Agribusiness overview: Egypt’s agriculture is poised for growth

By T.K. Maloy

CAIRO: There are two mains segments to agriculture in Egypt. The larger agribusiness operations growing produce on a large scale for export, domestic consumption or other usages. Still, the smaller traditional family farms account for 80% of the cultivated land in the country.

The traditional farms grow food for family usage and also target the nearby local markets. The majority of the smaller farms follow the course of the Nile, using the rich alluvial deposits left by the river during flood season each year.

The larger segment was created in the late 60s and 70s and these farms cover and area of up several thousand hectares and are dedicated either to production for exports, particularly of fruit, potatoes and onions, or to the industrial sector producing crops such as sugar beet, according to Daniel Leroux, CEO of KADCO, a company involved in the large agricultural development segment to supply produce for the domestic market and for export.

“I think that the agricultural sector was not affected too much by the political turmoil (of the last three years) because Egypt is a big country with many people to feed,” Leroux told Marcopolis. “Agriculture and agribusiness have been consistently strong during the past eleven years that I have been working here. I believe that the sector will remain strong in the coming years also.”

KADCO’s main focus is to cultivate crops such as wheat, corn, alfalfa and barley for the domestic market. And the company has a small production of table grapes for export to Europe and also exports dates.

Leroux said that a key challenge for KADCO is the growing terrain they use near the Sudanese border, noting, “We are cultivating in the desert in the middle of nowhere, about 50km from the Sudanese border. The soils are very erratic and are not homogenous at all which means you need to select the soil carefully before you begin to do anything. We always carry out a full mapping of our soils by digging holes and examining the soil profile to make sure that we can grow something there.”

Another top challenge is the heat and cold factor.

“Here it can reach 50oC in the summer and 0oC in winter. Therefore, we have 50 degrees Celsius of variation, which means we have to select the type of crop we want to plant very carefully and plan the exact time for plantation,” Leroux told Marcopolis. “We are able to cultivate two times per year, usually we plant barley and wheat during the winter and corn during the summer.”

Lastly, for KADCO there is also the workforce challenge.

 “We are 1,200km from Cairo and so it can be difficult to bring people to work on the farm. This is why we are opting for more mechanised agriculture instead of growing more fruit and vegetables as we used to do (which is labor intensive), due to the difficulties in sourcing labour.”

KADCO is in an expansionary phase were within the next five years it will be cultivating an additional 25,000 acres of land.

On the smaller farming front, Leroux noted “I would say that the main problem comes from the very small farms that exist on the delta because every time there is a (family) succession, those farms are divided again. They need to find new land outside of the delta such as in Toshka, East Oweinat and North Sinai, etc.”

He added: “In Egypt, as long as you have water, you will have no problems at all. The key issue is water. If you can find underground water or you have access to the Nile River, then you can grow whatever you want.”

Egypt currently imports many of its key food products. The country is the biggest importer of wheat in the world, at 11 million tonnes a year. The country also imports up to six million tonnes of corn, and there is high demand for other products such as meat, fish, cooking oil, and sugar.

For Leroux and KADCO, the dependence of Egypt on food staples from the abroad is an opportunity to help the country achieve food independence by improving domestic production.

“Thus, we need to develop our agricultural sector further in order to try to compensate for these imports, which require a lot of hard currency and make the country very dependent,” Leroux said. “The target is to try to be more and more self-sufficient. With a growing population, it is going to be difficult but there is a lot of room for progress.”

Tony Freiji, President and CEO of Wadi Group, a large agribusiness and food processing business, told Marcopolis that Egypt is at point where the agricultural sector is facing the prospect of major growth.

“If we look at this particular sector, Egypt is poised to play a leading role in supplying quality food and processed foods to the rest of the world, particularly Europe, the Eastern United States and the rest of the Mediterranean Basin,” Freiji said. “The agribusiness industry in Egypt is going through a series of transformations. The government has an important role to play in addressing the issues faced by the agro-industrial sector of the country. However, we feel that with some serious tweaking, and easing of some cumbersome legislation, the sector can contribute more to the GDP of the country.”

Tony Freiji and the Wadi Group were originally Lebanese in origin, with an elder brother founding the Levantine iteration of the company in 1957. Like many Lebanese businesses and citizens, the 15-year-long Lebanese war pushed the company into looking abroad. It was a decision which was to prove a success.

“During the Lebanese war, we had to move out of Lebanon to Syria, Jordan, and Saudi Arabia. I personally came to Egypt thirty years ago. (And) I am happy I dropped anchor here. Egypt has been good for me personally and for our Group, eventually becoming our flagship,” said Freiji.

“The growth of the Group in Egypt was mostly driven by building on synergies, building on businesses that support our core business. This has been a top factor for our growth in Egypt, and in Sudan and we are now looking at expanding into other countries in the area. Apart from poultry, Wadi Group has been growing in the food sector, particularly olive oil, fresh vegetables, and fruits grown particularly for export,” Freiji said, adding, “We have branched into feed manufacturing on a large scale as well as logistics. If we look at the whole picture, the core business supports our other companies. Today our core businesses are poultry and agro food. We employ over 3,500 team members, who are present in seven industries.”

The Wadi Group CEO concluded, “We are committed to our presence here and we look forward to growing our business in Egypt and from Egypt to the countries around us.”

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