1 Market potential for Agro-Products - Enterprise Mauritiussourcemauritius.com/.../2013/...Market-Potential-for-Agro-Products.pdf · 1 Market potential for Agro-Products ... Mauritius

Market Survey - Egypt 1 Jan 2013

1 Market potential for Agro-Products

In general, the key success factors for a new agro product to penetrate the market are: Suitable

prices, long expiry date and well known brand names.

Mauritius is currently exporting pet food, animal feeds, and special raw sugar to Egypt. The

Survey has revealed that sugar, instant noodles, tuna, insecticides and bio-fertilisers have

good potential to penetrate Egypt.

The Egyptian importers import tuna from Turkey, Thailand, Brazil and Greece because they

offer the best quality of tuna.

Animal feeds are in great demand in Egypt and Mauritius is currently exporting to one Egyptian

customer since the Mauritian company doesn’t want to deal with any other small non-reliable

Egyptian importers since it has had bad experience with a few importers in the past. There is a

big potential to further increase the exports of animal feeds in Egypt. As far as Animal food and

pet food are sourced from China, USA, Canada, Brazil, Argentine and EU. To be noted that a

large part is also produced in Egypt.

Egypt’s total import figures for sugar are 800,000 tons per annum. Total consumption capacity

of sugar is 2 million tons while local production is around 1.2 million tons.

Although Egyptians are great Pasta-eaters, Mauritian pastas, will find some difficulty

penetrating the perfectly competitive pasta market. Mauritian suppliers would need to offer

competitive prices to make inroad the market. Also, they would need to improve their

packaging. Packaging of pasta should be in 400g as it is in more demand than the 500g. It also

has to be transparent so as to attract attention and enable the customer see the colour and shapes

of the pasta.


Likewise, Mauritian Jams have very low potential and may have difficulty to penetrate the

Egyptian market because the jams marketplace is already crowded.

Fruit paste have good market potential but among the high end segment only (the AB class

representing 11% of the population) and should be distributed in up-market stores like Alfa

Market (also known as Seoudi Market). It may also be distributed in major hypermarkets like

Makro, Spinneys and Carrefour.

Bio-fertilisers, though five times more expensive than chemical ones, are mostly demanded by

large farms. Samples shown to Egyptian manufacturers and importers of fertilisers met with

good response and they have expressed their willingness to import the bio-fertilisers.

Insecticides, fungicides and herbicides are in good demand among the Egyptian farmers. It is to

be noted that before they could be imported in Egypt, bio-fertilisers would need to go through a

lengthy registration process that may take up to three years and that include costs to be borne by

both importer and exporter.

In terms of packaging of agro products, it is important to note that the brand name can be in

Arabic or in both Arabic and English but it is compulsory that the ingredients be specified in

Arabic. Many importers have told us that packaging is sometimes more important as Egyptians

are attracted by carefully designed and vibrant-coloured packaging than the content itself, which

they discover at a later stage. Brand adoption is more likely to happen at the time Egyptians

choose the packaging than at the tasting and trial stage. Therefore, Mauritian exporters are

advised to work on the packaging element of their marketing mix so as to attract attention.

Mauritius should try to negotiate with key retail chains in Egypt to facilitate the distribution of

foodstuffs to the middle and up market segments. The Egyptian Businessmen Association and

the Mauritian Embassy should be contacted to facilitate negotiations with major players like Alfa

Market, Makro, Spinneys and Carrefour.

Mauritian Agro companies should use low-price strategy to penetrate the large and growing

Egyptian market. Moreover, to have market acceptability, food tasting should be organised in

supermarkets for agro products, especially for litchis, noodles, pasta, fruit jams and fruit

paste.

Although not on our potential product list, litchis proved to have good potential in the Egyptian

market. Hamis for Import and Export, a fruit importer, has accepted to undertake tasting of

litchis in selected shopping centres and should it be successful, is willing to import litchis from

Mauritius.


Supermarket products (refined sugar / sugar Confectionary-fish fats-tunas-frozen fish fillet-

uncooked pasta-bottled water-soap-sanitary articles of paper) are imported from Turkey, China

and Thailand. The Egyptians import tuna from Turkey, Thailand, Brazil and Greece because

according to the importers met they offer the best quality of tuna.

