Agricultural Development and Marketing Corporation’s (Admarc) plans to acquire a maize flour milling plant has the potential to turn the State grain produce trader into profitability, experts have said.
This follows Admarc’s call for supply and installation of the plant through international bidding.
Reads the statement in part: “Admarc wishes to notify all prospective bidders that the bidding period for the tender for supply, delivery, installation, commissioning, user training and after-sale service of maize flour-milling plant has been extended to October 22 2024.”
business sense
The flour milling plant will come two decades after Admarc’s similar venture, Grain and Milling Company Limited, was sold to Bakhresa Group under the Malawi Government’s privatisation programme in 2003, but analysts think this is the right time for the State-owned entity to return to value addition.
Admarc spokesperson Theresa Chapulapula, confirmed the plans, but did not respond to questions regarding the level of investment, financing and the business model of the expected venture.
But in an interview on Friday, agriculture development policy expert Tamani Nkhono-Mvula, who is also on Admarc board member, said the move makes business sense.
He said: “Considering the track record of Admarc, I don’t think private sector players would be willing to partner it for this venture at the moment, but what I would expect is that since the plant is earmarked for Lilongwe, if it does well, then other players might think of establishing the same in other cities.”
In a separate interview, agricultural extension service expert Leonard Chimwaza said the move is in line with the proposed reforms at Admarc.
“For a long time, Admarc has been doing much work on the social services, which has not been good as it has failed to sustain its operations. Value- addition drive is vital to our economy,” he said..
Chimwaza said this initiative is in line with the market liberalisation policy in which market forces will be key determinants.
Agricultural expert Zachary Kasomekera said such value-addition will contribute to the national economy.
He said Admarc, which was already in the flour production business before privatisation, could help in stabilising prices in the sector.
Kasomekera, who is Lilongwe University of Agriculture and Natural Resources Council chairperson, said: “A balance is necessary between parastatal and private sector participation in the national economy. Parastatal participation works as a price stabilisation factor, as clearly demonstrated in maize prices in Malawi.
“As such, one would expect parastatals to be engaged in more key economic activities to ensure good and affordable welfare for the citizenry.”
Admarc was formed in 1971 as a government-owned parastatal to promote the economy by increasing the volume and quality of its agricultural exports.
