Egypt’s packaging industry has a very big potential,” says Youssef Allam Group

Interview with Adel Allam, President of Youssef Allam Group

Before we move on to covering the printing industry or your sector in particular, please let us know your overall evaluation of what it means to do business in Egypt nowadays.

It’s been three and a half years since the revolution and the environment in Egypt now is very optimistic. There is a very enthusiastic atmosphere among the various business sectors, because development is on its way. We started noticing this since the time people started investing in machineries. This was not the case for three years. Now, many considerations are being taken. We feel that everything is coming back to normal. The environment is very good and promising.

And what have been the trends in the printing industry?

The printing industry all over the world has been affected because of the media. However, the packaging industry is still active all over. In Egypt, the potential in the packaging industry is very big. A lot of products need to be packed. Just last week we signed a contract with a very big packaging company for quite a big project, which is the first such project in the last 3 to 4 years. The other sectors such as newsprint, publishing etc. are not so active. This is the case all over the world, so we are not any different from the rest of the world in that respect. But packaging is a very promising industry.

Please summarize the position of the Youssef Allam Group in the market. You mentioned that Allam means ‘favorite’. Please elaborate on that.

Our company was established by my late father in 1948, so the company is 66 years old. My father was the largest trader in the paper industry in the 50s. He was very well known not only in Egypt, but all over the Middle East. I started working with him very early. I was still in school, but as I was naturally interested in machinery, I started trading in machinery. Over the years we became the largest supplier of paper and printing equipment in Egypt. We established the Print Academy about 15 years ago, which is the only one in Egypt, in Africa and the Middle East. So, it made us very well known in the area. We not only cover Egypt and Libya. We used to have a presence in Iraq, but not any more. But we still have projects in the Middle East countries. Due to our unique services, we have nearly 150 engineers. Because our services cover all the requirements of the printing industry, starting from creating the text, the image, color separation, printing, book binding, box making etc. We have engineering support for all the lines. This has given us a unique edge. Due to the special assortments and services that we offer, we have absolutely no competitors. So we enjoy a very good market share. We have diversified from the printing industry. We have entered the plastic and resin industry. Many years ago when I realized that plastic bags are replacing paper, we established a presence in that field and we are well known in this industry. We are very big suppliers of resins, machineries and plastic industry as well.

20 years ago, we started some services in the Health Care industry. We mainly concentrate on image handling, which is X-ray. We are planning to expand further in the Health Care industry. This is the 4th sector we are present in.

Do you also represent some international brands?

Yes, we represent international brands since many years, be it paper manufacturing or the printing machinery. We have been representing the famous Heidelberg Printing company in Germany since more than 45 years. We represent several brands. We have a very good relationship with our partners and good trust.

You mentioned that you had presence in Libya and Iraq; where else do you have presence?

We are present in Sudan, but only for service for the time being, because of the boycott. But in the past we had a greater representation there. Now we just offer service and supply parts. In Libya, we have a very big office, a very big presence, because we are the suppliers for nearly 100% of the printing materials and paper etc. available there. We have engineers there and we offer a complete-service package to them. We also have an office in Dubai and we have a very big presence in Iraq before the war. 

Are you planning on adding new offices? Do you have further expansion plans in the region?

We are expanding locally. We are building a board factory to manufacture duplex boards used in the packaging industry. This will be the biggest in Egypt and possibly also the biggest in the Middle East. It is 130,000 tons. It is expected to open by the second half of next year. The building is almost finished and we have started storing the machine. The test run will be done by May or June 2015. We are going to start another line, which is renewable energy. But this is a completely new field for us. We are studying this very closely. We intend to actively start in that area by February or March.

With respect to the new companies and the renewable energy field, are you partnering with some international companies?

No, we are partnering with some local Egyptian company called the Citadel Group. It is a very big group here. We are 50-50 partners. We are earning experience from Germany. All the machineries are from Germany. Right now we don’t have any partnership with any international companies, but we are open to expansions with any of the multinational companies.

Is it challenging to get knowhow from outside?

It is easily available. That is not a problem, because it is an industry that also exists in Egypt in a smaller scale. So, there are several such factories in Egypt.

If you would be expanding in the future, looking for international partners, how would you describe your competitive advantages? Why would the companies partner up with you? What are the strong points of the group as a whole?

Our strongest point, which has been the image of our company for many years, is that we service our customers very well. The people trust us, because they believe that the goods we offer are completely genuine. For instance, if we want to represent a company to sell machinery, we first train our engineers, stock our spare parts, and then start selling. So, in this way we are completely confident that our customers will never suffer. This sort of image and the services we offer has helped our company succeed. This is our strong point. Even when we entered the Health Care, the doctors knew us. They said, ‘Allam is selling it? We want to buy it from Allam.’ This is because they are confident that they will be getting good service and good support. So, even when we enter another sector, selling equipments etc., now we are selling MRIs, CT scanners etc., the customer buys from us and not from our competitors, because he knows that the image of Allam is very reputed. This is our asset. The other thing is the continuation of the company. We have the third generation coming up now. We already have 5 active members from the third generation, my son, my nephews, they are in the learning curve, but they are already taking responsibilities, but they maintain the heritage, they maintain our reputation. They are following in my footsteps and that of my father.

You started out 60 years ago in the paper industry. Now the introduction of technology must have reduced the work load. I am sure that your load might not even be half of what it used to be. Do you think that you would give up on that specific sector one day and just focus on the other machineries? Because in this age, paper and printing have become nearly obsolete.

I have seen several technologies die out. When I started working on the machineries, I started selling a hot-metal typesetting machine. It was composing the text or characters, which were actually lead pieces. So the text was created by putting these pieces together. I was selling this machine. After some years, this technology became obsolete and got replaced by another technology and so on. So, I have seen a lot of technologies becoming obsolete, a lot of industry dying out and a lot of industry getting established. I believe that paper is also going to be affected drastically. So, that’s why we decided to start working in the packing industry, because the packaging industry will never go out of fashion, but I think that papers used for publishing, books and so on will definitely die out, because the coming generation is very screen-oriented.

Even in schools. There have notebooks and laptops in place of books.

Yes, even schools. Of course we are preparing ourselves for that day. If this is the case of the industry, we have to respect this. If there is no market for this, I simply cannot afford to be stubborn and say, ‘no, we are a paper company.’ We will mainly concentrate on packaging and in the A4 size sheets. Most people have printers at home and they use these. I believe that these two areas will continue, so we will also continue developing them. That’s why we are also expanding into other directions.

Do you have a final message? Do you want to say anything to the international reader about the Group or the company in general?

I will speak about Egypt. Egypt has a great potential in practically everything. If you look at the statistics in Health Care in Egypt, it is far behind, so there is a lot of scope for investment in Energy and various other industries. I believe that it is a very attractive country for investors. Now, it is gradually becoming a safe place to do business in. So, I request people looking to invest to come and check out Egypt.

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