2014

Arab African Conferences and Exhibitions

[FOOD AND BEVERAGE INDUSTRY IN EGYPT AND

MENA REGION] The following report provides market data about the sector of food and beverage industry in the MENA region.

Table of contents:

Overview

Introduction

Food and beverage market in Egypt.

Market segmentation_ Egypt

The beverage Market (market data)_ Egypt

Food and beverage industry_ Egypt

Facts and figures global beverage market

Global Trade_ Egypt

Food and Beverage export and import in Egypt

Source markets for FDI to Egypt, 2003 to 2011

Food and beverage market in Libya

Food and beverage market in Sudan

Food and beverage market in Algeria

Food and beverage market in Morocco

Food and beverage market in Tunisia

Overview

Egypt is the most populated country in MENA region (90 Million), and it has one of the largest

economies in Africa. Egypt’s economy traditionally associated with agriculture, which has become

much more diverse, with focusing on industry to serve the local markets as well as Exports. The market

is concentrated primarily in the rapidly growing food processing, pharmaceutical, and chemical

manufacturing industries. Packaging equipment for the food processing industry represents 50% of

the total market, which is growing at a pace of 25% annually, Opening up huge opportunities for

international companies.

This report aims to provide information concerning the key elements regarding the sector of food and beverage technology in Egypt and MENA region generally.

The following report provides information concerning the food and beverage industry in MENA region, and the opportunities of the growing market in this sector. The report also includes market data concerning (Production, consumption, import, export etc.)

Introduction

The demand for food and beverages continues to rise concurrent to the population growth rate,

therefore, the Egyptian market has great potential due to the rapid population growth, and that is

associated with the surge in the food and beverage technology. In order to meet the growing

consumption needs. Arab-African Conferences and Exhibitions is planning to establish a separated

exhibition for beverages technology and to expand at 2015. Egypt is the center of MENA region;

accordingly, we are aiming to make Afro Packaging and Afro Food Exhibitions the main for food and

beverage technology exhibition in the MENA region.

Egypt is recognized for its low budget tourism, the hotels rate and accommodation in Egypt is quite cheap comparing to other countries in the region. Therefore, there is high potential for exhibition tourism in Egypt, as manufacturers will manage to save the high travel expenses, and they will be able to visit/exhibit in the biggest exhibition in North Africa, with a suitable budget.

Afro Packaging and Afro food has been recognized as the largest and most successful food packaging and food processing exhibition in Egypt and North Africa. Afro food and packaging exhibitions hosts 300 local and international exhibitors in its annual fair on an area of 12000 m2. At 2013 Afro packaging attracted over 10.000 professional visitors from Middle East, Europe and Africa. Afro packaging and Afro food exhibitions gather food professionals and food manufacturers, accordingly, by expanding our annual exhibitions and cooperating with Messe Munchen; we are expecting the exhibitors to reach (500) local and international exhibitor, and to attract over 20.000 visitor. Upon cooperating with Messe Munchen; local and international food professionals will be keen to join the exhibition. Consequently, Afro Packaging and food packaging and processing exhibitions Egypt is not going to be the platform of Egyptian manufacturers only, but it’s going to be the platform for food manufacturers across North

Africa.

The food and beverage market in Egypt

The food and beverage market in Egypt is constantly growing, according to the growing population

rate, the food and beverage consumption is growing rapidly regardless of the political and economical

situation in the country.

The rapid growth of the Egyptian population is associated with growing consumer demand; accordingly, at 2012 Business monitor international stated that there is a significant opportunity for the food and beverage sector in Egypt. BMI forecasted that the consumer group is predicted to spend more on fast-moving goods.

HEADLINE INDUSTRY DATA, 2012

Indicator 2011 forecast 2015 forecast

Per capita Food Consumption +4.6% +55.9%

Mass Grocery Retail Sales +14.9% +251.9%

Carbonated Drink Sales +9.5% +73.0%

Source: BMI, 2012

As indicated above the end users consumption of food and beverage sector is concurrent to the population growth, the food and beverage industry is growing at a pace of 25% annually and it’s expected to be increased over the upcoming years; which makes Egypt an attractive market for international companies in the sector of food and beverage technology.

Egypt lacks a suitable agriculture land and poor infrastructure which is one of the factors that should keep the import demand for food and beverage high. The Egyptian food and beverage industry is composed of several companies. The growing demand of food and beverages, and the unsaturated market, makes the increase and development of food and beverage technology essential in order to meet the growing food demand. Hence, it indicates a high opportunity for opening new markets for food and beverage manufacture in the future.

