Tag Archives: IAOM MEA

Flour Millers Gather In Ethiopia

For the first time, Addis Ababa, Ethiopia, Africa’s unofficial capital, hosted the International Association of Operative Millers (IAOM) Mideast and Africa (MEA) Conference and Expo, Oct. 24-27, at the Millennium Hall. The 27th rendition of the event, perhaps the weightiest gathering of the global wheat and milling industry annually, drew more than 500 participants from 46 countries for exchanges of market and technical information both in educational forums and on the trade show floor, which featured 92 exhibitors from 22 countries.

Representatives of many of the Ethiopian Millers Association’s 350 member companies were able to enjoy unprecedented contacts with leading global technical experts, traders and equipment suppliers. The country’s milling sector has been steadily industrializing to cope with 20 million tonnes of annual cereals production. A record 2 million tonnes of wheat imports came into the country in 2016 to compensate for the drop in domestic cereals production due to the worst drought in decades.

Africa Panel

The milling industry’s challenge of feeding economically growing African countries was the theme of the opening panel discussion.

“Africa is number two in the rate of wheat consumption growth after Southeast Asia,” said Dan Basse of AgResource Company. “Sub-Saharan African demand is increasing the most. Average caloric intake of rest of the world is leveling off, but Africa is still increasing.”

He added, “The world on average needs 1.8% more food per year but is producing 2.8% more.”

Panel moderator Martin Schlauri, managing director of Bühler’s African Milling School in Nairobi, pointed out that 70% of the grain used by East Africa’s industrial millers is imported, and milling to feed the region’s 330 million people accounts for nearly one-third of electricity consumption.

Brad Allen of Ardent Mills speaks at the IAOM MEA Conference.

Abubakar Bakhresa, executive director of Said Salim Bakhresa & Co. Ltd., the region’s dominant milling group, commented on the need to upgrade skills. “We used to send millers to Mysore, India or Europe for training but now can we send them to Nairobi,” Bakhresa said. “We are sending millers from all our mills.”

The key to efficiency is standardization of operations, observed Nick Hutchinson, group managing director of Unga Holding.

“We must introduce ways to measure efficiency,” he said. “Another challenge is maintenance. We need competent people.”

Local grain supply also was discussed. Esubalew Kefale of Ethiopian biscuit producer Ahadukes Food Products observed that in Ethiopia wheat is not segregated well in the marketplace.

“It is difficult to maintain quality standards,” Kefale said. “Biscuits need two types of grain quality. The flour millers’ association is providing training but the problem is raw material.”

Government Intervention

For the first time IAOM MEA directly addressed the politically sensitive and complex topic of government intervention in grain markets in the Middle East and North Africa. The panel included industry leaders from four countries.

Mohamed Reza Mortazavi, director of the Iranian Federation of Food Industries, said that in 2012 there was a brief period of market liberalization allowing millers to buy 80% of the wheat crop, but that since 2013, an election year, Iran’s government has been buying 85% of the wheat crop at above market prices, including 11.5 million tonnes of wheat from this year’s bumper crop. Farmers received $375 per tonne while government allocates the wheat at just over half that price to millers in order to keep bread and pasta prices low. Including 5 million tonnes of carryover, government stocks are at 16.5 million tonnes. But the country only needs 8 million tonnes for subsidized bread and 2 million tonnes for pasta.

From left, Merzad Jamshidi, KFF Mills; Essa Al Ghurair, Al Ghurair Foods; and Dr. Mebrahtu Meles, Ethiopia’s state minister for industry.

Essa Al Ghurair, chairman of Al Ghurair Resources, cited Egypt’s introduction of debit cards for social welfare recipients to replace heavily subsidized bread. Beneficiaries are happy to be able to buy higher quality baked goods or cooking oil. The innovation may reduce wheat consumption and wastage in the wheat import-dependent country.

Gunhan Ulusoy, chairman of the Turkish Federation of Flour Industrialists, remarked that cereals purchases and sales by the Turkish Grain Board vary according to crops and markets but are limited in most years to 2 million to 3 million tonnes, depending on the need to support farmgate prices. Turkey’s position as the world’s number one wheat flour exporter has mostly to do with logistical convenience of importing low-cost Russian wheat and a highly-efficient milling sector. Half of Turkey’s 3 million tonnes of flour exports are going to strife-torn Iraq and Syria, he said.

