MANUFACTURER OF THE MONTH- Once a month, Inside Industry will be dedicated to profiling a manufacturer — whether locally bred or an international player with a manufacturing base here in Egypt. The monthly feature will cover 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. Our first Manufacturer of the Month is Pyramid Glass, a leading glassware manufacturer.

Pyramid Glass produces glass tableware products, including everything that ranges from cups, plates, and mugs, to fruit bowls and trays. All our products have a functional use, or can be used for decorative purposes. The company began manufacturing in 2009 with a factory set up in Borg El Arab. Pyramid Glass also has a sub-brand called Value Glass, which is more focused on direct to retail exports and has a more exclusive clientele than the rest of our brands.

We export nearly 100% of our products to international markets because we’re a freezone company. With our current export volumes, we place as a large enterprise by Egyptian standards when it comes to exports — and we plan on tripling capacity within the next year. We currently export to over 60 countries in North and South America, Europe, Africa, Asia, and Australia. Our export markets include Brazil, Turkey, South Africa, the US, and the majority of eastern and western Europe.

Considering we’re geared almost entirely towards exports, we make sure our products are competitive abroad by prioritizing consistent good quality and service. We achieve this by ensuring we have an attentive quality control team in place and always put the customer first — these two things help us maintain a smooth flowing supply chain both internally and externally. We also created our sub-brand, Value Glass, to better compete in the retail market abroad. And we participate in fairs and exhibitions abroad, such as Ambiente in Frankfurt, to gain more exposure and create a presence in international markets.

The vast majority of our manufacturing components are locally sourced. In terms of quantity, it’s about 80% locally sourced and about 20% from imports, so we rely heavily on the local market for components and raw materials. However, in terms of the cost burden, it’s not the same 80/20 split — imported materials are more expensive, so they account for more than 80% of our spending on materials and inputs.

We don’t have any immediate plans to change where we source our materials from, especially since the majority of our inputs are coming from the local market, which reduces our exposure to issues with imports and any currency fluctuations. However, the government is working on building a soda ash factory, which could help us heavily reduce our reliance on imports. This is definitely something we’re keeping an eye on, since it could change the equation of how and where we source our materials.

As a freezone company, we also benefit from VAT exemptions on our local purchases, which is a great incentive the government offers companies like ours. Our experience has been that the government has been supportive and lenient on their policies for freezone companies. Although there’s always room for improvement, there’s been a direct line of communication between us and we see openness to change at the top level of government.

Our main challenge at the moment as a manufacturer in Egypt is the lack of certainty when it comes to the local currency and local tax policies. This uncertainty makes companies more reluctant to commit to larger investments — if they’re unsure whether or not they’ll be able to continue operating when the general economic environment is unstable, it’s difficult to be bullish on the market and commit more money.

Your top industrial development stories for the week:

  • The Egyptian Beauty Company will invest EGP 100 mn to build a new factory in the Gamasa Industrial Zone in order to double production and boost exports of the company’s products. (Al Mal)
  • Roche tech transfer to allow Eva Pharma to produce advanced immunosuppressants: Swiss pharma giant Roche and local meds firm Eva Pharma are set to localize the production of immunosuppressant medications for organ transplant patients.
  • Abdos to build USD 30 mn plastics factory in SCZone: Abdos — an Indian firm specializing in the production of plastic lab equipment — inked an agreement to build a plastics factory worth USD 30 mn in Orascom Industrial Parks’ (OIP) Sokhna complex.
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