Local wheat farmers are set to increase their earnings after one of East Africa’s largest flour millers, Bakhresa Grain Milling (BGM) Rwanda, pledged to purchase the grain locally.
The company, which has its headquarters in neighbouring Tanzania, further pledged to help local farmers increase yields in order to reduce on the high cost of importation of raw materials from overseas, which heavily affects its overall business and pricing structure.
The company also promised to channel the import savings to growers by paying them more for their produce.
Julius Ndunga, the head miller at BGM Rwanda, disclosed to Business Times that the cost of importation of one tonne of wheat from the United States to the port of Mombasa, Kenya, goes for an average of $600.
According to Ndunga, BGM has a daily capacity to process 250 tonnes of wheat and 7,400 tonnes per month. He, however, bemoaned that local farmers supply the company with a meagre 0.1 per cent with the rest imported from United States of America, Canada, Brazil, Argentine, Russia, Ukraine and Australia.
He further pointed out that at least 17 trucks ferry the commodity from Mombasa to Kigali with each carrying 30 tonnes of wheat.
He noted that before they began operations in the country one year ago, a 25 kilogramme packet of wheat flour sold for an average of Rwf17,000. However, the same quantity costs Rwf12,000 at BMG.
Ndunga believes the presence of their plant is crucial to the country but reiterated the opportunity lost to make more profits owing to the high cost of importation of the raw material.
According to officials at the ministry of Trade and Industry, the problem is not unique to Rwanda, but the whole region. They pointed out that even in Tanzania where Bakhresa is based; wheat is imported as local farmers cannot meet the demand.
However, the Director General in the ministry of Trade and Industry, Alex Ruzibukira, said that Rwanda could not let go the opportunity to host a milling plant.
He added that unlike in the past, the country now saves on foreign exchange in terms of processed wheat importations.
In a bid to assist farmers to meet market demand, the government tasked the ministries of Trade and Industry; Agriculture, as well as Rwanda Agriculture Board and district authorities to form a taskforce with the aim of assisting farmers to increase the quality and quantity of produce in the wheat growing districts of Musanze, Bugesera, Kayonza, Gicumbi and Nyamagabe, so as to meet the demand of the country’s two millers. Apart from Bahresa, the other locally based miller is Pembe Flour Mills Ltd.
“By next year, we will start to progressively supply both Bakhresa (Grain Millers) and Pembe (Flour Millers Ltd),” insisted Ruzibukira, adding that Rwanda aims to become a net producer of wheat.
Last month, the minister of Trade and Industry, Francois Kanimba, and his counterpart in the ministry of Agriculture, Agnes Kalibata, told the upper chamber parliament of their commitment to work together to avail to farmers quality seeds and train them on modern agricultural techniques to improve the quality and quantity of the produce.
They further disclosed that they had put in place post-harvest and value-chain mechanisms to ensure proper storage of the produce so as not to lose quality before this is supplied to the two millers.
According to the company’s management, 70 per cent of its produce is consumed locally with the rest exported to other countries in the region, including the Democratic Republic of Congo and Burundi.
The Tanzanian Bakhresa wheat milling factory was the first enterprise to break ground at the Kigali Industrial Park, located near Kimironko, Kigali.
The BGM plant is equipped with four silos of 3,000 metric tonnes each, allowing the firm to store up to 12,000 mt of grain in the first phase. Provisions are made to double the storage capacity in future, which will allow BGM Rwanda to be in a position to receive local and imported wheat, and avoid the factory running out of raw material.
Bakhresa Group has invested a total of $24 million (Rwf13.7 billion) in Rwanda in their expansion drive since early 2010.