In Lebanon, wheat imports and wheat flour sales are mostly on a free market basis, said Patricia Bakalian, CEO of Bakalian Flour Mills. However, the government has intervened in the past to subsidize flour prices when world wheat prices have spiked.

Overabundance Of Wheat

“The world is awash in wheat,” said Basse, who moderated the market outlook sessions. “Prices are at a 10-year low. The Black Sea continues dramatic rises in production.”

Dan Basse of AgResource Company speaks during a panel discussion at the IAOM MEA Conference in Addis Ababa, Ethiopia. Photo courtesy of IAOM MEA.

Russia, with a 70-millon-tonne wheat crop, has displaced Canada and the U.S. as the top wheat supplier to the world. Global wheat prices are now set in the Black Sea, not the U.S. Gulf.

The U.S. had “practically perfect planting and harvesting conditions” said Ian Flag, regional director of U.S. Wheat Associates. “U.S. supply is 17% above the 10-year average.” HRW carryover stocks of 29.5 million tonnes are nearly a record.

Low world prices mean that Australian wheat growers will store their crop longer than usual, commented Nick Poutney, regional manager for GrainCorp.

“They will not plant as much next season,” he said. “There is a large increase in take-out of pulses in rotation. Crop size is getting large enough so bulk vessels shipments instead of container loads will become feasible.”

In contrast to other leading export origins, both France and the Baltic region saw smaller crops.

“There is a big lack of wheat in France,” Jean-Pierre Langlois-Berthelot of France Export Cereales informed the gathering. “Production of 28.2 million tonnes of milling wheat is 24% below the average. Usually the country exports more than 50% of its crop. There is a lot less wheat to export this year than in other countries.

“In France, everything went wrong in May. The cycle of vegetation of wheat was totally disrupted by rain. Average yield was 7.5 tonnes. Low radiation meant unusually low test weights. The average is 45 grams per 1,000 kernels but this year’s crop is only 37 grams. High ash content is unusual as well.”

Langlois-Berthelot also predicted that due to the low French yields combined with depressed prices from the global glut, half of French wheat growers could go bankrupt without a French government or E.U. rescue.

Indrek Aigro of Copenhagen Merchants, Denmark, noted that a cold February resulted in winter kill in Baltics. “There is 5 million tonnes smaller production so we will have 5 million fewer tonnes of exports,” he said. “There is a loss of 7 million tonnes of quality milling wheat. There is only 9 million tonnes of milling quality wheat compared to 14.5 million tonnes last year, so 5.5 million tonnes less.”

Next Year’s Event In Dubai

In his welcome speech, IAOM regional director Ali Habaj explained a revamping of the IAOM MEA website to provide a platform for new and used machinery and employment opportunities in the sector. The postings will be in English, Arabic and Persian.

Closing the conference, Habaj announced a return to Dubai, United Arab Emirates as the site of the 28th IAOM MEA Conference and Expo in in the fall of 2017.

The Glencore booth was busy with visitors during the trade show.

Merzad Jamshidi, KFF Mills, asks a question as David McKee, grain industry consultant, looks on.

Danilo Carloni, OMAS, gives a presentation on the Leonardo Rollermill.

Dr. Lutz Popper, Mühlenchemie GmbH & Co. KG, gives a talk on Nutritional and Technical Improvement of Flour for Bread and Pasta.

David Balaguer, Fundiciones Balaguer, gives a presentation on the company’s new Optical Fluting Test.

From left: Martin Schlauri, African Milling School, xxxxx, Ethiopian Millers Association; Ali Habaj, Atyab Investments & Oman Flour Mills Co.; Dr. Mebrahtu Meles, Ethiopia’s state minister of industry; Andreas Flueckiger, Bühler AG; Essa Al Ghurair, Essa Al Ghurair Investment LLC; Anas Shaar, National Flour Mills; and Adama Ekberg, Nations Unies.

Ethiopia’s Italian connection

Italy’s close past and current economic ties with Ethiopia, particularly in the agricultural and food sector, were highlighted at “Wheat, Flour, And…”, a high profile sideline event held concurrently with the IAOM MEA Conference in Addis Ababa and at Ocrim’s world headquarters in Cremona, Italy.

