Dabur Egypt Limited represents 5% of revenues for its parent company in India, being one of the largest foreign entities of the company.
Dabur Egypt aims to double sales in the next three years, Ashish Jasoria, Head of Finance at the company, told Daily News Egypt.
The company posted sales worth EGP 82m for the first quarter of 2014, representing an increase of 28% compared to the same period last year.
Dabur Egypt was founded in Egypt in 1994 as a foreign arm of the Indian company. The parent company Dabur India Limited is the fourth largest FMCG Company in India with revenues of over Rs 7,073 Crore [$1.15bn] and market capitalisation of $5bn. Building on a legacy of quality and experience for more than 130 years, Dabur operates in key consumer products categories like hair care, oral care, healthcare, skin care, and home and food products.
Dabur Egypt Ltd represents 5% of the parent company’s sales. How do you explain that?
The Egyptian market is very promising for investment. A large population of consumers was the driving force behind the presence of the company in the Egyptian market during the 1990s. Egypt is one of the most populous countries in the continent of Africa and the Arab world, and Dabur International aims to expand in these regions.
Dabur targets a presence in promising near-African markets in order to increase its sales alongside the parent company’s presence in India.
What is the reason behind the sales growth during the first quarter?
We achieved sales with a growth rate of 28% in the first quarter of 2014 as previously mentioned. This growth was a result of increase sales for hair oils, creams, Vatika shampoos, and other new company brands launched during the previous year.
What were company sales for last year?
Last year we achieved sales with 20% growth compared to the year before, and 99% of these sales took place in the Egyptian market.
Will you establish a presence in other foreign markets through Dabur Egypt?
Dabur Egypt is looking to expand in African markets, especially in the East and North African regions. This will be achieved by adding new products to those currently produced by the company.
Dabur Group operates in more than 100 countries around the world and has recently established two factories in Tunisia and South Africa.
Dabur International has also acquired two new companies, one in Turkey and one in the US in the last couple of years.
How much are your investments in Egypt worth?
Dabur Egypt Ltd has investments worth EGP 100m in Egypt, represented through our factory in 10th of Ramadan City and it operates on a 24-hour schedule, non-stop throughout the week, on an area of 20,500 square metres. We hope to inject investments into Egyptian operations over the next two years in order to expand production and increase sales and support new businesses.
Are the factory workers from India?
No – 100% of workers are Egyptians out of a total of 400. We are hoping to increase the headcount by 10% to 15% to match the sales growth.
What is your opinion on the investment climate in Egypt?
Egypt has a large population, which means that it is an attractive market for investment. This has allowed the company to take the lead in cosmetic and personal care product sales.
The company has invested heavily in the Egyptian market pre and post-revolution, experiencing success in its brands across the categories of hair care, skin care, and oral care.
The current Egyptian government provides a stable investment environment as a means to create more job opportunities at present and in the future.
Did the recent energy price hikes result in any adverse effect on the company’s sales?
The price hikes did not affect the company’s sales. However, it has increased operational costs resulting in fewer profits, and we are looking at the possibility of running the factory in 10th of Ramadan City with natural gas to make it cost effective and environmentally friendly.
How about taxes?
The increase in tax rates will in fact affect the company’s profitability. However, Dabur Egypt understands the difficult economic circumstances that Egypt is experiencing at the moment.
The purpose of these taxes is to develop Egypt and enhance the quality of services provided to citizens.
What is the extent of the effects on profits?
The expected decline in profits under the new tax policy expected to be implemented by the government will be no less than 5%.
However, we believe that these effects will not last for long and we hope that sooner than later the economy will recover and we will be able to sustain high growth rates.
Recently, there has been talk about setting a minimum wage for the private sector. What is your opinion on this?
Setting a minimum wage for workers in the private sector will not affect the company since workers’ wages at present are much higher than the minimum wage targeted for the private sector.
I want to emphasise that Dabur Egypt Limited cares for its workers and ensures high levels of satisfaction, given that they are partners in success.
Dabur Egypt, in addition to providing good compensation packages for its workers, also has extensive training programmes for its human resources that lead to higher production efficiencies.
Investing in the company’s human resources enhances workers’ loyalty to the company, which is a very important factor for the company’s success.
How do you market your products in Egypt?
Dabur views publicity for its products as a crucial aspect of its presence in the Egypt market, evidenced by the fact that 15-20% of the company’s total sales are spent on advertising and marketing.
What is your share of the personal care market in Egypt at the moment?
Dabur Amla hair oil accounts for 20% of hair oils on the market, while Vatika products represent 40% of the market.
The company has acquired 40% of the personal care and hair gel market in Egypt.
The company is home to big brands such as Amla, Vatika, and Miswak and they are all supported by huge promotional campaigns, building on real consumers’ insights and supported also by extensive marketing research activities.