Konstantin Kolesnik, managing director at Tetra Pak Egypt, said that his company aims to boost its sales in 2018, adding that during 2016, the company sold 3.2bn packages. However, in 2017, that number did not increase due to the small sales of the food sector in general, influenced by the economic changes that the country witnessed after the floatation decision, when inflation rose to as high as 35%.
Kolesnik told Daily News Egypt that inflation changes slowed the growth in consumer spending as rising prices affected purchasing power, adding that despite that, “we see good growth coming back and we aim to achieve very solid results in 2018.”
Daily News Egypt sat down with Kolesnik for an interview, the transcript for which is below, lightly edited for clarity.
What are your company’s main clients in the Egyptian market and how many?
We have around 30 customers, including Juhayna, Faragallah, Domty, Lamar, Obourland, Greenland, Lactalis, Danone, and Al Sakr.
What about the new products you offer on the market?
We have launched an array of new technologies and packages at Gulfood Manufacturing, such as the new Tetra Fino® Aseptic 100 Ultra MiM package, as well as new processing equipment, such as the Tetra Pak High Shear Mixer and the Tetra Pak Extrusion Wheel. There are also a number of new innovative projects in the pipeline for Egypt.
What were your sales in 2017 and what are the expected sales and plans for 2018?
Tetra Pak has been operating in the Middle East and Africa region for over 60 years, developing long-standing partnerships with many customers. This region is one of our biggest markets and we have delivered more than 28bn packages last year.
What were the sales of Tetra Pak internationally in 2017, and what is expected in 2018? How many countries does Tetra Pak operate in?
Our strong business performance has seen Tetra Pak grow successfully year-over-year at both regional and global levels. We continue to grow in both processing and packaging. Every day the distribution of Tetra Pak packages exceeds 433m in more than 170 countries. In 2017, the number of packages sold reached 188bn and Tetra Pak’s global net sales reached €11.5bn.
What is your strategy for Egypt in the next 5 years?
Tetra Pak has been operating in Egypt for more than 35 years. We work closely with our customers to identify and resolve any issues and support them to produce the highest quality products.
Our business is in serving our customers to offer the best packaging solutions and we continue to do this with the same level of reliability, efficiency, and commitment.
The company takes pride in being the world’s leading packaging and processing company. This left us with a great responsibility for coming up with out-of-the-box innovations to meet the growing needs of our customers, especially considering the current economic challenges. There will always be room for innovation, and therefore offering products at lower prices of good quality.
We will also benefit from innovations and trends we have seen in other markets that can be suitable for the Egyptian market.
Our customers continue to run their businesses and we continue to work together with them. Tetra Pak has an unbroken track record of over 60 years of doing business in the region and we are committed to continuing this for many years to come.
How do you see the economy and the problems that the investment climate suffers from right now?
The Egyptian economy has been facing many challenges in the past period, yet there are signs indicating that Egypt is getting back on a more sensible economic track after the economic reform programme that has been applied by the government.
Generally speaking, the Egyptian market is considered a very promising one with lots of potential and very specific advantages such as the large population and various diversified market segments.
Our investments in Egypt are focused on our human resources as we invest in our employees and their trainings to make sure that we can offer our customers the most advanced packaging and processing solutions.
The combination of quality and affordability is the key to unlocking any challenges facing the industry. This is what we have always been emphasising during our Innovation Day held every year. For example, last year Tetra Pak gathered all liquid producers in Egypt to discuss the best ways to adapt to the changed market dynamics and consumer habits.
We encourage our customers to rise to the challenges by sharing with them the best global practices on moving forward in economic downturns. Also, we encourage them to introduce cost-effective innovations, which have significant benefits in operational cost reduction, to eventually enable our customers to deliver high quality products at affordable prices.
Tetra Pak invests extensively in research, product development, and innovative technology solutions. This helps reduce production costs to ensure the success of our partners and customers. Tetra Pak has introduced the new eBeam technology, which offers significant benefits in operational cost reduction by 10%.
This approach supports the companies and helps them face the problem of increasing costs, and at the same time provides innovative solutions, which affect productivity and manufacturing processes.
How do you see the opportunities in the food industries sector?
We are the leading packaging and processing company in the world. This left us with a great responsibility to lead the market with out-of-the-box innovations to meet the growing needs of our customers, especially considering the current economic challenges. There will always be room for innovation, and therefore offering products at lower prices of good quality.
We will also benefit from innovations and trends we have seen in other markets that can be suitable for the Egyptian market.
Do you have any campaigns to encourage using packaged milk or any social responsibility activities?
“Your Health is in this Package” is a campaign that aims to increase awareness about the nutritional benefits of milk, benefits of safe packaged milk, and the potential hazards of loose milk.
Tetra Pak promotes the consumption of safe packaged milk all over the world, by developing and implementing awareness campaigns, highlighting the nutritional value of milk in general, as well as listing the benefits of consuming safe packaged milk and the hazards of consuming loose milk.
The company, in cooperation with the Egyptian Paediatric Association and the Chamber of Food Industries, succeeded in executing several initiatives through “Your Health is in this Package” campaign, which helped increase the consumption of packed milk from 23.4% in 2010 to 44.6% in 2017.
About 91% of packages sold in Egypt are Forest Stewardship Council (FSC) labelled and we are planning to increase the number of labelled packages. We also have plans to increase customers and consumers’ awareness about Tetra Pak’s responsible resourcing.