Ocrim SpA, the Italian embassy, and Ethiopian Millers Association co-sponsored a gathering that drew more than 120 participants and included a live video conference with a panel of Italian food entrepreneurs in Cremona. Matteo Antolini, Ocrim vice-president, noted that his company has been in Ethiopia for 35 years, having supplied many of the first industrial wheat mills in the country.

Ocrim CEO Alberto Antolini addresses attendees at the Cremona, Italy portion of Ocrim’s “Wheat, Flour and...” video conference event.

Given the presence of 12 Italian equipment companies exhibiting at the IAOM, the transfer of milling and pasta production technology was one of the main themes.

Ocrim Vice-President Sergio Antolini speaks to attendees at the Addis Abbaba, Ethiopia portion. Photos courtesy of Ocrim.

Pasta has been popular among Ethiopia’s urban consumers since its introduction after the first contacts with Italy 120 years ago. In the last decade an increasing number of food enterprises, particularly milling companies, have installed new pasta production lines, but wheat quality and availability is a constraint.

In the past, semolina millers and pasta producers could import their own durum in containers, but foreign exchange controls and the government monopoly on commercial wheat imports prevent this option now.

Tiberio Chiaria of the Italian Agency for International Cooperation (AICS) observed, “Ethiopia is importing 40,000 tonnes of pasta per year, so there is a demand for quality.”

Ethiopia is now growing an additional 50,000 tonnes of durum wheat per year, thanks in part to support from AICS, which imported 40 tonnes of improved durum seed from Italy selected for planting in Ethiopia’s Bale region. It has dry growing conditions similar to Italy, Europe’s leading durum producer with a forecast of nearly 5 million tonnes forecast in 2016-17.

Ethiopia’s state minister for industry, Mebrathu Meles, outlined Ethiopia’s ambitious goal to attract foreign direct investment and become “the leading country for light manufacturing in Africa.”

He noted that Ethiopia offers a wide range of agro-ecological zones where almost anything can be grown, and so is seeking to attract agro-processing investment. Noting that Italy is a successful model of development of light industry and high value agricultural products, he asserted, “We have a long-term relationship with Italy. We should maximize it.”

AICS general manager Ginevra Letizia said Italy has committed to invest $180 million over five years in agro-industrial support, particularly the building of infrastructure.

Meles elaborated on the government’s own support for infrastructure, outlining plans to build four major agro-industrial parks around the country to house food processing companies. The first such park is under construction.

AICS senior economist in Ethiopia, Andrea Ghione, validated the concept.

“Industrial parks are clusters for processors and a pull for producers,” Ghione said. “They can provide a steady demand for certain products with certain quality. There are opportunities for agro-processors.”

Ghione further observed that the agro-industrial parks will provide some economies of scale in warehousing and require aggregators to deliver standardized quality raw materials like grains in 16.5-tonne trucks as the minimum marketing unit.

Ocrim presented Captain of the Year awards to food manufacturers Bira Food Complex and K.O.J.J. Manufacturing, as well as the Oromia Agricultural Research Institute for their contributions to development of the cereals value chain in Ethiopia.

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IAOM MEA celebrates 25th anniversary

Middle East and Africa District attracts more than 600 delegates from 45 countries to its annual conference  in Cape Town, South Africa.

The International Association of Operative Millers’ Mideast and Africa Conference (IAOM MEA) returned to Cape Town, South Africa to celebrate its 25th year Dec. 3-6, 2014. Over 600 delegates, exhibitors, and speakers came together from 45 countries during the three days to renew old ties, establish new relationships and to exchange the latest  information on technical developments in milling as well as data and trends in wheat markets.

South Africa’s National Chamber of Milling (NCM) hosted the event for the second time in just over four years. The first IAOM MEA in South Africa took place in 2010 shortly after the first World Cup in that country.

In his welcoming speech, NCM Chairman Peter Cook made particular note of the progress of flour fortification in Africa with 19 countries now mandating the public health intervention compared to just two countries, South Africa and Nigeria, 10 years ago.

25th Anniversary

The Middle East and Africa region continues to account for nearly half of the world’s trade in wheat at 73 million tonnes in 2013-14, according to the International Grains Council, and much of the global increase in milling capacity. On this basis, the IAOM MEA has not only proved sustainable but has grown substantially over the last quarter century.