The total number of food and beverages factories in Egypt is 3390, however, the rapid increase of the Egyptian population leads to growing consumption, therefore, it is expected that the food and beverage technology will continue to rise in future. According to US Agri-Food, the demand for convenience-based food has increased rapidly in Egypt as the increasing numbers of women have entered the work force. The number of independent, modern supermarkets as well as hyper markets has also rise, as traditionally family-run stores have gradually declined. Acceptance of Western products and brands is

also expected to increase with new entries in the market. The United State, France, Germany, Italy, Switzerland, Greece, Holland, Denmark, Thailand and China are the dominant suppliers of consumer-ready food products to Egypt.

Market segmentation

The Egyptian food products vary widely in type, composition, quality and distribution. The major

segments of the food industry can be categorized as:

Processed Vegetables: Egypt’s export of processed increased 57.6% (from 92 to 145 million US$ in six years) Egypt stands 17th in the world, and the 3rd in the region. Furthermore, the domestic market is estimated to be growing at more than 20% a years. Hence, there is a great potential in the Egyptian market associated with the growing domestic demand and the export market for the Egyptian processed vegetables market.

Fruit Juices: Egypt has a recognized potential of the processing of fruit juices, due to the availability of fruit during off seasons, and through direct cost advantages. The sector has grown from $713,000 to $13.5 million in six years.

Dairy products: Total milk production within Egypt is estimated to be 3.8 million tons, with a total cattle population at around 7.3 million cattle. In addition, there are an estimated 8 million sheep and goats but which share a minimal portion of this output. Exports of cheese reached 11.6 million dollars, while imports reached 15.6 million dollars.

Major products in food processing industry in Egypt

Milk and fruit juices

Soft drinks

Ice cream

Cheese (White and cheddar versions)

Sweet and salty snacks, processed food, oil and migraine

Drinking water

Processed meat, chickens and vegetables.

Source market survey

The beverage market

The following tables include information of the tradeoff volume of the different beverages segments, along with the expected increase by 2016.

Soft Drinks off-trade volume

Million liters

2007

2012

2016 Period Growth

2012-16 in%

Soft Drinks 1.234,0 1.669,2 2.065,7 23,8

Bottled Water 228,7 338,0 435,0 28,7

Carbonates 861,9 1.146,0 1.397,3 21,9

Fruit/Vegetable Juice 139,8 181,4 229,2 26,4

RTD Tea 0,3 0,3 0,4 33,3

Sport/Energy Drinks 0,1 0,1 0,1 0,0

Alcoholic Drinks off-trade volume

Million liters

2007

2012

2016

Period Growth 2012-16 in%

Alcoholic Drinks 106,2 157,5 227,0 44,1

Beer 104,3 155,0 223,6 44,3

Drinking Milk Products volume sales Total milk production within Egypt is estimated to be 3.8 million tons, with a total cattle population at around 7.3 million cattle. The table below includes information about the dairy products volume sales from 2007, and the expected increase at 2016. The period growth is significant, as it is expected to increase by 87.3 % which highlights an essential growth of the drinking milk industry sector in future.

1.000 tons

2007

2012

2016

Period Growth 2012-16 in%

Drinking Milk Products 145,8 330,6 619,3 87,3

Food and Beverage industry The following table provides a precise data about the food and beverage industry in Egypt, the table

illustrates the food and beverage industry different segments in terms of number of employees, profit

and the total number of factories.

For instance: Sugar, Confectionery & Chocolates occupies the highest rank in the number of employees,

and the profit etc. The food and beverage factories are classified to 3 classes in terms of (Number of

employees, production, profit etc.

Divisions No of Employees

Members Cos.

Total Paid-in-Capital (million L.E.)

Class A

Class B

Class C

1. Sugar, Confectionery & Chocolates

89618

718

20150

86

223

409

2.Milk & Dairy Products

30727 293 2973 77 121 95

3.Juices, Drinks and Water

36459 224 4154 64 160 None

4.Meats & Poultries & Fish

33793 690 6734 102 214 374

5.Fruits & Vegetables

34656 355 17171 54 140 161

6.Oil and Vegetable fats

25223 134 5340 22 40 72

7.Specialty Foods, yeast and food additives Food Additives

5516 145 1154

37

108

None

8.Different Food Products

24811 767 4353 76 213 478

None Active Members

1532 64 46 None None None

Total

282335 3390 62075

518

1219

1589

Source chamber of food industries

Machinery trade: Processing and Packaging Machinery for the Beverage and Food Industry- Imports in Egypt The following table captures the growth of the food and beverage machinery trade from 2007 to 2011.

