Paper mill to fill supply gap in Egypt’s packaging production

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CAIRO: El Motaheda S.A.E. is building a new paper mill that aims to support local duplex board packaging production in Egypt and boost the country’s recycling efforts.

The plant — whose parent company is the National Printing Company — aims to increase the availability of locally produced paper packaging goods, as well as reduce local and regional costs.

The International Financial Corporation (IFC) is investing $10 million in equity towards the company and providing a loan of $15.5 million to complete construction of the mill.

The plant will use recycled fiber from local wastepaper as the main raw material to produce duplex board used in product packaging.

“There has always been a huge gap between the supply and demand of duplex packaging in Egypt and the Middle East and North Africa region as a whole,” Managing Director of Modern Shorouk for Printing and Packaging, Ahmad Allam, told Daily News Egypt.

National Printing — formed in 2006 by Grandview Investment Holdings Corporation and Ibrahim El Moallem — controls 89.9 percent of Modern Shorouk for Printing and 94.3 percent of El Baddar for Packages.

Grandview Investment Holding is the small- and mid-cap investments Platform Company of private equity firm Citadel Capital.

“Egypt produces around 40,000-50,000 tons of duplex packaging yearly, yet we use 150,000,” Allam added. “We import the rest of our supply from Far East Asia and Europe, which is extremely costly.”

In response to this growing demand in Egypt and the region, Sherif El Moallem, managing director of El Motaheda, said that over the next three years, the company aims to triple Egypt’s duplex packaging production.

“The idea of El Motaheda started about two years ago since there is only one main company in Egypt that specializes in duplex packaging,” El Moallem said. “The quality of the product that is produced locally is very poor, but by using brand new state-of-the-art equipment, we plan to triple the capacity and produce high quality packaging in accordance with Western standards, as 40 percent of our production will also be exported.”

“Our goal is to transform Egypt into a regional hub for the packaging industry, becoming the primary provider of high-quality packaging materials for multinationals and exporters alike,” said Ibrahim El Moallem, chairman of Modern Shorouk for Printing and Packaging.

When completed, the plant expects to provide about 800 jobs.

“The jobs created from building this new paper mill demonstrate the importance of the private sector as an economic growth and employment generator,” said Rashad Kaldany, IFC vice president for Asia, Eastern Europe, the Middle East and North Africa.

The mill, which is just outside of Cairo in Egypt’s industrial district, Sadat City, is also expected to assist in reducing greenhouse gas emissions in the country. According to the IFC, Egypt exhausts 60,000 tons of solid waste each day, 12,000 tons of which are paper.

“We will be working on recycling all wastepaper in Egypt,” El Moallem said. “The machines being used for the recycling and production processes will significantly reduce carbon emissions and the waste will be handled using specific international standards because the IFC has certain guidelines that we must follow.”

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