Domty, FrieslandCampina to investigate joint cooperation in cheese exports

Alyaa Stohy
2 Min Read

The Arabian Food Industries Company – Domty and Dutch multinational dairy company, FrieslandCampina, are to investigate cooperation between the two companies to further develop cheese exports to Africa. The two companies have signed a Memorandum of Understanding (MOU) in this regard.

Meanwhile, Domty will soon increase its new mozzarella production capacity, targeting 60 tonnes per month compared to the current 55 tonnes.

The mozzarella segment’s gross processing margin (GPM) is usually higher than the cheese segment’s average GPM, with the total cheese GPM expected to improve due to the production increase.

The company’s mozzarella cheese product GPM is also expected to be further enhanced soon, as the company has decided to restart distributing mozzarella cheese to small retailers and grocery stores. This will take into account that Domty has higher price controls and better margins

In July, the Domty management decided to implement cost-cutting programmes across several departments and units, with the goal of these policies to improve the company’s bottom-line.

Domty reported revenues of EGP 711m in the second quarter (Q2) of 2020, reflecting a downturn of 4.6% quarter-on-quarter (q-o-q), but an increase of 9.9% year-on-year (y-o-y).

The company’s performance during Q2 of 2020 was relatively sturdy. For the cheese segment, Domty has been able to increase sales, despite the continuous drop in sales to the Ministry of Supply. The increased sales also come despite the severe decline in sales to hotels and restaurants due to the novel coronavirus (COVID-19)-related restrictions imposed by the government.

The growth was led by Domty Plus sales, which have been the company’s main focus during the last 12 months.

Sales of Domty Plus grew by around 35% y-o-y in the first half (H1) of 2020. Sales were also driven by the full utilisation of the mozzarella segment

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