Juhayna Company for Food Industries objected the decision of the Minister of Supply to oblige the companies working in the field of food industries to print prices on the packaging starting next year.
According to Seif El Din Thabet Executive chairman of the BOD and CEO of Juhayna, printing the prices on the packaging violates the free market’s policy based on the principle of supply and demand, because with the implementation of the decision ends flexibility to reduce and increase prices.
Additionally, he explained that the government has taken a lot of decisions in the last few months to reform the national economy, which was necessary despite its negative effects. However, it will work to control the economy and put it on the right path to achieve high growth rates.
Furthermore, Thabet pointed out that the challenges faced by the economy are offset by many pros and opportunities, especially after the implementation of some reform decisions, including liberalizing the exchange rate and review some investment laws. Which reflects the ability of the economy to overcome all these challenges in addition to recovering and accessing the significant stability stage.
The food industry is one of the most promising sectors and has many opportunities, but still needs to create the right atmosphere and increase coordination between the government and the private sector to take advantage of the opportunities available in this strategic sector, according to Thabet.
“We believe that the decisions taken will pay off gradually, and we believe that the private sector is the main engine of economic development and a powerful driver of sustainable growth”, said Thabet.
Thabet stressed that the government is not responsible for achieving sustainable development alone, but it is a shared responsibility between the public and private sectors and civil society institutions.
The concerted effort is necessary to push development efforts and reach a collective agreement on a common strategic vision linking short- and long-term goals.
He added that the government has taken the first step to develop a strategy to promote inclusive growth and sustainable development through comprehensive community participation from all parts of Egyptian society.
Juhayna’s revenues in the first half of this year reached about EGP 2.86bn, an increase of 17% over the same period of 2016, while net profits fell 22% to EGP 86m compared to EGP110m last year.
Thabet attributed the decline in net profit by the end of 2016 and the first half of 2017 to the rise in production costs, currency differentials, raising interest rates, low purchasing power, plus value added tax (VAT) and the decision to add the price to the packagings.
He explained that the food industry does not work in isolation from the national economy, so it faces the same challenges faced by the market in general, foremost liberalization of the exchange rate, raising interest rates, in addition to VAT.
The company has set up a series of urgent plans to work on reducing expenses and operating cost, increase sales and improve the level of liquidity. Additionally it is expected to show results during the next few days, refusing to disclose details in light of strong competition in the domestic market, according to Thabet.
He pointed out that exportation is a top priority of the company in line with the policy of the state, exchange rate changes and the devaluation of the Egyptian pound, which increased the competitiveness of Egyptian products in world markets.
He explained that the company is working on an ambitious plan to invade new markets, including the Middle East countries such as Jordan, Kuwait, Lebanon and some African countries such as Sudan and Ethiopia, in addition to interest in the African market in all countries.
As for the new investments and expansions of the company, Thabet stated that since 2011-2016, we have been keen to invest in various projects and are keen to continue. However, this year’s strategy focuses primarily on working on what has been pumped over the past years, in order to increase the efficiency of the operation and development of staff.