Walid Ali Mohamed Saeed Councilman
Alsaeed Trading Company
Martin Schlauri Councilman
Nicolas Tsikhlakis Councilman
The Modern Flour Mills and Macaroni Factories Company
Dubai Draws Millers to IAOM-MEA Conference & Expo Nearly 1,000 milling industry professionals from over 50 countries attended the 28th Annual IAOM Mideast & Africa Region Conference & Expo from October 22-25 in Dubai, United Arab Emirates. The expo hall featured 113 companies, who spent three days meeting with current and future clients from over 130 milling companies during the show. The largest delegations came from Iran, Saudi Arabia and Turkey. While the conference was conducted in English, simultaneous interpretation was offered in Arabic, Farsi and Turkish.
Opening Session As Conference Host Committee Chair Essa Al-Ghurair, Essa Al-Ghurair Investments, opened the conference, he pointed out that with all of the challenges facing millers, it is important to take advantage of all opportunities at such a meeting to share and exchange new ideas as we meet with new and old friends.
“These challenges will require a new innovative way of thinking to come up with new solutions. Polish your brain like a diamond – polish it to make it sparkle,” he said.
In his remarks, Al-Ghurair introduced a theme that would recur throughout the conference – the emergence and growing importance of artificial intelligence (AI).
Al-Ghurair said that the government of the UAE had recently announced the creation of a new ministry – the Ministry of Artificial Intelligence. The new minister is a 27-year-old man, he said, and the purpose of the ministry is to examine how AI can become more useful to humanity.
“Consider how AI can and will be used in milling,” he challenged the audience, suggesting that it could be used in an automated tempering environment where AI could check moisture content and regulate and adjust the water flow. Or it could adjust rolls based on a monitoring system.
“There will always be people, but machines will help to accelerate the know-how,” he said.
IAOM MEA Region Director Ali Habaj, Sohar Flour Mills, introduced a new award for the region.
“There are many leaders in this region who go beyond their jobs to promote social and humanitarian initiatives. The IAOM-MEA Leadership Council would like to recognize them,” he explained.
The first recipient of the IAOM-MEA Regional Leader Award is Walid Ali Mohamed Saeed, Midstar Commodity Management Ltd.
Habaj said that Saeed’s family company, HAS Group, has done exceptional charitable work in Yemen. He said that this work began before the war and they have continued to operate food facilities to help Yemeni throughout the fighting.
“Thanks to your family for going beyond the norms to help the people in Yemen,” Habaj said.
The award was presented by Al-Ghurair.
Habaj also highlighted some of the activities of the region over the past year, noting that a special emphasis has been placed on education and training – which aligns with the overall IAOM strategic plan. In the week leading up to the annual MEA Region Conference, IAOM-MEA organized a training course for Arabic speakers. The technical training course had 35 millers from 8 countries.
In addition, the IAOM Correspondence Course in Flour Milling has been translated into Arabic and will be available for purchase before the end of the year. Funding for the translation was provided by the International Milling Education Foundation (IMEF).
Keynote: Leading at the Edge of Chaos
Vusi Thembekwayo, Motiv8 Advisory Ltd, delivered the opening keynote address on Leading at the Edge of Chaos.
The world public speaking champion started by noting that there has never been a better time to be a human on Earth. He asked where the growth is coming from and provided evidence that the answer is Sub-Saharan Africa.
He said that one of the challenges we have as human beings is the rate of change and experience of life on Earth. He noted that what we see happening today isn’t new; it isn’t happening for the first time.
“Every 250 years humans go through a loop of change,” he explained. The current loop is far more aggressive than in the past.
According to his research, Vusi said that by 2030 China will surpass the United States in terms of rate of growth. For the first 1,000 years, he noted that China and India had the highest rate of growth in the history of world GDP. In 1820, China was the largest economy in the world.
Why should people invest in Africa?
Vusi explained that you can’t look at Africa in absolute terms – it’s about growth trajectory.
