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Economic crisis, inflation hike behind change of consumer behavior: Tetra Pak - Daily News Egypt

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Economic crisis, inflation hike behind change of consumer behavior: Tetra Pak

Turnout is on small package, food sector expected to recover in 2018

Tetra Pak Egypt’s sales fell this year by 25% compared to the same period last year, driven by the short sales of the food sector, which plummeted by 40%.

The company’s Egypt managing director, Konstantin Kolesnik, said that the economic changes experienced by Egypt during the current year are not a secret, where inflation rose to 35% and the low consumer purchasing power maximized the problem.

He pointed out that the consumer has been looking at the price of the product before the specifications of the packaging, no longer considering if the package is easy to open or not, and many have started buying less quantities and smaller packages.

He explained that a large proportion of the company’s customers in the local market are not expanding at the moment and prefer to upgrade equipment and machines, due to the low sales and lack of vision for the future of the markets.

He added that companies began this year to withdraw their low demand products and cut costs across all stages, where the printing quality and raw materials are reduced without affecting the final form of the pack, next to reducing weights of packages to avoid raising prices.

He said the company’s sales last year amounted to 3.2 billion packages and dropped by 25% this year. “This does not mean that the market share declined, but the market itself did, hence impacting the total sales,” Kolesnik said, adding that the company did not get new clients in 2017.

In addition, Kolesnik ruled out the company’s thinking about setting up a factory in the Egyptian market at present, due to the low local sales and the investment climate, noting that the company will establish a new plant if the economic feasibility is proven.

He added that the risk and the establishment of a plant at the present time raises the cost of packaging and thus the final price of the product, explaining that the company owns factories nearby in the region in Turkey that provides the needs of the Egyptian market of packaging and cardboard, and there is no need to set up a factory now.

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