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, and the path forward as Egypt looks to build a more robust local industry. This month, we spoke with Osama Hellal (LinkedIn), plant director for Mars Egypt, a subsidiary of the global chocolate and candy giant Mars Wrigley.

Mars first set up in Egypt in 2001 with a sales office. Two years later, the company decided to build a factory in Sixth of October City, spanning 70% of an 82k sqm plot allocated to it. Production began in mid 2005, reaching full capacity by 2011 with six modern production lines and investments worth USD 200 mn by 2023. Today, Mars is a leading confectionery and chocolate manufacturer in Egypt, offering 149 different products from well-known brands like Galaxy, Mars, Twix, Bounty, Maltesers, M&M’s, Extra sugar-free gum, and Skittles. The factory’s current production capacity is around 25k tons annually, producing 2 mn units of various products per year. The facility employs about 500 workers and provides an additional 20k indirect jobs in transportation and distribution.

We source 40-50% of our production inputs (excluding cocoa, which isn’t grown in Egypt) and about 80-90% of our packaging materials from the local market. Developing infrastructure, distribution networks, local markets, suppliers, and manufacturers is the foundation for becoming the largest industrial hub for confectionery and chocolate products in Africa and the Middle East. We have a dedicated team for supplier development that help us meet Mars’s quality standards, with many significant success stories involving local suppliers.

We are racing against time to up our exports to 90% of our total output with the launch of two new production lines in Q1 2025, with an additional USD 250 mn worth of new investments being injected from late last year through the end of 2025. This expansion will fully utilize the allocated land for the factory and is expected to boost its production capacity to 65k from 25k tons annually, adding 15 new products. Our exports — which currently account for 65-70% of annual production — are also expected to rise significantly.

Mars Wrigley aims to transform its Egypt factory into a regional industrial hub covering Africa and the Middle East, as part of a plan that also targets distributing products from our factory to about 25% of countries worldwide. We currently export to 44 countries, with Saudi Arabia accounting for more than a third of Mars Egypt's exports. We aim to add six new export markets in Eastern Europe and Central Asia, including Uzbekistan, Kazakhstan, Turkmenistan, Belarus, and Turkey, when production kicks off at the new lines.

Quality standards are the cornerstone of Mars Egypt's competitiveness in foreign markets, followed by highly competitive pricing policies, a robust and integrated supply chain that we are working to digitize, a wide network of suppliers that the company invests in to boost flexibility amid local and international market changes, and lastly, customer trust in the company and its products.

The continuous growth in exports has granted Mars Egypt more flexibility to cope with the FX shortage. However, like other exporters from the local market, our exports have been affected by disruptions in the Red Sea, which have delayed delivery times by one to two weeks and increased shipping costs. Despite these challenges, we have borne the shipping costs without adjusting our prices, thanks to the company's policies and its longstanding relationships with shipping companies.

What distinguishes Egypt as an export market is its extensive trade agreements with numerous African, European, American, and Asian markets, its strategic geographic location, the abundance of skilled labor, and the broad and diverse supplier base.

On the other hand, the biggest challenges facing exporters in Egypt today are the slow procedures and automation of processes that might otherwise help build a strong logistical base to support exporting companies. However, we cannot overlook the government's efforts to encourage exports by developing port infrastructure and simplifying export procedures and policies.

Mars Egypt began its digitization and process automation journey in 2019, with investments amounting to USD 20-30 mn to date, following a roadmap based on Fourth Industrial Revolution principles: analyzing strengths and weaknesses to maximize the benefits of automation. Currently, we employ robots in production processes and are working on integrating AI and internet of things technologies in the near future. Cybersecurity is a major focus as we transition to digital operations, particularly ensuring the protection of company data and maintaining production stability. Additionally, we are committed to developing and training our factory workers to handle new technologies, with 25k training hours dedicated to our team last year alone.