As illustrated the import rate increased by -1.1 % at 2010/2011.

Million €

2007

2008

2009

2010

2011

Growth rate

2011/2010%

Imports 221 344 333 309 306 -1,1

Facts and Figures: Global Beverage Market

Top 10 Markets Soft Drinks, sorted by2012, off-trade volume

Million liters

2012

2016 Period Growth

2012-16 in%

USA 80.632 82.634 2,5

China 67.495 90.006 33,4

Mexico 36.105 41.637 15,3

Brazil 20.824 26.076 25,2

Japan 20.382 20.910 2,6

Germany 20.328 20.719 1,9

Indonesia 18.517 23.477 26,8

France 12.357 12.933 4,7

Italy 12.251 12.687 3,6

Russia 11.792 13.691 16,1

Egypt Rank 40 1.669 2.066 23,8

As indicated above Egypt is ranked 40 among regarding off trade volume, however, by 2016 the off

trade volume is expected to increase to 23.8 %

Top 10 Beer Markets, sorted by2012, off-trade volume

As indicated below the potential of the off-trade volume is expected to increase highly by 2016.

Although Egypt is ranked 58 in the global beer market, the off-trade volume is expected to reach 44.3 %

by 2016.

Million liters

2012

2016

Period Growth

2012-16 in%

China 24.463 29.563 20,8

USA 17.414 17.379 -0,2

Russia 9.251 9.042 -2,3

Japan 5.500 5.514 0,3

Mexico 5.434 6.074 11,8

Germany 5.386 5.256 -2,4

Brazil 5.063 6.414 26,7

Poland 2.872 2.852 -0,7

South Africa 2.516 2.713 7,8

Ukraine 2.298 2.472 7,6

Egypt Rank 58 155 224 44,3

Global Trade

The charts below provide a breakdown of Egypt’s top trading partners in food, beverage products in

2011. The top destination markets for exports of these products were Saudi Arabia (9% of exports),

Sudan (8%) and Libya (7%). Total exports of food beverage from Egypt reached ZAR9.2bn in 2011

declining by 0.73% from 2010.

The top source markets for imports of food, beverage products to Egypt in 2011 were Brazil (27% of

imports), Argentina (11%) and the United States (10%). Total imports of food, beverage by Egypt

reached ZAR18.6bn in 2011, and growing by 40.2%. This indicates that Egypt is a strong and growing

importer of food, beverage products.

27%

11%

10% 6%

5%

4%

3% 3%

2%

2%

27%

Source markets for imports of food and beverage to Egypt, 2011

Brazil

Argentina

USA

Netherlands

Germany

Thailand

UAE

Switzerland

Malawi

France

9%

8%

7%

6%

5%

4%

4% 4%

4%

4%

45%

Destination markets for exports of food and beverage from Egypt, 2011

KSA

Sudan

Libya

UAE

Italy

Jordan

Lebanon

Morocco

Yemen

Somalia

Food and beverage export and Import Data

The Tables below include data regarding the top exports and imports of food and beverage products in

Egypt.

Top 10 exports from food and beverage from Egypt, 2011.

The top exports of food and beverage products from Egypt in 2011 were cane, beet sugar and chemically pure sucrose followed by pipe as well sugar confectionery. Exports of prepared or preserved vegetables increased by 799.82% in 2011, while can or bet sugar and chemically pure sucrose increased by 1, 22.02%

Rank

PRODUCPRODUCT (HS6)

VALUE 2011 (ZAR)

% GROWTH 2010/2011

1

Cane or beet sugar, &

chemically pure sucrose in solid form.

1581

1122.02%

2

Sugar confectionery (incl. white

choc), not containing cocoa

793

28.26%

3

Fruit & vegetable juices,

unfermented

767

57.62%

4

Pasta & couscous

656

175.55%

5

Chocolate and other food

Preparations containing cocoa

455

211.64%

6

Oil-cake

419

78.79%

7

Prepared or preserved

vegetables (incl. frozen)

363

799.82%

8

Food preparations

351

101.38%

9

Ethyl alcohol & other spirits (if

indentured then higher than 80%

302

263.20%

Total Exports

9 214

-0.73%

Source: Trade Map, 2012

Top 10 imports of food and beverage to Egypt, 2011.

