Manufacturers increasing reliance on local inputs, expanding exports | Enterprise

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Sunday, 30 April 2017

Manufacturers increasing reliance on local inputs, expanding exports

Manufacturers in Egypt are sourcing more of their inputs from local suppliers as prices increase, Reuters’ Asma Alsharif writes. “Localising raw materials is extremely important at this time. We cannot depend on a [USD]-based cost structure with an Egyptian pound revenue streamline,” PepsiCo’s North East Africa General Manager Ahmed El Sheikh told a recent conference. PepsiCo is harvesting its first crop of potatoes produced from local seeds to make the local brand of chips Chipsy. Alsharif says the company still had to import about 40% of seeds it required for 2017, but plans to cut this percentage to 30% in 2018. Mars Inc is also using more local suppliers and has been increasing its base of local packaging suppliers in Egypt over the past three years. 70% of its packaging comes domestically now and it hopes to increase this to 100% by 2018. Multinationals are also looking to export more from Egypt. PepsiCo is looking at exporting its Egyptian-grown potato seeds and Unilever plans to double its asset base with the aim of turning Egypt into a regional export hub. Mars Inc is investing EGP 750 mn over the next 18 months and aims to increase exports to 80% of its output from 50-60% currently. Alsharif also gives a shout-out to Juhayna, quoting CEO Seif Thabet as saying the company is working to cut reliance on imported production inputs.

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