By Basma Tharwat
Sakr Group for Food Industries’ sales amounted to EGP 1.2bn since the beginning of this year to the end of August, compared to EGP 700m during the same period in 2014.
The company’s Chairman, Ahmed Sakr, said that Sakr Group intends to develop its dairy factory to raise its production capacity from 120 tonnes per day to 300 tonnes, with investments worth EGP 60m. The factory, Sakr said, will be completed by the second half of 2016.
He added that the company opened a new juice factory worth EGP 170m in the industrial zone in Burj Al-Arab, Alexandria. The factory has the capacity to produce 500m packs per year.
Sakr emphasised the need for participation in foreign exhibitions to increase the marketing of Egyptian products, pointing out that Sakr Group has been participating in foreign exhibitions for a long time and that its participation in the Anuga exhibition in Germany marked its seventh time consecutively.
He pointed out that the export sector has been suffering from a lack of interest since the revolution of January 2011 and the subsequent strikes in ports and companies, calling on the state to take interest in the sector and work towards its development.
Sakr added that banks should facilitate procedures and provide dollars at their official rate for factories, so as to be able to buy raw material and manufacturing equipment, in addition to issuing the export support funds in time and taking interest in supporting foreign exhibitions to stop exports from declining and losing value.
He stated that the company’s exports have been adversely affected over the past years due to the political and security unrest in Arab countries, such as Yemen, Iraq, and Libya. He noted that the closure of the Erbil land port since last July, which is the port of entry for Egyptian products to Iraq, had a significant impact.
Sakr pointed to the importance of increasing trade exchange between Egypt and African countries, especially Mauritania and Sudan, as they are the largest food importers in the continent, along with supporting exports to African countries to increase the volume of trade with them.
He pointed to the need to pave roads and provide transportation between Egypt and Sudan, which could help to facilitate the transportation of goods across the continent. Sakr also stressed the need to review export policies and their support, as well as the need for new economic agreements to promote the sector’s different fields.
He said that of the main obstacles facing Egyptian exporters is the increase of smuggling of goods to some Arab countries, on top of which is Libya, due to the absence of border control.
He demanded the tightening of controls at borders to protect the official exports and maintain the reputation of the Egyptian products in foreign markets, as smuggled goods are usually of poor quality.
He noted that the damage caused to the reputation of the Egyptian products in the Libyan market would cause a negative impact on the sector’s exports, since the Libyan market accounts for a large share of the food industry’s exports.
Sakr added that the security tensions in Libya prompted many investors to manufacture their products in Egyptian factories and re-export production to Libya. This production accounts for 70% of the total products in the Libyan market, according to Sakr.
He explained that Sakr Food Industries’ sales since the beginning of the year to August amounted to EGP 1.2bn, compared to EGP 700m achieved sales in the same period last year.
He noted the company has been dedicated to providing high-quality and diverse products since its establishment in 1997, to match the needs of the domestic market as well as exports, especially in light of the strong competition between the sector’s companies.
He stressed that the production costs have significantly increased recently, which negatively impacted the competitiveness of companies both locally and globally, pointing to the lack of logistics and storage zones outside ports, which would lengthen the waiting period and lead to paying more storage fees.
He said that many factories in the Burj Al-Arab industrial zone are building storage yards because of the difficulty of transporting from the zone to ports. This would increase the volume of exports, he noted.
Sakr called for the establishment of a freight train from the industrial zone in Burj Al-Arab to the port of Alexandria, to facilitate the export process, as well as to ease the discharge of products in the local market.
He said that the low price of sugar in world markets will not have an impact on the prices of juice in the domestic market, due to the high production costs and the burdens that have been imposed on factories, such as the increased water and electricity prices, as well as wages and other regular expenses.
He added that the prices of all production inputs in the juice industry have increased, due to the increase of the dollar exchange rate, especially concentrates, which rose by 5%, in addition to the price increase of containers and packaging materials.
Sakr Group for Food Industries owns six factories in Burj Al-Arab Industrial Zone, most notably a plant for processed cheese, another for sterilised milk, and a third for natural and pure juices, as well as a factory for margarine and butter.
The company opened two factories in Burj Al-Arab in 2002 to expand the range of products and services provided by the company. The group also opened another factory in 2008 for the manufacturing of butter.
The company exports its products to about 53 countries, including European and American countries, as well as Asian and Arab states.
Sakr said Egyptian beverages have occupied a privileged position within global markets, whereby the industry includes many major companies that use modern technology and has well-trained labour.