Nestlé considers Egypt as one of its leading markets in the region, so the company looks forward to investing more in this market.
This has always been stressed and highlighted by the company’s management. In his last meeting with Prime Minister Mostafa Madbouly, Nestlé Egypt’s Chairperson and CEO Moataz El Hout stressed the company’s keenness to pump more investments into the market and make it a hub for new products. This will take place by enhancing the manufacturing processes and factories, contributing to the local production, according to Nahla Kamal – Corporate Affairs Head at Nestlé North East Africa Region during her interview with the Daily News Egypt.
“We are already exporting products with a total of EGP 50m per year to Lebanon, Jordan, Libya, Sudan, and the Gulf, in addition to markets overseas, such as the USA and Canada, and we are on the right track to achieve this goal,” she said on the company’s five-year strategy.
The interview also touched on Nestlé’s investments in Egypt, the impact of the novel coronavirus (COVID-19) pandemic, its factories, and many other aspects.
How did COVID-19 impact the fast-moving consumer goods (FMCG) industry, and more precisely the food and beverage (F&B) sector in Egypt?
It is without a doubt that COVID-19 has inflicted serious challenges on the global economy, causing hardships and serious challenges to many industries, and the FMCG was no exception to that.
The fast-moving consumer goods industry faced considerable changes as the pandemic spurred demand for food commodities amid consumer fears of being unable to access stores, which translated into stock reductions in mass grocery outlets. Although manufacturers had to operate at less than full capacity in their plants to be able to contain the spread of the virus, they still had to double their efforts in order to increase the production rates to meet the high consumer needs resulting in two and three shifts daily. On the other hand, FMCG companies’ supply chains were negatively impacted due to a delay in cross-border trade.
In order to mitigate the impact on the supply of goods and production as a result of the curfew, the Egyptian government announced targeted support to private businesses through sector-specific measures.
This pandemic has taught the world important lessons and for the FMCG companies they should revisit their sourcing strategies, diversify their product ranges and assess the resilience and agility of their supply chain
Could you brief us on the history of Nestlé’s presence in Egypt?
Nestlé’s heritage and investment in the Middle East and North Africa (MENA) region goes back over 150 years, with the introduction of Nestlé’s first baby food product in Alexandria. Since then, it had a deep-rooted presence in the Egyptian market. The company has considered the country one of its growing markets and currently, Egypt is a strong contributor to growth in the Europe, Middle East, and North Africa (EMENA) region. Today, Nestlé operates three factories in Egypt, and provides direct employment to more than 3,000 employees and 8,000 indirect opportunities, mostly for youth who are all committed to Nestlé’s purpose of enhancing quality of life and contributing to a healthier future.
Considering Egypt as one of the main markets in the region, we have dedicated investments to the expansion of factories and production lines that will enable us to export more to the region. Nestlé currently owns and operates three factories in Egypt: 6th October Factory 1 for producing and the repackaging of Dry Goods, including NESCAFE, NIDO, MAGGI, CERELAC..etc, and 6th October Factory 2 that is producing coffee. The third factory is Nestlé Water factory, which is located in Banha and produces Nestlé Pure Life with all its range including sparkling waters and BARAKA products.
Actually, Nestlé has been investing in Egypt since 1900, and we are committed to increasing and sustaining our investments in the Egyptian market to complement our exceptional range of brands with additional opportunities.
What main products contribute to the company’s annual sales?
Nestlé has a diversified portfolio of products in Egypt that includes nine segments: coffee, dairy, confectionery, culinary, health science, pet food, cereals, nutrition, and water. The diversity of our portfolio appeals to a large audience enabling us to lead in several product groups.
Regarding coffee, we have a diversified product portfolio consisting of Nescafe and Bonjorno. Each brand has its own sub-products including in home consumption products, ready mix out of home consumption products and flavoured coffee. Each brand appeals to a different target audience.
As for waters, 2019 was a very successful year regarding the new launches. This year marked the launch of our new vitality sparkling water and flavoured sparkling water. Additionally, we introduced different size bottles, including small sized bottles and kitchen-use bottles allowing us to become a leader in this area.
In the past couple of years, Maggi marked several breakthroughs in the culinary segment with the introduction of new seasoning mixes (such as the Chinese and Indian mixes), and soups to help its customers create tastier balanced meals.
Due to the current situation and the growing demand for FMCGs, we have updated our objectives, vision and plans for the market to better correspond to these growing needs and with it our investment has changed to cater for this end. Accordingly, we are more focused on increasing production lines, introducing more technology, launching new tastier and healthier products.
Egypt is a promising market for us where we have invested a lot to expand and explore more manufacturing opportunities as we have developed a solid vision for the country to become the export hub for the entire region. We started exporting Cerelac to Morocco and Tunisia in 2019, and we are confident in our ability to continue to boost our exports over the next few years.
Our world-class Dry Goods factory located in the 6th of October City, producing products like Nido and Nescafe, has the capacity to enable increased exports. It is one of the top factories in terms of KPIs and efficiency standards in the EMENA region.
Nestlé will remain a long-term investor in Egypt as it started its business in the country 150 years ago, and continued to invest there during the good and the bad times. Since then, Nestlé has considered Egypt one of its strategic markets bringing together a diverse mix of manpower, appealing investment opportunities, large population demonstrating high sales and many more. The company’s total investments in Egypt reached EGP 3.5bn.
