White Land for Food Industries aims to double its sales in 2017 to reach EGP 300m, up from EGP 160m in 2016.
Saeed El Mashad, chairperson and managing director of the company, said that White Land is seeking to increase its sales volume by increasing the annual production of cheese for expansion in the domestic market, as well as for export.
He added that the size of production in 2016 reached 17,000 tonnes of cheese and that the company aims to boost the size to 31,000 tonnes after injecting investments worth EGP 15m.
He explained that the company’s export volume last year amounted to EGP 35m—about 25% of total sales—adding that there are plans to increase the ratio to 35% of sales to register EGP 105m.
The company exports to 12 Arab countries, notably Iraq—with about 22% of total exports—followed by Kuwait, Lebanon, and Jordan.
El Mashad said that White Land does not target expansion into the European market this year, but would rather focus more on African nations as they have great economic value.
He added that the company had sent two shipments since the beginning of 2017 to Ghana and three shipments to Angola, where it aims to communicate with more clients to boost its marketing ability.
He noted that White Land is planning to participate in three different international exhibitions this year, including exhibitions in Kenya and Ethiopia.
He explained that taking part in international exhibitions gives the company the ability to interact with global suppliers and customers—consequently boosting the confidence of these markets in Egyptian products.
He pointed out that the increase in the dollar’s value against the pound grants export advantages by providing opportunities for companies to submit price offers that are less than other competitors’.
He said that the flotation decision was good, but did not bring much benefit, as exports dropped to less than $20bn per year, versus imports of $65bn.
He added that Egypt does not put too much effort into exporting and still needs more to achieve development.
He explained that commercial representation offices abroad do not carry out their role in helping exporting companies and providing them with the necessary knowledge of the nature of the target market.
He pointed out that the Egyptian industry needs a number of new legislations to help achieve advancement, as well as further state support and a clear strategy that stresses the need to stimulate exports.
El Mashad said that presence in African countries has become of more importance and will facilitate a two-way trade that would prove much better than with other countries.
He added that the Egyptian interest in the countries of the continent does not rise to the targeted level, noting that proximity to African markets makes them Egypt’s best bet. He said that the government is unable to overcome the logistical obstacles as of yet.
He explained that even though Egypt set up the Food Africa exhibition last year, which focused on African countries, no representatives from these markets attended it.
He urged the need to accurately define the needs of African markets—and then the government—to consider the potential to strengthen trade and economic ties.
El Mashad called upon the state to study international experiences with Africa, especially the French experience, as France allows goods from African French-speaking countries to enter its borders without customs.
He said that African countries prefer other countries’ products, so Egyptian exporting companies must be supported by the government to sign cooperation protocols in overseas marketing.
He pointed out that the tense security and political situation in some Arab countries caused a drop in the volume of exports during recent years, which urges the need to look for alternative markets to achieve development.
El Mashad added that Egyptian food products cannot market themselves in Southeast Asia.
He explained that Asian countries have high purchasing powers, so they first consider the quality of goods. “Egyptian products lack the necessary specifications to expand strongly, which drives the attention of these markets away towards Europe,” he added.
He said that 2016 saw a setback on the industrial sector in general—especially the food industry—because of the difficult hard currency shortage.
He noted that the scarcity of the dollar reduced the volume of raw materials imports, which led the production decrease and impacted the market share.
He added that the decline in the production capacity of the company in 2016 caused a decline in sales and therefore profits.
He stressed that the food industry imports a large proportion of the necessary materials for production from abroad, especially dairy, which relies 100% on imported input, except for water and salt.
He pointed out that the exchange rate gap after the Egyptian pound flotation also had negative impacts on the sector and brought down the company’s ability to cope with the turmoil facing the markets in Egypt and abroad.
Furthermore, El Mashad said that the export subsidy program does help companies to compete abroad but still does not provide the necessary assistance.
He explained that the program needs further developments as companies receive their subsidy dues after a long time that could extend for up to 18 months.
He noted that the long period reduces the economic value as the pound depreciates against the US dollar.
He pointed out that the rise in the dollar price at customs after the flotation caused an increase in the cost of imported raw materials and therefore hiked the final price of production, which hinders the company’s ability to compete in exporting.
He added that the company faces problems when it has to raise its prices, as the Egyptian purchasing power has declined on the back of rising living costs and fixed incomes.