In an interview with Daily News Egypt, Minister of Supply Khaled Hanafy speaks about the ministry’s efforts of providing commodities for consuming markets.
What are the ministry’s efforts to solve the lack of oil in consuming market?
The ministry is currently working on the continuous provision of crude oil for El-Max plant in Alexandria, with up to 70,000 tonnes to ensure the availability of oil throughout the year, and so it is not influenced by air fluctuations that occur during the winter. The supply will start at the beginning of February.
The ministry will provide oil for the public and private sectors to avoid the repetition of the previous market crises and to ensure plenty of strategic reserves of oil on an ongoing basis.
The Ministry of Supply began to pump 2,000 tonnes of oil per day in the middle of last week, in subsidised from, for the products of the Food Industries Holding Company (FIHC), the private sector in the branches of consumer outlets, and in ration grocery shops to provide citizens with oil alongside the other rationed goods.
Last week, the ministry decided on a tender to import 100,000 tonnes of oil to be distributed through ration cards, and we contracted for the importation of this amount from 10 to 20 February.
Next month, the ministry will begin providing goods to consumers in exchange for saved ration points for bread through the FIHC. The points can be exchanged later.
The Holding Company will provide goods either from their products or from the private sector by negotiating low prices with retailers. The saved bread ration points amount to up to EGP 500m monthly and so the holding company will contract with private companies to buy commodities for this amount. In turn, they will get substantial discounts from the companies, which contribute to reducing the final prices of products.
What is the status of sorting out the ration cards to identify filter out those who do not need subsidies?
The ministry’s collaboration with the Ministry of Military Production will end within a month for the sorting out of all ration cards, through which we concluded with validating 80% of the total of 22m ration cards.
The ministry is currently working on a database through the Civil Status Organisation (CSO) to look for each duplicated name, the names of deceased persons, and those of travellers who have been abroad for more than six months. They will then be excluded from the ration cards system.
What about the development of the ration offices in the governorates?
The ministry is continuing the modernisation of 1,600 ration offices all over Egypt by adding computers and linking them to a unified network to provide all means of convenience for citizens.
The ministry announced the provision of lands throughout governorates to establish major business chains; what are the offers received by the ministry?
The ministry received 16 offers from major commercial chains to establish branches in the governorates. Carrefour, HyperOne, Spinneys, Fathallah Market, Bim, Kazyon, Metro, Kheir Zaman, and Panda were the most prominent commercial chains that have requested access to lands.
The ministry had announced the availability of 709 plots of land and 366 outlets through the Internal Trade Development Authority (ITDA), affiliated to the ministry, to establish business projects in the governorates. The ministry has received 360 applications for investment in lands and development of outlets, in addition to the development of 108 consumer complexes on a local level in cooperation with the private sector.
Is increasing the subsidies for farmers conditioned upon the ministry’s purchase of wheat from the farmers?
No, it is not. Subsidies allocated to the farmers are unconditional and each will receive the subsidy as soon as they start cultivation of wheat.
The aim of the decision is to increase wheat productivity since the subsidy increased to EGP 1,300 for every acre on a maximum of 25 acres, which would work in favour of small farmers.
The farmer will receive the subsidy twice; first when he cultivates wheat and the second through a loaf of bread subsidies. This will become available after the application of the new bread system.
What is the size of the grain storage capacity for the wheat season?
The storage capacity available within the next wheat season will be 5.5m tonne after the completion of establishing all silos, which the ministry began nearly two years ago.
The ministry will finish building 61 silos by the end of 2016. We built 25 silos using a UAE grant, 25 silos using Saudi Arabian financing, and 11 other horizontal silos using Italian financing.
We also plan to complete the development of 105 earthen barns and turn them into modern developed barns by the end of March to save the wheat in 79 locations within 20 governorates in the first stage. The ministry has also contracted to develop 189 earthen barns in the second phase.
How many beneficiaries are there from the Gamaeyti (money pooling) project?
The project was signed last month between the ministry and the Social Fund for Development (SFD) and there are approximately 30,000 young applicants. The ministry approved 10,000 applicants who met all the required conditions and the operational procedures for the project will be launched next month.
The ministry had announced granting commodities loans for small projects for youth, funded through the SFD, and the loan value will range from EGP 50,000 to EGP 100,000. The loans are supervised by the consumer complexes and the FIHC to provide job opportunities for youths, increase outlets for commodities, and offer goods at discounted prices.
The ministry is also studying other suggestions to provide other privileges on the ration cards. Among them is making the ration card a guarantor of a citizen, to eradicate the phenomenon of debtors. The “Build Your Apartment” initiative will help young couples establish their apartment with all the necessary furniture at discounted prices.
What is the role of the ministry in developing the sugar industry?
All financial allocations for the purchase of sugar are available. The farmers are paid EGP 400 per tonne. The cane supply bill next season will range between EGP 4bn and EGP 5bn for the purchase of 10m-11m tonnes of cane, to produce about 1.2m tonnes of sugar.
The ministry is working on developing the production of the Egyptian Sugar and Integrated Industries Company (ESIIC) through the establishment of a trademark. This trademark is currently being negotiated with private sector companies.
ESIIC’s stock did not exceed 180,000 tonnes in the past season. It managed to export 42,000 tonnes of sugar to Kenya and 20,000 tonnes of ethanol to European countries. ESIIC is currently seeking to export products to African countries and contracted to sell 50,000 tonnes of ethanol at the cost of EGP 250m to an Indian company in Egypt.
We negotiated with a major global Chinese company to build three factories in Egypt to produce paper from sugar cane leftovers, with a production capacity of 100 tonnes per day for each plant, with investments of EGP 1bn.
The Chinese company will responsible for providing the full amount, in addition to the three factories built for packaging, according the latest quality standards, and with the capacity of 2,000 tonnes of sugar per day.
What are the ministry’s efforts to regulate commodity prices?
The ministry will continue its plan to cut prices through the consumer complexes and through contracts on new quantities of local chicken in the upcoming period.
Consumer complex cars are spread in all regions with the necessary commodities at discount prices 25% lower than market prices.
Refrigerated fresh meat is sold at EGP 50 per kg and frozen chicken is EGP 19 per kg. In addition, the “Make your Meal” initiative achieved a sales record of about 1m meals at the cost of more than EGP 25m.