Lashopack Food Industries aims to boost the size of annual sales in 2017 by 15% to reach EGP 41.4m—up from EGP 36m in 2016.
The company’s sales director, Mahmoud Aboul Saoud, said that the company will increase its dealings during 2017 by directing a greater proportion of their production for exports.
The company exports about 40% of the total annual production, while the remainder is pumped to cover the needs of the local market through 23 distributors.
Lashopack exports to 15 Arab and Gulf countries, where Kuwait alone accounts for 15%, Sudan for 8%, Qatar for 10%, and Bahrain for 5%.
Aboul Saoud said that exporting to foreign markets is difficult now—especially in the dairy field—due to rumours about Egyptian products.
With regards to the Egyptian pound’s flotation, he explained that the decision was not beneficial to the exporting sector due to the hike in production costs.
However, he described the decision of the flotation as good in general.
He pointed out that large companies are the biggest beneficiary of the flotation—due to the volume of their exports—as the cost of production reduces as production size increases.
He added that the exchange market is still volatile, which makes the company unable to set a cost for more than 30 days.
Aboul Saoud said that the decline in the dollar price would make companies cut their prices, especially as costs are calculated at EGP 18-19 to the dollar.
He added that the rise in costs of final products did not only affect the local level, but also shed its impact on exports.
He pointed out that targeting increased exports cannot come at the expense of the value of its business, where the company cannot sell at lower prices than input costs.
Following the flotation decision, some Arab countries designated exports offices in Egypt to buy products directly from local companies and export to their home states, he said.
He explained that these offices buy Egyptian products in pounds, while also bearing the shipping costs.
Furthermore, Aboul Saoud said that local companies are making great efforts to boost their exports and improve the competition abroad in order to increase their dollar resources and import raw materials.
Regarding the foreign markets, Aboul Saoud said that the local markets need to increase external marketing in the coming period.
He noted that Egypt lacks a global presence—unlike other countries—adding that commercial representation offices do not carry out their designated roles and urging the Ministry of Industry to inspect the problem.
Moreover, he said that foreign markets welcome Egyptian products, but the high production costs reduce their competitiveness among other countries, adding that the local market needs to make more efforts to enter new foreign markets.
Aboul Saoud said that Egyptian companies need to attend international exhibitions—especially in the countries in which Egypt lacks a presence, including the African market.
He pointed out that foreign countries support their exports through helping their companies attend international exhibitions for free by providing air tickets, hotel reservations, and transportation fees.