The investments will be funnelled through International Dairy and Juice (IDJ), a joint venture between Saudi Arabia’s Almarai, which owns 52% of the company, and PepsiCo, which owns the remaining 48%. IDJ subsidiary International Company for Agricultural Industries (Beyti) will be the main vehicle for the Egyptian investments.
“Through this investment plan, Almarai, and its joint-venture partner PepsiCo, re-affirm their commitment to the expansion of the Egyptian market,” said a statement from Almarai.
“The programme will be funded in majority by an equity injection from both joint-venture partners, as per their percentage of ownership, the rest through Beyti’s financial debt. For Almarai this equity injection will be financed through its own cash-flow,” the statement continued.
Factories and farms
Almarai CEO Abdulrahman Al Fadley said he hoped to increase the investment to US$560m over the next few years at a Cairo press conference announcing the plans, alongside Egyptian trade and industry minister Mounir Fakhry Abdel Nour.
Planned investments include a new fruit juice factory, a 5,000-cow dairy farm, and improvements to Beyti’s facilities and transportation infrastructure, according to Beyti CEO Mohamed Badran, quoted by Reuters.
Badran said if the investment were to rise, as suggested by Al Fadley, the additional funds would go towards creating the largest dairy farm in Egypt, with a total of 20,000 cows.
A growing market
Earlier this year Coca-Cola announced it would invest US$500m in Egypt, including a US$100m juice plant in conjunction with its Saudi Arabian joint venture Aujan Coca-Cola Beverages. The rest of the investment will go towards enhancing Coca-Cola’s existing Egyptian facilities.
As Egypt recovers from years of unrest following the 2011 revolution, the country is becoming an increasingly attractive proposition for external investors, with strong growth forecast in many sectors. Euromonitor predicts a 9% average annual growth rate up between 2013 and 2018 for Egypt’s fruit juice market.
Along with its substantial domestic market, Egypt is also becoming an increasingly significant hub for exports to the rest of the growing North African market. More than 30% of the production from Coca-Cola’s concentrate plant in Cairo is exported, and the company aims to double the factory’s export volumes within three years, according to a Reuters report.