28 November, 2018
Boosting private sector role and competitiveness
Egypt is one of the world’s biggest consumers of wheat – and one of its biggest importers.
Egypt is currently producing eight million tonnes of wheat every year, but consumes around 20 million. This huge gap is covered by imports from other markets such as Ukraine and North and South America.
The role of private companies that specialise in grain import will become even more important in the future as imports are projected to increase to 27 million tonnes by 2025.
Vital role of agribusiness companies
Agribusiness companies have an untapped potential to become a crucial component of the Egyptian economy. But their growth is often hampered by lack of innovation, poor productivity and substantial skills mismatches.
With its Agribusiness Advisory service, supported by the European Union (EU), the EBRD helps companies to modernise their operations and improve productivity.
Providing valuable advice leads to quality improvement, which will further strengthen the competiveness of Egyptian agribusiness in global markets. “The EU is happy being a partner in this endeavour. This project is a good example of the EU's support for the Egyptian private sector. It also provides opportunities for additional social and environmental benefits in the agribusiness ecosystem," said Ivan Surkos, Ambassador to the EU Delegation in Egypt.
Medsofts – the challenges faced by a growing family business
One of the Egyptian firms which has benefited from such support is Medsofts. Established in 2001 as a family-run company, today it is one of the biggest importers and suppliers of grains and oilseeds for the local market.
“We are also one of the main logistical operators in the country,” said Tarek Tawfik, one of the two brothers who founded Medsofts.
Confronted with growing demands and increasing competition, the Tawfiks realised business as usual was no longer an option; they needed to reimagine their business to be more competitive.
What they needed in fact was the sort of bespoke business support and cooperation which the EBRD provides, the expertise and know-how which otherwise companies cannot easily obtain in the local market and which is partially funded by the EU.
The only way is up…
“Our growth became the main reason for our challenges. The bigger you become, the more prepared you have to be and improve your competitive advantage. Otherwise you are not going to pass to the next level,” Tarek Tawfik explained.
“One of our biggest challenges was trying to obtain sufficient financing for the growth of our business. Later on, we started facing logistical challenges in our operations and we also started looking into our risk and management policies.”
An international adviser helped the company assess the situation and proposed strategic improvements. The company then successfully followed the advice in areas such as commodity risk management, information technology, material handling and human resources.
The Tawfik brothers quickly started planning their next big step: improving the capacity of their grain-storage and handling terminal in the port of Alexandria.
“When we decided to build this storage on the river Nile in 2012, it was a brand new approach to grain handling in Egypt. Today it is the only such river terminal for grain storage in our country,” said Sherif Abdel Ghaffar, Medsofts General Manager.