Cairo – The Egyptian company Samo Food Industries, owner of the brand Abu Auf, decided to replicate its successful experience in the local market in other Arab states, opening retail branches in the Gulf countries like the United Arab Emirates and Saudi Arabia. The company specializes in coffee, tea, dates and other healthy snacks.
The company’s chairman Ahmed Abu Auf announced that the first branch outside Egypt was opened in the city of Dubai, UAE, last Sunday (1), one day before Eid Al-Fitr, the celebration that marks the end of the holy month of Ramadan.
According to Ahmed, as the first step of the expansion into the Gulf states, the company plans on opening five branches in the UAE, four being in Dubai and one in Sharjah, with an estimated investment of USD 2.5 million.
The executive said that in 2021 the sales of the company grossed over EGP 1 billion (USD 24 million) thanks to the development of an ambitious plan to boost the volume of business, which started by expanding the productive capacity and introducing new products like honeyed oriental pastries and dates.
According to Ahmed, Abu Auf plans on stepping up its coffee production to 8,000 tonnes starting next year, up from 6,000 tonnes that are expected to be produced this year. The Maamoul date production will also be expanded, and new lines will be added. The company’s production is this segment is estimated at 300 tonnes.
The company also plans to acquire a bread factory in the city of Port Said, in a 10,000 square meter area. According to the executive, earlier this year two production lines opened with investments of EGP 30 million (USD 1.6 million).
Abu Auf: 200 branches Egito
Abu Auf has approximately 200 branches in the Egyptian market across 16 provinces. The company aims to expand into Egypt’s southern and touristy provinces to be present across the entire Egyptian territory.
The company has two factories now, the first one in the 10th of Ramadan, in an area of 25,000 square meter, which received investments of EGP 70 million (USD 3.7 million). The second one is located in the 5th Settlement in an area of 5,000 square meters, with investments of EGP 25 million (USD 1.3 million).
Ahmed says that the market was severely affected by the global changes, as the imported pure green coffee doubled due to several reasons, including the devaluation of the Egyptian currency compared to dollar and the decline in coffee production in Brazil, a world’s leading producer. But the company managed to absorb a large part of the increased production costs, and prices rose only by 15%. This varies according to the product.
New moment
The executive says the liberation of the exchange rates back in 2016, which led to the EGP devaluation compared to dollar, made the company develop an experience of how to deal with this type of situation. Egypt has recently went through a new USD appreciation.
Ahmed says that the company took many precautionary measures since October 2021 and stepped up its stock levels from two to six months, which has mitigated the effects of the current business crisis.
Exports
The chairman said that exports are one of the pillars of the company in the current year. The company plans on grossing USD 7 million in foreign sales this year compared to USD 2.5 million last year.
Abu Auf exports to the UAE, Saudi Arabia, Lebanon, Germany, United Kingdom, Netherlands, the United States, and Canada. According to Ahmed, the company is focused on increasing the volume of business to these markets, as well as exporting its new products.
The company concluded all procedures for a stock offering, but this has been postponed from the second to the third or fourth quarter of 2022 due to the world’s current situation that have heavily affected the emerging markets.
He stressed that the increase in US interest rates has led many companies to take their cash from emerging markets, thus hampering public trading.
Abu Auf
Founded in 2010 in Egypt, Abu Auf has become one of the most famous names in delivering products like coffee, nuts, nut butters, healthy food, and dried fruits. The company is committed to providing 100% organic, ethically and sustainably sourced food. “Our success is based on sourcing top grade raw materials from around the world,” Ahmed said. Abu Auf brings more than 400 organic products to Egypt and elsewhere.
Translated by Guilherme Miranda and Ahmed El Nagari