Melinda Farris, IAOM executive director, presented plaques of recognition to four long-time members of the IAOM MEA Leadership Council who have led the transformation of their annual conference from a modest gathering of 25 or so millers and grain industry representatives 25 years ago in Cairo into one of the global wheat industry’s premier events. The four included District Director Ali Habaj of Oman Flour Mills; District Chairman Merzad Jamshidi; Essa Al Ghurair, Chairman of Al Ghurair Resources LLC; and Martin Schlauri of Bühler AG, Switzerland.

Jamshidi, who has played a vital role in the important participation of Iranian millers in the district over the years, identified as a major accomplishment “just the fact we have been able to consistently keep the events attractive for both the millers and suppliers. After all, 25 years is a quarter of a century. As for the future, we are trying to get more of the mills’ key personnel coming to the show with custom-made papers to serve their needs.”

Furthermore, the  event will “go to countries where traveling would be a bit easier and could act as a hub.”

The event’s formula for success includes its benefit to and support from major wheat exporters as expressed by Sean Cowman, regional manager – Middle East and Africa of CBH Group, a cooperative owned by 4,200 Western Australian grain growers. He noted that the conference “is a unique and invaluable link to industry stakeholders.” He said it provides the connection of “Australian grain from our growers to the end users in the Middle East and Africa. We enjoy seeing customers and industry colleagues at this unique and well organized event.”

Bühler’s Martin Schlauri offered his own vision for the future, saying the event “will remain a fixed date in the agenda of the milling executive. Building up sub-regions in MEA will bring the IAOM values and contribution even closer to the markets. This would allow to further focus on topics of specific regional interest, such as processing of maize or other grains.”

Schlauri predicts that as has happened in developed countries already, in the Middle East and Africa the grain processing industry will be challenged by changing consumer expectations and trends, such as food safety or GMO issues in the raw material. “These topics and more shall be on the agenda of the future IAOM MEA conferences,” he said.

Food Security

U.S. Wheat Associates (USW) President Alan Tracy used his opening day address before key industry players from the world’s major wheat importing region to announce the launch of a major new food security initiative based on a proposed full liberalization of the world’s wheat trade. Such a measure would be the most effective way to provide “genuine food security to the world’s wheat importers.”

He pointed out that as the most important global food grain, wheat “provides 20% of the calories consumed every day on earth and 20% of the protein for the poorest half of human population. Demand is growing, but not every country that consumes wheat can produce wheat.”

The USW concept would be based on government-to-government sectoral agreements under the auspices of the World Trade Organization. “In exchange for eliminating tariffs, licenses and other trade barriers, the world’s wheat buyers would have guaranteed access to exportable wheat supplies even when world supplies are down.”

Trading Session

The emergence of the Black Sea and Baltic Sea regions as origins for wheat to the region has been one of the biggest shifts in Middle East and Africa grain trade in the last quarter century. Indrek Aigro of Copenhagen Merchants, Denmark, pointed out that the eight countries of the Baltic Sea region have seen wheat exports rise from 9 million tonnes four years ago to an estimated 17 million tonnes in the current marketing year, accounting for much of the near doubling in net European Union wheat exports to 40 million tonnes in recent years.

Total Baltic Sea region wheat harvest will be 52 million tonnes, exceeding the previous record by 15%. Saudi Arabia and Iran have become the main destination of Germany and Poland’s milling wheat. The two countries now have exportable surpluses of about 11 million tonnes.

“Germany’s wheat is reaching many new markets because of the surplus,” said Aigro. That amount will be 7.5 million to 8 million tonnes. Eleven years ago, the three Baltic countries of Estonia, Latvia and Lithuania had no exportable surpluses, but now they are shipping out two-thirds of their production.

Andrew Vorland of Glencore Grain BV, Netherlands, surveyed the supply situation from the Black Sea, noting that the 35 million tonnes of wheat exports from Russia, Ukraine and Kazakhstan this year will constitute 24% of world wheat exports.

“Black Sea wheat is moving to 100 countries these days,” he stated. Russia’s 6.2 million tonnes of wheat exports to Egypt and 3.6 million tonnes sent to Turkey account for 60% and 86%, respectively, of the wheat imports of the two countries.

