Seif’s interview with the German chamber magazine
Seif Thabet is currently the CEO of Juhayna Food Industries and has been the Deputy Chairman of the company’s Board of Directors since early 2016. Thabet began his career at Juhayna in 2004 and, since then, he has been assigned a number of junior and senior positions in the sales, marketing, and project management divisions.
In addition, he is currently the President of the Dairy Division at the Egyptian Chamber of Food Industries and a member of the Food Export Council’s board.
What are the key challenges the industry is currently facing?
The food and beverages sector has faced many challenges the past few years due to political turbulence and recently due to the strict economic reform measures that were taken, albeit extremely important for the country’s future.
The most recent of these challenges was the devaluation of the Egyptian pound which substantially increased our production costs. As you know, milk is a sensitive commodity present in every household, hence, our conscious decision was not to pass on the increase to the consumers all at once. We gradually raised the price, but the time taken to do so has negatively impacted our bottom line and portability. The increased cost has been coupled with the general decline in purchasing power as a result of the government’s recent decisions to reduce subsidies.
In a nutshell, the main challenge that faces the manufacturing industry in general not just the food and beverages sector is the current unpredictability of the market.
What are the policies that the government and the parliament should work on to enhance this sector in Egypt?
It all starts with the first link in the chain – agriculture. Ensuring sustainable agricultural practices is of interest to the entire food chain, from producers to consumers.
Improving the agriculture sector is of pivotal importance at this moment when Egypt should closely monitor its international dependencies. We can revolutionize the economy if the right focus is given to that sector by improving the quality of Egyptian products and consequently increasing foreign demand. This could be the beginning of our economic autonomy.
We also call on decision-makers to empower the private sector by facilitating local and foreign investments. We should acknowledge that the pro private sector is the main driver for economic development and a powerful engine for sustainable growth, employment creation, and poverty reduction.
Looking at the bright side, the formal approval of the long awaited Food Safety Law is considered a major victory. This shall not only be in the best interest of the citizens but shall also eliminate trade barriers and open new export opportunities.
What are the opportunities that lie ahead for this sector in Egypt?
The food and beverages industry is a key facet of the Egyptian economy, given that Egyptians spend a sizable portion of their monthly salaries on food. Egypt’s population is now closing in on 100 million and its growth is not expected to slow down anytime soon, hence the country’s demand for food and beverages is forecast to rise, irrespective of the political and economic situation. The economy might be undergoing some challenges now; how- ever, it is expected to recover in 2017/ 2018.
Egypt is also an excellent production and/or exports base, given its central location and it’s existing free trade agreements and strategic partnerships.
What types of agribusiness technology are you most interested in investing in?
Our agriculture arm is a key component of our vertical integration strategy as it enables us to ensure that the highest quality ingredients are delivered to our production facilities in a timely and dependable manner.
Our move to have tighter control over our sup- ply chain began in 2008 with the establishment of our farming subsidiary, Al-Enmaa for Agricultural and Livestock Development.
There, we invested in state-of-the-art technology applying the most advanced and environmentally- friendly farming methods, including the use of drip irrigation systems to grow cow feed and oranges. The company has implemented an innovative cool- ing system for cows to ensure higher productivity and better quality of milk. We have also installed a highly efficient rotating parlor with fully auto- mated 80 milking points. It milks about 450 cows per hours, after which the milk is cooled and then loaded directly into the company’s well-equipped vehicles that directly deliver to our factories.
Through an electronic device attached to their feet, all cows are closely observed through out the whole day through advanced devices that monitor their health status. Moreover, the farm’s techno- logically advanced laboratories are used to test the cow feed and analyze the milk produced ensuring the absence of any microbes.
What could the private sector do to improve the food and agriculture sector?
As one of Egypt’s leading food manufacturers, Juhayna is firmly committed to the sustain- able development of the food and beverage sector across every level of operation. From our adherence to environmental standards, energy efficiency and waste management in our operations to the projects we undertake to empower our farmers and suppliers, our commitment goes above and beyond the simple notion of “giving back.”