The top imports of food and beverage to Egypt in 2011 were cane, beet sugar and chemically pure sucrose, followed by soya bean, oil-cake and other solid residues as well as pipe imports of bran sharps, and other residues increased by 102.22%.

Rank

PRODUCPRODUCT (HS6)

VALUE 2011

(ZARm)

% GROWTH 2010/2011

1

Cane or beet sugar and

chemically pure sucrose in solid form

5 475

59.59%

2

Soya-bean oil-cake and other

solid residues

2 406

92.91%

3

Pipe, chewing & snuff tobaccos

1 668

42.48%

4

Beet-pulp, biogases and

brewing or distilling dregs and waste

957

25.51%

5

Animal feed preparations

844

73.61%

6

Prepared/preserved fish &

caviar

772

0.93%

7

Malt extract; food preparations

of flour, meal, starch or malt extract

618

51.02%

8

Bran, sharps and other residues

707

102.22%

Total Imports

18 547

40.19%

Source: Trade Map, 2012

Source markets for Foreign Direct investment to Egypt (food, beverage sector), 2003-2011

The table below includes the top source markets for FDI to Egypt in the Food and Beverage sector, from

2003 to 2011.

Rank Country Number of

projects

% Projects Capex

(Zarm)

% Capex Companies % Companies

1 Saudi Arabia 7 17.07% 4 498.5 22.59% 2 6.25%

2 UAE 7 17.07% 1 261.36 6.33% 6 18.75%

3 United states 5 12.20% 1 181.98 5.94% 5 15.63%

4 France 3 7.32% 1 415.36 7.11% 3 9.38%

5 Netherlands 3 7.32% 346.1 1.74% 2 6.25%

6 Austria 3 7.32% 1 415.36 7.11% 2 6.25%

7 Spain 2 4.88% 1 249.45 6.27% 2 6.25%

8 United kingdom 2 4.88% 253.22 1.27% 2 6.25%

9 Kuwait 2 4.88% 6 516.35 32.73% 2 6.25%

10 Switzerland 2 4.88% 769.99 3.87% 1 3.13%

11 India 1 2.44% 39.69 0.20% 1 3.13%

12 Lebanon 1 2.44% 624.72 3.14% 1 3.13%

13 Germany 1 2.44% 165.91 0.83% 1 3.13%

14 Japan 1 2.44% 7.94 0.04% 1 3.13%

15 Greece 1 2.44% 165.91 0.83% 1 3.13%

Total 41 100.00% 19 911.81 100.00% 32 100.00%

Source: FDI Intelligence, 2012

The food and beverage market in Libya

Libya is the fourth largest country (total area: 1,759,540 sq km) on the African content. It has borders

with 6 African countries: Egypt, and Sudan to the East, Tunisia and Algeria to the West, and Chad and

Niger to the south. In the north, Libya’s coastline on the Mediterranean Sea extends for approximately

1,774 kilometers. Libya is quite recognized for agriculture plans, hilly areas and large desert space.

Despite of the average growing population rate, Libya remains a net importer of food due to climate

conditions and domestic food production. Therefore, Libya is an attractive market in the sector of food

and beverage industry due to the increasing import of food products.

Libya imports the majority of its food, but the agricultural industry is developing steadily year after year,

due to the government’s investment, various irrigation projects and the use of fertilizer Libya is eager to

reduce its dependency on oil as its source of income, and to increase its investment in several sectors

including agriculture and fisheries. Agriculture is a government priority also to encouraging the domestic

agricultural products and lessens the dependence on imported items.

According to the African Economic Outlook (2011), the mining and hydrocarbon industries accounted

for well over 95% of the Libyan economy in 2010. Despite the agriculture sector being the third-largest

in the economy, Libya remains a net importer of food due to climate conditions and domestic food

production. The civil war in 2011 has also limited domestic output of food and beverages.

BMI View: At (2012), BMI indicated that per capita food consumption is forecast to grow by 12.13 % in

2012 and by 8% at a compound annual rate to 2016. Overall demand in the country is forecast to

rebound in 2012, should the oil production industry recover.

