EGYPT – Edita Food Industries plans to establish a new factory in 6th of October City for raw materials and food products in early 2017 with an investment of EGP 50m.
This new factory will manufacture and mix all the raw materials used in food production, according to sources from Edita.
The company plans to complete the new factory by the end of 2017. The new investment will cover the cost of purchasing the land estimated at EGP 19m.
Edita recently announced that an agreement was finalised to acquire 12,878 sqm of land in 6th of October City’s Polaris Al-Zamil district. The cost of the land will be paid in three instalments over six months.
The new factory will allow Editia to expand its production by providing the production inputs, controlling production costs, and ensuring the confidentiality of the products’ recipes as well as reducing production costs.
The sources said that Edita seeks to complete the construction of its new E08 factory in 6th of October City during the first quarter of fiscal year 2016/2017, with an investment of EGP 160m.
The E08 factory will manufacture some new food products, which the company intends to launch in the local market for the first time, including wafers.
Edita announced in May 2015 that it had acquired 55,000 sqm of land in 6th of October City’s Polaris Al-Zamil district to build a new factory.
The transaction was valued at EGP 54m. It came after Edita had received the exclusive right to produce 11 new products for the first time in the Egyptian market. The company received several bank loans to finance these expansions.
The financial report of the company in the first half of 2016 showed that the company’s net profit reached EGP 87.261m, compared to EGP 148.258m in the same period of last year.
The sources cited the decline in profits during the first half of 2016 to exchange differences of EGP 53.9m, compared to profits estimated at EGP 4m in the period of comparison.
The sources added that the company has a huge opportunity to improve its profit margins especially with the manufacture of cakes, through changing the current prices of the products and launching new products with a high profit margin.
The profit margin of Edita declined during the second quarter of 2016 by 36.7%, compared to 37.6% during the same period of 2015.
The sources considered this decline acceptable in light of the high cost of raw materials and the currency crisis.
The company has directed 94% of its sales to the local market, while 6% goes to 14 foreign markets, including the Arab region.
According to the data released by Edita, the company acquires 68% of the cake market in Egypt, 69% of the croissant market, and 42% of crackers.