarc’s involvement is expected to keep prices stable, making it easier for consumers to access affordable flour.

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