PepsiCo and Almarai plan $1bn Egypt investments
Last year the firms, which operate the joint venture Beyti in Egypt, said they would invest a combined US$345m in Egypt. It was not clear whether these new announcements included this previously announced spending.
PepsiCo said in a statement the investment would go towards “strengthening and expanding” its operations in Egypt. Currently the firm operates 11 factories, 47 warehouses and other facilities, employs around 10,500 people full time, and works with around 10,000 Egyptian farmers as suppliers.
“Egypt is the anchor of our North African operations and one of our most important and promising markets. We have only scratched the surface of the long-term growth opportunities that exist for PepsiCo and our partners in Egypt, and we are confident that this investment will help us continue our momentum in the country,” said Omar Farid, president for the Middle East and Africa at PepsiCo.
“We have a laser focus on expanding into new categories and providing diverse product choices to meet the demands of our Egyptian consumers, in addition to growing PepsiCo’s footprint in new North African markets,” he added.
Almarai eyes acquisitions
Almarai made no formal announcement of its investment plans, but according to anonymous sources quoted by Al-Borsa newspaper, also plans to spend US$500m in Egypt this year. The funds will go towards expanding its current facilities in the country.
As well as growing its existing operations, Almarai may also be considering acquisitions in the Egyptian food industry, currently a popular preoccupation. Among its targets is rumoured to be Dina Farms, currently owned by Qalaa Holdings, which is seeking to divest its food businesses.
Almarai has invested around US$160m in Egypt since buying Beyti in 2009, and then selling 48% of the acquisition to PepsiCo within a few months. Beyti currently has a 20% share in the Egyptian dairy and fruit juice market, which the firm is aiming to increase to 35% within five years.
Last month’s Egypt Economic Development Conference, held under tight security at Sharm El Sheikh, saw governments and multinationals pledge billions of dollars in investments, and was widely interpreted as a sign that international confidence in Egypt’s economy has been restored following the Arab Spring. A number of major agricultural projects were among the big infrastructure announcements at the conference.