KALONGA MILLING PLANT

Executive summary
The economic success of a production firm depends upon their ability to identify the needs of its
customers, to quickly create the subsequent products and to produce them at a low cost.
Achieving these goals is not solely marketing, a design or a production problem, but rather a
management problem involving all of these functions.
Production Management involves the planning, organizing and controlling of the whole
production process. The interrelation of these activities and operations involved in producing the
goods and the services is called a production system.
Introduction
Kalonga Milling is a newly established company situated in central province of Zambia in kabwe
along mukobeko road whose aim is to cut the cost of mealie meal that is used to feed inmates on
behalf of the government. The plant will purchase its raw materials from the prisons farms and
also buy from the farmers. The maize will be transported from the farms by the zps trucks to the
milling plant. In order to produce quality maize meal; Zambia prisons service has erected a
facility for a maize mill and also has completed detailed financial, operational and business
startup planning.

BUSINESS DESCRIPTION
MISSION STATEMENT
To effectively and efficiently provide and maintain humane custodial and correctional services
to inmates and to increase industrial and agricultural production in order to contribute to the
wellbeing and reform of inmates and maintenance of internal security
Business description
BUSINESS NAME

: KALONGA MILLING COMPANY

LOCATION

: ALONG MUKOBEKO ROAD

P.O BOX

: 80926, KABWE.

PHONE No.

: 222121 4

FAX

: 223916

TELEFAX

: 81428

Email

: registry@zambiaprison.gov.zm

BANKERS

BUSINESS LINE

: Mealie - Meal Distributors and Stock Feeds Suppliers

1.0.2 Business Document

The Zambia Prison Service department was established under the Act of
Parliament (Cap 97 of the laws of Zambia) with a purpose of reforming
and rehabilitating, providing and maintaining humane custodial services to
the inmates lodged therein and increase industrial and agricultural
production as a way maintaining internal security.

Objectives and goals

To help reduce the cost of feeding inmates

To improve industrial and agricultural activities in the service
Job creation
Help stabilize mealie meal prices in the long run.

PLAN OF OPERATIONS
The figure below explains the systems aspects of milling production or operations function of the
organization:
OUTPUTS
INPUTS

MEN
MACHINES
MATERIALS
MONEY
METHODS
MANAGEMENT
TRANSFORMATIO
N

FEEDBACK INFORMATION/CONTROL
(CONVERSION)

GOODS
PRODUCED
OR
SERVICES
RENDERED

PROCESS

The organization will receive several inputs as indicated on the left hand side of the above fig.
and converts them into final products which in this case is shown on the right side of the fig.
using available facilities.in the process of conversion, definitely, there will be some deviations in
the products attributes like quality, size and number of units produced.
Just to cope up with the pre-determined plans and policies, it is highly essential to communicate
these deviations to the input stage in the form of feedback for making necessary corrections.
A sample list of corrections is presented below:

Tight quality check on the incoming materials e.g. maize.

Adjustment of machine settings
Change of tools e.g. rollers, sieves etc.
Change in production plans like increase or decrease in production volumes depending
on the laws of supply and demand.

MANAGEMENT

Management is one of those words which we all use and which we think we understand until
we are asked exactly what it means.
At its most general, management can be viewed as a process which enables organizations to
achieve their objectives. The inclusion of the word process tells us that something is going
on. Thus, the question, what is management? management is defined us the
accomplishment of desired objectives by establishing an environment favorable to
performance by people operating in organized groups.
It is a truism to claim that people are organizational resources because they are the key in an
industry without which the organization would be unable to deliver any meaningful product.
The management is adequately qualified and has sufficient knowledge of
running a business such as Kalonga Milling Company. In addition, the current
crop of staff at Kalonga Milling Company has relevant knowledge on how to
manage or run the business. This, however, can be achieved if the workforce
is motivated by allowing it perform or operate independently.
The companys management will develop a policy of meeting every after a
specified period of time to plan and review the activities related to the
smooth running of the establishment.
3.2 Day- to-day Operations
In our day-to-day operations we will need the following personnels:

The managing director who will be in charge of seeing the day to day running of the
company.
miller
Production manager
The purchasing officer who is in charge of buying the required materials for the milling
plant
The marketing and sales officer in charge of marketing the products on sale and seeing to
it that sales are conducted in an orderly manner.
The finance officer who is in charge of the funds for the business and is accountable for
all cash flow statements.
The human resource officer who is in charge of the human capital in the company.
Casual workers
Office orderlies who help out in the business.

