SEABOARD SILOS SOLUTION SIGNED IN MADAGASCAR

UNCLAS ANTANANARIVO 000640 SIPDIS SIPDIS STATE FOR AF/EPS AND AF/E USDOC FOR RASHIDA PETERSEN JOHANNESBURG FOR SCO NAIROBI FOR SCO E.O. 12958: N/A TAGS: EINV ETRD ECON KTDB PGOV MA SUBJECT: SEABOARD SILOS SOLUTION SIGNED IN MADAGASCAR REF: ANTANANARIVO 0426 AND PREVIOUS ¶1. Seaboard Corporation's Armando Lopes signed a five-year lease extension for its silos at the Tamatave Port June 28. Tamatave Port Director Pierrot Botozaza and Minister of Transport Julien LaPorte have approved and signed the agreement. According to Lopes, the terms and conditions of the extension are fair and will allow Seaboard's local venture, Madagascar Mills (LMM) to continue its wheat milling operation in competition with the newly-opened TIKO mill. ¶2. Until renovations can be made by Seaboard and the Port to connect the silos to a modern conveyor system (already connected to the TIKO facility),Seaboard will enjoy discounted offloading fees. Both sides agreed to substantial investments to renovate Port equipment. ¶3. In addition to allowing an American enterprise to remain in the Madagascar market, the agreement has the ancillary benefit of guaranteeing two operators - Seaboard and TIKO - in the wheat milling sector. Millions of dollars of U.S. Government PL480 commodities, mostly wheat, are imported and monetized to finance food security and development activities by CRS, CARE, and ADRA. With two buyers for wheat, the monetization consortium should be able to negotiate better prices, thus generating more revenue for these activities. ¶4. COMMENT: The Embassy has invested more time in the Seaboard case than in any other U.S. venture in Madagascar. While Port Director Botozaza and even the President were at times intransigent, it appears our arguments for a level-playing field carried the day in the end. While difficult and frustrating, this case illustrates the GOM's willingness to guarantee fair treatment for U.S. investors. END COMMENT. SIBLEY