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 Nedal Alzatari (LinkedIn), Chief Commercial Officer at Fine Hygienic Holding.

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Fine Hygienic Holding was established in 1958 by a Jordanian businessman of Palestinian origin, Elia Nuqul, and entered the Egyptian market in 1989. The company currently invests around EGP 6 bn in four specialized factories manufacturing fast-moving consumer products, including napkins, kitchen and table paper, toilet paper, baby and adult diapers, as well as personal protection and hygiene products. Following its acquisition of local cosmetics and personal care brand ‘Easy Care’ in April 2023, the company added three new production lines to its Alexandria factories, increasing production to 2.5k tons annually.

Fine plans a debut on a regional stock exchange: FHH is preparing for listing on one of the regional stock exchanges within the next four years, according to Alzatari. He added that the company has strategic objectives it aims to achieve in the next two years in preparation for the listing, while experiencing strong annual growth in financial indicators and sales “despite all regional challenges.”

FHH's strategy focuses on deeply understanding customer needs and delivering high-quality products at competitive prices. The company heavily invests in strong and innovative distribution channels and broad geographical presence, working with a network of local distributors to achieve comprehensive coverage of both the Egyptian and export markets.

Egypt serves as FHH's regional hub, with four factories exporting to more than 30 countries across Europe, the UK, Russia, the Middle East, and Africa, according to Alzatari. This is in addition to Easy Care's two factories in Alexandria, which export 80% of their wet wipes production to 11 countries. Fine Hygienic Holding also maintains industrial facilities in five other countries including Jordan, Saudi Arabia, UAE, Morocco, and Pakistan.

Trade agreements are among Egypt's key industrial investment advantages, with about 10 free trade agreements with economic blocs covering most countries worldwide, including COMESA, GAFTA, the EU, Arab countries, and Turkey, Alzatari told EnterpriseAM. Furthermore, FHH plans to expand its exports to Morocco, Ghana, Kenya, and Rwanda this year.

Paper products and diapers make up 30% of annual exports, while Fine Hygienic Holding is working on installing three new production lines for paper tissues to increase exports from Egypt to 50% of production by the end of 2025.

However, export insurance availability and Egyptian banks' presence in Africa are among the biggest challenges facing export expansion, requiring government support similar to many countries worldwide, Alzatari noted. Additional challenges include logistics constraints, exchange rate fluctuations, and compliance with various regulatory requirements in target markets. On the bright side, the government subsidizes around 50% of transportation costs to these countries along with an export support program that extends to various markets, according to Alzatari.

Egypt's consumer base offers FHH a competitive edge abroad: Having access to a broad consumer base of over 100 mn consumers in Egypt provides a strong foundation for international competition, supported by large-scale production that provides the company with a competitive advantage vis-a-vis other producers, Alzatari explained, adding that it also reduces the impact of any disruptions in export markets.

“Our products maintain their competitive edge in global markets through our commitment to quality and continuous innovation, as well as adherence to international standards, focusing on delivering products specifically designed to meet target market needs,” said Alzatari.

FHH views Egypt as a key market, seeing significant growth potential due to high population density and increasing awareness of healthcare products. The Egyptian market also benefits from skilled labor at competitive wage rates, geographical proximity to international markets, and government policies supporting exports.

Fine Solutions, the away-from-home division of Fine Hygienic Holding, is also targeting the expansion of its services to institutions in Egypt. The division is focusing on areas such as the New Administrative Capital, Upper Egypt, and the Red Sea Governorates, according to Al Zatari, who noted the strong growth in this sector, which includes 684 customers with 1,200 facilities, including hotels, hospitals, and clubs. This division represents 20-25% of FHH’s annual sales.

Fine Hygienic Holding imports the majority of its raw materials, particularly pulp from South America, as it is not grown in Arab countries. However, it relies on the local market for 50-60% of its packaging materials and marketing tools. The company also exports intermediate raw materials to its factories in Saudi Arabia and Jordan from Egypt, while sourcing 80% of the raw materials for Easy Care products from local components due to their availability in the Egyptian market.

While the EGP float in March affected consumer purchasing power, FHH's sales strategy focuses on meeting consumer needs and tastes through designing diverse, high-quality products with price flexibility. This has enabled increased annual sales volume and market share, Alzatari explained. The paper tissue and diaper industry's dependence on imported raw materials — which make up over 30% of inputs — has put additional pricing pressure on manufacturers amid shipping disruptions in the Red Sea, with many costs being passed on to consumers. Online tissue and diaper sales represent 10% of retail sales in Egypt, with significant expansion in e-commerce both locally and regionally, according to Alzatari.

Economic headwinds during the past period have provided stronger opportunities for some sectors to expand externally and accelerated the pace of industry growth and expansion in Egypt, Alzatari told us.

FHH's flexible strategy has enabled it to overcome regional challenges from conflicts to supply chain disruptions and economic challenges, as well as intense competition and rising raw material costs, according to Alzatari.

The gray market accounts for 5-10% of personal care product sales in Egypt: The volume of smuggled or counterfeit personal care products like paper tissues is estimated at 5-10% of the local market. However, the country’s regulators are attempting to limit this market, Alzatari said.

AI integration is a big win: FHH has expanded its adoption of artificial intelligence technologies from research and development to sales, marketing, and operational processes, achieving significant gains for the company in terms of financial indicators, profits, operational efficiency, and market share, Alzatari confirmed to us.

Your top industrial development stories for the week:

• China’s Asia Potash to build phosphate complex in Upper Egypt: Asia Potash International is investing USD 7-10 bn to establish a phosphate fertilizer industrial complex spanning Esna to Sibaiyya. The first USD 1.6 bn phase, set to go live in 18 months, will produce 2 mn tons of phosphate annually for export.
• Onaelectric Industries to invest EGP 500 mn in circuit breaker factory: Local manufacturer Onaelectric Industries plans to set up a circuit breaker factory in Tenth of Ramadan City by early 2026, with investments worth EGP 500 mn. The factory will use up to 100% local inputs and export 70% of its output, with plans for international expansion, including a USD 15 mn investment in China and Europe.