PRODUCTION
According to the capacity of the plant which is 80 metric tonnes/day (3200 by 25kgs bags), we
are able to produce about 135 * 25kgs bags of mealie meal (3200/24) per hour.
Hence, production per day is 135bags/hour*8 hours=1080*25kgs bags.
CONSUMPTION RATE FOR INMATES
All things being equal, if we are to put the number of inmates at 18000 country wide, then
consumption per day is 18000*0.450=8100kgs/25kgs giving us 324 by 25kgs bags of mealie
meal.
Therefore, consumption per month is equal to 324*30 days=9,720 by 25kgs bags.
Consumption per quarter: 9720*3 months=29,160 bags.
For the year we need about 116,640*25 kgs bags of m/meal.
Total production days/quarter: 29160*25kgs per quarter/1080*25kgs per day= 27 days
This means, we have 4 months of production for the inmates and 8 months of production for the
market in a year.
MAIZE NEEDED FOR THE PLANT TO RUN THE WHOLE YEAR
1000*50kgs bags of maize is required to produce about 1600 *25kgs of mealie meal.
Hence, in a quarter we need about 18225*50kgs bags of maize. The total number of bags of
maize required for the inmates in a year is 72,900 *50kgs bags
For the public, we need 675 by 50kgs bags *20 days*8hrs=108,000 by 50kgs bags of maize
Total bags needed: 108,000 +72900=180,900 approx. =181,000 *50kgs bags of maize.

3.3 Expected Growth and Expansion

Within the first year of operations, our concentration is on one product line which is mealie meal
but in future we intend to buy another maize mill machine which will enable us to increase on
our product lines by adding lines for stock feed, sample meal and wheat flour.
THE INDUSTRY
i. Sector Description
Zambian Milling Sector History - Since maize meal prices were decontrolled during the early
1990s the milling industry has enjoyed a much more competitive market structure with smaller
milling operations gaining ground against prior monopolies. With the eruption of the well known
political crisis in Zimbabwe many commercial farmers who lost their farms where offered land
in Zambia. Two years after the settlement of the initial groups of farmers, Zambia experienced its
first year of maize surplus.
ii. Competition
There are two categories of mills in Zambia: small scale mills that only serve their immediate
communities and large scale mills that sell their product throughout Zambia. The following
millings are considered the only competitors in central region:
National Milling Company (NMC) is the largest milling company in Zambia.
Chimsoro Milling, FVG Milling, Simba Milling.
These large scale milling companies are able to spend significantly on marketing and enjoy
customer brand recognition. They are located in areas of established infrastructure and have
strong relationships with maize producers, grain traders and outlets.
Large scale milling companies do however struggle to serve remote locations due to
transportation costs.

Competitive Advantage
Kalonga milling intends to take advantage of being a government entity by bidding to handle all
government institutions that are in need of mealie meal. These institutions could be the Zambia

army, Zambia air-force, Zambia National Service, Zambia police, government schools, hospitals
etc.
iii. Market Characteristics
Zambia in general - Maize meal is the staple diet of Southern and Eastern Africa. An average
adult in Zambia will consume around 120kg of maize meal per year (Chapoto & Jayne, 2006.)
Most Zambians, will eat maize meal porridge for breakfast lunch and dinner with various side
dishes. In rural parts of Zambia, such that surrounds kabwe, a bag of maize meal means food
security for an average family for two weeks and is their first priority when receiving a salary.

