El-Zomorada Food Industries plans to supply EGP 200m in new investments this year to develop production lines as part of its plan to increase the company’s production capacity.
Chairman of the Board of El Zomorada Food Industries Fathy Koshk said that the food sector is among the most promising in the local market, pointing to the significant investments recently pumped into dairy and pasta processing and other manufacturing industries.
The company aims to increase its sales this year by 10% after supplying the new investments, aiming to bring total sales to EGP 286m for the current year compared to the EGP 260m recorded in 2015.
According to Koshk, the company aims to open a new factory at the beginning of June, which will operate on an area of 40,000sqm for starch and glucose production. The new factory will use modern technology and will have a productive capacity of approximately 8,000 tonnes per month.
There is much confusion and dispute about recent decisions made, alongside the crises faced by manufacturers who import yellow corn to manufacture glucose and wheat. He emphasised that the government must establish a clear economic vision and demonstrate its stance on all goods and products while rely on imports.
The company intends to increase its production capacity by 10% this year from the current 85% to 95% of total capacity.
The government must cease making decisions that isolate local manufacturers and producers, Koshk said and that any new decision made should be considered from all aspects so that it does not impact one sector at the expense of another.
He stressed the need for the state to leave the local market to the forces of supply and demand as the government maintains its ability to intervene through its own outlets if there are unjustified price increases. Free market policies are beneficiary for the consumer because they guarantee a high quality product at a suitable price.
It is important that government cash and fiscal policies stabilise and that no decisions are taken or reversed last-minute, Koshk said. This harms the economy’s reputation, which ultimately scares investors and makes them reluctant to enter the Egyptian market.
In Koshk’s opinion, officials should be able to take decisions easily without fear to achieve flexible implementation. He called for the process of granting licenses and approvals for investment companies to be facilitated in order to attract investors to the local market.
El-Zomorada Food Industries operates in the rice packaging industry and distributes its products in Greater Cairo and the coast.
Stable political and economic conditions in the country and a fixed government cash and fiscal policies are what foreign investors look for, Koshk said. These factors make companies capable of establishing a vision to increase and expand their work and provide a suitable climate to attract new investments whether they be of local, Arab, or foreign origin.
He said a lack of clarity in the state’s economic vision makes companies who wish to pump new investments into the local market ambivalent, especially foreign ones.
Banks are afraid to provide dollars to investors because they are not sure of how they will obtain the currency once again, Koshk said. He emphasised that the entire business climate in the country must be revamped to become capable of attracting investment in various sectors, whether that take place through changing legislation or policies.
Improving the business environment, modifying legislation that cripples investment, and issuing laws anticipated by the local market will help revive the sector and improve performance.