By Selim Hassan
Farm Fresh Egypt aims to increase the size of its exports by 50% to reach 4,000 tonnes of agricultural crops by 2017.
Export Director Joseph Paulas said total exports by the company amounted to about 2,000 tonnes of agricultural crops in 2014, and the company targets stabilising the volume of exports during 2015.
Paulas explained, in an interview with Daily News Egypt, that the company offers 15% of its total production (900 tonnes) to the domestic market annually, and it seeks to increase that volume in the upcoming period.
The US is considered the largest export market for Farm Fresh products, as it acquires 50% of total exports. Italy is the second largest with 20%, while France, Germany and Spain receive the rest of the products, according to Paulas.
Paulas said that Farm Fresh added a new production line of frozen products in 2014, and it helped the company implement its plan within the targeted period.
In a related context, Paulas said increases in energy prices in 2014 raised the cost of production by 15%-20%, which led to a decline in the company’s profits by the same volume.
He explained that the electricity bill of the factory is currently EGP 150,000 per month, recording a 100% increase over the past months, prompting several factories to reduce their production.
According to Paulas, the company faces frequent crises as a result of differences in product prices year-on-year, indicating the high contrast of planting areas each year.
“Producers change their plantations year to year, according to the gains or losses they have witnessed during the previous year, therefore prices are in a constant state of deterioration,” he said.
An agricultural plan is therefore needed for exported products in all the provinces, to identify the plantation areas for each product in accordance with the needs of the domestic and export market, he said. He explained that this plan clarifies the exporting map and maintains the reputation of Egyptian products abroad.
The Ministry of Agriculture must also create a plan to monitor the volume of pesticides used for crops to be exported, he added, explaining that the random use of pesticides by farmers causes many shipments to be unsuitable for export.
“Most world countries have turned to organic agriculture and using pesticides has become very old-fashioned. If the Egyptian government continues to rely on this method, it will be out of the global market,” Paulas said.
He noted that the Chinese market has become a fierce competitor, adding: “In spite of being a newcomer in the field of agricultural exports, it acquired the largest volume in the global arena.”
He noted that the presence of all agricultural companies in international exhibitions is vital, to learn of new technologies used globally, and to introduce Egyptian products to the global market.
Paulas said many companies do not care about exporting products to the Arab market, as they provide it with low-quality products compared to the European market.
Farm Fresh imports 90% of its products to domestic and overseas markets, while it plants only 10% of its products domestically.
He pointed out that the high price of the dollar against the pound is a double-edged sword for the company. Although it benefits the company in terms of the difference between the two prices, it also increases the cost of production the following year; therefore the company is not affected by its rise or decline.
The government reduced energy subsidies in the state budget for fiscal year (FY) 2014/2015, to record EGP 41.5bn instead of EGP 100bn. He expected that the state will cancel energy subsides within five years.