“Thinking in exponential growth environments, there is an alternative truth or set of facts,” Vusi said. “Sub-Saharan Africa jumped the world in technology. In Sub-Saharan Africa, there are 420 million unique mobile subscribers, accounting for 43% penetration. That number is projected to grow to 535 million (50% penetration) by 2020,” he said.
The mobile industry’s contribution to GDP in 2016 was $110 billion (7.7% of GDP), in 2020, that is projected to grow to $142 billion (8.6% of GDP).
He pointed out that there are 731 million SIM connections, projected to grow to 942 million by 2020. He explained the disconnect by noting that the average professional has a full-time job and a side hustle, for which s/he uses a different SIM card.
The opportunity in Africa is in the shadow market, Vusi explained.
When the projected growth rate was 8%; they had 18% growth.
Vusi identified four countries as the main drivers of growth in Africa: South Africa, Nigeria, Kenya, Ghana. Some of the key indicators are percentage of middle class, access to electricity, total population and income per capita. One in every seven Africans is Nigerian.
He pointed out that with the numbers presented it may be difficult to justify capital investment; however, he re-emphasized the trajectory story not the absolute numbers.
“Africa is about creating demand. Go and localize your product,” he said. “It’s important to have global technical competence and local market expertise. Local market expertise gives you a far longer runway for growth.”
Vusi explained some of the keys are product differentiation and distributor capabilities. He also emphasized trade over aid in the region.
Vusi said that it is important for any companies entering Africa to have a long-term view, noting that African return on investment averages 10 to 15 years. However, he noted, once you are in; you have a market leading position.
Vusi also touched on the issue of artificial intelligence, with the just-walk-out technology that has been introduced by Amazon and the implications it could have in Africa.
Global Grain Market Dan Basse, AgResource Co., shared his thoughts on the global grain market. He shared four themes that he sees happening in wheat economics: order is changing to disorder, world agricultural productivity is rising, Russia is recording large wheat yields, a strong dollar and good weather keep wheat prices down.
He noted that the world wheat trade was flat in 2017-18 at 180MMTs and there has been a slight decline in overall stocks. All currencies are down compared to the US dollar, which has benefited producers in the Black Sea and South America, in particular.
Basse noted that world wheat supplies are the largest in history, and could grow to 280-281 MMT in 2018-2019.
Russia and China have both witnessed sharp rises in wheat yields.
In Russia, yields are up 80% in just 5 years. Russian farm productivity is soaring and the question is whether they can increase to 100 MMTs of wheat by 2022. Just 25 years ago, Russians were the biggest wheat importer; now they are the largest exporter. Ukrainian wheat yields are up 100% since 2000 as well.
Basse explained that the yield increases were a consequence of the sanctions enforced on Russia following its annexation of Crimea.
“Ag profits increased by 200% when ruble prices fell,” he explained.
Logistic problems and constraints will be the limiting factor as Russia does all it can to export as much grain as possible.
Soon, Basse predicted, the Chine
se government will have to decide what to do with their substantial wheat stocks.
“At China’s recent five-year planning session, there was a lot of talk about expanding biofuels,” Basse said. “This could consume 40-45 MMT of grain, which could change the landscape of the grain market going forward.”
As wheat production expansion continues across the Black Sea region, wheat farmers in the United States and across the EU will continue to suffer.
Basse also noted that the wheat shortfall in the Southern Hemisphere will shift Asian demand to the US and EU in early 2018. The outlook also calls for Australian wheat exports to decline sharply beyond December on supply, which could result in an increase of 3-4 MMT of US wheat exports.
Basse pointed out that every 7-14 years, there is a significant weather event that rallies the world grain markets.
“Weather abnormalities or policy changes – some sort of supply dislocation – gives the grain market some vitality,” he explained.
Conference Over the course of the three days of educational programming, presenters shared their knowledge and expertise in sessions on technical milling, feed milling technology and trends, What’s New, trading, and a regional outlook for wheat imports.