2 Market Testing of Agro Products

2.0.1 Forever Green

Forever Green is an importer of foodstuffs. The company is currently importing cheese from

Turkey; about 120 tons or six 40 ft containers six times per year. Forever Green has been

approached as it is interested to import pasta and noodles from Mauritius. According to the General

Manager, Mr Ibrahim Mohammed, the company works in a collaborative manner with its existing

suppliers. He would like to extend this working relationship with Mauritian suppliers, whereby he

would be providing feedback on the market to the suppliers and expecting them to be responsive in

terms of making necessary product modifications or proposing discounts to promote the products

when faced with competition.

According to Mr Mohammed, to be able to compete favourably on the Egyptian market, Mauritian

pasta should be offered at a cheaper price with good quality and in the right packaging. He stated

that the packaging can be in English and Arabic but it is compulsory for the ingredients

specifications to be in Arabic as otherwise the products will not be cleared by the Egyptian Customs.

He also added that packet of 400g is more popular than 500g, the reason being that the price of 400g

will be slightly lower than 500g. He recommended that the expiry date should not exceed 9 months

as otherwise it will be considered stale by the authorities. Finally, there is no need for pasta to be

Halal certified as in Egypt, Halal is only meant for meat and meat products.

Mauritian Pastas

The Mauritian pastas were given a high rating of 7 out of 10 when asked. The packaging was seen

as good as it is transparent and from the colour of the pasta, the quality can be judged as good.


Finally though the importer was impressed with the wide variety of pasta, they emitted the wish to

also import spaghetti.

Mauritian Noodles

Mr Mohammed prefers noodles in cup rather than in small plastic package of 85g. Instant cup

noodles are more convenient for the Egyptian market and can be used. He recommended that small

packet of 85g be made partially transparent so that the uncooked noodle appeal to the buyers in retail

stores.

2.0.2 Abdeen Transport Services Abdeen Transport Services is an importer of tuna, fish fillets, live fish, tomato sauces and olive oil.

The company has not been importing for two years since the revolution. It was contacted as it

wishes to start importing again and was interested with the Mauritian pasta in particular. According

to Mr Riyad Abdeen, the Managing Director, competing in the pasta market is hard as it is already

flooded with both local and international brands. Therefore, to be able to penetrate the market,

companies have to play on price so that the final retail price should not exceed LE 2 (MUR 13).

However, if quality is good, the pasta can command a price as high as LE 4.5 (MUR 29.25), which is

the case for local brands like Regina and which are principally consumed by the middle class. The

upper class looks for high quality pasta made of semolina and durum wheat.

The importer found that the packaging of the Mauritian Pastas samples were good. He would be

interested to source pasta from Mauritius provided that prices are competitive.


2.0.3 Mickady Group The Mickady Group is a large trader of foodstuffs, textile and apparels and medical devices,

employing more than 80 people. The group imports a diversified range of products: lentils, rice,

garments, tuna, dry figs, lingerie, denim, syringes, medicines, etc. Main sourcing markets are India,

Turkey, Jordan, and Iraq. Mr Ayad Mickady, the Chairman, stated that nowadays it is difficult to

predict the Egyptian market as there is a strong presence of parallel market (grey market). The

group registered poor sales performance over the last two years and he considers the market as too

risky; fuelled by the uncertainty in the political arena. He likes to trade with India but he considers

the Indian exporters too slow as they take too much time due to many public holidays and festivities.

Mauritian Noodles

Mr Mickady found the packaging reflecting better quality than the imported brand “Indomie”. He

rated the Mauritian noodle 7 out of 10. He said the noodle packaging depicts good quality but that it

is recommended to do market tasting among customers in shopping malls to know their preferences.

Pasta

Currently the company is importing pasta from India. Mr Mickady claims that the packaging of

pasta should be in smaller size, that is, 400g and not 500g. He claims that he imports pasta at USD

950 per ton. The retail price of pasta of 400g is LE 6 and the more semolina content the pasta

contains, the higher is the price. He rated the pasta 4 out of 10 because of the poor packaging.

