Seed Co Malawi unveils $7m expansion plans
Seed Co Malawi, a wholly-owned subsidiary of Zimbabwe Stock Exchange (ZSE)-listed Seed Co Limited, has unveiled plans for a $7 million (K2.4 billion) worth business premises in Kanengo, Lilongwe, to boost production.
The company’s managing director Dellings Phiri told Business News the new plant will increase the company’s capacity and output through modernised processing.
“The desired result being increased efficiencies and improved product quality,” he said.
The company, which started operations in Malawi in August 2000, has attained market leadership position in maize and legume seeds market in the country.
Figures from the logistics unit of the Farm Input Subsidy Programme (Fisp) show that Seed Co Malawi accounts for about 51 percent of all certified seed sales (maize and legume seeds combined) and around 49 percent of all maize hybrid seed sales for the past four years.
The company is in the business of producing and marketing crop seeds such as hybrid maize, legumes [soya beans, groundnuts, beans] and other cereals such as wheat and sorghum seeds.
Vegetable and sunflower seeds are marketed under agency agreements with foreign developers.
The company’s operations have not been without challenges, according to Phiri, who argued that the maize seed market is fairly stagnant, but the biggest challenge remains the low cash market for maize seeds.
“Currently, certified maize seed adoption hovers around 43 percent, thanks to the subsidy programme. Without the government intervention, effective seed market is still very low, far lower than 25 percent. Investment into such a small market becomes a big challenge,” he said.
Phiri observed that on seed marketing, there has been a paradigm shift in the mode of seed retailing: from use of highly trusted, but rigid retail chains to highly aggressive, but largely untrustworthy agro-dealers, most of whom operate in rural areas.
This is because the subsidy programme, being a high volume channel, requires deep reach which is only provided by agro-dealers.
Seed Co has been expanding on the continent and controls slightly over half the maize seed market in Malawi and Zambia, 40 percent of the Tanzanian market.
