It’s a case of a gamble paying off handsomely for Flagstaff-born Xolela Makabane (35) who now supplies the entire Eastern Cape Boxer stores network with his own Umgubo Wesintu sifted yellow maize meal brand.
Last year, his company Pondoland Maize which started operating in December 2010, started supplying the Spar Group as well as Bargain Wholesalers mainly in KwaZulu/Natal. He is also at the final stages of off-take agreement negotiations with Pick ‘n Pay to supply the retailer with their Pondoland Broiler Pallets animal feed.
“When I started the milling plant in 2010 it was located in my mother’s garden. The processing plant had a 200kg capacity per hour employing four people at the time. We were doing about 20 tons a month. It’s funny now but after we produced our first 200 bags of maize meal we suddenly realised we had no one to sell the products too which was a valuable learning curve. We then decided to target SASSA grant pension pay out points in the major Transkei towns and sell our products there. That was the turning point because our market started telling us that they didn’t want super maize meal from us, they wanted sifted yellow maize meal to use for traditional purposes and Umgubo Wesintu was born in response to market demand.
With the new factory we received from the Eastern Cape Development Corporation (ECDC) at the beginning of 2017 we have significantly enhanced our efficiencies and profit-making abilities. There is no way we would have secured these off-take agreements and service them to meet demand without the two factories with a 2,000 square metres. The new factory has increased our processing capacity to 2 tons per hours. We now have three product ranges which are the sifted maize meal which comes in 1kg, 2kg, 5kg, 10kg and 12,5kg as well as the whole maize meal which comes in the same sizes. We also manufacture animal feed in 2kg and 5kg bags,” says Pondoland Maize chief executive officer Makabane.
ECDC chief executive officer Ndzondelelo Dlulane says support to Pondoland Maize is earned as it responds to the development financier’s mandate.
“The support to Makabane’s initiative falls in line with efforts geared toward the development of Black industrialists as well as the creation of sustainable jobs in the region. ECDC is proud to be associated with Pondoland Maize and we are looking forward to a fruitful and profitable relationship,” Dlulane says.
Born in Emangquzu village in Flagstaff, Makabane says the new factory has resulted in Pondoland Maize increasing its production capacity to 250 tons per month from its three product ranges. Today alone, we will be sending 34 tons to the East London Boxer Stores distribution centre. He says interestingly enough, Pondoland Maize’s first big break with Boxer came when in 2014 a woman went to the local Flagstaff Boxer store and demanded from the manager that he sells them Umgubo Wesintu. When a second customer made the same demand he looked for Makabane’s contact details and advised him to approach the Boxer Head Office in order to be listed as a supplier which was successful within three months, Pondoland Maize was supplying all 17 of Boxer’s Transkei stores.
“Without this building, I can tell you we would not be able to supply the Boxer distribution centre in East London. The factory has unleashed our growth potential. ECDC has also approved R620,000 for disbursement to Pondoland Maize through the Eastern Cape Jobs Stimulus Fund and they expect that we will employ a total of 62 employees. They have disbursed a total of R260 000 so far.
We have already increased our number of employees to 25 permanent staff and 10 temporary employees. We have also received branding and marketing support from ECDC. This has been a major boost especially from an expenditure side especially where it relates to staff costs,” says the father of two.
Makabane, who left what is now called Absa Capital after successfully establishing a business process engineering division says he had to fork out R586 000 of his own cash to start the business in 2010 and a further R718 000 to refurbish the new structure. He even has held to sell his car and home to finance the business.
The University of South Africa (UNISA) MBA graduate who also holds an Honours degree in industrial engineering from the University of Pretoria says his initial interest in processing and milling started when he joined Siemens’ global supply chain division in Munich, Germany for two years consulting for Fast Moving Consumer Goods (FMCG) clients such as Unilever and Tiger Brands.
He left Siemens to join Absa in 2006 where he was asked to set up a business process engineering division. At the end of three years, he had appointed 25 industrial engineers running a matured industrial engineering division. It was in 2009 that he decided to start Pondoland Milling.
“Every time I would come back home and I would see these 25kg bags of maize meal and I realised that the Eastern Cape is the biggest consumer of the product yet we can’t produce our own food. I wanted us to start producing our own maize meal for the world not the world producing maize meal for us.
“I had to put in R586 000 of my Siemens pension to start the factory at my mother’s garden and we had to procure tractors, disc planters, boom sprayers and lease communal land for primary production for the milling plant. We had decided that the milling plant would receive maize for processing from local suppliers. We soon realised that they could not meet the processing capacity of the mill and we had to outsource suppliers in Kokstad, Free State and in the North-West to guarantee the supply of maize meal from JSE listed companies,” says Makabane.
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