Tetra Pak: time for a sharp choice cut

Daily News Egypt
6 Min Read

Tetra Pak, the company specialised in food processing and packaging solutions, believes that the Egyptian economy has been facing many challenges during the past period, according to the Managing Director of Tetra Pak Egypt Konstantin Kolesnik.

Daily News Egypt interviewed Kolesnik to get an insight into how the economy has affected Tetra Pak, as well as his general outlook for Egypt’s forecasted recovery programme, the transcript for which is below, lightly edited for clarity:

To what extent where you affected by the increasing exchange rate of foreign currency?

Foreign exchange rate (FX) is a challenge facing all companies operating in Egypt and it has affected prices of everything.

How long have you been working in Tetra Pak? And how long have you been in Egypt for?

I have been part of the Tetra Pak family for 16 years and now part of Tetra Pak Egypt for more than 2 years.

Where were you located before Egypt?

I joined Tetra Pak in 2000, and since then held a number of different responsibilities within the company. In 2014, I was appointed as the managing director at Tetra Pak Iran. Before that I held different positions in Tetra Pak in the Ukraine, Russia and West Siberia.

What are the challenges you have witnessed in the Egyptian market?

The Egyptian market is a very promising market with a lot of potential and very specific advantages, such as the large population and various diversified market segments. However, there are several challenges such as the shortage in foreign currency and increasing FX rate. The biggest challenges that are directly related to our field are that the consumption of loose milk is still very high in comparison to packed milk, which is why Tetra Pak is constantly working on raising awareness about the benefits of packed milk and the hazards of loose milk through taking part in the ‘Your Health is in this Package’ campaign. The second direct challenge is that the consumption of milk in general in Egypt at 13 litres per capita is still very low when compared to the global average consumption rate at 33.3 litres per capita.

How much are your total investments in Egypt?

Tetra Pak is a privately-owned company by a Swedish family, and is not registered in any stock markets. Therefore, the company does not disclose its investment figures. However, our investments in Egypt are focused on our human resources as we invest in our employees and their trainings to ensure that we are capable of offering our customers the most advanced packaging and processing solutions.

What are you anticipated sales this year and next year?

This year we are expecting to sell 2.3bn packs. As for next year we foresee a further increase in our sales.

Besides packing, what other services do you provide for your customers?

Today, we are the world’s leading company in packaging and processing solutions, and we have the largest portfolio of packages in the world; therefore, this enables us to provide an integrated processing, packaging, and distribution line and plant solutions for food manufacturing. Additionally, we constantly try to provide our customers with the latest innovations and market trends from around the world to offer the highest quality products to Egyptian consumers, and a perfect example of these efforts would be the Innovation Day we are holding today.

Do you have any plans to establish a factory in Egypt anytime soon?

The number of packages we currently produce in Egypt does not allow us to establish a factory; however, we have an ambitious plan to build our first factory here once our production reaches higher levels to make sure the factory is fully utilised. 

Why do you consider yourself Domty’s partner?

We work as one team. We think innovate and accomplish projects together. Throughout 10 years of partnership we have managed to provide Domty with end-to-end solutions including processing, packaging, and services, while maintaining the highest standards of food safety, operational performance, and sustainability. Add to this, we share with Domty market research findings, latest trends, innovations from around the world, and product ideas.

How did this partnership help Domty to grow in the Egyptian market?

The partnership started in 2008 with 4 production lines, 2 products, and 1,300 employees. In 2018, 23 there were production lines, 160 products and 3,263 employees. Domty increased their production capacity from 3m packs in 2008 to 420m packs in 2018. Now Domty was able to expand to 39 new markets across Europe, Asia, and Africa and they are one of the biggest white cheese producers in Tetra Pak in the world.

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