The pasta market is a perfectly competitive one and to penetrate the market, Mauritian operators

need to play on price.

Mr Mickady gives the following advices:

Mauritian exporters should trade only in Letter of Credit from international banks

Egyptian Customs may not be so ethical and may create difficulty for some importers

Sometimes the importer also might change decision when the goods arrive at customs.

Recommended to do product tasting.

He mentioned that Mauritians should select their importers carefully to avoid unpleasant

experience.


Egyptians like all Arabs are attracted by packaging first and then taste afterwards. Hence,

packaging should be of good standard so as to appeal to the mass.

He mentioned that Mauritian companies have to understand the consumption behavior of

Egyptians, who prefer to have pre-cooked foods at affordable prices such as Raji products from

India as depicted in the picture below. He recommended to introduce rather instant food

preparation.

2.0.4 Alrabeea brothers Co Ltd

Alrabeea has been established since 1982 and trades in white seeds, super seeds, dry active beans,

black sunflower seeds, peanuts, pistachios, almonds, dry coconut, coconut, walnut, apricot, and all

nuts, dry fruits, wheat. Mr Mamoud Rabia imports from Turkey, Syria, Iran, Ukraine, Argentina,

China and Romania. He definitely will import from Mauritius if the price is reasonable and

competitive.

Fruit Paste

Mr Rabia likes the Mauritian fruit paste but mentioned that since it is expensive, he can import for

his upmarket retailers.

Fruit jam

Mr Rabia finds the Mauritian fruit jam of good quality but not competitive.


2.0.5 Agroland

Agriculture Development for Import and Export is a major importer of vegetable seeds and fertilisers

and boasts 40 years of operations. The company has a branch in Alexandria as well as two farms. It

imports for its own consumption as well as to market to retailers and Farmers’ Associations. The

company imports vegetable seeds such as cucumber, tomato, hot peppers, cauliflowers, cabbage,

squash and carrot from various countries such as Europe, Japan, America, Vietnam and India.

Currently the company has reduced its importation because of the unstable political and economic

situations prevailing in the country but has plans to increase its volume of imports once the situation

gets back to normal.

Bio-fertilisers

He is interested in importing mainly insecticides, fungicides and herbicides. Prior to importation,

each product would first need to be registered per crop. The cost is USD 3,000 and is to be borne by

the exporter. Also, several trials for the same fertiliser would need to be made before it is approved

by the authority for importation.


2.0.6 Abo Ghaneima

Abo Ghaneima is both an importer and manufacturer of fertilisers. It sells to wholesalers, retailers

and farmers. The company imports potassium sulphate and ammonium sulphate from Russia and

yoria from Libya. He normally pays 50% cash in advance and 50% upon delivery. According to Dr

Mohamed Mallah, the Import and Executive Manager of Abo Ghaneima, the key success factors to

facilitate entry in the Egyptian market are quality, packaging and prices.

The yearly requirements of the company are:

200,000 tons of Noria (currently imported from Libya)

4000 tons of Potassium sulphate(currently imported from Russia)

4000 tons of Yoria

200,000 tons of Ammonium sulphate

Bio-fertilisers, though demanded mainly by large farms, are five times more expensive than

chemical ones. For instance, the retail price of one litre of chemical potassium sulphate is LE 30

while the bio one is LE 150. For Mauritian bio-fertilisers to succesfully penetrate the Egyptian

market, the price should be in the range of USD 10 - 12. He currently does not import bio-fertilisers

but would be interested to import from Mauritius. The opportunity for insecticides is high for Egypt.

One litre of chemical insectide for chemical costs LE70 whereas the bio one is LE250.


It must be noted that there is a lengthy process of registration that may take up to three years as there

are control tests that are carried out by the Ministry of Agriculture. The registration charges amount

to LE 2,500 LE for insecticides and are to be shared equally by both importer and exporter whereas

those for fertilisers are to be borne exclusively by the importer. Dr Mallah rated the samples 7 out of

10 but views the price as expensive.

