VZCZCXRO8538
PP RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHAN #0053 0230627
ZNR UUUUU ZZH
P 230627Z JAN 08
FM AMEMBASSY ANTANANARIVO
TO RUEHC/SECSTATE WASHDC PRIORITY 0885
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC

UNCLAS ANTANANARIVO 000053 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR AF/E AND AF/FO 
 
E.O. 12958: N/A 
TAGS: ETRD PREL ECON MA
 
SUBJECT:  SEABOARD FIGHTS FOR LEVEL PLAYING FIELD IN MADAGASCAR 
 
Reftel:  07 Antan 1144 
 
¶1. (U)  SUMMARY:  Seaboard Corporation continues to report 
difficulty in doing business in Madagascar, citing unfair 
competition from the President's TIKO conglomerate.  Seaboard's 
Madagascar country manager has concluded the President is trying to 
force them out of the market.  Seaboard has begun a new round of 
lobbying and will not go without a fight, for which they continue to 
enjoy full embassy support.   END SUMMARY. 
 
¶2.  (SBU)  Armando Lopez, Manager of Seaboard's flour mill 
investment in Madagascar "Les Moulins de Madagascar," updated the 
Ambassador on operations and competition with President 
Ravalomanana's TIKO flour mill.  Sharing data on world wheat prices 
and shipments, Lopez made the case that TIKO is selling flour well 
below cost in what Seaboard concludes is an attempt to force them 
out of the market.  He estimated TIKO is losing up to USD 200,000 
per month in this strategy.  Seaboard, sitting on stocks of 
lower-cost wheat bought forward, has suspended operations until such 
time as TIKO raises its price - then they will restart flour sales. 
 
¶3.  (SBU)  Lopez continues, without success, to seek a meeting with 
TIKO's General Manager to discuss potential business cooperation. 
He believes the President has forbidden TIKO officials from having 
any contact with Seaboard.  Similarly, officials at the Port of 
Tamatave are dragging their feet on promised upgrades to the 
conveyor facilities to the Seaboard silos, and also refuse to meet 
with or speak to Seaboard.  Overall, Lopez concluded, Seaboard faces 
obstacles at every turn to remain in the Madagascar market. 
 
Playing Hardball 
- - - - - - - - - 
 
¶4. (SBU)  To up the ante on the price war over flour, Seaboard will 
soon enter Madagascar's rice, sugar, cooking oil, and powdered milk 
markets - all sectors where TIKO is dominant or has an outright 
monopoly.  "We will try to get the President's attention, to hit him 
where it hurts," Lopez said. 
 
New Round Of Lobbying 
- - - - - - - - - - - 
 
¶5. (SBU)  Lopez shared that he will initiate a new round of lobbying 
of international organizations in Madagascar, starting with the 
International Monetary Fund.  He will make the case that TIKO must 
be compelled to pay tax and port fees in Tamatave, otherwise the 
President's company clearly has an unfair advantage.  Seaboard Vice 
President Ralph Moss will make the rounds in Washington to make the 
point that if President Ravalomanana continues efforts to force 
Seaboard from the market, then the United States should reexamine 
its support for Madagascar.  This comes just as the GOM is preparing 
their "MAP Road Show" to Washington during the week of February 4Q 
during which they hope to showcase Madagascar's investment 
potential. 
 
What the Embassy Will Do 
------------------------ 
 
¶6.  (SBU) The Ambassador readily agreed to continue to raise 
Seaboard's current problems with the GOM, including with President 
Ravalomanana and Prime Minister Rabemananjara, with whom meetings 
have been requested (MCC will be the other major agenda item).  The 
Ambassador arranged a meeting last week between Lopez and the 
Agriculture Minister to buttress our own meeting with the latter on 
this issue.  Our point continues to be that potential American 
investment in Madagascar will remain stillborn unless and until 
Ravalomanana makes good on his November promise of a level playing 
field (reftel) and to welcome foreign investment in all sectors.  On 
that point, New Year's receptions on Friday and Monday at the 
Presidency and Foreign Ministry respectively offered the Dean of the 
Diplomatic Corps the opportunity pointedly to remind the GOM of 
those promises, using language we provided. 
 
MARQUARDT