Nestlé opens new coffee factory in Egypt as demand steams ahead

By Tingmin Koe contact

- Last updated on GMT

Nestlé has opened a new coffee factory in Egypt to meet the growing demand of soluble coffee. ©Pixabay
Nestlé has opened a new coffee factory in Egypt to meet the growing demand of soluble coffee. ©Pixabay

Related tags: Egypt, Coffee, Nestle

Nestlé has opened its new coffee factory in Egypt to meet the growing demand of soluble coffee on January 24.

The factory situated in the 6th​ of October industrial zone is 12,740 sqm wide. 

Containing eight manufacturing lines with a production capacity of 14,000 tons, the factory is expected to hit a capacity of 22,000 to 44,000 tons in the future. 

Producing coffee mixes under the brand "Bonjorno Coffee Mix" and "Bonjorno Cappuccino", the coffee would mostly be supplied within Egypt itself, although there was export potential to the other Middle Eastern markets and North Africa, Mostafa Baligh, Coffee Business Executive Officer, Nestlé North Africa Region told FoodNavigator-Asia​. 

The raw coffee ingredients, on the other hand, are imported from Nestlé Factories in Morocco and Spain. 

EGP$250m (US$13.9m) was invested in the new coffee factory, which provided 240 direct hires and 7,000 indirect hires. 

“We are delighted to inaugurate this new factory, which operates using Nestlé’s strong manufacturing & innovation capabilities leveraging the most advanced technology,” ​said Executive Vice President and Head of Operations Nestlé SA, Magdi Batato.

“This factory opening reflects Nestlé’s ambition to invest in Egypt and foster the development of the rapidly growing soluble coffee segment, which has been gaining popularity among Egyptians.

“We aim to have the Bonjorno factory as an export hub for Coffee in the region.”

The inauguration came after Nestlé has acquired Caravan Marketing Company SAE​, a leading Egyptian instant coffee company owner of the Bonjorno brand in Jan 2017.

The firm previously said that its Nescafe brand and Caravan’s Bonjorno have complementary strengths. Together, the two can accelerate the development of Egypt’s soluble coffee market.

1bn invested

This is Nestlé third factory in Egypt, which signals the importance of the market.

Over the past few years, the firm had invested nearly EGP$1bn (US$55.8m) in Egypt’s operations.

As for its coffee business in Egypt, it observed a CAGR volume growth of 8% to 10% over the past four years. 

“The inauguration of our third factory reflects the importance of Egypt to us and our confidence is clearly highlighted by the extensive investments we have made in Egypt over the past 5 years.”​ stated Chairman and CEO of Nestlé North East Africa , Moataz El-Hout.

“In the last few years, our local workforce to reached almost 3,500 direct employees and invested almost EGP$1bn (US$55.8m) into manufacturing, distribution facilities, and skill development.

“We have been part of the Egyptians’ lives for over 100 years and we are confident that Egypt offers great business and economic opportunities.”

On the domestic coffee market, Baligh said that consumers looked for product safety and affordable prices when buying coffee products.  

Insufficient coffee import

The Egyptian importers have complained the insufficient amount of exported coffee previously.

This is despite the fact that Egypt’s annual coffee importation rate has rose by 10% to reach 45 tons in 2018.

Seventy per cent of the import came from Indonesia due to its cheap prices and high quality.

However, the Indonesian ambassador to Egypt revealed during November 2018 that the Egyptian importers have complained a lack of coffee exports into Egypt, local news Egypt Today reported.

The ambassador thus pledged to pump up the amount of Indonesian Rubosta coffee that Indonesia exports to Egypt.

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