1.

0 KALONGA MILLING PLANT

1.1 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.
1.2 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 Zambia prisons
service trucks to the milling plant. In order to produce quality maize meal; the organization has
erected a facility for a maize mill and also has completed detailed financial, operational and
business startup planning.
2.0 BUSINESS DESCRIPTION
2.1 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

2.2 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

Business line

Mealie - Meal and Maize bran producers.

2.3 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.
2.3 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.

3.0 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

B/fast meal
Roller meal
Maize bran

FEEDBACK INFORMATION/CONTROL
(CONVERSION)
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.

3.1 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 current crop of staff at Kalonga Milling company are qualified and have relevant knowledge
on how to manage or run the milling plant. 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.

3.3 Production

According to the capacity of the plant which is 80 metric tons/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.
3.3.1 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.
3.3.2 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.

4.0 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.
5.0 THE INDUSTRY
5.1 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.
5.2 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.
5.3 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.

5.4 Market Characteristics

6

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.

6.0 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.
6.1Target 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.
6.2 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:
6.3 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.
6.4 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
8

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.

6.5 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.
6.6 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:6.7 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.

7.0 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.
8.0 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

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

like Shoprite and Spar.

10

KALONGA MILLING
PLANT
PROPOSED BUDGET FOR THE YEAR
2014
N
o.

DESCRIPTION/ITEM
PRODUCTION

PRICE/UNI
TY

QTY

K
RAW MATERIALS
1 (MAIZE)

181,000 by
50Kg

TOTAL
K
14,480,00
0

80

CUMM
TOTAL
K
14,480,00
0

PACKAGING
2 MATERIALS
(PRINTED BAGS)

300,000

900,000
15,380,00
0

3 SEWING MATERIALS
(COTTON)
LOGISTICS
1
TRUCK(HOSE)

500
4

20

100,000

500,000

15,480,00
0

2,000,000
17,480,00
0

INTERLINK TRAILERS

300,000

1,200,000
18,680,00
0

LIGHT TRUCKS

150,000

300,000
18,980,00
0

FORD
4 RANGER/NISSAN H.B

180,000

900,000
19,880,00
0

MINI BUS

120,000

120,000
20,000,00
0

FOLK LIFTERS

200,000

200,000
20,200,00
0

7 FUEL/LUBRICANTS

300,000

300,000
20,500,00
0

8 PALLETS

1000
11

350

350,000

20,850,00
0
MAINTENANCE/SERVI
9 CING

50,000
20,900,00
0

10 STAFF TRAINING

100,000
21,000,00
0

0FFICE
OPERATIONS/EQUIP
1 FURNITURE

15,000
21,015,00
0

2 COMPUTERS

10

4,000

40,000
21,055,00
0

3 PRINTERS

600

3000
21,058,00
0

GRAND TOTAL

Proposed

PROCUREMEN
T
MANAGER

STORES
CLERK

MILLING PLANT
MANAGER

organization Structure

MKETING
MANAGE
R

A/CTANT

MKETING

P/DCTION

H.R

MANAGE
R

MANAGER

ASS.

CLERKS

A/CTANT
ASS. H.R
MANAGE
R
MAINTENANC
E
MANAGER
12

HEAD

Q CONTRL

MILLER

MANAGER

SHIFT
MILLERS

elect

S/ man

Loaders

fitters

R/man

A/mec
h

S/visor

S/visor

S/visor

Process
control/maten
a

m/terial

Lab

Driver

Cleaners

13

inspec/tes
t