El Maleka Pasta exports 23% of production, plans to increase share this year

Shaaban: Egyptian companies must be supported to enter the American and Chinese market

Exports account for 23% of the total sales of El Maleka Pasta Company, one of the companies of the Savola Group for Food Industries. The company seeks to increase exports during the current year.

Mohamed Shaaban, director of export at El Maleka Pasta, said that production is sufficient for the local market and large quantities are exported abroad. However, he said, quantities amounting to 5% is imported from the Turkish market as a result of the decline in the prices of the Turkish lira.

He added that the percentage of exports of El Maleka Pasta ranges between 20 and 23% of the production, which reaches 370,000 tonnes, putting exports at around 50,000 tonnes.

He said that his company aims to increase the percentage of exports in the coming period, starting from 2023, since there is a great demand to import pasta from foreign markets.

He pointed out that the main challenge facing pasta producing companies is pricing, given that the costs of all production inputs witnessed a significant increase. For example, wheat, which represents 60% of manufacturing costs, is imported from Ukraine or Russia, which control global prices.

He stressed that the most promising export markets are the African market, especially East Africa, due to the COMESA agreement, but Turkish products are a strong competitor to the Egyptian products there due to the depreciation of the lira exchange rate, which, of course, is reflected in the prices of the products that Turkish companies export abroad.

He added that Turkish products also enjoy governmental support for agriculture, production, manufacturing and export, in contrast to Egyptian products that are export-supported only, and thus Turkish products are lower in prices.

He said that Turkish products also have another advantage in shipping with major container companies such as Maersk, which gives them special prices for some African countries. Egypt has started implementing these contracts in some ports such as Alexandria and Sokhna.

He expected a drop in prices in July to follow the current relative rise in prices in conjunction with the wheat harvest season in Ukraine and Russia, and consequently a drop in wheat prices globally.

He stressed that the low prices of international freight to African countries and the export support from the government help Egyptian companies to invade the African market with their products, even if the export support is disbursed after a period of up to two years.

Shaaban called for the necessity of supporting Egyptian companies to enter the American and the Chinese markets, especially since Egyptian companies have not yet been able to enter these markets because the support on shipping is specific to African countries only.

He said that El Maleka Pasta was able to enter the American market with two of its products and is seeking to increase its exports in the coming period, and that, during 2018 and 2019, it was also able to enter the Chinese market and will return to it soon.

He revealed that his company seeks to increase production lines in the coming period to keep pace with the increasing demand for its products locally and abroad.