20 Oct 2020

The future and continued survival of local sorghum milling companies is said to rest on government support and protection of the industry against retailers and foreign companies.

Mane Blocks Holdings managing director, Mr Modise Jeremiah and the company’s sales representative Mr Mogakolodi Ndane speak in consonance that government needs to enact an act with a view to protect Batswana sorghum meal manufacturers against retail shops and foreign companies.

In the act, there should be a provision that states categorically that sorghum milling and packaging be reserved for Batswana companies as is the case with packaging of rice in India, Mr Ndane posited in his arguments.

Litanies of issues are on the table. While the sales representative dwells on the challenges of taking the product to the consumers and actually securing market for Farmers Pride sorghum meal, the principal product, the managing director chronicles a genesis of the current problems dogging the industry.

A company that got off from backyard milling in 1998, then known as Tsetsebjwe Mills, to a now renowned licensed sorghum meal, general food supplies and other agricultural products player observes that retailers pack some slick tricks to undermine sales of his company’s brands.

Mr Jeremiah cites that retailers accumulate rebates from the manufacturers whilst in his business know-how his company should rather be the recipient of such rebates. 

In fact, the issue of manufacturers paying wholesalers rebates has been before Ministry of Investment, Trade and Industry for determination.

Mane Blocks Holdings believe that paying wholesalers rebates leads to stunted growth of Batswana sorghum milling companies.

In addition to paying rebates to wholesalers, the company management reveals that their relationship with wholesalers is not based on contracts, but listing.

In listing wholesalers allocate sorghum meal manufacturers a space in their warehouse on condition that you pay rebate and when the product has expired in the shelf companies collect at own expenses. 

Again, if the product has not been bought the expenses are borne by the supplier. The pain of it is that wholesalers would discontinue selling the products, Mr Jeremiah says.

“House brands are dangerous because there always exists a possibility of them taking away the manufacturing of the product from you upon realising that their brand is sustainable in the market. So, it is a risk on its own,” says Mr Jeremiah.

Mr Ndane reiterates Mr Jeremiah’s claims and adds that some shops play underhand tactics to ensure that their in-house brands get not only visibility, but also sell before others.

“How do you expect your brand to succeed against an in-house brand competing against you at their factory?” Mr Ndane asked rather rhetorically before pointing out that these are foreign companies competing with Batswana companies in the sorghum milling and packaging industry.

Mr Ndane also calls for regulation of sorghum prices to ensure that anti-competitive behaviour is nipped in the bud. 

He observes that in-house brands usually sell at lower price, a calculated move to stifle other brands. Though they call for government to support them in addition to protecting Batswana milling and packaging businesses, Mr Ndane finds that it takes longer for schools to place orders with them after winning tenders.

Like Mr Ndane, the managing director has a bone to pick with government institutions in the SPEDU region that continued to source sorghum meal outside the region, snubbing their efforts. 

However, the company has sought SPEDU intervention.

He says he would prefer doing business with government through councils and Botswana Agricultural Marketing Board than production of house brands for chain stores.

However, he was alive to the brutal business reality that, “…if we don’t do it then somebody else will. But you can’t be certain when in this kind of business because they can take their brand away anytime and give it to someone else.”

The company started as a backyard factory manufacturing sorghum and maize meals. Initially people were skeptical about purchasing the Farmers Pride sorghum meal as they were accustomed to the big brands of the time as Mmelegi and Sechaba.

However, the company management is adamant that their 20-year-old brand has the capacity to satisfy customers taste buds and has withstood all the battering weather to get this far.

There were a lot of FAP funded factories at the time and so were the sorghum and maize milling companies. 

He recalled there was a milling company at Mathathane, Mmadinare, two in Bobonong and Sefhophe which were direct competitors.

“It was difficult to break ground in sales because as a new entrant the market was skeptical about the product I offered” Mr Jeremiah, a former BAMB depot manager in Pandamatenga recollects how they went on direct sale of their products, dropping them off at shops and the struggles of getting their payments.

Realising that shops sent them from pillar to post when the time for payments arrived, a new strategy was hatched to establish wholesalers as the market. 

Though they do not pay better than shops, their payments are guaranteed.

The company’s break came after they stroke a deal with Pandamatenga farmers who supplied them with the right quality sorghum in 2002/03. 

This pushed the company to strive for big sales in order to pay the farmers. The payments to farmers cultivated confidence in him. ENDS