El Borg Establishment for Food Industries (Dream) realised sales growth in 2016 amounting to 10%, but the products channelled to tourism facilities showed less results, due to the suffering of the tourism sector in Egypt. General manager of the company, Ahmed Morsy, said that the company also expects 40% growth in its sales in 2017.
What is your target business size growth in 2017?
Dream aims to achieve 40% growth in local sales, but it is also likely to reach 50% if the tourism sector is revived.
The company achieved a 25% growth in sales last year, despite the political instability of other neighbouring markets, such as Yemen, Libya, and Syria.
The company also suffered from the unavailability of some production inputs as a result of the exchange rate hikes and the problems in clearing goods from customs at ports.
Yet, we penned an ambitious plan to raise exports in 2017 by almost doubling the size of our 2016 exports through introducing new products to the local market.
The company is focusing in the current period on exporting to Arab countries, with plans of reaching African markets.
What are some of the new products that the company intends to put on the market?
We will inject several products in the markets with a quality that matches the expectations of Egyptian consumers. We have plans to release more than 10 products, including candy, pastries, and chocolate.
During the Gulfood Exhibition held in Dubai in February, we introduced several products, such as brownies and pancakes mixture and yeast, as well as new flavours of jam, such as watermelon, green apple, peach, and tangerine.
We have the largest market share of the mixtures market in Egypt, including jam, cream caramel, and ice cream, along with pastries and cake mixtures of different types, in addition to instant beverages. The company is working to maintain the confidence of Egyptians in its products.
How were sales impacted by the declined tourism?
The decline in tourist inflow to Egypt negatively impacted the sales of our products that are channelled to the tourism sector. Sales for the sector dropped by 50% in 2016 compared to 2015.
We produce several varieties of products especially designed for hotel confectioners, such as cream decoration, dough, cake mixture, baking enhancers, and raw chocolate.
What is your plan to offset the decline of sales in the tourism market?
We intend to open new channels to offset the losses through supplying our products to cafes and restaurants in several cities, after coastal and tourism cities were impacted by the declining tourism movement.
We will see several unprecedented changes in 2017, such as economic reforms. These changes may be hard in the short term, but will benefit the economy in the medium and long run.
The general investment climate is gradually improving. The pound’s flotation removed a major problem facing investments. The unified New Investment Law will also serve to attract new investments.
With challenges are born opportunities. This is a good time to inject more investments into the market. Hence, Dream intends to raise its productivity across a number of products. We will also increase our distribution capacity and introduce new products to the market that replace imported ones.
What are the problems that you faced in 2016?
There were several problems in 2016 that impacted the industry sector in general and the food industries in particular. These problems include the price hike of production inputs after the flotation of the pound and the sudden surge in sugar’s price, the latter which forced us to almost double the prices of some of our products.
Moreover, the sugar shortage disturbed productivity, which adversely impacted our ability to meet the needs of consumers in Egypt and abroad.
The devaluation of the pound against the US dollar led to a sharp increase in production input and raw materials. This forced companies to raise their prices.How was the company impacted after raising the price of its products?
The rising cost of production forced the company, like many others, to pass part of the increase to consumers and final products. This slowed down the sales of some products.
The pricing policy of any product is linked to the production cost. We hope that input requirements do not see more increases so we can keep our current prices unchanged.
Does the sector need a food safety authority?
Yes, the sector is in dire need for a food safety authority. There is no doubt that when we deal with one body that possesses the expertise and knowledge of the sector—instead of dealing with many unspecialised agencies—will positively impact the food industries sector. It will also save much needed time and effort and lower the final costs.
Furthermore, a food safety agency can ensure protection of consumers’ health through adopting sound health standards and imposing them on the food products in the market. This will also protect manufacturers from the unfair competition with unauthorised factories.
How can the official sector benefit from control of the unofficial food sector?
Tightening controls on the quality of traded goods and eliminating the unauthorised factories is necessary in the coming period. This will also drive up the investments in the official market.
There should be more attention granted to technical education, as this will provide better labour equipped with knowledge of modern technologies.
Finally, the government must work to ensure that laws and bylaws complete one another without any conflict between them.