Nestlé invests EGP 1 bn in local market during past six years: chairperson, CEO for North East Africa region

Company's exports reached $50m on an annual basis, says El Hout

Chairperson and CEO – Nestlé North East Africa Region, Moataz El Hout, said that the company has invested EGP 1bn in the local market in manufacturing and distribution facilities, as well as skill development, during the past six years, adding, “we have been investing in the Egyptian market for almost 150 years since the introduction of Nestlé's first baby food product "Farine Lactee" in Alexandria in 1870, We have strong roots in the country where we have long been an integral part of the local community.”
Nestlé has 3,000 employees, 67% of which are less than 35 years old, in addition to offering about 1500 jobs through our agents and partners in nine business units and three factories, El Hout said.
Daily News Egypt sat down for an exclusive interview with El Hout, the transcript for which is below, lightly edited for clarity:
Do you have any expansion plans regarding your factories in Egypt?
Currently, we have three factories run by the capacity of 3,000 permanent employees, in addition to offering about 1,500 jobs through our agents and partners, and we are committed to induce more investment opportunities in the market to support the country's direction towards a more flourished and solid economy.
What about company's five-year strategy in Egypt?
In the course of the coming five years, we aim to work more towards improving the amount of exports through the development and addition of new production lines in all our factories. In addition, Nestlé Egypt's exports reached $50m on an annual basis, as we export products to different countries in the region including Lebanon, Jordan, Libya, Sudan, and the Gulf, in addition to markets overseas, such as the USA and Canada.
Our plans are to reach out to more markets especially North and East Africa, in order for us to support the bigger plan of the Egyptian government to increase exports, and hence contributing more to the national GDP.
We started 2017 with a strong investment through the acquisition of Caravan Marketing Company SAE, a leading Egyptian instant coffee company and owner of the Bonjorno brand. Nestlé is committed to grow its operations and to continue investments in Egypt as a strategic market in the region.
What are main products that mainly contribute to annual sales?
Nestlé has around nine business segments in Egypt; coffee, dairy, confectionery, culinary, health science, pet food, cereals, nutrition, and water. We firmly believe that there are enough opportunities in the segments that we have today to help us take the business forward and serve the consumers. Our objective is to be the nutrition, health, and wellness company of choice. We have categories of products that are distinguished for being diverse, as they target all groups and hence contribute to the company's sales.
These products include Nescafe, Bonjorno, dairies, including Nido, as well as Nesquik. Confectionery products, including Kit Kat, Dolceca Wafer, our new born healthy snack "Fitness Toasties" and other culinary products, including Maggie Cubes, and the various cooking mixes, baby food products to help infants who cannot get breastfeeding, and cereal products for children aged six months and above "Cerelac". Water products include Nestlé Pure Life and Baraka. There are also ice cream products of various ranges, and there are food products that are complementary to patients and special cases and pet food Purina.
What about R&D activities?
In Nestlé, our purpose is to enhance quality of life and contributing to a healthier future through three pillars which are individuals and families, community, and the planet. With regard to the individuals and families, the company has allocated a large part of its research capacity and development studies to provide food products with higher nutritional value. We have 39 food research centres around the world.
The journey of food products within Nestlé goes through a scientific and research cycle to reach the hands of the consumer.
The company primarily targets the health of individuals through food research conducted by 500 of scientists, engineers, and nutritionists. The real results of research and studies have contributed tremendously to improving the quality of our products, offering higher nutritional values.
Currently, the company focuses on fortifying products with vitamins and nutrients and reducing sugar, salt and sodium to provide a range of healthy choices for individuals and families.
How do you assess investment climate in Egypt? What about problems that face your company?
We definitely see the merit and the necessity of the recent reforms implemented by the government, the very promising reform strategy within Egypt's Vision 2030, we are very optimistic regarding the development and improvement in the investment environment in Egypt through an effective set of legislation, such as the New Investment Law, industrial licensing, and the food safety law. Such reforms aim at an overall improvement in the food and beverages industry.
