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Mahmoud M. El Rashoody - Commercial Affaires Head - at MISR EDFU
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Mostafa Magdy- Logistic Coordinator- at ISKRAEMECO, Energy Measurement & Management El Sewedy Electric Holding
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Eng. Ahmed Ismail - Egypt Plant Manager. GSE Lining Technology
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Eng. Khaled Shawky- Reliance Egypt.
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Challenges for the fresh produce industry in Africa
 
15 Oct 2014
 
Over the past few weeks, incidents such as the Ebola crisis in Africa or the Russian embargo on the U.S., the E.U. and Australia, as well as other problems, have had a great impact on trade for some of the world’s emerging economies. This was one of the topics discussed at the recent Cool Logistics Conference in Rotterdam.
On the issue of citrus black spot, Citrus Growers Association EU envoy Deon Joubert affirms that about 1 million people in South Africa with an income of 8 billion Rand rely on this industry, which has a huge European focus. “South Africa’s goal now is to show that what we can be trusted to do what we are best at: to export healthy food at an affordable price.”
Deon assures that a great effort has been carried out along with growers to tackle the problem, with fantastic results. “Some 3,000 orchards were voluntarily withdrawn by the growers; the second step was spraying and orchard sanitation; additionally, we are pre-screening all arrivals before inspection to mitigate the risk of further CBS interceptions.”
He also states that “communication and information are always the solution to most problems, so we have tried to find out exactly what was going on, on both sides, and to communicate what we know to fill any gaps information gaps.”
For his part, and still in the African continent, Khaled Fawzy, managing director of the Egyptian company Trimar Forwardind, explains that Egypt’s political situation is still in turmoil, although it is also showing signs of improvement, “which is positive news for the economy and businesses all around.”
The Suez Canal remains one of Egypt’s most important assets and the biggest source of foreign currency. “The government has taken a leap of faith in starting two mega-projects, one to create a side canal to speed up and increase shipping traffic, and another to set up a huge logistics hub, developing the areas around the canal,” explains Khaled.
He assures that there is also much room for improvement in the country’s infrastructures, including roads and railways, and much money is going towards the expansion of the country’s storage facilities.
According to Khaled, Egypt has a lot of potential in the medium and long-term, with great potential as a consumer, despite being currently hampered by difficulties to attract foreign investment, such as increasing taxes or lack of clarity when it comes to energy costs or wages. “Egypt is a bit of a work in progress, but within 2-3 years it will be a lot more reliable.”
Regarding Egypt’s current fruit and vegetable exports, oranges remain the most important product. It is the world’s sixth largest producer and second largest exporter, shipping about half of its production. Grapes, onions and potatoes are also quite relevant. The most noteworthy aspect in terms of markets is that “due to The Russian ban, Egypt’s export volumes to this destination are expected to grow significantly in the short term.”

Lastly, Marc Rooms, of Lancaster/Daforco, a company specialised in the shipment of frozen goods to Africa, says that “while the rest of the world tries to go to the moon, in Africa we still try to get to the next village.”
He states that, according to the United Nations report, African countries need to promote industrial development to spur economic progress and reduce poverty. “While 15% of the world’s population live in Africa, only 1% of the global manufacturing takes place there, which is mostly due to poor transport, communication and energy infrastructures.”
With some exceptions, South Africa is the only large, all seasons, perishable product exporter. “There is a large domestic market, so I believe that East and West Africa would rather remain import-focused, mainly for vegetables, such as onions and potatoes,” says Marc.
He believes that “Africa presents a few challenges. It is often not politically stable and often has cumbersome trade regulations. Congestion in some ports also at times becomes problematic, and last, but not least, diseases can simply put a stop to everything.”
Despite the various economies coexisting, Marc wonders whether Africa could become the next China. “It has low labour costs and plenty of resources. With additional demand for commodities, new industries are developing, and this is positive for container carriers, as more inbound and outbound cargo entails a beneficial two-way flow.”
According to Marc, Ethiopia, Sudan and Kenya also represent a great opportunity for agricultural produce, with a vast labour force. “They have the necessary water supply and a good fertile soil. They are also close to the Middle East; an area of great demand.”
Lastly, Marc affirms that Africa has great potential as an important hub in outsourcing, mostly in Kenya and South Africa; “lands which share Europe’s time zone, have decent IT structures, connectivity and political stability. How far will outsourcing go? We don’t know, but it has already drastically changed our way of doing business.”
Source http://goo.gl/wAlh6u
 
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