Cereals handling firm denies claims of monopoly at port

By Jackson Okoth

A grain-handling firm at the port of Mombasa has dismissed claims that it is a monopoly.

Grain Bulk Handlers Limited (GBHL) says the perception that it was the only grain handler is not factual.

"Concerns that GBHL is the only operator are misplaced," says Mr Jon Stokes, a director at the firm.

"For instance on March 2, a ship named Vogue Paul docked at the KPA controlled Berth number 7 and grain that had been imported by the National Cereals and Produce Board (NCPB), weighing 23,000 tonnes, was handled by a competitor offering bagging on quay rather than terminal storage," he added.

"While this was going on, there was no vessel at the GBHL terminal," he said.

Industry sources say a group of millers, keen to control the grain trade, are behind demands for a second grain terminal.

Interest in business

The group has vast interests in the grain import, milling and distribution business.

Operating as a team of three, the group recently acquired 12 smaller milling companies spread across the country.

Players in the recent NCPB maize allotments said the three control 67 per cent of the milling business, with a combined capacity of 3,320 metric tonnes a day.

Documents show that this is against the industry’s daily milling capacity of 4,940 metric tonnes.

While the debate on monopoly status at GBHL has been shrouded in political overtones, industry players warn that introduction of another terminal could lead to a new form of monopoly.

The fears are based on the fact that supporters of a second terminal have significant interests in importation, milling, distributing and retailing sectors.

GBHL is a common user facility, but an introduction of another facility will strategically promote vertical integration and present a comprehensive monopoly, entrusting the entire food supply chain in hands of a single group.

There are fears that this degree of monopoly could have disastrous consequences for the national interests of the country in addition to higher food prices. In an interview, Stokes says it is not economically viable to have another grain handling facility.

"We have sufficient capacity to handle three million metric tonnes a year which has so far been underutilised by 70 per cent," said the official. Statistics indicate that the highest tonnage ever to be handled at the terminal was approximately 1.1 million tonnes.

There are concerns that vertical integration and control of the supply chain by millers, who already have a market share in the milling and distribution sector, would force smaller millers out of business.