2.0.7 Hamis for Imports and Exports

Hamis For Imports and Exports imports apples from Syria and Lebanon and exports natural plants to

all Arab countries and also some European countries such as Italy, France and Turkey. In the

course of our meeting with the Managing Director, Mr Latif Fayz, he expresses his wish to become

an agent of Mauritian products. As he is a fruit importer, we sought his opinion about the possibility

of importing litchis in Egypt, even though this fruit was not in our targeted product list. Pictures of

the fruit were shown to Mr Fayz.

Pasta and Noodles

Mr Fayz of Hamis For Import and Export expresses his interest to import pasta and noodles. He is

willing to import noodles in the range of USD 0.12 - 0.16. Within this price range, Mauritian

noodles represent a big opportunity for the Egyptian market. In regards to the pasta, he proposed

that the suppliers send him their price lists and if the prices are competitive, he is willing to test the

pasta on the Egyptian market.


2.0.8 El Nasr Export & Import Co. El Nasr Export & Import Co. is one of the biggest public enterprises involved in foreign trade and

affiliated to the Holding Co for Maritime & Land Transport Company - Ministry of Investment. The

company imports strategic goods needed by the Egyptian market. El-Nasr Export & Import company

has 23 branches in Africa, Europe and Arab countries, namely:

Francophone Countries Anglophone countries Arab Countries

France

Ivory Coast

Central Africa

Republic of Congo

Nigeria

Benin

Togo

Senegal

Cameroon

Burundi

Nigeria

Ghana

Zambia

Kenya

Tanzania

Zimbabwe

Uganda

Syria

Kuwait

Sudan

Jordan

Its local branches are in Alexandria, Port Said, Suez, Domietta, Abu Sinbl.

It has one local store in Cairo, five in Alexandria, two in Port Said, one in Suez and one in Domietta.

The company imports items such as:

Foodstuffs: Wheat – maize – sugar – tea – coffee – tobacco - cocoa beans – lentils beans – sesame

– spices – vegetable oil – alive cows and camels - dairy products – frozen meat –

frozen and canned fish.

Textiles:

Raw wool – raw jute – threads – nylon – industrial and natural silk

– sisal – rubber threads.

He definitely is willing to import new products from Mauritius provided it can import at good prices.

According to Mr Shawky Olama, the Import Manager, the company selects an importer based on

price, variety, model and shape, reputation of exporters.


He underlined the fact that Mauritian companies should ensure that the packaging should have all

details on ingredients and other information both in English and Arabic for the mass market.

Noodles

Mr Olama rated the Mauritian noodles as good quality but the packaging should be improved and the

price should be lowered. He said that he may consider importing noodles if the price is reduced.

Pasta

With regards to Pasta, the Import Manager gave a rating of 7 out of 10 as he considered the pasta of

as good quality. However he mentioned that it would be difficult for the Mauritian companies to

penetrate the market as the fob price is high and the ingredients details are not elaborate. However,

he said that Pasta with Semolina is more in demand in Egypt. Mr Olama claimed that he is ready to

import provided the price and specification are appropriate. He even mentioned that he is ready to

re-export to other countries where the company is present. However Spaghetti is more in demand in

African countries where the company is present.

To be noted that pasta of 400g and 1 kg are more in demand in Egypt but for Africa the company

can export packet of 500g.

Sugar

When we showed him the samples of special sugar, he said that the brown sugar with darker colour

will not be accepted by the Egyptian people.

It imports sugar from the EU since they do not pay any tax but the company will stop buying from

EU as the agreement will come to an end. However, it will continue to import sugar from Brazil.

Currently the company sells to Kenya at CIF USD 0.8 while the fob price proposed of special sugar

is USD 1 which is way too high.

The consumption of sugar is 2 million tons and local production is only 1.2 million tons. Hence the

company needs to import 800,000 tons of sugar per annum.


2.0.8.1 Retail Prices of selected products available in Supermarkets

We have visited Makro and Carrefour with a view to collect retail prices of potential competitors for

Jam and Pasta as given in the table below.

