Kanawat for Trading and Distribution, an MTI affiliate, is set to channel investments totalling EGP 800m into its newly unveiled “Armadillo” brand, dedicated to producing and assembling home electrical appliances.
Mohamed Ouda, Kanawat’s Managing Director, announced that the firm has already allocated EGP 600m since the previous May to introduce “Armadillo” offerings.
He noted that since its launch last November, the brand has garnered sales of approximately EGP 160m, translating to 18,000 units sold.
The company’s strategy is to bolster sales beyond EGP 1bn by the close of 2024, coinciding with the rollout of novel products.
Ouda highlighted that Armadillo is poised to expand its product line in the latter half of the year to include major appliances like washers, fridges, and stoves. This follows the brand’s initial focus on smaller kitchen items such as mixers, food processors, and various cooking appliances, alongside the production of both standard and smart television sets.
The inception of Armadillo was a response to halted imports in Egypt, sparking a demand for locally-priced Egyptian goods. Ouda disclosed that “Armadillo” items contain 40-60% domestic components.
Armadillo stands as a registered trademark of Kanawat, with raw materials sourced from Chinese partners and assembled in Egypt.
Currently, “Armadillo” goods are distributed across roughly 500 Kanawat-owned points of sale and are extending to 2700 outlets. Plans are underway to incorporate “Armadillo” into an additional 1200 Kanawat locations by year’s end.
Ouda addressed market volatility, noting that while the year began with robust demand, recent currency fluctuations have tempered sales, with consumers anticipating price drops.
He asserted the ambition to position Armadillo among Egypt’s top 20 sought-after products, particularly targeting the substantial middle-income demographic.
Kanawat is eyeing exports to East African markets, beginning with a corporate venture in Kenya. “We’re poised to distribute ‘Sinix’ products and are exploring the establishment of a sales entity there,” he added.
The company’s export initiatives align with its Gulf market presence, notably in Saudi Arabia and the UAE, where a Dubai office has been inaugurated.
With over 15 branches, Kanawat spans Egypt’s governorates, catering to middle and upper-middle market segments.
Ouda revealed Kanawat’s goal to hit EGP 3.3bn in sales by year’s end, a leap from the EGP 2.4bn achieved in 2023.
Kanawat’s ownership is predominantly held by MTI at 70.6%, alongside other stakeholders.
Following the pound’s exchange rate liberalization last March, the company has seen progress in opening documentary credits, recently initiating a one-million-dollar credit for essential raw materials.
Kanawat collaborates with leading Egyptian financial institutions, including the National Bank of Egypt, Bank Misr, and the Commercial International Bank.
While self-manufacturing efforts are in the pipeline, the current focus remains on the Armadillo line’s success, supported by Egypt’s robust manufacturing sector.
Ouda confirmed ongoing negotiations for new contracts, with additional brand introductions anticipated by year-end.
Kanawat serves as a distributor for renowned brands such as Samsung, Nokia, Carrier, Media, Sinix, Ecolight, and Basus, and maintains a retail presence through 13 Kanawat Stores across Egypt.
