Halwani Bros aims to increase exports by 20% in 2018

Basma Tharwat
6 Min Read

Halwani Bros Egypt aims to increase its exports by 20% this year through expanding in its existing markets.

Tarek Madkour, executive director, said that the value of the company’s exports during the past year reached $11m.

Madkour explained that Halwani Bros Egypt has five factories to produce halva, meats and cold cuts, poultry, jam, juices, and ma’amoul. The chicken factory was opened two years ago with investments of EGP 100m and a production capacity of 12,000 tonnes per year.

He pointed out that the company will establish a new distribution centre in Cairo, with investments of $70m, that will be completed next year.

The new centre aims to enhance the presence of the company’s products in all regions and cover the largest number of commercial chains and shops.

He pointed out that the company currently has four distribution centres in Cairo, 10th of Ramadan, Alexandria, and Tanta, and seeks to strengthen its presence in Cairo.

Madkour estimated the total investments of the company in Egypt at EGP 300m, noting that there is no intention to inject further investments in its factories this year.

He added that the food industry and all sectors suffered during the past year from the consequences of the decision to liberalise the exchange rate at the end of 2016, which hiked production and final product costs.

He pointed out that companies tried to absorb the cost increases as much as possible, which led to gradual increases in prices of products.

He added that the prices will stabilise this year as the exchange rate reaches a stable price, noting that if the energy prices hike in the coming period, costs will go up by 3%.

Moreover, he said that the expected increase is slight and will be borne mostly by companies, especially as the country has suffered during the past period from the decline in purchasing power of citizens amid price hikes.

He pointed out that the rise in commodity prices depends on the rise in the price of the dollar and that the company, in case of a rising rate, will consider the introduction of smaller packages of its products to avoid raising prices.

Madkour added that the company aims to expand its exports during the current year in North Africa and Europe, since it currently exports to 29 countries.

He explained that Halawani Bros aims to expand in the European market during the current year through its participation in several important international exhibitions.

Madkour stressed the importance of participation in foreign exhibitions, saying they are a good opportunity for companies. He called on the need to increase the spaces available for Egyptian companies and the need to disburse exporting incentives.

He added that Africa accounts for only 5% of the company’s total exports due to obstacles, most notably the failure of some countries in southern and eastern Africa to abide by the Common Market for Eastern and Southern Africa convention, which provides for customs exemptions.

He pointed out that the company also had stopped exports to Sudan for political reasons, and said, “we hope that Egyptian diplomatic visits will end the crisis as soon as possible.”

Madkour pointed to the coordination between the company in Egypt and the parent company in Saudi Arabia on exporting its products, where the Egyptian company focuses on exporting meats and cold cuts to Arab markets.

He explained that the market share of the company in processed meats is at 65%, with plans to boost it to 70% in the coming year.

Madkour added that the food supply system of the Ministry of Supply and Internal Trade has contributed to promoting the sales of the food industry in general and the company’s sales in particular. “Consumers can now buy 20 goods per month,” he said.

The Ministry of Supply and Internal Trade allows citizens to exchange bread points for other supply products in exchange for them rationing their consumption of the subsidised bread, in addition to providing subsidised goods to ration card holders with a value close to EGP 3.5bn per month, after increasing the provisions for each individual in the system from EGP 21 to EGP 50 in July 2017.

Madkour pointed out that the decision of the Ministry of Supply and Internal Trade to write prices on the packages either through the submission of bills or shelves of supermarkets is only a regulatory procedure to adjust the market.

He noted that most commercial chains and stores were already committed to the practice before mandating prices on packages.

Madkour added that the Egyptian market has the elements of attracting investments in terms of population density and purchasing power as well as the presence of trained workers, but there are obstacles to investment in general such as lack of lands for investments.

He pointed out that some people buy land and keep it until prices go up and then sell it, urging the state to provide lands on an usufruct system to solve this problem.

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