4.0 MARKETING AND MARKET PENETRATION

Marketing is a management process responsible for identifying, anticipating
and satisfying customers requirements profitably. Marketing on the other
hand is a social and managerial process by which individuals and groups
obtain what they need and want through creating, offering and freely
exchange products and services of value with others.
1.5 target market
This is the act of selecting one or more market segments to enter. This,
however, involves evaluating each different segment created. Market
segmentation can either be by region, sex and age to mention but the few.
To achieve this as Kalonga Milling Company we intend to target central
region as our market segment. Central region at the same time will be used
as a pilot project and once our goods or products have been appreciated or
accepted by our customers out there, then we will be able to extend to other
regions such as Lusaka and Copperbelt regions respectively. If we are to be
effective in this area we shall create sales outlets in all the districts of central
region namely Kabwe, Chibombo, Kapiri Mposhi, Mkushi, Mumbwa and
Serenje.
In terms of management of these outlets, we shall identify officers within the
system who have done certificates and diplomas in either marketing or

business management courses to work as sales personnel in these

respective sales depots or outlets.
1.2 How Do We Create Demand
Marketing techniques are the tools used by the marketing department. The
marketing department will set out to identify the most appropriate
techniques to employ in order to make profits. These marketing techniques
can be used as factors that would create demand for the companys
products. As Kalonga milling company there is need to create demand for our
products through the use of marketing techniques and these include:
1.2.1 Advertisement
Advertising is an important marketing tool which is used to make products
and services more desirable and hence increase sales and profits. Any form
of publicity is advertising. There are two main forms of advertising although
in practice the two are inter-related. The informational aspect of advertising
involves providing information about products, services, or about important
issues. For example, the government provides information about the dangers
of cigarette smoking, which is an example of informative advertising.
Persuasive advertising goes further and uses a persuasive message, for
example by:

showing a famous personality (e.g. Christopher Katongo) using the

product

comparing the advantages of one product with another

If we are to penetrate the market as a company we need to invest in

advertisement. Its through advertisement that we can create awareness for
our products. To achieve this, we recommend that the department of
marketing be assigned with a vehicle to carry out daily activities of

promoting the products. As we move around we shall employ both

informational and persuasive advertising aspects so as to coax as many
clients as possible.
1.2.2 Promotion
Advertising is just one way of promoting a product. Promotion is the business
of communicating with customers. There are a number of ways of promoting
products and services, including:

in-store promotion e.g. giving away free samples in a supermarket

publicity in the media, competitions, and sponsorship

PR - public relations activities - i.e. presenting the public image of a

company to a wide audience

presenting products in attractive packaging

Creating an attractive brand for a product.

In view of the above we recommend that we run promotions for our products
by way of coming up with a competition, say if one buys 5 by 25kg bags of
breakfast meal such a person shall be entitled to a free 10kg bag of
breakfast.

1.2.4 Pricing
Price stands for the amount of money that a customer has to pay for a
product, this may also include the provision of price list, discounts,
allowances, payment periods and credit terms. In achieving this, as Kalonga
Milling we need to be flexible as we set prices for our products. What we

should bear in our minds as Kalonga Milling Company is that we are a new
player or entrant into the market. We therefore, recommend the market
penetration pricing policy. This policy is a policy of low prices when the
product is first being launched to the market so as to gain sufficient
penetration into the market.

1.3 How Do We Service Demand

There are a number of factors that forms the basis of servicing demand.
When you create demand for the particular product there is need to service
that demand, as such Kalonga Milling Companys products are not an
exceptional.
The following are the factors of servicing demand:1.3.1 Effective Warehousing Management
It is important therefore, that a separate storage shed is built specifically for
the finished goods or products. This will enhance effective storage of the
finished product and easy accountability of the same goods. Unlike the idea
of having storage shed to cater for both maize stocks which are raw
materials and mealie - meal which are finished goods. The separate storage
shed should have a stores officer who will be responsible for receiving goods
from the production centre and issue out to various places of need.
1.3.2 Transportation
Transport should be made available so as to easy the movements of raw
materials to the production center and the finished goods from the
production center to the sales outlets.
SWOT ANALYSIS

It is a decision making model which help managers to analyze the strengths, weaknesses,
opportunities and threats of a business or given situation. Based on the analysis managers are
able to make sound decisions. Below is the analysis for Kalonga Milling Plant.

SWOT ANALYSIS
STRENGTH
Government support
Excess capacity than internal market

WEAKNESSES
New in the Milling Industry.
Weaker brand name.

( Inmates)

Ability to attract qualified and

experienced manpower.
Able to increase product lines.
OPPORTUNITIES
Comparative advantage to supply

government institutions.
Potential to penetrate big supermarkets
like Shoprite and Spar.

THREATS
Existing players in the Milling Industry
Political interference sometimes could
be negative to the business.