Mars Wrigley Egypt has completed a $42.5m expansion to its chocolate manufacturing plant in the 6th of October City in Cairo. The company expects the new production lines to deliver a $100m increase in exports to Africa and the Middle East.
Mars Wrigley Egypt has inaugurated a new production line in its 6th of October City production plant in Cairo. The confectionery company unveiled the first phase of the plant’s $42.5m expansion that, according to company’s representatives, “not only reflects an increase in production capacity at [the] factory, but also represents a true turning point in operations, making Egypt the core of [the] industrial and exporting processes in the region.”
The Cairo production plant currently exports 80%-90% of its production to the rest of Africa and the Middle East. Mars expects the expansion project, which entails a second production line to be inaugurated in August 2018, to play an even greater role in turning Egypt into an industrial and distribution hub for the Asia, Australia, Middle East and Africa (AMEA) region. According to Mars’ plans, the expansion investment should return an increase of $100m worth of exports to Africa and the Middle East.
Mars’ investment comes at a time when the Egyptian confectionery market, especially the chocolate sector, is recovering from very poor performance in the past two years. Annual sales in confectionery fell by 10% to as much as 50% for some manufacturers.
As a result of the downturn in purchasing power and the hike in production costs, Mars Wrigley Egypt is not the only confectionery company looking to increase revenues by focusing on expansion through exports instead of focusing on local production. Companies Sima and Corona have also announced investments to drive increased export capacity.
Mars’ expansion in Egypt is fundamental to face the competition in the chocolate category by market leader Cadbury, which holds 44% of the market share against that of 28% of Mars. Nestlé occupies the third place with 8% market share. Last year Mars Wrigley Egypt generated sales of EGP1bn ($56.7m) in Egypt and exports to the value of $42m.
