Cairo – Egypt’s leading meatpacking and food group Halwani Brothers imports approximately USD 60 million a year in frozen beef from Brazil. In an interview with ANBA, Halwani Brothers Egypt CEO Khaled Akl (pictured above) said the company aims to steadily increase its plant’s production capacity as they strongly believe in the promising future of the Egyptian market.
He believes the pressures and crises the Egyptian economy is currently facing are temporary, as freight and raw material prices are bound to go back to their usual values. He also expects that the exchange rate is going to stabilize soon in the country, which will contribute to raise return on investments.
Halwani Brothers has operated in the Egyptian market for 35 years and is 100% Saudi capital, owned by the homonymous company listed on Saudi Stock Exchange. The company has six plants in the industrial zone of 10th of Ramadan, Egypt. Its biggest plant specializes in manufacturing frozen or refrigerated processed beef, which has allowed the group to gain a market share of 50% of the Egyptian market in this sector.
Akl added that the company’s second plant is a poultry facility, which the brand is heavily focusing on in the short term, particularly because it depends on products and raw materials supplied by Egyptians. The company also has a tahini production plant, which in turn caters to a halva production plan.
Halwani Brothers also runs a fruit processing plant that manufactures juices and jellies and whose production is completely focused on exports, because they’re high-quality products with special prices for the international market. The company’s sixth plant manufactures baked goods.
Raw material imports
Akl stressed that the beef plant is 100% dependent on imports from Brazil, as Egypt is not self-sufficient in beef. Average monthly imports are estimated at approximately USD 5 million. He says that the firm company works with Brazilian companies that cater to all its demands from farms located across Brazil and other countries in Latin America.
On the possibility of importing poultry, Akl stressed that this requires the Egyptian government to allow poultry import for industrial use. He explained there are restrictions on the raw material used in the production process. For example, meatpackers are not allowed to use local beef, contrary to what occurs with poultry plants.
Export opportunities
The Halwani Brothers’ CEO said the firm is focused on expanding exports in the coming months, thus prioritizing its FX management. The company currently exports goods like juices, jellies, sesame products, poultry, and beef products.
According to him, the company is working toward increasing exports of products that use Egyptian raw materials. Hence the interest in expanding the exports of juices and jellies, which are sold to over 17 countries, particularly Europe, the Americas, and some Arab countries. As for beef products, which have no incentives as they use imported raw materials, they are exported only to some neighboring countries that struggle with beef scarcity, like Libya and Sudan.
Regarding the impact of the recent years’ global crises on the company’s output and export targets, Akl revealed that beef prices accounts for over 60% of the production costs of processed beef products. According to the executive, the economic crises that global markets have faced hit all companies in countries around the world. However, Egyptian plants suffered the additional problem of the fluctuation of the exchange rate twice in short period of time – first in 2016 and then again last March.
He added that production costs have significantly increased due to higher raw material prices. Furthermore, energy prices have hiked, thus contributing to raise freight costs, which was aggravated by the high dollar prices in the Egyptian market. This combination of factors led Egyptian companies to have to increase prices in various proportions.
Akl explained that production costs climbed over 30%, but Halwani Brothers made sure to absorb most of the increases. This is mainly due to the fact that any price increase is followed by a fall in consumption. The company has felt that in the last period, when it saw a 15% decline in demand, which led it to put in place marketing plans and discounts to ensure the loyalty of customers.
About the company
Halwani Brothers is one of the most famous Saudi companies in the field of manufacture and distribution of food. Founded in 1950 in the city of Jeddah as a family business, the company started to produce halva. In 1987, Halwani Brothers wasn’t satisfied with sales and marketing policy only, so it turned to trading.
This transformation is one of the best achievements made after officially joining forces with Dallah Al Baraka Company. This supported upgrading quality standards of packaging and wrapping of products and increasing the proportion of sales and total net profits.
The company then opened an integrated factory in Cairo for food manufacturing. The company achieved great fame in this market, and it earned the trust of the Egyptian consumer and expanded its activities in the country by creating a large industrial complex with a poultry plant and other operations.
Translated by Georgette Merkhan & Guilherme Miranda