Jam

Jam from Egypt 1. Vitrac 320g, LE 6 (Rs 39) 2. Vitrac 850 g, LE 10.75 (Rs 70) 3. Hero 340 g, LE 16.25 (Rs 105) 4. El Rashid El Mizan 340 g, LE 4.40 (Rs 29) 5. Faragello 340 g, LE 3.10 (Rs 20) Jam from Spain Carrefour 370g, LE 9.95 (Rs 65) Jam from France Bonne Maman 340g, Promotion price, LE 17 ( Rs 111) Normal price, LE 26.50 (Rs 172)

Pasta

1. Panzani (pipe regate Tricolore) from Italy 500 g, LE 17.95 (Rs 117) 2.Torsade, 500 g, LE 13.95 (Rs 91) 3. Arrighi From Italy, 500 g, LE 13.95 (Rs 91) 4. Sahya Gold, LE 1.80 (Rs 12)


3 Annex 1: Import Regulations for Food Products

Before a food product can be exported to Egypt, it would first have to be tested by the Egyptian

Organization for Standardization and Quality Control (EOS) from the Ministry of Industry to see if it

meets Egyptian specifications. Food products would need to abide to the following requirements:

Certificates Requires for all Imported Food Products

The below certificates are required for all imported food products:

Certificate of Origin

Health Certificate

Veterinary Certificate (for meat, poultry, fish and dairy products)

Islamic Halal Certificate, “if applicable”

Temperature Certificate (for frozen, deep frozen and chilled products)

Analysis Certificate, “if applicable”

Weight and packing certificate

All the above certificates should be countersigned by the Chamber of Commerce and notarized by

the Egyptian Embassy or Consulate in the country of origin.

It is important to note that importers would need to present ONE set of all import documents to

the General Organization for Export and Import Control.

Food Additive Regulations

Artificial Colours

The following artificial colours are permitted:

Curcumin Ammonia caramel

Riboflavin: lactoflavin Sulphite ammonia caramel


Riboflavin 5 phosphate Brilliant black PN

Tartrazine: FD & C yellow no. 5 Brown HT: chocolate brown HT

Quinoline yellow Carotenes

Sunset yellow FCF: FD&C yellow no. 6 Mixed carotenes

Carmines: cochineal extract Beta carotene

Carmoisine (azorubine) Annatto extracts (bixin, norbixin)

Ponceau 4 R: cochineal red A, new

coccine

Paprika extract, paprika oleoresins

Red 2 G: azogeranine Lycopene; gamma carotene

Allura Red AC: FD&C, red no. 40 Beta apo 8 carotenal

Indigotine: FD&C, blue no. 2 Ethylester beta apo 8 Caro

Brilliant blue FCF: FD&C, blue no. 1 Lutein: xanthophylls

Chlorophylls and chlorophyllins: Beetroot red (beet red)

Chlorophylls Anthocyanins

Chlorophyllins Grape skin extract

Plain caramel Calcium carbonate

Copper complexes of chlorophylls Titanium dioxide

Copper complexes of Chlorophyllins

sodium and potassium salts

Copper complexes of chlorophylls and

Chlorophyllins

Fast green FCF: FD&C, green no. 3 Caustic sulphite caramel

Acceptable artificial colours are not always allowed in all food products. Exporters should check

with the Ministry of Health to verify the acceptability of any food colouring. There are no

exceptions to the regulations governing food colourings. The scientific name of the colour ingredient

and the %age of concentration must be indicated on the Analysis Certificate. Egyptian authorities

will not allow a product to be imported if it contains an unauthorized color, even if the use of the

color is acceptable in another country.

Natural Colours

The following natural colors extracted from fruits and plants are approved:


Fruit juices, concentrate, powders:

Berries, currants (black currents)

Citrus fruits

Drupes (cherry, plum, and prunes)

Melon family

Rose hips (hip berries)

Tomato

Pineapple, mango, kiwi

Vegetables, vegetable juice and

powder:

Pulses (pea flower)

Carrot

Cabbage

Beetroot

Spinach

Nettles (Utrica)

Alfalfa

Yellow and red turnip

Sweet potato

Capsicum varieties (cayenne pepper)

Cereals, fermented and roasted:

Maize

Purple corn

Rye

Barley

Spices, herbs, and flavourings:

Saffron

Sandalwood (red)


Carthamus red, yellow (safflower)

Paprika

Sage

Parsley

Shallots

Violets

Burdock

Others:

Malt Honey

Molasses Burnt Sugar

Yeast Hibiscus

Cocoa Tea

Coffee Mate

Egg yolk Crustaceans

Carob flour Nuts

Liquorices Mushrooms

Preservatives

All preservatives must be identified along with the allowed concentration expressed as a %age in

parts per million calculated on the acid base.

