P&G eyes Africa for export growth
Cairo, July 14, 2010
The Egypt unit of Procter & Gamble Company is aiming to double its exports from the North African country over the next five years, with an eye on markets in East and West Africa, said its general manager.
The household goods group exported $186 million worth of products from Egypt in the year to end-June, largely to Levantine countries such as Lebanon and Jordan, which the Cairo office also oversees, Mohamed Sultan said in an interview.
Sultan said he saw demand in Egypt and Iraq picking up, although the firm was now eyeing countries including Kenya and Ethiopia where big populations and increasing wealth were fuelling demand for products like diapers and detergent.
'These are virgin markets, they are untouched. You could argue it's Egypt 20 years ago,' Sultan said.
The company said last month it was building a 1 billion Egyptian pound ($176 million) diaper factory on the outskirts of Cairo, with 40 percent of production to be sold locally and the rest exported to Africa, Asia and Europe.
The factory represents most of the 1.8 billion pounds the company wants to invest over the next few years in Egypt, where it competes with Unilever and Henkel through brands including Head & Shoulders, Pampers and Tide.
Sultan said he saw consumer demand picking up in Egypt after the financial crisis hit growth and expected the market for the company's goods to grow at pre-crisis rates within a year.
'In our case we saw a slowdown, but still the market has continued to grow. This is broadly the story, and that obviously has helped us,' he said.
Procter & Gamble made a $2.6 billion profit in the quarter ended March 31 on sales of $19.2 billion.
Sultan said he also saw business in Iraq, where the company set up with a local distributor about six years ago, continuing to grow by about 20 per cent a year as security improves, but challenges remained for a consumer goods company like P&G.
'How do you ensure the safety of your people?' Sultan said. 'And how do you also start doing on-the-ground marketing, given the situation? Things like door-to-door sampling, or in-store activity and all that -- it's very, very difficult.'-Reuters