Om El Nour Group for Food Industries plans to invest EGP 200m during the upcoming period, including EGP 150m to double the production capacity of oils, and add a new vegetable margarine-production line.
Mahmoud Abo Bakr, the head of sales in the company, said that the group has four factories. The first is specialised in producing vegetable oils, the second in producing pasta, and both the third and fourth in producing wheat milling.
The first factory “Sila” produces 5,000 to 7,000 tonnes of oils per month, according to Abo Bakr.
He added that Sila sells large quantities of oils in the form of raw materials, ranging from 4,000 to 5,000 tonnes, whereas the remaining amounts are launched as final products in the local market and foreign markets through exporting.
The production capacity of the pasta factory, which is affiliated to Roma Group, is nearly 1,200 tonnes per month, with 16.5% of the amounts allocated to export and the rest marketed locally.
Abo Bakr added that the two milling companies produce about 300 tonnes per day to the local market, specifically for factories in the field of biscuit production. Some quantities are sold in retail markets to individual consumers.
He pointed out that the new investments of the group will belong to Sila Factory, where EGP 50m will be allocated to doubling oil production and EGP 150m to install new production lines of “shorting” margarine.
Abo Bakr said that he expects the new production lines to officially operate in the beginning of the second quarter of 2018, especially that the group has contracted on the production lines and has already started the work on the oil lines. The group is currently awaiting the margarine lines to begin operations.
Om El Nour is considering moving its pasta lines to the factory in Fayoum and adding new production lines during the upcoming period.
The group will start preparing for this step after finishing the development of the oils and margarine factory, which is expected to take place by the end of 2018.
Abo Bakr said the exportation market has witnessed improvements over the past period with the decline in the production in Egyptian pounds, which is a much better situation compared to that following the flotation decision.
He pointed out that the decision enhanced the ability of Egyptian products to compete against the products of other markets in the target countries—hence, improving export rates albeit slightly. More improvements are expected in the near future.
Abo Bakr revealed that a large amount of the raw materials required for the industry is imported, and it has become a necessity to mine them locally, where the products relying more on local raw materials benefited more from the flotation.
In addition, locally mining raw materials protects the industry from the fluctuations of global markets and the unexpected price increases. This limits the purchasing abilities to meet the needs of factories and drops production during specific periods.
He added that global prices of oils have witnessed an increase at the beginning of the year before a decline after the second half of the year, from $760 per tonne to $730.
Abo Bakr added that a large part of the improvements of exports is the result of a reduction in the consumers’ purchasing power locally, so the surplus was exported.
The company seeks to invade African markets over the upcoming period. There are many potential requests on pasta, especially by Dijibouti and Kenya.
He noted that African markets are considered more important than others during the current period as they do not have a diversity of products. To that, the company gives them a special priority. African markets are followed by Libya and Jordan in terms of importance and priority to Om El Nour, according to Abo Bakr.
“Kenya is the main gateway to the COMESA countries. It acquires a large share of the amounts directed to export by the group, ranging between 30-40%,” Abo Bakr said.
He explained that the group has established an office in Dubai in order to market its products better, pointing out the importance of fairs, which help in meeting customers and introducinh them to the group’s products.
He noted that the company is not considering invading European markets at the moment, as they require very high quality products.Hence, the company is trying to develop itself in terms of that matter.
He explained that the group is also seeking to obtain the ISO certificate by 2022, through which trade and deals with Europe will be made much easier.
