Hero MEA is a subsidiary of the Swiss company Hero Group, which specialises in producing cereals, biscuits, and nutrition supplements through its brands such as Hero and Vitrac.
The company’s total investments between 2002 and 2015 were $40m, according to Hero MEA managing director Mahmoud Bazan. In the coming four to five years, the company expects to increase its production rate from 120,000 tonnes to 140,000 tonnes
Daily News Egypt interviewed Bazan to talk about Hero MEA’s strategy to expand its business in Egypt and their expected sales in the coming years.
Will the company acquire any of Egypt’s food companies?
The company is not thinking about new acquisitions in the current period, but our plan focuses on investing in our factory here in Egypt and investing in the field we are involved in.
We have intentions to further develop our Kaliyoubia factory after having reached 11 production lines from just 2 lines in 2002.
You talked about the company’s plan to export and expand in Africa. What are some of the challenges the company may face in the case of exporting to Africa?
Egypt has a very positive merit in this regard, represented by the number of active agreements ratified by the Egyptian government in the Middle East and Africa. This helps us to export to these countries. Sometimes there are some problems, but we overcome them with the help of these agreements.
Although there are some challenges in transferring goods to African markets, these markets are promising and there is potential to manufacture and export to them. Ethiopia, Kenya and Nigeria are among the countries we are working to open business in.
What is the company’s export rate to Arab countries?
Our export to Arab countries is an estimated 55% to 60%, which is about EGP 200m.
What is your business’ plan for expansion in Egypt?
This year we have a plan to expand our factory in Kaliubiya with investments worth $5m.
Is the company listed on the Egyptian Exchange (EGX)or other market exchanges in other countries?
We are a private, closed company and we do not have any intentions to be listed in the EGX or any other stock exchange.
What kind of cooperation do you have with the Ministry of Supply?
We cooperate with the Ministry of Supply in suppling outlets with our products.
What is the company’s sales and the planned target?
The company targets achieving EGP 761m in 2016 compared to EGP 640m in 2015. Moreover, the company hopes to achieve EGP 1bn in sales in 2020.
Will the company import material from outside, and, if so, how will you deal with hard currency?
Since Hero’s start in Egypt, the country has been at the centre of exporting outside the country because of the raw materials we use and the industry’s qualified manpower. We do not have problems regarding the lack of hard currency because we export so we bring hard currency to Egypt.
Do you have investments in the agriculture sector?
No. We do not have business in agriculture but we help the investors who have investments in this sector. We work with all fruit farms in Egypt.
What is your strategy to develop 11 production lines for your factory in Egypt?
Our strategy is to develop the production lines on a daily basis. It is an ongoing development and restructuring process. The development includes production, the production line, new products, and employees.
In the coming four to five years we seek to raise the production rate from 120,000 tonnes to 140,000 tonnes and in four years we seek achieve EGP 1bn in sales.
How many employees work in your distribution outlets in Egypt?
We have 1,500 employees who work with the distributors all over the country and we have more than 38 distributors.
What are your standards when receiving fruit from Egyptian farms?
We make sure that the fruit we receive matches with international standards and the standards of the Swiss company.
What food expos are you participating in?
We participate in all food expos. We participated in Gulfood 2016, which was held two weeks ago, a food expo in Japan, to be held this week, and SIAL Paris food expo, which will take place in October. We are interested in these expos to market the products and meet clients and develop cooperation with them and get to know new clients.
In your opinion, do you expect Egyptian fruit exports to increase in the coming period?
I expect an increase in Egyptian fruit exports. As with Hero Company, we seek to increase our sales to 12% in total, and we hope to increase exports to more than 15%.