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Egypt and Blumberg Grain Launch World’s Largest Integrated Food Storage System

CovAfrica (PDF)

In the coming months, Egypt and the American company Blumberg Grain will create the world’s largest integrated food storage system for grain, constructing 93 sophisticated wheat storage facilities across Egypt that will process 3.7 million tons annually and store 750,000 tons of wheat.  The food storage system will launch this April, and is expected to save Egypt approximately $200 million annually, in addition to creating jobs within Egypt’s agricultural center.

Egypt is the world’s largest importer of wheat, as well as Africa’s largest wheat producer.  The country is intensely vulnerable to fluctuating international food prices, yet it commonly endures post-harvest grain losses of over 40% due to spoilage occurring in traditional, open-air “shouna” storage facilities.  Blumberg specializes in the development of cost-effective, efficient storage systems that aim to reduce post-harvest losses to 5% or less.  The new storage network will increase profitability and food security by storing, cleaning, and bagging grain products in climate-controlled, secure facilities throughout Egypt.

Following the political unrest that consumed Egypt in 2011, addressing Egypt’s food security concerns through infrastructure development proved especially challenging.  However, under the leadership of President Abdel Fattah Sisi and the Ministry of Supply and Internal Trade, infrastructure investment has become an increasing priority, and the government is open to investment partnerships.  Under Blumberg’s $28 million contract with the Egyptian government, the Egyptian army will build at least 93 wheat storage facilities using Blumberg technology; the contract provides for project expenditures of up to $56 million, and the modernization of up to 164 shounas in total.

In addition to revamping Egypt’s wheat storage system, Blumberg Grain also plans to build logistics centers for perishable produce across Egypt that will leverage cutting-edge technology to maximize the longevity of perishable produce.  Lastly, the company plans to build a $250 million manufacturing plant and export hub that will produce food security technology and equipment for the Middle East and North Africa (MENA) region.  While competition for this contract has yet to conclude, the company has stated that Egypt is well-positioned to gain the manufacturing plant and related processing and packing facilities.  The plant will create approximately 1,000 new jobs; KPMG estimates that the initiative will have a $1 billion economic impact during its first year, and a $7 billion impact over a five year period.

American companies have been comparatively hesitant to invest in Africa, yet Blumberg’s investment in Egypt’s food security represents an ambitious and noteworthy example of how investment-friendly African governments can yield exciting opportunities in the infrastructure sector.  Blumberg Grain estimates that across North Africa and the Middle East, there is a need for approximately 144,000 of its prefabricated food storage units.  In addition to the company’s activities in Egypt, Blumberg storage systems are currently established in Nigeria and the Democratic Republic of Congo.

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ZEITGEIST NOLA