Kernile Ltd. plans to boost its production capacity to 30,000 tonnes of peanuts a year after the new expansions carried out recently.
Director of the company’s factory, Hossam Mahmoud, said the company injected $23m in new investments over the past two years. These investments were used to buy three new production lines with a capacity of 30,000 tonnes per year. The first line was inaugurated in early 2016, with the second set to become operative this month.
Mahmoud told Al Borsa that the factory in Egypt is considered to be the largest peanuts factory in the Middle East and North Africa (MENA).
He added that the company is also set to double its production to 20,000 tonnes in 2017 with the second line coming into operations, up from 10,000 tonnes last year.
Kernile invested about $0.5m this year to buy some new sorting machines necessary in the development of its production lines. The company is also seeking to secure more land in Egypt.
He pointed out that the company is preparing to increase work shifts to two instead of one in 2017 and to three next year to raise production capacity.
Moreover, Mahmoud said that the company will produce 30,000 tonnes in 2018 to become the biggest processor, producer, and exporter of peanuts across the MENA region.
He added that the company has a 20,000-feddan land for cultivation of peanuts, noting that it will rent new lands to provide more input for the factory.
Kernile was founded in 2014 with an Egyptian-Dutch capital. It began operations in early 2016. The company is now operating in cultivation, processing, production, and export of peanuts with a network of sales distributors throughout Europe.
The price of peanuts varies according to its quality and type; where its first class is sold at $1,900 per tonne, the second class at $1,600, the third at $1,300, and the fourth at $1,000. Kernile channels its third and fourth classes for the domestic market.
Egyptian exports of peanuts amounted to 30,000 tonnes in 2016, valued at $50m.
Mahmoud said that the company e
xported 80% of the volume of production last year, by 8,000 tonnes worth $12m and channeled 2,000 tonnes to the domestic market.
The company aims to export 16,000 tonnes by the end of 2017.
Mahmoud revealed that the company has signed export contracts for 10,000 tonnes of peanuts with clients in the European Union (EU) countries.
He said that the company has positively been impacted by the flotation decision by raising exports, even though the same decision had a negative impact on the prices of raw material, where the price of first-class peanuts increased to EGP 40 per kg up from EGP 20 last year.
Kernile relies mainly on exporting peanuts to the European market, but it plans to expand to Russia, the United States, and England in 2017.
Head of logistics at the company, Rasha Fayez, said that the company signed three new deals in 2017 to export 4,000 tonnes to the US and England, along with 4,000 tonnes to new clients in Italy.
She added that the company aims to export to the Gulf by taking part in the Gulfood Exhibition held in Dubai.
She stressed that the company plans to export to Saudi Arabia, the largest country in the Middle East relying on peanuts as part of its dates industry.
Fayez said that the company had previously exported to Jordan and Tunisia, praising the deals with Arab countries.
She agreed with Mahmoud, explaining that flotation positively impacted the company’s profits, especially as it exports 80% of its total production.
She noted that the peanuts industry relies on organic agriculture, also pointing out that even though the demand on Egyptian peanuts is high, the cultivation of the crop in Egypt remains limited.