El Rashidi El Mizan, owned by the English investment fund Silk Invest, aims to increase its sales in the Egyptian market during 2017 to reach EGP 500m, compared to EGP 300m in 2016.
The company’s sales manager, Khaled Fawzi, said the company’s sales rose by about 120% in 2016 to reach EGP 300m compared to EGP 136m in 2015.
Fawzi added that the company achieved exports worth EGP 100m during 2016, reaching 400 million people domestically and abroad.
He explained that the company is seeking to achieve the targeted sales after the operation of the new plant, which is expected to increase the production capacity of the company and raise its market share.
The company is seeking to increase its exports by 15% after launching the new plant. The company is to expand in a number of African and Arab markets, particularly in Yemen, Palestine, and Somalia.
Fawzi pointed out that the company achieved an increase in the size of its domestic sales last year as a result of raising products prices after the increase in production costs.
He said that the company established a new plant on an area of 15,000sqm in the industrial zone of the 6th of October City to increase the annual production capacity.
Fawzi pointed out that the investment costs of the plant rose during the construction to EGP 200m—compared to EGP 120m allocated by the company before the beginning of the project in 2015—due to the increased value of the dollar and the increased cost of importing the equipment and machinery needed for the production.
The new plant produces halva, tahini, biscuits, ketchup, jam, and peanut butter.
Fawzi said that the company is seeking to expand its discount offers and to participate in several initiatives to reduce prices and minimise the recession.
He said that the increase in the prices of products makes consumers stop buying them, which is what happened with some of the company’s products, such as the new Sakalans biscuit—the sales of which dropped significantly during the last year.
Fawzi said that the company’s sales fell by about EGP 3m in January to reach EGP 22m, compared to EGP 25m in December 2016.
He predicts that the decline in sales is to continue this month to reach EGP 6m, after the direction of consumers to buy the local halva instead of the company’s product.
He added that the company has introduced small-sized tahini and halva products.
The company is considering producing 250g packs wrapped in plastic bags instead of plastic cans in order to reduce packaging costs, which amount to about 30% of the cost of the product.
He pointed out that the peak of domestic sales of sugary products is generally concentrated in the nine months between September and May of the following year. Consumption decreases during the summer because of the high temperatures and the end of school year.
He stated that the food industry sector is facing a number of crises in the domestic market, especially after rising production costs during 2016, which forced the sector to increase prices to cope with increased costs.
Fawzi said that the sector has witnessed a crisis in the provision of production in 2016 as a result of the dollar and sugar crises that have affected the operational capacity of plants.
He pointed out that the decision to float the pound is a good corrective step; however, it increased the exchange rate significantly.
He said that the cost of production has recently stabilised and is expected to decrease again, which makes the situation easier for the companies, unlike the previous period.
The company was forced to re-price its products six times in one month in 2016 as a result of the continuous increases in the prices of raw materials.
One tonne of packaging paper rose by about EGP 35,000 to reach EGP 58,000 in December. Sesame prices also rose by the same rate.
Fawzi added that sugar prices reached EGP 11,000 per tonne in December from EGP 4,500, after the Holding Company for Food Industries raised its prices four times in a row during 2016.
He called upon the government to stabilise the customs dollar price for longer than 30 days, so that companies can maintain the stability of their price lists, which is positively reflected in the growth of domestic and foreign sales.
He pointed out that exports are no longer a luxury for sectors in general—and food industries in particular—as the liquidity in the domestic market has shrunk because of the inflation, which created a surplus in supply.
He said that companies should expand in new markets rather than reducing their production, which brings benefit to the national economy.
El Rashidi El Mizan was established in 1988, and its first factory was established in the Sayeda Zeinab area. It currently employs more than 1,200 workers, and it is expected to exceed 3,000 employees after the completion of its expansion plan.