Industry News | August 4, 2009

Sales Forecasts Now Available for Egypt’s Food and Drink Industries

Research and Markets has announced the addition of the "Egypt Food and Drink Report Q3 2009" report to their offering.

Egypt Food and Drink Report provides industry professionals and strategists, corporate analysts, food and drink associations, government departments and regulatory bodies with forecasts and competitive on Egypt's food and drink industry.

Egypt places fifth in BMI's regional Food & Drink Business Environment Ratings table for Q309. Although a decline in private investment will dampen Egypt's outlook, its economy is expected to outperform the wider regions in 2009 with GDP growth coming in at 3.7%. Despite the global meltdown affecting expansions, Egypt's food and drink industries have continued to attract investment from Saudi Arabia in particular as discussed in BMI's recently published Egypt Food & Drink Report for Q309.

At the time of writing, International Dairy and Juice Limited - a promising joint venture between Almarai and PepsiCo - was on the verge of finalising the acquisition of leading Egyptian dairy company International Company for Agro-Industrial Projects (Beyti). Should the deal be finalised, it will be worth around EGP650mn, which would make it the biggest food and drink M&A deal in Egypt in 2009 so far. It is believed that Almarai will be responsible for managing Beyti's production, while PepsiCo will spearhead its marketing operation. Both companies stand to gain from BMI's forecast that through to 2013, food consumption will increase by 16.6% to EGP234bn (US$42bn).

In June 2009, Saudi food and drink company Halwani Brothers announced plans to double its annual sales growth to 10% by 2011 by investing SAR250mn (US$66.7mn) in expansions. The project will be set in motion by the launch of a new biscuit plant and packaging facility by 2010. Although it is based in Saudi Arabia, Halwani earns around 60% of its income in Egypt and is similarly well placed to benefit from BMI's upbeat aforementioned food consumption forecast.

Also in June, Saudi Arabia-based mass grocery retailer (MGR) Al-Othaim announced plans to enter Egypt's emerging retail market. Joining the likes of Carrefour MAF and UAE-based Spinneys, Al- Othaim will be encouraged by BMI's forecast that MGR sales are expected to rise by 32.9% between 2009 and 2013 to reach EGP32.5bn. Despite its undoubted promise, the country's MGR industry has proven a poisoned chalice for a number of distinguished retailers, most notably UK-based Sainsbury's and South Africa's Shoprite. Both have subsequently exited having failed to adapt to consumer preferences. As a regional retailer, Al-Othaim is less likely to encounter such difficulties.

Egypt is shaping up to be a key frontier market for food and drink companies. Through to 2013, its GDP per capita is forecast to rocket up by almost 150% to reach US$5,200 while its population is expected to grow to within touching distance of 90mn. What is more, the country appeal extends well beyond its own border. Export opportunities are aplenty through the country's free trade access to the Gulf Co-operation Council (GCC) and Common Market for Eastern and Southern Africa (COMESA) regions.

Key Topics Covered: Executive Summary SWOT Analysis Business Environment Food Drink Mass Grocery Retail Market Overview Key Players Appendix Commodity Price Forecasts Country Snapshot: Egypt Demographic Data Food & Drink Business Environment Ratings BMI Food & Drink Industry Glossary Companies Mentioned: •Cairo Poultry Company (CPC) •Faragalla •Al-Ahram Beverages Co (ABC)

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