What is the largest French speaking city in the world, where nearly three quarters of the population consumes a baguette every day? It is not Paris or Montreal, but rather Kinshasa, whose urban core is situated on the shore of the mighty Congo River, 400 kilometers inland from the Atlantic Ocean.
A decade of civil war in the eastern and southern parts of the Democratic Republic of Congo (DRC, formerly Zaire) along with the lure of economic opportunity have helped balloon the population of the country’s capital and economic hub to over 8 million.
One of the most common sites throughout the city is vendors carrying on their heads broad metal basins filled with a few dozen upright baguettes. Wheat flour is a relatively low-cost food staple, and the city’s population depends on bread, often spread with margarine and eaten on the run, for at least one meal per day.
Now that the vast country has experienced a number of years of relative peace, there has been solid economic growth. One result has been a boom in investment in the food industry in the last two years.
The country’s largest flour milling company, Minoterie de Matadi (Midema), a subsidiary of Seaboard Corporation in the U.S., is an industry leader that epitomizes investor confidence in the former Belgian Congo. Earlier this year, Midema inaugurated a 37,000-tonne wheat storage elevator at the DRC’s largest port, Matadi, adjacent to the company’s 960-tonne-per-daycapacity mill, where there is another 46,000 tonnes of wheat storage capacity.
While the company has enjoyed some success in the DRC, Dave Dannov, president, Seaboard Overseas and Trading Group told World Grain that investing in the DRC and Africa is not for the faint hearted. "Investors must be patient, deal with extraordinary political and commercial risk, accept restrictions on capital flows and generally take a very long-term view on investment returns. Seaboard is fortunate in the DRC in that the government is one of the shareholders. With this important strategic partner, who recognizes the need for food security, it reduces our risk profile relative to having made a stand-alone direct investment."
The port silo combined with a new ship unloading and loading barge greatly enhances the capacity and flexibility of Midema’s port operations at Matadi, according to Greg Stough, the company’s general manager, who recently was given additional responsibilities on a region level and is operating from South Africa. The overburdened Port of Matadi has only 10 berths, explains Stough.
"We have a ship in port almost 365 days per year. By refurbishing an unused part of the port, we were able to create an 11th berth and free up one of the 10 original port berths for other vessels. And we have gained autonomy from the port, since we no longer depend on them to schedule our ship arrivals."
In order to build the silo facility, Stough continues, "We had to haul out 5,000 tonnes of garbage that had accumulated over 50 years. The port had used the site as a dump."
Midema erected against the steep hillside a row of six grain bins supplied by U.S. manufacturer Chief Industries. Seaboard’s grain vessels moor alongside a barge on which there is a hydraulic grab system. "With this investment, we have quadrupled our throughput capacity at the port from 100 tonnes per hour to 400 tonnes per hour. And we have increased our loading out capacity from 40 tonnes to 200 tonnes per hour."
Midema has also invested in two small tugboats, Baby Boy and Baby Girl, to maneuver the Seaboard grain vessels in and out of their berth alongside the steel barge.
"Seaboard did most of the engineering for the project in house including the conveying systems and the civil works," says Stough. He puts total investment in the project at $15 million.
"This shows the commitment of Seaboard to Congo and to Africa. Seaboard is one of the largest U.S. investors in food and agriculture in Africa. Even in a place like Congo, with its historical instability, we are looking to supply agricultural goods for the long term," Stough said. "Midema is the biggest mill of Seaboard’s in Africa, and we are the largest in Congo. In volume or tonnage terms, we are both the number one importer and exporter in Matadi, and nationally, we are only surpassed by the mineral exports from Katanga. We import 350,000 tonnes per year of wheat, corn and soybeans, and we export 80,000 tonnes per year of feed pellets."
Given the limitations of the port of Matadi, achieving these volumes is not an easy task. The mouth of the Congo River is not dredged, and the water depth at the bar is only 22 feet maximum. The most grain that can arrive in one vessel is 12,000 tonnes.