We know that Nestlé globally is committed to support youth through its commitment to “The Community”. Can you tell us more about how you support and empower Egyptian youth?
Our core values revolve around contributing to a better future for the upcoming generations. Additionally, we invest in the development of the younger generations and the youth, believing in their potential and abilities.
In 2013, Nestlé launched its global “Nestlé needs Youth” initiative, which aims to support 10 million young people worldwide in accessing economic opportunities by 2030. The initiative focuses on three main areas, which are employment and employability, and entrepreneurship. To reach our ambition, we came up with the following projects:
HENRi@Nestlé is a global open innovation platform, which enables us to solve specific market challenges through partnerships with start-ups. Our latest local challenge included the development of a digital route mapping solution to complement our existing sales platform, DMS-1, which will provide optimised routes for our sales reps, taking into account the current traffic situation and predicted traffic. This will enable our fleet to visit more customers per day. We received 26 submissions, half of which were from Egypt, and two of which made it to the final shortlist!
Nestlé Needs YOUth has been providing university and technical institute students in Egypt with learning and training opportunities for years, in order to enhance their employability and address local barriers to youth unemployment. We have done this through a few partnerships, such as supporting Fanni Mobtaker, and we partnered with the American University in Cairo’s Venture Lab (AUC V-Lab) by sponsoring and supporting the 2019 Spring Cycle. We will be doing the same for the 2020 Spring Cycle, which entails Mentor Mingle with Nescafé (their speed mentoring activity) as well as expert knowledge sessions with start-ups.
We also partnered with Injaz Egypt, a non-profit organisation that aims to empower youth by delivering educational programmes in financial literacy, work readiness, and entrepreneurship and helps young entrepreneurs grow their entrepreneurial ideas.
Through this collaboration, eight Nestlé mentors will support in mentoring the programme’s 100 ambitious females to lead more sustainable lives.
We strongly believe in equal opportunity and reflect our Diversity and Inclusion commitment in every aspect of our corporate initiatives. In order to build female talent pipelines in our factory population. Accordingly, and with the support of the Ministry of Education, we have integrated female technical institute students into our Summer Internship Program.
How many CSR projects do you implement? What about future projects in this regard?
More than the quantity, we focus on an enhanced and sustainable quality of the initiatives that are aimed at a profound impact on the societies in which we operate. Throughout the years, Nestlé has made a commitment to positively impact communities, which is demonstrated in the following three pillars:
Individuals and families: by offering tastier and healthier choices, inspiring people to lead healthier lives and building, sharing, and applying nutritional knowledge. Under this pillar, Nestlé has an ambition to help 50 million children lead healthier lives by 2030. Accordingly, the flagship project “N4HK” was launched.
As part of N4HK, Nestlé Egypt has worked with several governmental and organizations from the civil society to contribute to the nutritional education of children aged from 3 – 12 and their parents. Accordingly, the programme benefited more than 860,000 students in 1,025 schools in 12 governorates in partnership with the Ministry of Education. The programme aims to build and increase nutritional awareness and promote healthy lifestyle among primary school students.
Communities: through promoting decent employment and diversity, respecting and promoting human rights and enhancing rural livelihoods. Under this pillar, Nestlé will help create economic opportunities for 10 million youth by 2030.
The planet: through caring for water, acting on climate change and safeguarding the environment. Under this pillar, Nestlé strives to achieve zero environmental impact by its operations by 2030. A flagship project governing water consumption and packaging was launched with the ambition of reaching 100% recyclable or reusable packing for all products by 2025.
What were Nestlé Egypt’s CSR efforts during COVID-19?
With the global outbreak of COVID-19, Nestlé Egypt acknowledged its role towards the health, safety and security of its employees first, ensuring business continuity and delivering their products safely to the consumers and shouldering its corporate social responsibilities to support the community and the government.
Accordingly, Nestlé Egypt launched its campaign “Ma’a Ba’d Ehan Adaha”, which aims to support the government, and empowering different groups that suffered the impacts of COVID-9. The campaign is based on three main pillars:
Fighting COVID-19: through funding ventilators, medical equipment, and medical supplies for fever and quarantine hospitals as well as hospitals nationwide, in collaboration with the Egyptian Cure Bank and Supreme Council for University Hospitals
Preventing COVID-19: through purchasing Personal Protective Equipment (PPEs) for medical teams in partnership with Ahl Masr Foundation, the UNICEF-AmCham initiative
Economic Support: supporting economically-impacted families through the Egyptian Food Bank, Misr El Kheir Foundation
The sum of donations made by Nestlé Egypt in an attempt to combat COVID-19 totaled to EGP 16m across the six partnerships.
Can you walk us through Nestlé’s R&D activities?
We have been dedicating more effort to our research, and today (R&D) is the competitive advantage for Nestlé. Without our R&D, Nestlé could not have introduced this wide range of food products with higher nutritional value and become an industry pioneer in nutrition, health and wellness. Hence, our main concern is the health of the individuals and families, Nestlé allocated all it efforts to have 40 R&D centres around the world where food research is conducted by 4,800 scientists and contributed tremendously to improving the quality of our products, offering higher nutritional values and developing our packaging and equipment