MANUFACTURER OF THE MONTH

Once a month, Inside Industry looks at a manufacturer — whether locally bred or an international player with a manufacturing base here in Egypt. The monthly feature covers manufacturers in different industries to look at their success stories, the challenges they have faced as local manufacturers, and the path forward as Egypt looks to build a more robust local industry. This month, we spoke with Mark Wyllie (LinkedIn ), CEO of dairy and juice producer Beyti, which is operated in Egypt by Saudi Arabia’s Almarai.

Beyti is currently one of Egypt’s biggest dairy and juice producers.?Since it was established in 1998 with investments of EGP 5 bn — starting with the acquisition of a major dairy farm from Saudi Arabian company Dallah Albaraka — Beyti has doubled down on diversifying its products to include natural and flavored milk, juices, yogurt, and yogurt drinks. The company manufactures its products at a company with 26 production lines, which was set up on the latest tech systems from Germany, Italy, and France for milk and juice production.

Our goal at Beyti right now is to increase the localization component of our production?— at least as much as we can. Our packaging material is 40% sourced locally, and once you count the milk, the total local material percentage goes up to 85% for our products. We don’t face any difficulties sourcing production inputs from the local market or even from abroad. For example, we import pineapple and apple concentrates, simply because they’re not available in Egypt, but our efforts to rely more on the local market for production inputs never let up. This can be seen in our KPIs, which show a clear increase in exports and decrease in imports over the past four or five years.

Over the past two or three years, we’ve really focused on localizing our production while?growing our exports.?The foreign currency crisis and the rising cost of the greenback against the EGP has caused massive pressure for Egyptian industry over this time, but what’s interesting is that it also spurred efforts to localize as much as possible. We grew our exports significantly over this period, to reach USD 35 mn last year from just USD 3-4 mn four years ago.

We keep local suppliers in mind, and we’re working on helping them develop to meet?Beyti’s quality standards.?We grew accustomed to importing lots of yogurt containers from Saudi Arabia, but we started working with local suppliers to increase the quality of their packaging to meet our standards and now we can use the local product for our yogurt containers. It was a long journey getting there and it wasn’t easy, because we have complex machinery that operates with very high standards and production speeds, so the quality of the containers needs to be perfect.

We always look at diversifying our suppliers due to the scale of our operations, which means we simply cannot rely on one country or one supplier. We sell 220 mn liters of milk, 230 mn liters of juice and 85 mn kg of yogurt per year. What happens if something goes wrong with that supplier or we face a shipping issue? That’s why we’re always looking for the best supplier possible who can give us what we need at the required quality standard and at the best price.

Quality puts us at the head of the competition both locally and internationally.?A consumer could buy a cheap product once, but will never stop consuming a high-value product. Our exporting journey was humble — just 3% of production three years ago — with a limited roster of clients to slowly build trust. Today, we have a portfolio of more than 100 different types of products.To build trust with export — which isn’t easy when it comes to food products — quality becomes the deciding factor. In Mauritania, for example, we have a large market share because people trust the Beyti trademark, but we built that trust over an entire decade.

Quality will always be our main competitive edge, since it’s the core of building a long?relationship with consumers?— particularly when it comes to food products. Once you hit the quality level you want and set a fair price point, quality is what determines your competitiveness against other brands in a highly competitive market. You can compromise on quality with other products or sectors, but it’s hard to do that with food. Quality is the main key for sales and exports, and consistent growth.

The current economic climate is the biggest challenge for manufacturers in Egypt right?now, which has knock-on challenges such as securing raw materials, customs backlogs, limitations in securing foreign currency, and the general difficulty in making sure you can secure the raw materials and everything you need for production at the right time. We’re trying to facilitate our imports by at least exporting enough to bring in foreign currency revenues to cover our import expenses. As far as exporting goes, the biggest challenge we face is establishing trust with our clients, finding the right product fit, and creating a network of distributors, as well as opening up new markets as fast as possible.

At Beyti, we have to price our products in a way that makes sense for consumers’?purchasing power, while also balancing with the prices we’re subjected to by suppliers. This is quite challenging. The examples we’ve seen of brands that are built on selling cheap products without really caring about quality are often short-lived businesses that find it difficult to grow and develop.

We’re looking to export 18-20% of our production output this year, which would push our?exports to USD 50-55 mn, from USD 30-35 mn last year. We’re also focusing on growing Beyti’s business in Egypt, which is already a big market. We have a big factory, which we plan to expand in the future. We’re hoping to develop all of our markets; we have the potential to push high growth in the next few years. Beyti exports a portion of all of its products, with the exception of yogurt, which we can only export to nearby markets because its quality can be heavily affected very quickly by long shipping and storage times, so we only export yogurt to Libya, Palestine, and Jordan.

Beyti’s biggest export markets are Libya, Palestine, Somalia, and Yemen, as well as all?“nearby” markets including Sudan and Saudi Arabia, which is now one of our biggest markets in addition to Jordan. We have limited exports of juices to 40 other countries.

Amid the current complicated challenges in the market, industry players must focus on?exporting and maintaining quality.?If we hadn’t put that as our focal point, we wouldn’t have grown our exports as much as we have in the past few years. We also have to always keep in mind the importance of developing our team and improving their quality of life. Egypt is full of talent — all that’s missing is investing in these talents and using them in the right places, and everything else will follow.