Seaboard operates a fleet of grain vessels that bring wheat of all origins to its Africa mills. Generally these vessels do partial off-loading at other Seaboard mills in ports with deeper drafts before putting into Matadi last. On the return voyage, the same vessels haul wheat middling and bran pellets from the same mills to customers in Morocco or the Caribbean.
Midema, whose port facility handles all wheat currently imported into the Congo, supplies the grain to its sole domestic flour milling competitor, which is located in Kinshasa. The Minocongo milling company has made major investments in the last two years as well. It is now completing construction of one of the world’s most modern and largescale bakeries, Pain Victoire, with a capacity of 4 million baguettes per day.
Midema is also the number one feed miller in Congo, though the sector is still in an embryonic stage, considering Congo’s population of almost 70 million. The Midema feed mill near Kinshasa has expanded in the last few years from 400 tonnes to 2,100 tonnes of feed pellet production per month. Diversification plans include a project under way for an integrated poultry production facility near the company’s feed mill site. Midema also has a small maize mill.
"The key to Congo’s growth will be infrastructure development," says Stough. "We need roads to reach markets. And the better the roads become, the more local materials could be used in our feed milling operations, especially corn. For now we are using imported corn, which costs 20% less, and soybean meal."
At present, over 80% of Midema’s wheat flour production is consumed in the two westernmost provinces of Kinshasa and Bas-Congo. Less than 15% is exported by distributors to Brazzaville, capital of the Republic of Congo, directly opposite Kinshasa on the Congo River, as well as to the oil rich Angolan exclave of Cabinda north of Matadi, and to Angola proper. Some wheat flour is shipped by distributors on weeks-long journeys up the Congo River or by road to the cities in other western provinces. Eastern and southern DRC, however, depend entirely for wheat flour and other processed foods on imports from Uganda, Tanzania and Zambia.
MILL EXPANSION PENDING
Despite the transportation infrastructure constraints, the market potential is huge. Midema has a planned mill capacity expansion of 800 tonnes per day to create a mill with a total of 1,760 tonnes daily capacity.
Midema is also a company that understands corporate social responsibility. Since 2007, the company has been enriching 100% of its wheat flour production with iron and folic acid on a voluntary basis. After such a long period of civil war, the country is just now getting back on its feet and still has some of the poorest health indicators in Africa, including malnutrition and high levels of micronutrient deficiencies, even among the urban poor.
Stough noted that the Bresky Foundation, established by the family that owns Seaboard, is building a 32-bed maternity hospital in Matadi. The foundation funds anti-retroviral drugs for 45 people suffering from AIDS.
In Matadi, the silo project was directly overseen by Jacques Collet, who has been director of the mill in Matadi for five years. Collet describes the importance of Midema to the local economy as follows, "We consume 10% of the electricity in the Bas Congo region, but our payments represent 50% of the revenues of the local power company."
Seaboard, which operates mills in South America and the Caribbean as well, has assembled an international team at Midema, reports Collet, who is French, "We have a Haitian, Colombians, a Sri Lankan and others."
Built in 1972 as a joint venture between the Congolese government and Continental Milling Corporation, Midema is a historic mill in a historic location. It sits not far from where the American explorer Henry Morton Stanley built a fort after completing the first ever expedition from the Indian Ocean to the mouth of the Congo River.
A few years later, with Morgan’s help, Belgium’s King Leopold II had established a trading post at Matadi. A small army of porters trekked with goods for many days around the falls and rapids of the lower Congo River to what is now Kinshasa before a narrow gauge railway was completed in 1898. Now trucks carrying wheat flour make the journey every day in just a few hours.
Matadi remains the gateway to the Congo basin, which is one of the reasons Seaboard’s Midema port silo and mill are well positioned for the future.
David McKee is a grain industry consultant providing market research and other services to companies seeking to initiate business in new markets. He can be reached by e-mail at