Even South Africa, once dependent on the U.S. and Argentina, has become a major outlet for Russian wheat.

Jean-Pierre Langlois-Berthelot of France Export Cereales reminded the audience in his presentation that nearly 100% of his country’s wheat exports go to North African and West African countries, with Algeria, Morocco and Tunisia as the largest markets but growing volumes heading to the francophone countries of West Africa.

After Asia, the Middle East and Africa are the most important destinations for wheat exports from Australia, taking 40% of nearly 20 million tonnes in exports in the 2013-14 crop year with the trend lower this year. Nick Poutney, regional manager for Graincorp, Australia’s largest wheat exporter, explained that among the seven ports operated in the east of Australia by Graincorp, “each port zone has a specific supply and demand dynamic and quality parameters.” But this year all test weights are quite strong, he said.

Dan Basse, president of AgResource, Chicago, Illinois, U.S., in addition to moderating the trading session, provided his own animated and insightful prognostication for global grain markets in the coming years with statements such as: “We think the super cycle in agricultural commodities is kind of dead,” and that with the price of protein going up, “this is the year of species, not of grain.”

Exhibition

Ninety exhibitors from five continents and 20 countries were present at the trade show held jointly with the conference at the Cape Town International Convention Center. Turkey’s contingent of 23 exhibitors was the largest. Italy followed with 11 companies present.

A handful of firms have been present at nearly every IAOM. Ihsan Mustafa Aybakar commented, “As Aybakar, it is our 24th conference. It is not about business alone anymore. We all look forward to catch up with members of the industry. It is the biggest sectoral networking opportunity for the region. You get to meet mill owners, grain traders, equipment and service suppliers. We will be attending in the future.”

The largest groups of exhibitors were mill manufacturers, steel silo companies, and suppliers of flour additives such as enzymes and vitamin and mineral premixes for fortification.

Management Forum and Technical Sessions

During the first day’s session a series of world-class speakers challenged conventional management thinking and encouraged listeners to doubt their standard perceptions, explore the unknown and push for innovation in their approach to business.

The Technical & What’s New Session, taking up the entire second full day, provided a platform for 16 speakers to present the latest technological developments in all aspects of wheat milling. Jeff Gwirtz, president of JAG Services, Manhattan, Kansas, U.S., offered one of the three keynote speeches of the day, pointing out that in milling operations “problems may exist without you knowing it.” He described an approach relying on “the importance of checking and knowing your flour sheet to solve problems.”

Feed Milling

For the first time the conference featured a Feed Milling Technology and Trends Seminar, held on the third day. Diets in many of the countries of the region are improving to include more animal protein as economies develop and incomes rise. Many large wheat millers, most notably in Nigeria, have moved into the feed sector or are at least exploring opportunities.

African Milling School

Bühler’s Martin Schlauri as moderator of the management forum took the occasion to present Bühler’s own initiative to develop management skills in Africa by inaugurating its African Milling School in Nairobi after three years of planning and the construction of a building for that purpose at its milling service center. The first two courses are fully subscribed.

Schlauri has been named director of the school but will continue to  manage key account relationships. Noting the big increases in mill investment activity in the sub-Saharan region in recent years, Schlauri commented, “Africa is definitely on the move.”

FFI Workshop

The Flour Fortification Initiative (FFI) continued its long-running affiliation with IAOM MEA by holding a separate one-day workshop on Dec. 2 attended by about 60 public health officials, millers and NGO representatives.

FFI Director Scott Montgomery presented an FFI award recognizing the contribution of Abubakar Bakhresa, CEO of Said Salim Bakhresa & Co. Ltd., the largest milling company in Tanazania and East Africa, through its support since 2013 of national level mandatory vitamin and mineral fortification in Tanzania of all industrially produced wheat flour. Magdy Shehata of World Food Programme in Egypt received an FFI award as well in recognition of his six years of tireless work to institutionalize fortification of government-subsidized baladi bread.

IAOM MEA Dubai 2015

At the closing ceremony, Essa Al Ghurair, chairman of Al Ghurair Resources, Dubai, UAE, received the handover of the IAOM MEA District flag from Peter Cook. Organizers hope for a record turnout in late 2015 at the ever popular, thriving and business friendly air transportation hub where the event will be held for the fourth time.

Original PDF article as appeared in the World Grain magazine.