Overall, Nestlé has a strong faith in the Egyptian market and its ability to overcome challenges. As a group, we have experience in markets that have undergone currency flotation similar to the one that Egypt has implemented; Russia and Turkey are good examples. The currency flotation is a challenge, but it is also an opportunity for growth and expansion and our last year acquisition proves that.
Although 60% of Nestlé's products are locally produced, the vast majority of raw materials used in production are imported from abroad.
We appreciate the efforts exerted by the government to stabilize the value of the Egyptian pound; nevertheless, to overcome this challenge, all sectors concerned should work on the existence of local alternatives to raw materials, which will compensate for the price of the final product provided to the consumer.
How many job opportunities do you offer youth?
Nestlé is seeking globally to help more young people out of school and into work through "Nestlé needs YOUTH" initiative. This initiative includes employability skills, including entrepreneurships and apprenticeships—a key success factor in bridging the gap between school and the workplace.
Local efforts include programmes and "readiness for work activities." Over the past six years, Nestlé Egypt has provided career knowledge and skill enhancement to about 10,000 university students. So far this year, we reached about 2,000 students across universities in Egypt through the programmes and readiness for work activities. 120 students from public and private universities across Egypt, international universities, Don Bosco Institute will be graduated from our Summer Internship Programme in August. Including technical institutes like Don Bosco is one of Nestlé's proud expansion initiatives this year, as it believes that the technical sector is a key driver of the economy and industrial field.
Fifteen strong performers currently have the opportunity to be part of "Students on Projects," who continue to work with their assigned departments on a defined project alongside their studies. This initiative will continue to grow, as Nestlé Egypt enhances its readiness for work programmes to prepare students and develop their skills for the workplace. Our aim is to expand across Egypt and reach universities and institutions across the entire country, to support the transition from education to work.
How many CSR projects do you implement? What about future projects in this regard?
As a company, Nestlé truly believes that the only way the company will be successful in the long term is through creating value, for both the shareholders and for society. This has become more than just a company culture and is now a principle of how we do businesses.
Our impact on society mainly focuses on enabling healthier and happier lives for individuals and families and consequently assisting in the development of thriving and resilient communities based on using the planet's natural resources in the most efficient way, we held various partnerships with entities, which facilitate creating an impact in communities.
These partnerships include projects with the Ministry of Social Solidarity, the Ministry of Education and the National Council for Women.
One of the main initiatives is “Nestlé for Healthier Kids” which focuses on enhancing the quality of children's lives with near-term focus on children from three to twelve years of age, through the awareness and services that will help parents raise healthier children.
Currently, the company is interested in investing more in the empowerment of women and developing and activating respective roles in society. Nestlé Egypt is proud of its strong image of women, representing 30% of the company's board of directors, 30% of the total managers, and 34% of the total number of employees.
We are not only considerate regarding women competing in the workforce for job opportunities; we are increasingly considerate about people with special abilities to be offered a fair job opportunity to be considered an integral part of society. This aligns with President Abdel Fattah Al-Sisi's announcement of this year as "Year of the differently abled" emphasizing the role of all society's sectors in supporting more integration and inclusion of this segment into the community and work force.
The company has also localized production inputs to rely more on local suppliers, more than imports from abroad, and to support the local market.
Notably, the company also pays meticulous attention to technical education, apprenticeships, and training programmes. We care about the surrounding environment, as the company safely disposes waste products through heat treatment in cement factories, which makes us one of the first food industry companies in Egypt to dispose of waste in this creative and safe way, and thus preserve the environment for future generations.
Would you please tell me more about global Nestlé, its sales, revenues, operation markets?
Nestlé is the leading food and beverage company in the world. We have more than 2,000 brands ranging from global icons to local favourites, and we are present in almost 150 countries around the world.
Nestlé sales recorded about CHF 89.8bn in 2017, it has about 323,000 employees in over 150 countries and 418 factories in 86 countries, while there are 1bn Nestlé products are sold everyday.
Our aims can be summarized in helping 50 million children live healthier lives, improving 30m livelihoods in communities directly connected to our business activities, and striving for zero environmental impact in our operations.