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Front Page » Business & Finance » Blumberg Grain marshals resources in Algeria deal

Blumberg Grain marshals resources in Algeria deal

Written by on May 2, 2017
Blumberg Grain marshals resources in Algeria deal

Miami-based Blumberg Grain’s mega-project to build state-of-the-art grain storage facilities across Algeria – estimated by David Blumberg, the company’s CEO for the Middle East & Africa, to save the country some $200 million in post-harvest losses – seems stymied by internal politics.
Philip Blumberg, founder & chair of holding company Blumberg Partners, says he is confident growing support in Washington, DC, may provide the motivation to clear the necessary hurdles.
In March 2016, he says, he met with Algerian Prime Minister Abdelmalek Sellal, who had heard about Blumberg Grain’s other projects in the region, including a network of 100 storage facilities in Egypt monitored and controlled by a single command control & logistics center in Cairo.
Prime Minister Sellal was eager to implement a similar system in Algeria. With the country’s president also on board, Philip Blumberg says, a contract was drawn up for the first phase of a project that would “remake Algeria’s failing grain storage system in two phases – some 200 sites for the storage of over 1 million metric tons of wheat.”
Thirteen months later, despite continued assurances from Prime Minister Sellal, the contract remains unsigned.
Blumberg Grain works primarily with emerging market governments to develop networks of food storage infrastructure that reduce post-harvest losses from more than 50% to less than 5%, says David Blumberg, often doubling the nationwide output of locally harvested crops.
“We have support in Algeria at a number of different levels,” he says, “including the president, the prime minister and the minister of industry. Farmers are absolutely demanding this because they’re looking at a potential bumper crop this year – but that could dissipate because there’s nowhere to put it.”
A recent article in Le Courrier d’Algérie – a daily newspaper published in the capital city of Algiers – cites the potential loss of much of the promising 2017-18 harvest to rainfall, rodents and birds due to “antiquated means of storage” such as open-air plots and old, unsuitable hangars before making an impassioned plea for “a modern storage infrastructure with international standards.”
The impasse, says Philip Blumberg, appears to stem from a tendency of bureaucrats in the region to thwart the will of elected officials, perhaps rooted in an anti-American bias dating from Algeria’s alliances with the former USSR.
At the Algerian government’s insistence, he says, Blumberg Grain has gone so far as to provide them with the proprietary design and engineering drawings for its systems, “so denying these projects would be very problematic to us and our suppliers. It’s possible that the Algerians will try to do the project themselves or provide our designs to Chinese or Russian entities to implement.”
“We are marshaling all our resources to achieve a resolution in Algeria,” says David Blumberg, who has so far made 44 trips totaling 130 days to Algiers. “But it’s nearing a point of our abandoning the project.”
Those resources include support from the highest levels of the US government.
“Several senators and congressional representatives are presently intervening with the Algerian ambassador,” David Blumberg says, “to help resolve this issue before the Algerians face a more public and damaging conflict with Congress, President Trump and the media.”
“This would be Algeria’s third major lawsuit from a US company,” says Philip Blumberg. “I’m finding that people in Congress are running out of patience with these lawsuits, and they are behind us.”
Among many who have sent letters to the Algerian ambassador supporting the project are Rep. Debbie Wasserman-Schultz of Florida, immediate past chair of the Democratic National Committee; Rep. Ileana Ross-Lehtinen, a Miami Republican who just announced her upcoming retirement from Congress, and Jeb Hensarling, a Texas Republican who chairs the House Financial Services Committee.
Adding their voices to these appeals are several suppliers who work with Blumberg Grain on large international projects, stating that they have already invested significant time and resources on the Algerian project since it was sole-sourced to Blumberg Grain more than a year ago.
President Trump is watching the issue with interest, Philip Blumberg says, since it would involve the creation of 2,400 jobs in the heartland – “Trump country, where he has promised more jobs as part of his Hire American Buy American program.
“We certainly don’t think this will get to a lawsuit,” he says, “as we know the prime minister and other leaders are strongly advocating for this project. We feel confident that the prime minister and president will prevail and make Algeria food-secure.”