Flavourings

The Ministry of Health does not maintain a list of approved flavorings. However, all flavourings

accepted under CODEX or WHO also are approved for use in Egypt.

Pesticides

All pesticides must be registered in Egypt before they can be used. An application should be

submitted to the Pesticides Committee (PC) of the Ministry of Agriculture showing the following

information:


Registration certificate valid for the country of origin

Toxicological data prepared by the FAO/WHO Joint Meeting on Pesticide Residues (JMPR)

Copies of all environmental impact studies

Field and laboratory evaluation results and recommendations

Label

Upon review, the PC refers the application to the Recommendation Committee, which sets the

recommended usage rates. The Recommendation Committee then forwards the application to the

Research Station for field evaluations and monitoring. The Pesticides Committee includes

representatives from:

The Ministry of Health

The Central Laboratory for Pesticides

The Environmental Affairs Agency

Egyptian standards for pesticide residues in food are derived from FAO and WHO standards. It is a

criminal offense to sell food or bottled drinking water containing pesticides, heavy metals or

mycotoxin in excess of the Maximum Residues Limits (MRL) set by these organizations for those

products.

Shelf Life

Egyptian shelf-life requirements for food products differ in many respects from the standards used

by other countries. “Best-Used-By” dates are not acceptable in Egypt. Any product that exceeds its

established shelf-life is not considered fit for human consumption. There are several factors that

affect the shelf-life of a product including food additives, packaging, storage, etc. Egyptian

authorities establish shelf-life standards, which are usually more stringent than those, used in

international trade.

The product must arrive at the port of entry with the following periods remaining of its established

shelf life or otherwise the consignment will be rejected:


3 months minimum for products that have shelf life of more than 6 months

One month minimum for the products that have shelf life of 3-6 months

One week minimum for the products that have shelf life of less than 3 months

3 days minimum for the products that have shelf life up to 10 days

The shelf life of a product is calculated from the date of production until the date of completion of

all customs procedures and import certification at the Egyptian port of entry.

Labelling

Egypt requires that in addition to the foreign language, all labeling information must also be written

in Arabic. Arabic language is mandatory. Any contradiction between the English and Arabic dates

may lead to product rejection.

Labels can be printed on the package or be of a permanent adhesive type.

Dates are accepted in English, but the word ʺProductionʺ and ʺExpiryʺ MUST also be written

in Arabic

Products cannot show more than one date of manufacture or expiration on the package. For

example, goods have been rejected if the inside package has a different date than the outside

carton

Information on the label cannot be erased, scratched, or altered in any way. Requirements

are more restrictive for meat and poultry products

All labels must include the following information:

Name and address of manufacturer

Brand or trademark, if appropriate

Country of origin

Type of product and grade

Name and address of importer

Production and expiration dates: These dates may be mentioned separately on the top of the

package. They can be applied by laser, imposed, or printed. In such cases, there is no need to

repeat them on the label.

Product use instructions (optional)


Product ingredients

Storage instructions or temperature

Net weight

Gross weight and total number of the packages per case or carton

If the product contains preservatives, the %age of each preservative should be indicated

If the product is meat or poultry, the following statement must appear: “slaughtered

according to the Islamic ritual” or “Halal slaughtered”

However, the following items are exempted from the labeling obligation:

Small items whose greater surface is 10 cm square or less.

Milk and beverage packs whose quantity is 200 milliliters or less

Packing and Container Requirements

Egypt has no special packaging or container size requirements, regulations, or preferences. There is

no special Municipal Waste Disposal Laws or product recycling regulations and there are no

restrictions or limitations on the use of any packaging materials like PVC.

Documents

1 Market potential for Agro-Products - Enterprise Mauritiussourcemauritius.com/.../2013/...Market-Potential-for-Agro-Products.pdf · 1 Market potential for Agro-Products ... Mauritius