Privatization of Biscomisr has led to product improvement
CAIRO: The Egyptian company for foods, Biscomisr, which has recently undergone full privatization, is ready to launch new products and expand on its exports after it has reclaimed its old fame, says Samir Sabet, chairman and managing director.
“New products are, and will be, formulated but the old products will be developed under the same name, Sabet tells The Daily Star Egypt. “Currently we are in the process of encouraging more investment, and undergoing major restructuring and restoration.
According to Sabet, budget expenditure was set at LE 50 million for a restoration plan covering a period of 30 months. “We want to restore our major and our top position. We doubled the export percentage from 5 to 10 percent, with [the] objective to reach 30 percent in two to three years.
The company, which produces chocolate, cookies, chewing gum, candy and sweets, sends exports to the Middle East, Africa and Europe.
Biscomisr, one of Egypt’s leading biscuit and cereal companies, was established in 1957. The company was originally a public sector company owned by the state until 1997, when it was partially privatized. But not until its full privatization at the end of May 2005, following a final decision by the general committee, did the company begin to experience a rise in its sales and the quality of its products.
The initial decision to sell the company was made in January the same year, when the state-owned company was then offered publicly. According to Al-Ahram Weekly, the consortium of private sector companies, which had originally offered to buy 5.86 million shares, eventually acquired all of the 6.46 million offered by investors.
According to the weekly newspaper, seven Egyptian companies paid LE 156.3 million for 56.5 percent of the company at the time, with the holding company retaining a 36 percent stake in Biscomisr, which was valued at LE 83 million.
The new government management stemmed from the general committee, according to Sabet, who further explained that although the company featured a new board – headed by Concord, the largest shareholder – all the company’s original 2,700 employees were kept on board. Also, the main production line of the company had to be maintained.
“One of the principal conditions outlined in the sale agreement was the continuity of the company’s main line of production which is confectionary. We also wanted to maintain the original labor force. The salaries of the employees had to be increased as well.[It’s true that] a restructuring of labour force is being done, says Sabet.
The lack of investment was one of the key reasons behind the decision to sell the company to the private sector. No investments had been made since 1985, explains Sabet, adding that there had been no maintenance to production lines, buildings or machinery.
“Previously, the whole focus was on making profit, says Sabet. “The factories were in need of refurbishment; it was hard to go on under these conditions. Money had to be pumped into the company in order to revamp the factories and install new production lines.
The company, which owns three full-size factories in Alexandria and Cairo, had suffered problems in maintaining product quality in the few years before the privatization was fully implemented; something that caused people to lose trust in the company’s merchandise.
“All the old products are now renewed. We went back to respecting the ingredients of products. We improved the quality of packaging, explains Sabet.
“All the old products have now been renewed. We went back to respecting the ingredients of products. We increased the quality of packaging. The product now reaches people without losing its distinctiveness, says Sabet, stressing that even the presentation of the products is now “more refined. “The most recent cookie season was very successful as a result. People regained their trust in Biscomisr’s cookies.
One of the main highlights of the Biscomisr brand name, in its public sector days, were the prices of the goods with the unit price for most products generally ranging between 25 and 50 piasters, making the merchandise largely affordable to the middle class. “The prices have not changed, Sabet says. The unit price of 80 percent of our products is still between 25 and 50 piaster[s]. The refurbishment (in an attempt to increase productivity) is on the top of the company’s agenda now. The refurbishment is continuous, says Sabet. “Our main aim is to increase productivity and quality; we’re expanding our factories by installing new production lines and new machinery.
The restoration (in an attempt to increase productivity) is on the top of the company’s agenda now. The restoration is continuous, explains Sabet. “Our main aim is to increase productivity; we’re expanding our factories to include new production lines and new machinery.
“That means that the aim is to have a cheap product, to decrease its price and increase its quality, explains Sabet, adding that eventually by covering the entire market, the company can make “good profit.
The company has also launched new advertisement campaigns, which have been ongoing for two months. “We also have 5,000 prize coupons inside our products. We also have a grand prize of LE 25,000. We’re also planning another campaign in preparation for the cookie season, starting the 15th of Ramadan.
“People have started to trust the quality of the product, says Sabet, adding that they regularly do market assessments through surveys and through sales in order to specify their position in comparison to other local companies that specialize in the same activity.
“Many selling outlets were also revamped and new ones were added, especially in sports clubs. People see it everywhere now; prestigious venues, better sellers, better service and products.
