Om El Nour Co spent EGP 200m on investments last year to increase its production of margarine and vegetable oils to meet the needs of the international market and increase its share of the local market.
Mohammed Bakr, sales manager, said the company has purchased a new electronic packaging line for oil with a capacity of 1,200 cartons per hour, which fills the oil packages and packs them into cartons.
Om El Nour owns four factories. The first one produces vegetable oils, the second one pasta, and the third and the fourth ones produce wheat.
Bakr added that the company has contracted to buy a new production line for vegetable margarine (shortening) with a production capacity of 50 tonnes per day. It is scheduled to arrive this year. The canned margarine will be produced with variant weights of up to 11 kilograms.
The company has decided to move its pasta factory in Fayoum and is considering several possible locations, most notably looking to establish the new factory next to its Sila Edible Oil plant, to take advantage the large unused space. The other option is to establish the factory in Dubai.
He pointed out that moving the plant to the UAE will be a strong opportunity to market the company’s products on a wider scale, with ease of transport from Dubai to African countries.
He pointed out that Om El Nour Co has appointed a research company to study the market and the company’s competition. The results are scheduled to be completed within 60 days. The study will also include the best place to move the factory, in addition to the value of investments required.
The current production of the pasta factory reaches 5,000 tonnes per month, and the company seeks to increase it to reach 8,000 tonnes per month after its transfer.
As for the oil plant, Bakr said that the company started producing and pressing oils for other companies. The ratio of oils produced from pressing soybeans is 27%, while the rest is used as feed. The amount of oils reaches 34% in sunflower seeds.
He pointed out that the company has entered the feed production market strongly during the past few months period, as it imports raw materials directly from Brazil and Argentina.
The group opened branches for the Sila plant in Alexandria, Assiut, and Luxor, and has contracted with agents in the rest of Egypt’s governorates to market its products and explore entering their markets.
He added that Sila sells large quantities of oil in its raw form, ranging from 4,000 to 5,000 tonnes, while the remaining quantities are put in the form of a final product for the local market or exportation.
The group also contracted with a group of chains to market their products, including Fathallah, Ragab Sons and Carrefour.
He added that its mills produce about 300 tonnes per day and their total production is allocated for the local market, for use in factories specialised in producing biscuits. Some quantities are sold commercially.
Bakr added that a large proportion of the raw materials needed for the industry are imported, saying the transformation to manufacture locally has become a necessity. Products that depend on local raw materials have benefited more from the flotation of the currency.
He added that manufacturing raw materials locally protects the industry from the fluctuations of international markets and the prices increases.
He added that part of the improvement in exports resulted from the reduction of the purchasing power of consumers locally, which led the surplus to be exported.
The group exports flour to the Common Market for Eastern and Southern Africa (COMESA), including Djibouti, Eritrea, and Kenya, especially since the agreement saves the company from having to pay customs.
It exports oil to Yemen, Kenya, Libya, and East Africa. The company supplies special packages of 2.5 and 5 litres of mixed oils to suit its consumers’ tastes.
The company is close to entering the Saudi market and is currently negotiating with some clients there. This is expected to happen after the installation of the new oil and vegetable margarine production line. The company is also considering entering European Union markets soon.
The company also seeks to penetrate African markets in the coming years, with great potential demand for pasta production, especially from Djibouti and Kenya.
“Kenya is the main entry point for the COMESA countries and has a large share of the quantity the group sends abroad, ranging from 30-40%,” he said.
He explained that the company has established an office in Dubai to better market its products in the markets it targets.