Foreign direct investment in Libya remains suboptimal following the 2011 civil war, although the Middle

East Association reported in July 2013 that interest from UK businesses was increasing across all sectors

following a number of trade missions to the Libyan capital. Work has continued on rebuilding the

country's fractured manufacturing and logistics networks, with a program that seeks to sell a number of

state-owned companies into private hands announced in October 2013. Ongoing security risks and the

opaque business environment continue to present downside, especially across the non-oil economy.

The former president of Libya's General National Congress, Mohammed Magariaf, warned in a televised

speech on February 17 2013 that foreign companies' reluctance to invest in Libya will significantly slow

the country’s development, boding poorly for the medium-term economic outlook and consumer

spending.

Source: BMI, 2014

HEADLINE INDUSTRY DATA (Local Currency)

Indicator 2014 forecast Forecast (CAGR) to 2018

Per capita Food Consumption +5.83% +3.47%.

Mass Grocery Retail Sales +13.51% +8.03%.

The following graph tracks the population growth rate in Libya from 2000 to 2012. The growth rate has

been quite stable, average of 2% annually.

Source: CIA World Factbook

Country

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Libya

2.42

2.42

2.41

2.39

2.37

2.33

2.3

2.26

2.22

2.17

2.12

2.06

2.01

Source: CIA World Factbook

World development indicators: structure of merchandise imports_ Libya

The following table tracks the development of structure of merchandise imports in Libya from 2000 until 2012.

Source: World Bank

Country

Merchandise

imports/ $ millions

Food

Total %

Agriculture

raw materials Total %

Ores and

Metals Total %/

Manufacturers

Total %/

2000

2012

2000

2012

2000

2000

2012

2000

2012 2012

Libya

3,732

23,000

28

12

1

1

1

2

70

84

Trade- Libya

The graph below shows Libya’s trade in food and beverages from 2002 to 2011. As demonstrated, Libya

is a net importer of food and beverage products. Imports totaled ZAR3.8bn in 2011, a decline of 22.44%

from 2010, while exports totaled ZAR6.26m, declining by 12.87% in 2010.

Libya Trade in food and beverages, 2002-2011

Source: Trade Map, 2012

Food and Beverage exports and imports-Libya

The following tracks the top 10 exports of food and beverage products from Libya in 2011. The top

exports of food and beverage products from Libya were chocolate and other food preparations

containing cocoa, prepared or preserved vegetables (including frozen) and bread, biscuits, wafers, cakes

and pastries, the exports of prepared or preserved fish, and caviar increased by 97.33% in 2011.

Source: Trade Map, 2012

Rank

HS6

CODE

PRODUCPRODUCT

VALUE 2011 (ZAR)

% GROWTH 2010/2011

1

1806

Chocolate and other food

preparations containing cocoa

1.95

-------------------

2

2004

Prepared or preserved vegetables (including frozen)

1.19

-------------------------

3

1905

Bread, biscuits, wafers, cakes and

pastries

0.86

37.67%

4

1604

Prepared/preserved fish & caviar

0.45

97.33%

5

2005

Prepared or preserved vegetables

(excluding frozen)

0.31

-22.86%

6

2202

Non-alcoholic beverages (excl. water, fruit or vegetable juices)

0.27

----------------------

7

2009

Fruit & vegetable juices,

unfermented

0.24

-83.95%

8

1704

Sugar confectionery (including white

choc), not containing cocoa

0.24

-18.60%

9

1701

Cane or beet sugar and chemically

pure sucrose, in solid form

0.21

----------------------

10

2106

Food preparations

0.19

-----------------------

TOTAL EXPORTS

6.25

-12.87%

The following table tracks the top 10 imports of food and beverage products to Libya in 2011. The top

imports of food and beverage products to Libya in 2011 were cane or beet sugar and chemically pure

sucrose, prepared or preserved tomatoes, and prepared and preserved fish and caviar.

