World Grain - October 2008 - 37

FEATURE: IMPORTANT PORT

Gateway competition?
Managers at Grain Bulk Handlers Limited (GBHL) remain convinced that opening a second grain terminal at Mombasa would
be a poor use of limited port resources.
Local millers have been calling for more stevedoring competition at the port for more than a year, claiming that GBHL's handling
and storage costs are artificially high. One local miller claimed
recently that GBHL charges between $13 and $16 per tonne for
stevedoring and shore-handling, while in Egypt, where multiple
operators are available, charges are around $7 per tonne.
GBHL says that the comparison is flawed because, unlike in
Egypt, its charges include general port tariffs set by Kenya Ports
Authority (KPA) as well as the shipment of grain via conveyors to
silos outside the port boundaries.
Jon Stokes, GBHL finance director, says that GBHL has never
had a monopoly over grain handling at the Port of Mombasa.
"Our License Agreement with Kenya Ports Authority provided restrictions on the development of certain types of grain handling
facilities for a short period, which has expired," he explained.
"We believe that there is no economic case for a second terminal
at present, as we have sufficient capacity to handle demand for
at least the next 15 years."
However, KPA has not dismissed the idea of allowing a secmany of the logistical difficulties eased,
but the events had made it clear to GBHL
that planned investments in silo storage
and discharge capacity had to be brought
forward. "The political problems experienced earlier this year illustrated the difficulties faced by the Port of Mombasa's

ond import terminal to be developed, and local millers - Mily
Grain Millers, Kitui Flour Mills, Premier Flour Mills, Kitale Industries, Supaflo Flour Mills, Pembe Flour Mills and Mini Bakeries Ltd.
- have all been quick to offer support. "We envisage a facility
with a grain discharge rate of 2,400 tonnes per hour enabled
by advanced technology," said Munir Thabit, finance manager
at Mombasa Maize Millers, earlier this year when he criticized
GBHL's 600-tph handling speeds.
Stokes argues that many of the millers are owned by a small
group of powerful importers with little interest in fair competition. "It is evident that the group wishing to establish a second
terminal is a cartel of millers looking out for their own benefit.
That is, to import and handle their own cargo, unlike GBHL, which
is a common user facility catering for all millers and NGOs in
Kenya and its neighbors."
Whether or not millers commit to participation in any new import venture, with port space at Mombasa already at a premium,
the key challenge facing any prospective operator would be finding space near the port.
"Scarce port resources such as berths with adjacent storage
areas could be best utilized by improving the handling of other
commodities such as non-food dry bulks," Stokes said.

hinterland when key transport systems
are disrupted," said Stokes.
PLANNED EXPANSION
The company is now pushing ahead
with plans to expand its import capacity
for wheat, maize (corn), sorghum and soy-

beans. "GBHL's vision is to create at the
Port of Mombasa a 'hub' for relief agencies, millers and traders to stock sufficient
grains to enable a rapid response to regional food emergencies," he explained.
Last year the terminal handled
931,000 tonnes of bulk grains, down

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World Grain - October 2008

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