Head of the Chamber of Food Industries (CFI), Ashraf Al Gazayerli, said that the sector is expected to experience significant growth during 2017, both in terms of domestic sales and exports, as a result of the depreciation of the national currency and government measures.
Al Gazayerli told Al Borsa that the sector’s exports will climb by 15% by the end of 2017 if all restrictions limiting exports are removed.
The food industry exports recorded a growth of 1% in dollars and 24% in pounds during the period between January and November 2016, reaching $2.468bn, compared to $2.437bn in 2015.
Al Gazayerli said that the fiscal and monetary policies of the Egyptian government were not stimulating exports before, which hindered the sector.
Yet, he explained that the recent measures, including the flotation, will have a positive impact on exports.
He added that the local market is witnessing a decline in food imports, clearing the way for local companies and factories to increase production and sales.
Al Gazayerli said that the food industry sector has been seeing many challenges over 2016, including the raids on factories that stocked sugar and the questioning of the reputation of major companies.
He added that continuing to take corrective measures and issuing informed decisions contributes to increasing domestic and foreign investment.
He said the rise in the dollar price after the flotation decision in November 2016 was only a natural result, noting that the market has been becoming less volatile recently.
He pointed out that the price hikes of the company’s products impacted sales, especially as most input is paid for in dollars. This was countered by the companies deciding to depend more on local alternatives.
He stressed that relying on domestic production inputs will contribute to the creation of new entities and increasing industrial activities.
He predicted the sector to see a surge in investments in the coming period, in conjunction with the establishment of the Food Safety Authority.
Al Gazayerli said that the parliament’s approval of recent laws boosted optimism in the sector, adding that despite the harshness of the economic reform measures taken by the government at the end of 2016, affecting the industry and the local market, they were right and required to put Egypt back on the right track.
He pointed out that the availability of hard cash and the exchange rate stability are the most prominent challenges in the food sector during 2017, leaving companies to compete for new markets and boost their production.
He urged the state to facilitate measures for obtaining exports subsidies from the Ministry of Industry to help companies increase their exports size.
Al Gazayerli explained that 2017 will be difficult. “Reform comes at a price,” he stressed. However, he added that passage of new legislations will improve the economic climate.