OREANDA-NEWS. July 08, 2013. The Ministry of Agriculture and Land Reclamation of Egypt is ready to create maximally comfortable conditions for Ukraine’s investment in agricultural infrastructure of the country. In particular, the Ministry expects NIBULON, a leader of Ukraine’s agrarian market, the largest exporter of grain to Egypt, to assist in building facilities for storage of imported grain crops and investing in other infrastructure projects connected with food supply to Egypt.
 
Minister of Agriculture and Land Reclamation of Egypt Ahmed Mahmoud Ali El-Gizawy informed about it during the International Conference “Private Sector for Food Security: Improving the Investment Climate in Egypt’s Agribusiness Sector” held in Cairo. This is the second international conference dedicated to the food security in the Mediterranean region organized together with the European Bank for Reconstruction and Development and the Food and Agriculture Organization of the United Nations (FAO). Earlier the same event was held in Istanbul.
 
Minister El-Gizawy made his statement having negotiated with NIBULON’s General Director Oleksiy Vadaturskyy where the parties discussed opportunities to use NIBULON’s practices to revive the Dnipro and the Southern Bug Rivers as main transport waterways of Ukraine in Egypt. In particular, the Egyptian party was interested in construction of elevators and fleet for grain transportation along the Nile River, the world’s biggest river, which is not navigable for cargo vessels at present.
 
“I would like to thank NIBULON for assisting in grain supply to Egypt. One of the key factors for us is quality of imported wheat. And we are completely satisfied with the Ukrainian grain quality. We hope to expand cooperation with the Ukrainian party, including the issue of losses reduction during grain supplies. This company will ensure construction of such facilities in Egypt”, announced the Minister.
 
The intention to invest in the infrastructure of Egypt’s agricultural sector was confirmed by NIBULON’s General Director Oleksiy Vadaturskyy. According to him, the company is ready to help the Egyptian partners to construct elevators, transshipment terminals and to revive navigation along the Nile River. “Those activities performed by us in Ukraine will be carried out in Egypt. The whole world knows how we construct elevators. Everybody knows that we construct any facility on a waste land within three months. And this evokes respect, admiration and delight. And everybody wants us to share the experience. And we ourselves are able to organize such activities in the countries that import our grain. Construction experience of our company allows to construct tens of facilities along thousands of kilometers of the Nile River navigable part. The facilities we have created for several years in Ukraine can be constructed in Egypt too”, says O. Vadaturskyy.
 
According to him, the situation in Ukraine and Egypt creates similar prerequisites for activation of water transportation and increase of efficiency of food supplies to consumers. “We have poor roads and imperfect logistics like in Egypt, our Dnipro River was not navigable like the Nile River in Egypt now. At present their river ports are inoperative, and our river ports do not operate at full capacity or do not work at all. I told how we had solved this problem in Ukraine. Today the Dnipro River has been revived; we plan to transport up to 3 mln tons of grain crops along it. We have built a series of vessels; we are reconstructing the shipyard and are ready to build vessels in future and not only for Ukraine, but also for revival of the Volga River, the Volga-Don Canal, and the Caspian Sea. The Egyptian partners asked how we could build vessels for Egypt”, informed O. Vadaturskyy.
 
Today NIBULON plays a key role in economic relations between two countries. In particular, the company’s share in the total commodity turnover between Egypt and Ukraine comprised 23% last year. The volume of supplies was about 2 mln tons to the amount of above USD 700 mln. “The whole commodity turnover can be replaced by 4 companies like NIBULON”, says O. Vadaturskyy.

According to Director for Agribusiness of the EBRD Gilles Mittetal, the key problem to supply food to Egypt is considerable losses because of inefficient work of the infrastructure. “About USD 500 mln are lost annually for lack of capacities for storage, processing of crops and other commodities. The volume of import losses comprises about 20%”, says Gilles Mittetal. He notes that the existing situation is connected with a high level of the government influence, including on import deliveries of food.   
 
“Today we make everything to reduce this influence and to increase the private sector’s role, and the role of foreign companies that could invest in the infrastructure of Egypt’s agricultural sector.  Today NIBULON expressed its interest in such investment. I hope these negotiations will end with NIBULON’s investing in Egypt. We are ready to support these initiatives”, reported G. Mittetal.
 
According to him, Egyptian companies and the government have a lot of things to be learnt from NIBULON. For example, construction of own fleet that will allow to increase import efficiency. “Today it will take you about a week to unload a vessel with grain in Alexandria port (the Mediterranean Sea). The port lacks for capacities to take all grain. If NIBULON’s experience will be implemented and barges will take grain in the roads and then transport it on the Nile River within the country, it will increase efficiency of the whole grain transportation chain considerably”, added G. Mittetal.
 
NIBULON’s experience in the implementation of the large-scale project to revive navigation on the Dnipro River for agriculture needs will be used in Egypt where the EBRD starts its activities. “The same team who implemented projects with NIBULON will be engaged in developing Egypt’s agrarian infrastructure. In particular, we intend to use the experience of transportation and storage of large amount of grain crops”, informed the US Member of the EBRD Boards of Directors James Hudson.
 
According to EBRD Director for Egypt Philip ter Woort, the European Bank for Reconstruction and Development is ready to provide with all necessary conditions so that Ukrainian companies invest in the development of Egypt’s agriculture. “Both investors and companies are encouraged to make an investment during political instability this country is still suffering from”, said Philip ter Woort. According to him, Ukrainian companies can provide Egypt both with funds and experience accumulated during solution of such problems in Ukraine. “For example, the project implemented by NIBULON (construction of own fleet and elevators) can be implemented here. And the EBRD is ready to be a partner in such a project”, he added.
 
According to Dmytryy Pryhodko, an economist of FAO Investment Center, water transportation can become a promising direction in case Egyptian government will decrease fuel subsidies gradually. These and other bureaucratic obstacles can slow down implementation of the investment projects of Ukrainian business in Egypt. “Today we realize what things should be avoided when doing business: our vessels are checked twice, despite there are no claims for grain quality.
 
Head of the Ukrainian Agrarian Confederation Leonid Kozachenko considers NIBULON to be one of the most welcome investors in Egypt. “The company ensures above 20% of grain supplies to this country from Ukraine which is above 50% of all supplies from Ukraine. NIBULON’s investment in the infrastructure of Egypt’s agricultural sector is a prospect of the next two years. The company can become a pioneer in such type of investment in Egypt”, said L. Kozachenko.
 
At the end of his speech O. Vadaturskyy invited the Egyptian colleagues and partners to visit production facilities of the company, and he also called on to adopt not only NIBULON’s agribusiness experience, but also effective cooperation with Ukraine’s government.