As a market pioneer, Juhayna is committed to delivering high-quality, healthy, and safe products to its consumers. Over the years we have upheld our standards and worked diligently to enhance them at every opportunity. We have invested heavily in furthering our ongoing research and development initiatives. The ongoing emphasis on research and development stands to bene t not only the company internally but also the industry as a whole by raising the benchmark for premium quality Egyptian manufactured products.
Juhayna, in collaboration with the Egyptian National Research Center, is an active organizer and participant in an annually-held dairy science and technology conference which highlights and promotes Juhayna’s core belief in the necessity of Public Private Partnerships (PPP) to upgrade industry standards.
Furthermore, Juhayna has a long-standing partnership with Tetra Pack to raise public aware- ness on the dangers of buying loose milk. Today the percentage of consumers who buy loose milk in Egypt has dropped down to 57 percent of the population. While the gure has improved over the years, the high percentage is indicative of the need for a continued effort to spread awareness.
In addition, Juhayna and the European Bank for Reconstruction and Development (EBRD) entered a partnership to look at ways of boosting Egypt’s milk production capacity in an environmentally responsible manner. Out of the belief that the better informed our farmers are, the better we can operate as a company and as an industry, we collaborated with EBRD to develop an innovative training pro- gram to support local farmers in Egypt. The program included generating awareness on how to improve productivity by tackling issues such as the fertility,
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About Juhayna Food Industries
Juhayna Food Industries is a leading Egypt-based manufacturer specialized in the production, processing, and packaging of dairy, juice, and cooking products.
Founded by Safwan Thabet, in 1983, Juhayna Food Industries was built on a vision to introduce the market to a new business model for food production that holds innovation at its core. Today, with seven fully operational facilities, a vast network of distribution centers serving more than 65,000 retail outlets nationwide, and a 550-acre, fully-owned dairy farm that has the capacity to house 4,000 cows covering a sizable portion of the company’s raw milk needs, Juhayna continues to raise the benchmark for premium quality Egyptian manufactured products.
In its 33 years of operations, Juhayna’s dairy segment has cultivated an ever-increasing number of customers loyal to its brands, affording it a comfortable lead above all its dairy competitors with consistently strong market shares. It is also the sole supplier of dairy for McDonalds Egypt alongside many other leading fast-food restaurants, hotels, airlines, and educational institutions.
Our use of quality ingredients, internally manufactured concentrates, and state-of-the-art technologies for processing and packaging, along with heavy investments in R&D to enhance our product offerings, and in ful lling our vision of bringing high quality, nutritious products to our customers’ hygiene, and vaccination of livestock.
We have committed ourselves to developing the infrastructure of the farms we source milk from – so as for phase 1 we selected 25 farms in which we installed advanced cooling systems. By doing so, we reduce heat stress so that cows feel comfortable in summer, eat more, produce more milk and have fewer pregnancy problems.
he results of the program have been extremely positive with more than half of the participants reporting an increase in their milk volumes by more than 20 percent, with some even tripling their production of milk.
How can business ties with Germany be an asset in enhancing this sector in Egypt?
In our factories, most of the equipment and the building materials are German and have been installed by German engineers and/or experts. We are also so keen on attending the most prominent German exhibitions (Messen) like Interpack, Anuga Food Fair, Anuga tec and Drinktec. Nevertheless, we see that German entities can further play a pivotal role in developing this sector in Egypt.
What are your recommendations for the German-Arab Chamber of Industry and Commerce (GACIC) in order to enhance agribusiness relations between Egyptian and German companies?
In line with the country’s plan to double its exports by 2020, I think the German-Arab Chamber of Industry and Commerce can play a strategic role in matchmaking German and Egyptian companies and identifying lucrative export opportunities for the latter. Moving towards more diversified and higher value-added exports is definitely a key driver for Egypt’s economic development and I see that the GACIC can play a great role supporting this vision.