According to the latest fDi assessment, Ukraine is in the top 10 most competitive countries in the world for the construction of grain processing plants. Ethiopia took first place in this ranking, followed by Myanmar, China, India and Ghana.
The model allocates a 50% weight to both quality and cost factors but does not account for political risk. In short, the study reveals the best countries to open a modelled 31-person manufacturing facility producing grain-based consumer products, such as cereals, packaged cookies, pasta and baking mixes. For countries to be considered in this fDi Benchmark ranking, they had to have attracted at least one foreign direct investment (FDI) project in the grains and oil seed sub-sector between 2003 and September 2022.
The overall top 10 reveals that attractive conditions to set up grain processing plants can be found in countries at different developmental stages across global regions. Ethiopia, which the World Bank classifies as a low-income country, tops the ranking, but is followed by lower-middle-income country Myanmar (second); upper-middle-income China (third); the lower-middle-income countries of India (fourth) and Ghana (fifth).
The study reveals that the sheer size of the grain processing industries in China, India and the US made them attractive locations, but cost factors ensure Ethiopia and Myanmar stand out. It costs just $81,309 to run a 31-person grain processing facility for a year in Ethiopia, according to fDi Benchmark estimates, primarily due to labour costs being 90% lower than the average across the study. In terms of operation costs, Ukraine is in the 5th with $263,851 in total operating costs per year for a grain processing plant.
The most competitive location in Europe, due to a balance of cost and quality in setting up a grain processing plant was Turkey, where wheat production is estimated at 17 million tonnes per year, according to the US Department of Agriculture. In May, US-based Seaboard Corporation invested $1.22m to expand its vegetable oil manufacturing operations in the Turkish port city of Izmir. Millions of people have been impacted by spiralling food prices after Russia’s full-scale invasion of Ukraine blocked grain exports via the Black Sea. Although exports resumed in July 2022 after an agreement signed by Ukraine, Russia, Turkey and the UN, the food insecurity caused by this geopolitical development underlined the importance of domestic crops and processing capacity.