Chamber of Cereals industry: Egyptian mills produce flour of excellent quality

Interview with Tarek Saied Hassanein, Chairman of the Chamber of Cereals Industry in Egypt, Board Member of FEI (Federation of Egyptian Industries)

In general, how is business now and what impact does it have on the company you represent?

Of couse, things are now different after the revolution of June 30th  and president CeCe taking the chair. Things are different now, first there is a leadership that you can talk to, there is business, and ministers who work actively. This is being reflected on Egyptian market, present industries and industries union of which we are a chamber. We have a lot of related activities. What can I say, the country now has a man that can depend on.

Now, coming to your sector which is food manufacturing and food processing, cereals, etc., how have you been impacted by the past three years? What are the current trends in the industry?

The existence of the new government and the present president encouraged industries and caused them not to shrink like before, before the revolution of June 30 where there was fear and both investments and businessmen shrunk.

In general, when there is no stability and no clarity of vision, it results in *fear of high risk investment.  In all industries, people shrunk, and everybody ever wanted to expand their business ended up shrinking. They were trying to figure out what’s coming next, but things became different after the revolution of June 30. Egypt had an entity, it was a new situation and people started to think. You can feel it. What is different is that the government now has a vision that didn’t exist before. People are thinking ahead of what they want. Vision is now clear. As a result, all the industries of the chamber, whether mills, pasta plants, bakeries or rice mills, all started to have hope for future. They feel secured, and so they started to think of ways to expand, grow, export, employ new manpower and make new investments.

Where is Egypt standing in cereals production and food processing when it comes to the surrounding region? What is Egypt’s role?

Egypt is very capable when it comes to milling. We have mills that produce excellent quality. They are capable and some of them even export to Africa. This is as far as flour milling is concerned. As for pasta, we are also very capable and we also export to Africa. Egyptian rice, on the other hand, is one of the best kinds of rice in the world. We even opened the way lately for Egyptian rice exportation. It was banned before, but thanks to the chamber and the cooperation with ministers, we issued a resolution to allow exportation of rice. We are internationally renowned for it.
Those are the three things we deal with as a chamber.

We are influential in the Egyptian, African and Asian markets. We are also the biggest importer of cereals. The biggest importer of wheat where we import about 5 million tons annually. Market needs food. We, as an importer, have our weight in the market. When we enter the international bourse, we influence it.

What is the balance between the local production and the production for exports? What is the ratio between these and the local consumption? Are there any products being produced only for export? What is the balance between these?

We are still growing. We lost the African market in the past time and now, me and all the other officials, are trying to get it back. Market is promising. We are preparing logistic areas in Damietta Port. We will work with international companies and since over 50% of cereal trade pass through Egypt, we will deal with cereals storage in general. We are trying to make use of our strategic and logistic location by storing cereals during their season and then sell them to Africa or Asia all year round. So, Egypt will be an important logistic axis when it comes to exportation to Africa and Asia.

You already mentioned that your chamber is cooperating closely with the government, can you name some of the recent acts or initiatives that you are working on?

The most important initiative was the issuance of smart cards to be used for the distribution of bread on citizens. This was in collaboration with the Ministry of Supply and Internal Trade. It was the most important resolution for us. The second one was how to export food supplies through our companies and the way used for that. Before, there used to be tenders where our companies bid, these tenders are distributed to to wholsales locations and then to people. We decided, by mutual agreement with the minister, to change this system. For better results, we hand the supplies, and only charge for the portion actually sold. So, basic nutrition supplies are being distributed to people based on the cards I mentioned. So the system now is to charge for the products actually sold. That’s how we can guarantee the quality of the product.

Those were two important points. The third resolution with him was to allow exportation of rice. This was very important. The fourth thing was not to go for certain mills, and not to use specific ones that would require high capabilities and not to finance them from the bank to avoid loss of investment funds. One of the responsive parties was the Ministry of Electricity where it stopped supplying power for plants with increased power.   Like Al-Fakher (excellent) mills for instance, if someone came to start one, we won’t finance him and we would tell him that he is not a priority because he is doing something that is already there. When I have deficiency in power, I would finance other things.

Also, same thing applies to pasta factories. So, there are 3 or 4 important resolutions made in partnership with the concerned ministers whether the minister of industry or the minister of supplies.

What are the most promising investment opportunities we have?

In general, and when it comes to investment, there is a group working to filter the related old act and regulations in order to come up with a united investment law that fascilitates investors work in Egypt. This is very important and it will be announced before the economic conference in February, God Willing.

In addition to that, the ministry of investment is serious about introducing the one window for investors. Investors should be able to get all procedures done by visiting one window only. We already started working on it and shall be finished soon.

There are major fascilities for investors to be announced during the conomic conference on February.

Are there investment opportunities in our sector, like silos for instance?

We are with the government. We act according to government resolutions. There are investment opportunities for us especially when it comes to silos. Egypt needs a lot of silos with high capacity. We need silos that can store 5 million tons. If each silo has a capacity of 50,000 – 60, 000 tons, then I may need no less than a 100 silos so that I can store the Egyptian wheat all year round.  We would like to get rid of soil granary where wheat is being stored. We lose about 15% because of it being there. It is uncivilized and wheat is exposed. It can be polluted or affected by weather. To the contrary of that, when it is stored in silos, it will be kept and accordingly the quality of  the end product will be a lot better. We are working with the Ministry of Supplies to transform all granaries to metal silos within two years.

Our private sector, or lets say our chamber has a big investment opportunity especially with these silos. We already started, and some people already got approvals. We are working on it.

What are some of the key companies represented by the chamber? I don’t know if you can divide them by cereals, pasta etc. or just give us the names so we have an idea?

Of course, we have Al Fakher mills, Al masryoon mills, who are leading companies in milling sector in Egypt. We have Al ekhwa (the brothers), a leading mill in Damietta. We have Sun Flower, in 6th of Octorber, Also a leading mill. Those are the ones I can recall right now.

As for pasta, we have Regina Macaroni and Almalika. Both are leading companies in the industry.
As for rice, we have have Majdy Alwelely which is a big company and an important exporter of rice. There is also Rajab Shahata company for rice and cereals exportation.

As for bakeries, we have Rich Bag for French bread in 6th of October area. It is one of the great companies. Those are some of the famous brands.

Is there anything that you would like to talk about?

As a chamber, we provide many services for our member. We take part in a lot of exhibtions. We have technical committees that help them with any problem they may have. We follow-up with the officials on any resolutions they make, whether negatively or positively, we always make an effect so that resolutions are not issued without consideration to practical life. This is one of the chamber’s goals. InshaAllah, we have hope for future. Some people are very active and we are very hopeful with our president Al Cece. He is a faithful man, very active and acts with sincerity.

Accordingly, the ministers are acting on the same level, but not the employees below. We are still discussing them. Hope is there and Egypt is progressing Insha Allah.  

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