Savola Foods, part of Saudi-based Savola Group, is seeking to roughly double exports of vegetable oils from Egypt in 2009, an executive said on Wednesday.
The firm is looking to offset declining market share as its products compete with cheaper government subsidised alternatives in Egypt, Senior Vice President for Egypt and Africa, Zakaria Akil, told Reuters on the sidelines of an oil and fats conference in Cairo.
“Consumers rather than buying from us have almost free oil from the government,” Zakaria said.
He said the company’s Egypt unit would raise exports to 45,000 metric tonnes in 2009 from 20,000 tonnes in 2008.
The Egyptian government tripled the amount of subsidised oil available to Egyptians through ration cards during the past seven months to almost 900,000 from 350,000 tonnes per year, Akil said.
“Our volume definitely went down and so we are trying to offset this by growing exports and developing our business,” he said.
Savola Foods exported 10 percent of its Egypt production in 2008, mostly to Libya and Iraq.
“We are the number one company in Libya with products that are manufactured and sold out of Egypt,” Akil said.
Savola Foods has a production capacity of 340,000 tonnes a year from its two Egyptian plants. The company is running on 60 percent of its capacity.
Egypt’s government provides subsidized edible oil at prices ranging between 1 Egyptian pound ($0.18) and 4.25 pounds a litre while market prices range from 6 to 12 pounds per litre.
“It’s a problem we have but when you have big problems you come up with big ideas,” Akil said. (Reuters)
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