CAIRO: What happens when one white goods heavyweight from the east joins hands with another from the west? The odds are; presence in every household around the globe. That is what the new Olympic Group-Electrolux alliance aspires to achieve.
“Olympic Group [OG] is determined to be the global leader in the field of household appliances. Already, OG is a regional leader in the industry, however, it is striving for more, explained Ahmed El Bakry, the group’s managing director, at an event announcing the OG-Electrolux partnership on Monday night.
The equation works this way. Electrolux is the world’s largest manufacturer and supplier of household appliances with topnotch technology. At the same time, OG dominates the Middle East and North Africa (MENA) market and utilizes cost-effective labor force. The outcome will be a wider range of products at more competitive prices and a higher global market share.
Obviously, it’s a win-win situation. While OG will be able to use the renowned Electrolux trademark and international distribution network, Electrolux will gain access to the group’s factories, which currently reach nine plants nationwide, with two more in the pipeline.
“Today’s event [will] deepen the name of a global brand name.and leverage both companies’ assets in countries [worldwide], Magnus Yngen, executive vice president at Electrolux, said on Monday at an event announcing the new partnership.
Electrolux is a global leader in home appliances, owning popular brands such as AEG-Electrolux, Zanussi, Eureka and Frigidaire. It sells around 100 million products to customers in 150 countries every year. The $60-70 million company is now eyeing the MENA region for further growth.
After all, which company can serve Electrolux’s expansion plans in the region better than OG? With a history that spans across some 70 years, OG manufactures products that range from electric water heaters, gas-fired heaters, washing machines, microwave ovens, fans, radiators, vacuum cleaners, refrigerators and gas ovens. The group also acts as a sole agent of international giants such as Sony, Daewoo, Philips, and now Electrolux. It has 45 service centers in Egypt, a call center and a 1,600-stores-strong distribution network in Egypt.
“At OG, we know best what consumers in this region need. One of our main goals [behind this alliance] is to provide various segments of the society with affordable products, El Bakry added.
OG already has corporate offices and retail outlets in Saudi Arabia and Dubai and recently established a joint venture in Sudan to manufacture refrigerators. The group exports to 27 regional markets including Libya, Sudan, the Gulf, Morocco, Jordan, Syria, Lebanon and Iraq. It also expanded its reach to China where it opened a sourcing office in May 2005.”Our domestic and regional sales soared to LE 2 billion, and we are publicly traded on the Egyptian stock market [with a market capitalization] of LE 4.32 billion, said Niazy Sallam, the group’s co-chairman.
The group is the best performing stock in its sector, as it currently trades at LE 71.99 per share, with a par value of LE 10. Olympic posted another banner performance in 2007 as revenues climbed to LE 1.89 billion, up from LE 1.81 in 2006.
Under the new partnership, OG will export finish products to Electrolux that will be sold in European markets under Electrolux’s brand names. OG expects this new development to at least double its sales volume to LE 4 billion within the next few years.