Source: Trade Map, 2012

Rank

HS6

CODE

PRODUCPRODUCT

VALUE 2011 (ZARm)

% GROWTH 2010/2011

1

1701

Cane or beet sugar and chemically pure sucrose, in solid

form

715.37

-30.57%

2

2002 Tomatoes prepared or preserved

614.43

20.96%

3

1604 Prepared/preserved fish & caviar

452.12

-34.64%

4

1905 Bread, biscuits, wafers, cakes and pastries

341.31

-21.34%

5

1806 Chocolate and other food preparations containing cocoa

307.41

-10.82%

6

1901

Malt extract; food preparations of flour, meal, starch or malt extract

282.50

-4.47%

7

2202

Non-alcoholic beverages (excl. water, fruit or vegetable juices and

mi

217.26

-23.40%

8

2009

Fruit & vegetable juices,

unfermented

186.08

-20.68%

9

1704

Sugar confectionery (including

white choc), not containing cocoa

84.99

-28.66%

10

2106

Food preparations

83.63

-50.00%

TOTAL IMPORTS

3 810.71 -22.44%

The top export & import markets for food and beverage products from Libya in 2011

The top export markets for food and beverage products from Libya in 2011 were Italy (41.26% share of

exports), Belgium (19.08%) and Turkey (14.14%). In terms of export growth in 2011, the top markets

were Belgium (16,273.53%) and Malta (57.85%).

RANK

Destination market

VALUE 2011 (ZARm)

% Growth 2010-2011

% Share 2011

1 Italy 2.58 -------------- 41.26%

2 Belgium 1.19 16273.53% 19.08%

3 Turkey 0.88 -------------- 14.14%

4 Thailand 0.45 -------------- 7.13%

5 Jordan 0.40 -76.29% 6.44%

6 Egypt 0.34 22.03% 5.40%

7 Greece 0.31 ------------- 4.94%

8 Malta 0.06 57.85% 0.92%

9 Ecuador 0.04 ------------- 0.69%

10 Honduras 0.07 -------------- 1.15%

Total Exports 6.26 -12.48% 100.00%

Source: Trade Map, 2012

The top import markets for food and beverage products to Libya in 2011 were Italy (21.79% share of

imports), Turkey (16.04%) and Egypt (15.13%). In terms of import growth in 2011, the top markets were

France (138.86%) and Turkey (52.67%).

RANK

Destination market

VALUE 2011 (ZARm)

% Growth 2010-2011

% Share 2011

1 Italy 830.32 31.92% 21.79%

2 Turkey 611.07 52.67% 16.04%

3 Egypt 576.58 12.07% 15.13%

4 Thailand 444.28 -17.96% 11.66%

5 Netherlands 294.83 -6.59% 7.74%

6 France 275.35 138.86% 7.23%

7 Brazil 137.23 -36.96% 3.60%

8 Spain 83.30 -48.24% 2.19%

9 Algeria 70.61 -63.07% 1.85%

10 Germany 63.53 -43.98% 1.67%

Total imports 3 810.71 -22.56% 100.00%

Source: Trade Map, 2012

Inward FDI food and beverage to Libya, 2003-2011

The table below lists two FDI projects initiated in Libya in the food and beverages sector. SlamaFreres

initiated a manufacturing facility in the grains and oilseed sub-sector in January 2009, while Dardanel

initiated a manufacturing facility in the fruits, vegetables and specialist foods sub-sector.

DATE

Investment Company

Source Country

Source State

Industry Sector

Sub-Sector

Cluster

Industry Activity

Capital Activity (ZARbn)

Jobs

Jan-09

SlamaFreres

Tunisia

Manouba Governate

Food & Tobacco

Grains & oilseed

Food, beverage & tobacco

Manufacturing

3.53

21

Nov-04

Dardanel

Turkey

Turkey

Food & Tobacco

Fruits, vegetables and specialist foods

Food, beverage& tobacco

Manufacturing

4.82

259

Source: FDI Intelligence, 2012

Outward FDI

In December 2005, LAAICO (Libyan Arab African Investment Company) signed an agreement with the

Uganda Coffee Development Authority (UCDA) to establish an instant coffee factory in Uganda.

The former data with regards to the Libyan geographical borders with Egypt, suggests a strong potential between Libya and Egypt in the sector of food & beverage industry, and by expanding Afro packaging & processing exhibitions; mutual cooperation between Libyan and Egyptians manufacturers will grow to rise in future.

The food and beverage market in Sudan

The Republic of the Sudan is an Arab republic in the Nile Valley of North Africa, bordered by Egypt to the north, the Red Sea, Eritrea and Ethiopia to the east, South Sudan to the south, the Central African Republic to the southwest, Chad to the west and Libya to the northwest. The Nile River divides the country into eastern and western halves.

Sudan is the third largest country in Africa (after Algeria and the Democratic Republic of the Congo) and also the third largest country in the Arab world (after Algeria and Saudi Arabia).

