Egypt open for business, ready for growth

Egypt’s central location, large consumer base and impressive reform programme is attracting growing interest from the global food and beverage sector. Ashraf El Gazayerli, Chairman of the Egyptian Chamber of Food Industries, explores some of the key food and beverage opportunities within the country, and discusses how the country plans to become one of the largest 20 economies in the world. 

Egypt is a country brimming with potential. With nearly 100 inhabitants it is the most most populous country in the Arab world, and is growing at a rate of 2% a year. Currently the 14th most populous country, its location at the crossroads between Africa, Europe and the Middle East makes it an ideal regional business hub.

“The value of the Egyptian food sector market is close to $17 billion,”El Gazayerli told Fi Europe 2019 attendees in Paris. “Egypt imported $4 billion in food ingredients and food additives in 2018, from a diverse range of sources. This included wheat from Ukraine, coffee from Kenya as well as ingredients from the likes of Brazil, Argentina and New Zealand.”

Egypt is also an exporting country, with annual food and beverage exports of $5.4 billion growing at around 10% a year. Top exported foods include beverage concentrates, frozen fruit, confectionery and processed cheese. Other exports gaining global market share include olives, dried onions and oranges. 

Sound business environment

In addition to its location, the country’s business environment is also setting the stage for a prosperous future. Monetary and economic reforms enacted in 2016 are beginning to pay off, with a stable economy that is growing at over 5% a year. “The implementation of reforms along with the gradual restoration of confidence and stability are starting to yield positive results,” says the World Bank. Foreign direct investment, which topped $10bn in 2018, is expected to have reached nearly $14 billion by the end of 2019.

“We’re proud of a recent Gallup report, which looked at doing business in Egypt and assessed the environment,” said El Gazayerli. “We were judged to be the safest country in Africa, the second safest in Middle East and the eighth safest worldwide.”

This sound business environment has led to impressive infrastructure investments, such as the largest solar power installation in the world and a project to increase available agricultural land by 20%. Some 50 new grain storage silos have been built. Bilateral agreements across all parts of the world mean that Egypt is very much open for business. 

Untapped potential

Looking to the future, El Gazayerli identified dates, medical aromatics, dried tomatoes and olive oil as Egyptian products with high export potential. The meat & poultry, rice & cereals and dairy products sectors are also predicted to record strong results going into 2020. “This is partly due to regulatory reforms that make it easier to do business in Egypt,” he said.

In terms of trends, El Gazayerli noted that packaged milk has huge potential for growth, along with frozen semi-prepared products and on-the-go snacks. Egyptians consume around 10 litres of milk a year compared to the global average of 42 litres, which underlines the untapped potential. Safety concerns are also driving consumers towards packaged milk over unpackaged milk.

In the snacking sector, local firm Edita has built up a business with a market cap of more than USD700M in just over 20 years. The Bonjorno coffee brand has also enjoyed huge success, with business acquired by Nestlé in 2017. The company recently invested $13 million in a new factory to aid further expansion. “Food makers are developing innovations to meet new trends such as lactose-free products and filled snacks,” said El Gazayerli. “There are growing opportunities in fulfilling local needs.”

All this growth ties in with the country’s ambitious 2030 Vision, a coordinated strategy that aims to put Egypt on the pathway to becoming one of the largest 20 global economies. “To do so requires regulatory reform, infrastructure development and support for the private sector,” said El Gazayerli. “We are proud to be holding FI Africa, as part of AFM in Egypt this year, when we can share more of Egypt’s success stories.”

In addition to chairing the Egyptian Chamber of Food Industries, El Gazayerli is a Board Member of the Alexandria Chamber of Commerce, Vice Chairman of the  Egyptian Food Export Council, Board Member of the French- Egyptian Presidential Business Council, Former Chairman and current Member of the Board of Trustees of the Egyptian Junior Business Association and Vice Chairman of TVET, the Reform of the Technical and Vocational Education and Training Systems for Egyptian Food Industry Unit.

El Gazayerli was also the founding Chairman of the Arab Sustainability Leadership Group Chapter in Egypt, an Arab wide Initiative led by HE Queen Rania Abdallah of Jordan. He is passionate about profitable growth, job creation, impactful socio-economic initiatives, people’s development, and promoting entrepreneurship.