Misr Cafe company plans to raise its exports by 10% this year through expanding in a number of Latin American markets within the Mercosur agreement.
Mounir Masoud, chairperson, said the company achieved exports worth $22m last year, with plans to increase it by $2.2m this year.
He pointed out that the company faces a number of obstacles hindering the increase of its exports, including the difficulty of maritime transport especially for West African countries.
He added that there are several obstacles that must be solved, such as the difficulty of maritime shipping, especially to the countries in West Africa. He noted that shipping accounts for 8% of the final price to Africa, while shipping to Europe only accounts for 3%.
Misr Cafe was founded in 1984 to become the first company in Egypt and the Middle East to produce roasted instant coffee through three brands.
The company is specialised in producing instant coffee products, including Instant Coffee, 2×1 Coffee, 3×1 Coffee, Ginseng Coffee Mix 4×1, Ginger Coffee Latté 4×1, flavoured instant cappuccino, and iced cappuccino.
Masoud said that the food industry is one of the most promising sectors in the Egyptian market, adding that the Food Export Council is working to remove obstacles for exporters.
As for the company, Masoud said that Misr Cafe increased its production capacity to 9,000 tonnes in 2016 and has also expanded production and packaging lines to increase productivity to 4,500 tonnes last year.
He pointed out that the floatation of the pound in November 2016 enhanced the competitiveness of Egyptian products throughout all markets, which contributes to the provision of foreign currency.
Masoud expected the coming period to see an increase in food exports, particularly as the turmoil in several countries stopped their production and increased their need for imported products.
He pointed out that the company exports to 32 countries around the world, including Malaysia, the US, Japan, and Canada, besides Arab countries, with plans to enter new markets in Europe and the Maghreb region, as well as Latin America.
In May 2017, the Argentinian parliament ratified the free trade agreement between Egypt and Mercosur, which includes Brazil, Argentina, Uruguay, and Paraguay, in addition to Egypt. The agreement was first signed in 2010.
Masoud pointed out that the agreement’s entry into force would increase the volume of trade and investment exchange between Egypt and the Mercosur countries, which are among the most important countries in South America. The agreement also aims to open new markets for Egyptian products in Latin American countries which achieve rapid economic growth rates.
He highlighted the need for taking part in food exhibitions to communicate with importers in other countries.
Masoud said that the company is participating in the Gulfood exhibition and other international exhibitions in the coming period.
He called on the government for increased support for exhibitions and to work on giving Egyptian exhibitors more space to leave clients with a good impression.
Masoud pointed out that all foreign countries seek to increase support allocated to exporters while Egypt is gradually cutting it.
He noted that the company’s market share in Egypt is 10-15%, noting that, in a bid to offset losses, priority is given to exports, especially following production cost hikes by 35% after the floatation of the pound in November 2016.
The company did not raise the prices of its products following the pound’s floatation, Masoud pointed out.
Additionally, factories aim to expand and find more opportunities following government decisions to limit imports, which gives local products a chance to replace imported goods, he stated.
Masoud further explained that the company is working on the development of its production, use of the latest technology in manufacturing, and improving the product-delivery process, as well as increasing spending on research and development.
Finally, he stressed the need for technical training in the coming period to improve the quality of labour in all fields.
He explained that some countries impose certain requirements on the packaging of Egyptian products, which also raises their cost, especially after adopting a floating exchange rate and the price hikes of several packaging materials, which account for 9% of the final price.
Moreover, Masoud said that the lack of shipping lines to many African countries hinders exporting to them, urging the government to sign trade agreements and waive the tariffs between the countries of East and West Africa and Egypt to lower the prices of Egyptian products and raise their competitiveness.