Egyptian vegetables go from substitute to being a key player
There are many business strategies that could lead a company to being profitable. For Egyptian vegetable producers and exporters, this usually means being on the sidelines until being called upon when required. Producing countries that are part of the EU should have a logistical and legal advantage versus non-EU competitors when it comes to dealing with countries in the EU.
Dr. Omar Abdin of Leafs Egypt says, “We produce and export a lot of winter crops such as broccoli, cabbage, sweet corn, pumpkins and sweet potatoes, most of which are all available in the southern parts of Europe. When the southern part of Spain and Italy are hit with bad weather business becomes good for us. We suddenly get orders from all over Europe.” In general the European market is very sensitive to weather.
“It is risky and difficult to operate a business that relies heavily on weather upsets. It is doable as long as one can forge long lasting relationships and contracts with importers in Europe. An exporter must have very strong programs with importers and retailers”, says Abdin.
Egypt might be seen as a substitute player at the moment, but its future seems very bright. According to Abdin, “If Egypt, as a vegetable and fruit exporting country, wants to establish itself as a powerhouse in the world, it has to sort out its logistics. It must choose wisely which markets it wants to enter and the strategy to use in each market.”
It’s not hard to see on a map that logistics is a barrier for Egypt when it comes to entering Europe with crops of that are of short shelf life, unless it is done by air. Abdin added that Koper in Slovenia and Ravvena in Italy are usually the fastest ports of entry to the European continent. Rotterdam takes around 14 – 15 days from Egypt, which could spell trouble for some of the fresh produce. Unlike citruses, vegetables have shorter shelf lives."
Despite having the same product, the approach to each market is usually different. “Each market is different. Russia is a very high volume market; margins here are not very big. Our business with them blossomed when they were given EU trade bans. The Gulf countries are not a volume market but are a very high margin market. Europe on the other hand is also low volume and high margin, because of their strict specifications when it comes to product quality.”
Abdin concludes, “Egypt is well positioned to improve its exporting prowess. Volumes are increasing year on year and in the past 3 years we’ve seen our business grow by 20%. The varieties of vegetables we grow and export is also increasing. With all this growth we are looking to do business in places such as China, South America and Africa. I believe that in 3-5 years we can really establish our country as a key player in the industry.”