Blumberg Grain of the US states that 40% of Egypt’s grain harvest is lost or wasted because of poor storage. That’s about $US1-2 billion a year. They might know something but are really just a Miami based venture capital firm with a strong ‘sales’ culture. They have been in grain storage for a few years. Their claims of the extent of waste are self serving because they offer a ‘solution’ to the waste.
The claimed waste is very odd because grain is heavily regulated by the government, has been for generations, the government controls and runs all storage and 10’s of thousands of bureaucrats make this work ‘perfectly’ at a high cost. Whether the loss is theft, mice, diseases, exposure to the elements or poor storage conditions isn’t clear but it would be naive to assume that any detailed analysis had been done to define the problem and come up with options.
Sounds like the people responsible for the waste are the bureaucrats/managers but holding people to account in Egypt is not the national approach – better to go for a big new, expensive initiative – particularly if it offers ‘opportunities’.
Blumberg has got a $US150-300 million contract to built a lot of silos to reduce waste. In Egypt they were given an option. Go home or get the contract on condition you employ a local with no experience. Their Egyptian Partner is the Army Engineering Authority. Wonder what their skills are and their profit margin. Will the 200,000 free army conscripts get an ‘opportunity’ to work on this job.
Its probably the 10 thousandth time an overseas company has been forced to take a partially qualified or unqualified local partner/military partner. Creaming off a government contract is a phrase which comes to mind.
This is one of their Egyptian silos – it looks like a low tech/idiot designed/small/basic tin storage shed to me and unlike any grain storage silo I’ve ever seen:
I assume this is an official opening and the Minister/General and his entourage are both driving Chrysler/Fiat Jeep 4 wheel drives 'assembled' in Egypt (but with no exports from Egypt because of quality problems and I thought any idiot country could assemble a car) by the same Supreme Militarios that built the tin shed. Correct me if I'm wrong but doesn't the main entrance to the shed create problems for mass deliveries of wheat in bags using either tractor trailers (expelling huge amounts of putrid exhaust into a closed shed) or trucks. What about donkey carts - or more particularly the rear end of the donkey? The manicured but not well laid down grass at the front of the shed and the 'sculptural' foundation stone shows you the skills and priorities we know well. The rough edges and irregular shape of the concrete driveway reflect concreting skills in Egypt generally.
Suitable for wheat in bags but what country on earth still stores wheat that way – its so labor intensive. The skills for building tin sheds seem to hardly justify a multinational let alone hundreds of millions. Most places go for scale – particularly large facilities connected to highways/rail lines/sea ports – but maybe not Egypt.
Scale and bulk handling, no bags, hugely reduces the costs of double handling – but what would I know. You can deliver in bags which are then tipped into a pit with an auger that transports it to the bulk silo.
How Blumberg got the contract I’ll leave to your imagination but it didn’t involve a tender. Whether the contract involves a UN grant I don’t know but am suspicious. New legislation passed by the current Government suspending the law requiring competitive tenders – in the case of military matters or national priorities. As if the opportunities for graft and incompetence weren’t already ample.
The Blumberg kid managing the contract looks about 25 years and unlikely to be either an engineer of farming graduate:
Blumberg Grain publishes no information on its profit or turnover. Their only contracts appear to be in Algeria and Egypt so they are hardly market leaders. Bentall, Meridian and Sioux are the world leaders in grain storage.
Here is an existing Egyptian silo which looks very different to the Blumberg tin shed but is consistent with what the entire world does:
Here is a German Seppeler silo currently being built in Egypt – without military assistance its conventional:
The Indians know a bit about grain – here is one of their storage systems again conventional:
One reason for scale and for being sensible, but not Egyptian, about cost is that these expensive facilities might be empty or partially empty for a deal of the year or in a bad harvest so you don't want to spend a heap on something you only partially use.
The Military Production Ministry will also supply and provide maintenance for electronic equipment, surveillance, and machinery for the silos – something they have no skills or experience in. Electronic surveillance seems a bit excessive and expensive for such small facilities – wouldn’t a properly locked door be better or maybe government staff that aren’t thieves/incompetent.
You wonder how much higher these contract costs are than if professionals got the job on their terms or if there was competitive tendering.
https://enterprise.press/stories/2017/1 ... a-project/
I reckon that the suburban steel shed storage system is near unique in the world and a clear break with previous Egyptian systems (which has a lot of incompetence with a lot of wheat out in the open with a tarp over the top which along with thieving staff was a reason for the ‘losses’ – a further example of government incompetence). Why would you do this with a company that barely knows what it is doing and a local partner that knows nothing.
Agriculture in Egypt is a blighted industry that owes most of its problems to government beginning with Nasser. This project deals with no fundamental problems and whilst the Government spends $US60 billion on a new capital it has no plans to reform an industry that can’t feed Egypt but employs 10-15 million.
By the Bye, Blumberg is a private Jewish owned firm controlled by the former chief executive of Israel’s fourth largest bank. A donor to the National Library of Israel with a workforce mainly Jewish, and with a branch of Blumberg in Israel. Time for Egyptian farmers to burn down the new silos/sheds and for Generals to wash themselves thoroughly. The wheat stored there will be contaminated and cannot be used for Egyptian bread.
At the end of the day Egypt faces serious problems with a farming industry that is fragmented into millions of small farms when the trend of history for more than 100 years has been into consolidation, larger farms, much less labor, more science, technology and machines and capital inputs. One day they will have to bite the bullet and quadruple the size of farms and deal with the millions displaced. Meanwhile they will pursue hundreds of these uneconomic sheds to deal with farmers that can't afford trucks to make the transition to bulk handling in large volumes to a small number of large modern silos at a distance.
