CAIRO: Univar, a UK-based industrial and specialty chemical distributor, is now fully operational in Egypt, after 15 years of indirectly doing business in the country.
Setting up shop in Egypt will permit the company, which works with a range of industries including coatings, food, personal care, pharmaceuticals, for example, "to reach the thousands of local customers in the industrial sector who are accustomed to buying from local suppliers in local currency," the company explained told Daily News Egypt.
Ahmed Fahkr El-Deen, the current head of local operations, was the former managing director of a large local chemical distribution company and joins Univar with over 12 years of experience in the Egyptian distribution market.
"Egypt is a very dynamic market with a lot opportunities, and having a local presence in Cairo is invaluable,” he told Daily News Egypt.
“We are already seeing a lot of activity here and there is a tremendous potential for many of our key business areas, including personal care, household and industrial cleaning, energy, food, pharmaceuticals and coatings," he added.
Commenting on the state of the Egyptian market, Nick Powell, Univar’s general manager of Middle East and Africa, said, “In terms of distributors, the Egyptian market is very fragmented, characterized by a multitude of local companies and a small handful of regional players that may have a presence in one or two additional territories close by."
There has been a "dramatic development in the Egyptian industrial sector" which has created a high demand for a wide variety of chemical products, with both international and local suppliers competing for a share of the pie, Univar officials said. This market dynamic has created "aggressive" competition in terms of both the quality of products and product pricing.
The company also cited a critical obstacle, which falls under the competition column: "The prevalence in the Egyptian market of low quality products from unknown Far Eastern suppliers."
In spite of this impasse, the company is not overly concerned given that the market worldwide is worth $170 billion, the company noted, citing the Boston Consulting Group, as well as it having posted $7.2 billion in earnings for 2009.
Univar already operates from 56 distribution facilities in 25 countries across Europe, the Middle East and Africa, with 2,200 employees and representing more than 2,500 chemical producers globally, providing it with serious leverage for the Egyptian market.
Although chemicals provide countless benefits, many consumer protection organizations are especially critical when the issue centers on chemicals, as the public’s concern over the issue is acute. Nevertheless, the company affirmed that it adheres to international chemical regulations, such as those found in the EU, which it applies across the board.
In fact, it is common for large multinationals to follow one set of rules and regulations when producing and distributing products, as it is financially more beneficial than trying to manage a different products and methods.
In essence, standardization within a firm brings down costs, so the argument goes, and as such, it is easier and cheaper to pick the best example to follow.
The EU has led the way in the domain of regulating chemicals through the recent implementation of the REACH directive, established in 2007, which regulates a gamut of chemicals that are hazardous to both human health and the environment, and has been considered a watershed in the regulation of the chemical industry.
In sum, the company affirmed, "We do not handle any chemical that has been banned in any part of the world."
