Fast-moving consumer goods group Premier is fully behind its maize business even as rivals exit the grain on growing pressure in a fragmented and margin-squeezed industry.
The company, which is SA’s second-largest maize miller by volume, says it remains committed to the category, citing scale, operational efficiency and strong brands as competitive advantages.
The maize sector is under scrutiny following Tiger Brands’ recent decision to pull back. Tiger, which owned the Ace maize and King Korn sorghum brands, is divesting its maize interests as part of a broader portfolio reshuffle to focus on core categories. The move has raised concern over profitability in a segment marked by oversupply, high input costs and subdued consumer demand.
Premier, however, sees long-term value.
CEO Kobus Gertenbach said in an interview with Business Day despite the challenging environment in the past financial year, driven by elevated raw maize prices due to regional droughts, the group expected a more normalised performance this season as maize costs return to typical levels.
Maize is one of the country’s most important crops for food security and the broader economy. It serves dual roles as a staple food for millions of people and as a key input in livestock feed and industrial applications.
According to the SA Maize market research report by MarkNtel Advisors, the local maize market was valued at about $2.93bn (R51.9bn) in 2024 and is projected to reach $3.88bn by 2030, growing at a compound annual rate of 4.79% from 2025 to 2030. Key players include Tiger Brands, Premier, PepsiCo, Indlovu Milling and others.
The market is fragmented, with dozens of millers competing for a share of the pie, according to Premier. The group estimates that it accounts for nearly 12% of the national maize milling volume, while the owner of White Star, Pepsico’s Pioneer, holds 16%-18%. Many smaller and regional players, including legacy co-ops and family-owned businesses, continue to operate despite thin margins, with most said to be unprofitable.
Gertenbach believes this market structure creates an eventual opportunity for consolidation. While no specific targets are being pursued at present, the group is open to participating in future rationalisation of the sector if conditions make commercial sense.
Premier’s confidence was underpinned by its state-of-the-art Kroonstad maize mill, strong consumer brands like Iwisa, Super Sun, and Nyala, and a highly efficient production base, according to Gertenbach. These advantages, he said, allowed the group to operate at a lower cost while maintaining quality and brand loyalty, an edge in a sector where price competition was intense and consumers were highly sensitive to quality.
He said maintaining margins in the broader FMCG sector remained a structural challenge, particularly given the buying power of dominant retailers. However, Premier was betting that its scale, brand strength and efficiency in maize milling would continue to deliver results.
Premier posted a rise in annual earnings, despite tough economic conditions and volatile commodity prices.
The company said it achieved growth across its key divisions by keeping a firm grip on costs, improving efficiencies, and continuing to invest in modernising its operations.
The owner of brands such as Snowflake flour, Blue Ribbon bread, and Manhattan and Mister Sweet confectionery, said headline earnings per share for the year to end-March rose 28.6% to 943c.
Revenue grew 7% to R19.9bn buoyed by growth in the Millbake, groceries and international divisions. Operating profit margin increased by 80 basis points, with operating profit up 16.9%.
Premier’s Millbake division emerged as the main contributor to performance, supported by higher sales volumes and production upgrades.
Its groceries and international business also delivered growth, with strength in home and personal care products. Though disruptions were felt in some categories and markets, the group said these were managed effectively.
Premier maintained cash generation during the year and continued to pay down its debt. It declared a final dividend of 271c per share.
Premier expects lower maize prices and subdued wheat costs to support affordability and moderate revenue growth into the new financial year.
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