Daily News Egypt sat down with James Michael Lafferty, the CEO of Fine Hygienic Holding, to discuss the company’s investment strategies, particularly in Egypt.
With the current global economic challenges, this year has become one of cost management. How is Fine Hygienic Holding navigating cost management during this period?
In the consumer paper sector, margins are traditionally tighter compared to other categories. Take supplements and nutritional supplements, for instance; these are high-margin businesses that offer more flexibility. However, consumer paper, particularly tissue, is a cost-intensive business. Consumers won’t bear the cost of inefficiency.
Historically, even before the current economic crisis in Egypt, with its currency and market fluctuations, we’ve maintained strict cost control.
As the situation has intensified, our focus on cost management has sharpened. While some companies may have had greater potential for improvement, our longstanding culture of cost efficiency has left us with limited room for further enhancement. Our industry benchmarking shows that our production and sales costs are competitive.
Moreover, governance—an area encompassing financial control and anti-fraud measures—has always been a priority. We continually strive to enhance our asset security and prevent losses. This crisis has only heightened our commitment to cost management, an area where we’ve consistently excelled.
What is the planned investment volume for 2024, and how will it be distributed among the countries where the company operates?
We approach investments differently, focusing on acquisitions rather than predetermined allocations. We don’t have a set investment volume for 2024, nor do we distribute funds by country. Our strategy is akin to choosing from a menu in a restaurant; we decide based on available opportunities.
Egypt is a key market for us due to its size and strategic significance, along with the presence of high-quality operations. While we don’t have a specific plan, we actively seek attractive acquisitions like EasyCare. Since acquiring EasyCare, we’ve expanded our presence from being predominantly an Egyptian brand to being a major brand in over ten countries, including Saudi Arabia.
Acquisitions are a meticulous and lengthy process involving due diligence and negotiations, often spanning several months. We pursue opportunities as they arise, without a rigid plan for investment distribution. If a promising opportunity presents itself in any country, we are open to considering it regardless of our initial plans.
Since your company has recently acquired new assets and introduced new products in Egypt, are you achieving the expected return on investment?
Absolutely. Our commitment to Egypt is unwavering. Since my start in 2018, we’ve been fully dedicated to this market. Our stance is unchanged today and will remain so in the future. Egypt is a core market for us, rich in talent and a significant contributor to our revenue. Despite challenges, we’re content with our progress and our team’s performance. We’re proud of EasyCare and our success in exporting high-quality Egyptian products worldwide.
In light of economic challenges, are there any markets you’re considering exiting?
No, we’re not planning to exit any markets. Our current focus is on maintaining sustainable businesses in all our markets. We’re committed to the long haul, not deterred by short-term setbacks.
Could you elaborate on Fine Hygienic Holding’s expansion and acquisition plans in Egypt? Are there other initiatives on the horizon?
Our approach is dynamic; we’re constantly evaluating potential ventures, though their realization depends on a myriad of factors. Our industry necessitates substantial capital investment, and we’re committed to annually funding new production capabilities. While I don’t have the exact figures at hand, our investment in Egypt is significant, with several new production lines already ordered. These will soon be installed in our Egyptian facilities, which include a diaper and a tissue plant.
Currently, our workforce exceeds 1000 individuals, and the introduction of each new production line signifies not only job creation but also an infusion of investment and expertise into the Egyptian economy. Our team is predominantly Egyptian, from our general manager to the head of production overseeing all plants. This reflects our belief in nurturing Egyptian talent and leadership for our operations in Egypt.
As for upcoming initiatives, we have about three production lines nearing completion, set to be shipped to Egypt in the coming months. Their installation will mark the beginning of new production phases, the expansion of exports, and the opportunity to welcome more employees into our fold.
Are there any upcoming product launches planned for the near future?
Innovation is crucial for our business. We have several exciting new products in the pipeline, which will be announced at the appropriate time.
What factors are prioritized when planning innovations for the market? Is it affordability, quality, quantity, or something else?
The driving force behind our innovation is the consumer—they are the true leaders of our company. Our focus is on understanding and meeting their needs, which may encompass various aspects such as quality, price, or packaging. Ultimately, it’s about enhancing their experience with our products.
For instance, we’ve recently introduced a product tailored for Sub-Saharan Africa—a single-roll kitchen towel, designed to be affordable for the market there. This innovation was made possible by our Egyptian team, who ingeniously adapted our existing machinery to produce this new product. It’s currently being launched in countries like Angola, Ghana, and Kenya. This achievement showcases our commitment to innovation and our belief in the capabilities of our Egyptian workforce. These guys are unbelievable. They figured out how to do what all the expatriate engineers couldn’t figure out.
