The Om El Nour Group for distribution, import, export, and business allocated EGP 30m to develop its Sila Edible Oils plant, recently purchased from the National Bank of Egypt (NBE) for EGP 100m.
Mohamed Abu Bakr, sales manager at Om El Nour, said that the new investment will be directed to the development of production lines and add new lines to produce ghee and shortening.
He added that the Sila plant is the oldest in the field of oils extraction and refinement in Egypt, with a storage capacity of 10,000 tonnes. The plant was built on an area of 10 feddans (10.38 acres)—out of total 35 feddans (36.32 acres)—and the company is considering possible expansions that could be established.
The company imports crude oil through its import and export affiliate Mydranr, but it intends to expand to importing oilseeds in order to reduce costs.
Abu Bakr said that the cost of importing soybean seeds and corn—to extract oil and sell the waste as animal feed—is lower than the cost of importing crude oil, so the company aims to extract oil in the new factory and will direct the products to the domestic market.
Om El Nour owns flour producer Global Mills, which has a capacity of 220 tonnes per day and is located in Badr City. It also owns the Aladham Company flour mill, which has a daily capacity of 150 tonnes, as well as Roma Pasta, the factory of which has a capacity of 5,000 tonnes per month.
Abu Bakr pointed out that the company aims to increase its production capacity of pasta to meet the demands in the domestic and foreign markets, adding that the company has already rented two pasta factories in the 10th of Ramadan City and Assiut, until the company is able to increase its own production capacity.
He revealed that his company exports only 5% of its total production, however they seek to increase exports in the coming period to 10%, through expansion in the African markets.
Abu Bakr said that his company promotes its products by choosing a suitable exporting name for each country, as well as the types of pasta and package sizes—noting that the African peoples tend to like the large types of pasta. These mechanisms help the company build a lasting customer base in these countries.
Abu Bakr said that the participation in international exhibitions gives companies experience in marketing and packaging, while also providing trial export contracts which facilitate entering global markets with competitive prices and at a high quality.
He pointed out that the currency difference following the liberation of the Egyptian pound’s exchange rate contributed to an increase in the production cost, which basically relies on importing production inputs. Therefore, the prices of exported Egyptian products increased.
Abu Bakr explained that opening new export markets is no longer a luxury option for private companies, in light of the decline of Egyptian purchasing power and the low sales rates since the beginning of this year.
He added that food industry sales are no longer stable and have become associated with specific seasons, such as Ramadan and Christmas.