Raya Foods, one of the companies of the Raya Holding Group, aims to reach EGP 1bn in exports next year, while the company’s exports are currently about EGP 700m, according to Omar Abdel Aziz, CEO of Raya Foods.
How has the Russian-Ukrainian war affected the company?
A total of 93% of the company’s products are actually exported, while the remaining 7% go to the local market. Work is underway to raise the local market’s percentage of the company’s production to 10% in 2022.
The company aims to seize the conditions of the Russian-Ukrainian war to direct its exports to North and South American countries, given that we enjoy great export opportunities.
The American market is still welcoming to exports and has great growth potential, in addition to the Gulf region, specifically Saudi Arabia, with the expected recovery in the Umrah market.
The supply chain crisis and the rise in freight rates negatively affected the company’s profitability this year compared to its previous counterpart; especially since we sometimes have to ship products without a profit margin or incur financial losses as a result of shipping in order to comply with our customers.
In the midst of global changes, it becomes clear the need to provide programs to support exports, and to provide additional incentives to exporting factories so that the Egyptian product can compete against other products in various circumstances.
Raya Foods is following with interest the changes that occur in global trade as a result of major global events such as the current Ukrainian war and the pandemic that changed the face of various businesses during the past two years.
What are the new markets that the company plans to enter in the coming period?
Entering the Brazilian market and the African continent is on the company’s radar, especially after monitoring demand for new products such as onions and apricots.
The company is currently studying the possibility of expansion in other countries, after making sure that the product can be sold and succeed in that market, in conjunction with a plan to establish a food industrial complex, which includes factories for related products with agricultural backs, to exploit the capabilities of the sister company “Raya Agricultural Crops or Raya Agro”. The company will reach its maximum production capacity during 2023, which made the expansion by adding new factories a necessity.
What are Raya’s plans for agricultural crops during 2023?
Raya Agricultural Crops is responsible for leasing agricultural lands, and is working on cultivating them with the required products according to the needs of “Raya Foods”. It is also entrusted with the production of the products to be exported fresh. The purpose of establishing the company is to fully control the production process and direct supervision of all stages of cultivation.
The company recently leased agricultural areas with a total area of 362 feddans, and has already concluded signing new contracts to lease about 600 feddans on the Alexandria Desert Road, to be planted in multiple stages, starting with an area of 300 feddans, with an increase of 100 feddans in each stage.
Raya Crops aims to grow 6,000 tonnes and export about 1,000 tonnes of its crops as fresh products, while the other 5,000 tonnes are supplied to Raya Foods’ production lines to constitute 20% of the latter’s needs.
What about the growth rate of the company’s sales in recent years?
Raya Foods recorded a remarkable growth of its business during the first half of 2022. The company’s growth rate increased by 65%, and the company’s operating profits increased by 30% by the end of the second quarter of this year, compared to the two rates during the same period in 2021.
The sales growth rate exceeded 45%, and the company recorded a profit growth rate of 95% in 2021 compared to 2020. The company expects to record a 65% growth in sales compared to last year.
The company witnessed a journey of logistical expansions after Raya Holding acquired in December 2016 one of the existing factories in Sadat City, with the aim of entering the food market quickly, and conducting replacement and renewal operations at the factory, which started exporting in July 2017.
At that time, Raya Holding invested about EGP 340m in acquiring the factory, financing the activity and the operation process. Now, Raya Foods Factory includes 3 production lines, with a capacity of 45,000 tonnes per year.
Recently, the company worked to rehabilitate four surrounding factories in order to use their capacity during periods of increased production, and a team from “Raya Foods” specializes in the process of managing these factories when they are exploited during peak periods, which resulted in an increase in its sales by 3 times.
Raya Foods works with a number of different governmental and private funding agencies. Raya Foods finances its investments equally between its own resources and bank facilities; It cooperates with the National Bank of Egypt, Banque Misr, QNB, CIB, and the National Bank of Kuwait.
The establishment of Raya Foods was an important strategic decision in the first place on the part of the parent group Raya Holding for Financial Investments, and the stability on the freezers industry was for two main reasons, the first of which is the length of the agricultural season, which reaches 12 months, and the other related to the documentary cycle and securing foreign currency from during exports.
What is the main goal of Raya Foods in the coming period?
Raya Foods aims primarily to provide sustainable sources of hard currency, especially since our main investment is in the export side to more than 40 countries around the world, is on the rise – while many of the activities of Raya Holding Group’s other subsidiaries are based on imports, it was necessary to secure a steady source of foreign currency.
What about the solar power project with Infinity Power?
Raya Foods is currently in the process of rehabilitating its factory in Sadat to inaugurate the solar power plant, and its factory will be the first among vegetable factories that use renewable energy in Egypt.
It is expected that the project will be implemented during the first half of next year, in cooperation with Infinity Power Company, which is fully financing the project, while Raya Foods will purchase the energy, with the right to purchase the station at a later period, after evaluating the investment and technical situation, and the ability and experience necessary to operate the station.