The Egyptian Company for Dairy Products & Food Additives (EGY Dairy) is targeting EGP 135m in sales this year, compared to EGP 110m last year—an increase of 23%.
Karim Mohamed, the company’s chief financial officer, said EGY Dairy produces intermediary products in the food industry, including dairy, cheese, cake, and pastries.
He explained that the company is implementing new projects to double its total production annually by injecting investments worth 40 million pounds. He pointed out that the real operational capacity of the factories currently ranges between 5,000 and 7,000 tonnes annually. After the modernisation of production lines, it is supposed to range from 10,000 to 12,000 tonnes.
The first installment of new investments will be made available through a finance leasing company, the second via banks, and the third by self.
Mohamed added that the company has already started implementation, expecting that the new production lines will enter into operation at the beginning of next year.
The aim of the increase in production is to expand exports during the coming period, especially as the total exports of the company to Saudi Arabia and Sudan is weak, so the company seeks to develop the size of its work in addition to the presence of international exhibitions to identify customers.
He pointed out that the company has not settled on a clear vision so far in the export process and the most important target countries, and it is still studying the markets and their needs, explaining that the initial expansion in the Saudi market through new customers and the transition to the UAE.
“The export of the European markets is difficult, especially since the company imports the basic raw material in its work from there, so the competition will be difficult,” Mohamed said.
The production lines of EGY Dairy produce chocolate, liquid, pastry, and powder materials.
Mohamed said that the company began to produce “Milky” chocolate as the first full-made product, and it is introducing some other products during the coming period, the most important being spread chocolate, after the decline in the volume of imports last period.
In the field of work in the sector, Mohamed said that the food industry in Egypt was affected during the last period, especially after the flotation of the pound, accompanied by the high value of imported raw materials.
Some products have recorded an increase in prices on the stock exchanges in the past period, which increased the burden of inflation in production costs, and in conjunction with the decline in sales after the reduction of finished product factories, the situation worsened.
He pointed out that most sectors of the food industry depend on imported raw materials, because of weak production of the domestic market or not producing from the ground.
He added that the middle goods industry is the other that depends on the import of raw material, as the company imports phosphates, as well as alternatives to dairy and starch, and there are no local alternatives.
In the coming period, the market needs to expand domestic raw material production, the ability to reduce the cost of production as much as possible, and competition in foreign markets.
Mohamed said that international exhibitions are important in the current period, especially as they help companies to identify new customers from the countries that deal with them, or from other countries targeting them.
He called for an exhibition in Egypt in parallel with Food Africa, pointing out that the host country is better able to market itself than other countries.