11 Responses to Blumberg Grain marshals resources in Algeria deal

  1. Larry

    May 2, 2017 at 11:25 pm

    You want to do business with Algeria by threatening to sue if !! ? What the, if I was Algeria I’ll stop any business talks with blumberg

  2. kim

    May 3, 2017 at 6:04 pm

    If a contact was not signed what is the base for a lawsuit. Maybe they like the plan but can not afford it.

  3. Mister Kay

    May 4, 2017 at 8:40 am

    I’m Algerian, and I think the project is a serious one. Just don’t forget about the financial side of the story, Chinese, among others, may be way cheaper, faster and friendly too

    • Naguib

      May 7, 2017 at 3:32 pm

      Exact concitoyen!
      Bien dit!

  4. Jennifer O'Grady

    May 4, 2017 at 3:02 pm

    It is necessary to be crazy to make affairs with Algeria. This failed country is not reliable.

  5. Brahim Rachedi

    May 4, 2017 at 4:48 pm

    Jen O.: General Electric was and is still doing business with Algeria for more than 40 years and they just landed a multi-billion dollar deal. Not so crazy, isn’t it. So many things Algeria could be blamed for. Unreliability is NOT one of them.

  6. Bayazid Merabet

    May 5, 2017 at 1:33 pm

    The problem with Algeria is the corruption and the shady government.
    You have to know and share who is behind the curtains in order to get anything done.
    The Chinese understood that and they are ripping the country of it’s resources.

  7. T

    May 5, 2017 at 5:13 pm

    No wonder! you propose a big project like this that costs too much money for a small country like algeria. no contract was signed therefore no obligation. that’s why Trump didn’t intervene. he is a business man and he understands business. Taking it to a Lawsuit is big bullying and not proper business practise. Trying to get in bed with algeria in first place by knowing all emerging countries suffer from burreaucracy and corruption requireds patience. . .
    and if the chinese or the russians have a more affordable solution that does the job then it is their full right to consider all offers as buyers who didn’t sign any contract.
    trying to get the president of the US to pressure a small country like algeria is like holding a gun to someone’s head and forcing them to buy whatever you sell!

  8. Chaib boumediene

    May 6, 2017 at 7:47 pm

    Agree with B. Rachedi. The paper is about a supply driven offer, like hundreds that may be made everyday to a government. It did not go through, so is the end result of other similar offers. Then, wait for a open, transparent bid to be made and make an offer. The issue would be different if the government was at the source and asked for an offer promising a contract after specifically defining the terms of such offer, he would have created legitimate expectations which he would later frustrate and may be ground for compensation. I understand that’s not the case here.

    The discussion on corruption, China, craziness of those trying to do business in Algeria and bla bla bla has no place here. They may be discussed in separate fora…

  9. borris

    May 14, 2017 at 8:17 pm

    Here are the reason why the contract is pending, according to TSA Algerian newspaper..

    The first point of divergence concerns the fact that the OPCW has requested that the integration of the project of the license of the management software and remote control for the 100 warehouses for storage either without financial impact. However, Blumberg Grain proposes to incorporate only with an amount of $40 million. An amount deemed “unjustified and disproportionate by the Algerian party.
    Another point of disagreement: The OPCW has claimed that the American company transmits to him a complete folder and in conformity with the regulation in force including an administrative folder, an offer detailed technical as well as a financial offer. However, the source close to the OPCW has qualified the content of the documents provided by Blumberg grain as being “summary” and not allowing a “objective assessment” of the American proposal, both on the technical plan that on the financial plan.

  10. Douglas

    July 13, 2017 at 3:03 pm

    This company, Blumberg, has absolutely no business being in this business. They have probably wasted millions of dollars trying to persuade these governments to go in and build their little food storage huts at exorbitant prices when the Chinese or even these governments themselves can build them at a fraction of the price.