Daily News Egypt

GALINA targets $60m in exports next year: CEO - Daily News Egypt

Advertising Area

Advertising Area

GALINA targets $60m in exports next year: CEO

25% increase in exports value after dollar price hike against EGP

By Salim Hassan

The Egyptian British Company for General Development (GALINA) aims to double its exports in 2016 to reach $60m, up from the $30m recorded last year.

CEO of GALINA Abdel Wahid Soliman said his company targets to increase the volume of its business in external markets to reach 8,000 tonnes annually, compared the current figure of 4,000 tonnes.

Soliman added that the company aims to expand in foreign markets in order to increase the volume of its business in European countries, as the largest market to obtain the company’s products.

The European market obtains 60% of the company’s exports, followed by the US and Canada, which acquire 30% of exports. Gulf countries came in last, with 10% of the company’s exports.

Strawberry and artichoke products dominate 50% of GALINA’s exports. Meanwhile, beans, peas, mixed vegetables, cantaloupes and pomegranates are the remaining 50%.

The company has pumped 1,500 tonnes in the domestic market last February, and it aims to increase it to 3,000 tonnes next year.

GALINA is also planning to have an initial public offering (IPO) of its stocks in the Nile Stock Exchange (NileX) in November, and it has hired Egy Trend consultancy firm as the financial advisor in that regard.

The number of the company’s stocks has reached 72m stocks, with an initial fair value of EGP 108 per stock. The registered capital of the company amounts to EGP 15m, meanwhile, issued capital amounts to EGP 7.2m, and assets of the company are valued at EGP 113m.

Soliman added that issuing the company’s stocks in NileX is deemed an essential step towards implementing its expansion plans, stating that the company has a chance to expand in the agriculture product industries, especially as it could establish a featured trademark in external markets, and increase the base of shareholders in the company to increase its financial ability.

The CEO pointed out that GALINA has benefited from the devaluation of the Egyptian pound against the US dollar recently, as the value of its exports increased by 25% due to the currency devaluation.

Soliman explained that the devaluation of the Egyptian pound benefited exporting operations; however, it negatively affected the cost of importing.

According to Soliman, increasing the price of the US dollar against the Egyptian pound makes up for the cost of agriculture products locally and also contributes to increasing the competitiveness of Egyptian products globally.

The competitiveness of products, which increased due to the dollar price hike, will appear clearly in the long term, Soliman said, noting that after the recent currency prices, the prices of the imported services have increased by the same percentage. However, in the long term, this will stabilise prices.

Soliman noted that the recent increase in the cost of local production of agriculture products has surpassed 20%, which resulted in exits of several small companies as they could not compete in light of the repeated hikes.

The CEO attributed the hike in the production cost to increases in energy prices in general, which affected manufacturers, processes of transport and storage and increased labour costs.

He added that the delayed payment of export subsidies is deemed one of the most important issues facing the exporting companies, explaining that until 2010, exporting companies did not suffer from any issues related to submitting the required documents for obtaining exports subsidies.

Currently, export companiesobtain export subsidies in two years; however, previously, the period was only one week.

Soliman said that giving attention to agriculture activities will help in solving unemployment issues, adding that the agriculture sector can generate more profits than several national mega projects.

Local and international demand for Egyptian products is growing faster than agricultural production and industrial growth rates, which requires improving the agriculture sector, Soliman said.

He added that the frozen vegetables industry basically depends on storage, to be offered in the market when their season ends. This industry requires huge liquidity and the delay in subsidised funding affects the companies, as they don’t have the sufficient financial liquidity in light of the current economic situation.

Promoting agricultural exports has pushed a number of investors to cultivate export products, besides land reclamation, after farmers have stopped cultivating these corps due to lack of demand and appropriate prices, Soliman clarified.

He also noted that investment companies entering the agricultural sector will increase the sector’s productivity and contribute to introducing new technological means that are not available for the ordinary farmer.

GALINA has begun making contracts with agricultural companies to ensure the highest quality of products, Soliman noted.

He added that a number of agricultural crops, such as strawberries, will be harvested in Egypt before their counterparts in the world and will be the only ones available in export markets, giving a competitive advantage to Egyptian agricultural products.

A number of clients decreased their contract volume with the Egyptian market after the 25 January Revolution. Companies are currently seeking to regain their global share in light of political stability.

GALINA always seeks the attendance of foreign conferences and exhibition, such as the Anuga conference and Fruit Logistica in Germany, as well as Gulf Food in Dubai, said Soliman.

He added that the company’s attendance aims to identify new experiences and learn of the latest findings of major international companies in the food industries and agricultural crop sectors.

The international exhibitions are also an opportunity for the companies to meet the Egyptian companies that produce and export food products and agricultural exports, Soliman added.

He further noted that the increase in exports of agricultural commodities is linked to a comprehensive plan for the exports’ movement. The exports development plan must include the crop types that Egypt has a relative advantage in cultivating.

The success of the export process requires “the right” legislation and governmental decisions to regulate the process, in addition to identifying the authorities responsible for the projects and programmes’ implementation, Soliman emphasised.

Soliman further requested the permanent activation of the supervisory role and to prevent the non-accredited companies to trade imported seeds in the market.

He also pointed out the significance of expanding in the establishment of refrigerators, as well as sorting, packaging and storage stations for products that are meant for export.

Soliman pointed to the need to prevent the trade of fake pesticides in the market, and to use modern technology in the development of new varieties of seeds resistant to diseases, and use the latest devices in detecting pesticide residues in organic agricultural crops.

He further demanded support and help for farmers and the resolution of their problems. Soliman also requested developing the export policy for all agricultural crops, which defines the areas that must be cultivated and the needs required locally and for export.

Soliman stressed on the need to expand in the foreign markets to make up for losses that affected the Egyptian market this season due to the Russian rouble and euro crises. He further noted that this process must start immediately, as foreign markets take a period between five and seven years to deal normally and directly with the local market.

GALINA was established in 2004. In 2014, GALINA increased its orientation to the domestic market through pumping new investments to buy packaging lines.


Breaking News

No current breaking news

Receive our daily newsletter