The technical session included presentations on sustainability and flour milling, operational milling, bakers’ demand on flour, grain storage, making quality pasta with low-protein wheat, enzymes and alternative grains, gluten aggregation kinetics, gluten-free diet fact and fiction, and flour heat treatment.
The feed milling technology and trends include presentations on energy savings and process optimization, practical storage and reclaim consideration
s for bulk materials, and nutraceutical pellet binders.
The What’s New session highlights new and innovative products recently introduced to the milling industry. This session included presentations on antimicrobial composite material, mill design concepts for economical investment, mill of tomorrow, temper time and water addition control system, wireless sensors and fumigation platforms for monitoring phosphine applications, moisture content measurement, and paper or plastic for retail flour packaging.
During the trading session, grain traders from the largest exporting countries provided updates and market outlooks for the coming year. Markets presented include French, US, Australian, Baltic Sea, and the Black Sea. The session included a presentation on the quality of the current wheat crop including prevalence of mycotoxins. Also addressed were basis price mechanisms, global rise of pulses, and food security in the region.
A question and answer session closed out the conference. The distinguished panel included Egyptian Minister of Supply and Internal Trade Dr. Ali El-Sayed Ali Moselhi; IAOM-MEA Chairman Merzad Jamshidi (Iran); Gunhan Ulusoy, Turkish Flour Industrialists’ Federation; Kamel Belkhiria, Rose Blanche Group (Tunisia); and Mandeep Singh Bindra, IFFCO Group (UAE).
Moselhi noted that historically, Egypt had been the world’s largest wheat producer; however, with a population that quadrupled in 60 years and insufficient water supply, it has become a wheat importing country.
“We are trying to minimize the gap between what we need and what we produce,” he explained. However, he said that the government has to guarantee enough wheat to produce enough bread for three months. With a demand of 250 million loaves of bread/day, Egypt won’t be self-sufficient.
In response to a question about the industry’s estimated 7-8 million tons of overcapacity, Moselhi said the plan is to eventually remove subsidies, which will ease the situation. He said this process would not be immediate, but more of a medium- or long-term adjustment.
He encouraged cooperation to fulfill the needs of the whole world; not just for a region or local area.
“Maintaining a global vision is critical. We will all benefit,” he said. “After all, the world is only four meals away from chaos.”
He emphasized that it is to the advantage of each and every country to use its own resources most efficiently.
Mohelsi said that Egypt is working to enhance the proficiency of its internal system – water management, yield issues, and divided ownership of land in order to increase the yield of every acre.
Expo and Networking One of the largest exhibitions to date, the IAOM-MEA expo hall was filled with 113 of the industry’s leading equipment manufacturers and service providers. During breaks and throughout the day, attendees had the opportunity to meet directly with the exhibiting companies. Over the course of the three-day event, several contracts were penned on the floor.
Each evening of the conference featured more opportunities for networking and knowledge sharing. The opening reception was held on the pool deck at the JW Marriott Marquis hotel. The welcome reception offers a chance for attendees to reconnect in a relaxed environment.
The second night featured a traders’ cocktail dinner at the Nikki Beach Club. The final evening was a night at Dubai Parks and included a Bollywood production of Jaan-e-Jiggar. The two-hour Broadway-style Bollywood musical was a classic story of good versus evil.
Closing IAOM President Stephen Doyle closed the session by highlighting several of IAOM’s priorities and initiatives, including efforts to help promote the industry and to develop a new pool of talent to replace the generation that will retire within the next ten years.
Habaj announced that the 2018 conference will be held at the end of October in Nairobi, Kenya. Paloma Fernandez, CEO of the Cereal Millers Association of Kenya, invited all delegates to attend next year’s conference.
“We are delighted to be given the opportunity to host in 2018!” she said. “On behalf of CMA members, I welcome you to Kenya.”