Organisation after organisation has queued up in recent years to point out that the African continent can become a net food exporter by merely applying the relatively simple technology that is available elsewhere today.
Many farmers in South Africa and Kenya export fresh fruit, vegetables and flowers to Europe and their counterparts in other parts of the continent could do the same but there is one missing element in the agribusiness chain – logistics.
To become a successful exporter of fresh produce, farmers need to be able to transport their produce from the field to the customer in an optimum state. This means that it must be moved quickly and, usually, in a climate controlled state, via road and then ship.
The lack of adequate storage facilities means that about 20% of all cereal production perishes. Excess fruit and vegetable production is often wasted because of the lack of refrigeration, which in turn stems from the lack of access to electricity.
As in many other sectors, South Africa’s agricultural supply chains are well developed, with unbroken temperature controlled storage and transport to extend the shelf life of produce. Some farmers export their produce through South African ports purely because of the associated logistics support, including refrigerated lorries. Concargo Global Logistics, for instance, has a road freight network that connects the whole of the Southern African Development Community (SADC) region as far north as Tanzania, with South African ports.
Concargo’s chairman and managing director David Kruyer, says: “We look at each customer’s business from the broadest possible perspective. We know supply chain management is a complicated proposition, requiring the sharing of information.”
He adds: “The lack of infrastructure in Africa has resulted in transport costs being amongst the highest globally, in most cases it costs more to deliver a load from the port of arrival to its neighbouring land locked country then it does to ship the load from anywhere in the world to that port. A simplification of documentary processes, the eradication of complicated bureaucratic processes, the harmonisation of standards and a reduction of border delays will go a long way in reducing transport costs.”
About 70% of refrigerated, or reefer, shipping cargo is expected to be transported by container by 2015. South Africa’s Safmarine, which is owned by Denmark’s AP Møller Maersk (APMM) Group, is one of the main carriers of South African fresh produce. The company’s global head of reefers, Marc Rooms, says: “Being a part of the APMM Group has not only allowed us to grow our reefer business significantly in the past 14 years, but it has also allowed us to meet the equipment demands of our customers and deliver the type of service the perishables industry needs. Today’s fruit and perishable product shippers are more reliant on containers than ever before.”
The company currently relies on the South Africa-Europe route but is keen to expand its operation to the Middle East and South Asia.
APMM and others are keen to expand their reefer shipping operations to other parts of the continent but air transport is another option. Ethiopia currently only exports fruit and vegetables to the Middle East and Europe but the steady expansion of Ethiopian Airlines should create new markets in Asia. The airline has launched a cargo service between Addis Ababa and the South Korean capital, Seoul, which will be served by its B777ER cargo planes, which have a carrying capacity of 100 tonnes.
The Ethiopian airline is also investing $200m in new cargo storage facilities at Addis Ababa Bole International Airport, including refrigeration capacity for perishable fruit and vegetables. The new perishable cargo terminal will eventually be four times the size of the old facility, which has now been redeveloped exclusively for flower exports. Sector specialist Celtic Cooling, which also operates similar facilities in Ghana, Kenya and Tanzania, opened the revamped flower store in February to serve rising Ethiopian flower exports. The country is now the second biggest flower exporter in Africa after Kenya. Some progress is also being made in tackling the lack of intra-African trade. Ethiopian Airlines has launched a twice weekly cargo service between Addis Ababa and Juba in South Sudan.