Grain Bulk Handlers, Kenya

Mr David Harris, the man who helped build the World Bank-funded Grain Bulk Handling Complex in Mombasa, says the facility, the only one of its kind in the country, has saved Kenya and the region a fortune in losses that used to be incurred before its arrival 10 years ago.

 

Among the areas in which huge savings have been realised is leakage of grain in the previous archaic and unwieldy bagging system. The wastage was massive. The bags too were expensive while filling and emptying them was time-wasting.

 
“On the contrary, bulk handling takes grain from a ship direct to the silos in a system monitored to the kilo and to the ton, without wasting a single grain, helping the Kenya Revenue Authority (KRA) to know exactly what to charge duty on,” says Mr Harris. “A grain terminal is a very important piece of equipment for any port — or country that has to import grain such as Kenya.

 

Doing it by the bagging method, straight off the ship, is cumbersome and expensive,” he says. “It has greatly eased congestion at the port. It would take 1,166 trucks each with a capacity of 30 tons as many as five days to unload a single ship carrying 35,000 tons of grain. Fancy the congestion if more than one ship has to be unloaded at a time.

 

“Moreover, grain brought in bulk as opposed to the one brought in bags makes it possible for ships to turn around and unload quicker, which is considerably cheaper, bearing in mind that ‘shipping time’ and ‘in port’ are two crucial factors in the industry,” he explains.

Mr Harris advises millers in Mombasa and Nairobi to build silos to accommodate bulk grain. “What are needed are more silos, of which we have made provisions for nine more to hold some 45,000 tons. Millers’ silos in Nairobi, in particular, would help us ship bulk grains by rail to the advantage of importers from Uganda and beyond.” He says the facility serves the region as far as afield as southern Sudan, Burundi and Rwanda.

 

Mr Harris, who today is a consultant at the complex where he was formerly the General Manager, had worked for the World Bank through Mersey Docks and Company Limited in Maputo, Mozambique, before he was picked to help put up the World Bank-funded US$35 million complex in Mombasa in 1998. Construction work took 13 months.

 

The Grain Bulk Handling Limited Chairman, Mr Mohamed Jaffer, thanks the Kenya Government for the support it gave to the project from the start. He says his ultimate goal is to export grain through the facility when irrigation as a farming option becomes a reality to give Kenya surplus grain. “I look forward to the day we shall use 90 per cent of our water currently flowing to the sea and the lakes for agriculture,” he says.

 

 

Herewith excerpts from an interview Mr Jaffer Mohamed gave on the occasion of GBHL’s tenth anniversary in 2010

 

Q: What put the idea in your mind to establish this grain terminal at the port of Mombasa?

 

A: It happened like this: Back in 1976, my family business, then known as Jaffer & Jaffer Ltd., set up the Inland Container Depot, which was one of the first container depots in Mombasa. But even before that, back when there was still the old East African Railways and Harbours Corporation, we had leased a plot from them to set up a timber storage yard, and also used these same premises for the manufacture of pallets — those wooden frames on which cargo is placed in warehouses, so that it is easy to take it up using a forklift. That, I would say,was really the beginning of my being involved in port-related business. Well, in 1983, mobile bagging operators were introduced in the port for quayside bagging of bulk grain and fertiliser.

 

The first company to enter into this line of business was called Nectar. Later other companies also joined in. Some of them used our Inland Container Depot to store their containers, and this is how I came to be aware that there was a need for more efficient offloading of grain and fertiliser from the ships. It is out of that insight that the plan for creating Grain Bulk Handlers arose in my mind. Later, I was to go to the great port at Hamburg in Germany, and see exactly how it was done. But even before I visited the grain terminal at Hamburg, I already knew what could be done.

 

Somehow, right from the start, I knew I could do this. I just knew. I also understood right from the start that it would not be easy, but I was determined to do it.

 

Q: It was a very long journey from November 13, 1984, when you first applied to the Kenya Port Authority for the way-leave from your plot just outside the port, to the berths at Kilindini, so as to make it possible for you to handle bulk grain and fertiliser imports; to February 14, 2000, when you handled your first ship. That’s a clear 16 years. Many investors would have given up long before 2001. What kept you going?

A: All I can say is that I was convinced that I could bring this project to a successful conclusion, and that I was determined to succeed in this. I never for one moment doubted that I would succeed. As you say, there were so many steps involved in this; so many conditions to be fulfilled, some raised by the financiers, others by the Kenya Ports Authority, others by various government agencies. I had to employ very many professionals at different stages of this journey, as international lenders require a very large number of professional reports for a project of this kind.

 

I also travelled a great deal to the US, the UK, and France, negotiating for the money which was needed to set up this grain terminal. All this had to be done before the financiers would commit the first dollar to the project. And it was not easy. I have sometimes thought that I would have made far more money if I had dedicated those 16 years to just expanding ongoing businesses rather than starting something completely new like Grain Bulk. But I have no regrets. I set out to establish a worldclass grain terminal at the Kilindini port here in Mombasa, and I was able to achieve this. That gives me a great deal of satisfaction, and I do not feel any regret about other opportunities that I missed during the years I was struggling to make Grain Bulk a reality.

 

 

Q: In an article on GBHL which featured in The Wall Street Journal late last year, you are quoted as having said that you look forward to the day when your grain terminal will be converted into a grain exporting facility, and that you believe that Kenya will one day again be a grain exporting country. Could you elaborate on this?

 

A: Kenya is at present harvesting only 6 per cent of the water it receives as rainfall. The rest, a full 94 per cent, flows into lakes and seas. I believe that if we could follow the example set by Israel and adopt modern techniques for harvesting rainwater and channeling it into irrigation projects, there is a huge opportunity to increase our acreage of land under productive agriculture (of which at present we are in fact only cultivating about 39 per cent).

 

So I was not just saying this off the top of my head. This is something I have given much thought to. I believe that, with the right policies, we can have Kenya returning to being a net exporter of grain, as it was in the early years of Independence. All we need is the right land use policies.

 

Q: Finally, there have been reports that you plan to set up a fertiliser handling terminal at Kilindini. What can you tell us about this?

 

A: At the present time, a major aspect of the cost of fertiliser to farmers is the cost of transport. In some cases we even get fertiliser free from some rich nations, but when you factor in the cost of transport, then you find that farmers still have to pay quite a bit for it. And part of these transport costs are right here at the port. At the moment, fertiliser can be offloaded at a rate of about 1,800 to 2,000 tons a day. So a 20,000-ton ship would take 10 to 12 days to completely offload its cargo at the current terminal.

 

With the new fertiliser handling terminal that I would like to establish, a 20,000-ton ship would take just one day to offload, leading to enormous savings in the final cost of that fertiliser when it eventually gets to the farmer on the ground. It’s a wonderful project, which would have a huge impact on the lives of millions of small-scale farmers, and I am very disappointed that it is taking so long to get it started, purely on account of bureaucratic delays.