BMI View: We forecast that real GDP growth in Sudan will reach 2.5% in 2014, a significant improvement from the 2013 rate, estimated at 1.4%. Even so, significant headwinds persist, and this rate of economic expansion is far below the 6.8%-average the country experienced over the 10 years prior to the secession of South Sudan in 2011.

Inflation in Sudan averaged 36.6% over the first 11 months of 2013, among the highest rates in the world. Unfortunately for consumer purchasing power, the trend is in the wrong direction, with price growth rising to 42.6% year-on-year in November, up from a low of 22.9% in August. Although policymakers have committed to bringing inflation under control by refraining from printing money to finance government expenditures, we expect that inflationary pressures will remain elevated over the near term. Despite these inflationary factors, we believe that the government's goal to halve inflation over the course of 2014 is within reach; our own forecast is for end-2014 price growth to fall to 25.0%.

According to CIA world Factbook The oil sector had driven much of Sudan's GDP growth since 1999. For nearly a decade, the economy boomed on the back of rising oil production, high oil prices, and significant inflows of foreign direct investment. Since the economic shock of South Sudan's secession, Sudan has struggled to stabilize its economy and make up for the loss of foreign exchange earnings. The interruption of oil production in South Sudan in 2012 for over a year and the consequent loss of oil transit fees further exacerbated the fragile state of Sudan’s economy. Sudan is also subject to comprehensive US sanctions. Sudan is attempting to develop non-oil sources of revenues, such as gold mining, while carrying out an austerity program to reduce expenditures. The world’s largest exporter of gum Arabic, Sudan produces 75-80% of the world’s total output. Agriculture continues to employ 80% of the work force.

GDP (purchasing power parity):

$89.97 billion (2013 est.)

$86.59 billion (2012 est.)

$89.51 billion (2011 est.)

GDP (official exchange rate):

$52.5 billion (2013 est.)

GDP - real growth rate:

3.9% (2013 est.)

-3.3% (2012 est.)

-1.8% (2011 est.)

GDP - per capita (PPP):

$2,600 (2013 est.)

$2,600 (2012 est.)

$2,700 (2011 est.)

note: data are in 2013 US dollars

Gross national saving:

26.6% of GDP (2013 est.)

18.1% of GDP (2012 est.)

26.8% of GDP (2011 est.)

GDP - composition, by end use:

household consumption: 64.1%

government consumption: 11.3%

investment in fixed capital: 23.2%

investment in inventories: 3.4%

exports of goods and services: 17.9%

imports of goods and services: -19.9%

(2013 est.)

GDP - composition, by sector of origin:

agriculture: 27.4%

industry: 33.6%

Services: 39% (2013 est.)

Agriculture - products:

cotton, groundnuts (peanuts), sorghum, millet, wheat, gum Arabic, sugarcane, cassava (tapioca), mangoes,

papaya, bananas, sweet potatoes, sesame; sheep and other livestock

Industries:

oil, cotton ginning, textiles, cement, edible oils, sugar, soap distilling, shoes, petroleum refining, pharmaceuticals,

armaments, automobile/light truck assembly

Industrial production growth rate:

11% (2013 est.)

Labor force:

11.92 million (2007 est.)

Labor force - by occupation:

agriculture: 80%

industry: 7%

Services: 13% (1998 est.)

Exports:

$4.145 billion (2013 est.)

$3.368 billion (2012 est.)

Exports - commodities:

gold; oil and petroleum products; cotton, sesame, livestock, groundnuts, gum Arabic, sugar

Exports - partners:

UAE 63.2%, Saudi Arabia 9.2%, Ethiopia 5.3% (2012)

Imports:

$5.941 billion (2013 est.)

country comparison to the world: 120

$8.123 billion (2012 est.)

Imports - commodities:

foodstuffs, manufactured goods, refinery and transport equipment, medicines and chemicals, textiles, wheat

Imports - partners:

Macau 18.1%, India 8.8%, Saudi Arabia 7.9%, Egypt 6.7%, UAE 5.2% (2012)

Economic activities in agriculture

land use: arable land: 5,5% //; - grass land: 46,3% //; - wooded area: 18,1% //; - arid land and desert: 30,1%

agriculture: labor force: 63% //; - part of agriculture in GDP: 36%

agricultural products: sugarcane, sorghum, millet, groundnuts, wheat, seed cotton, cottonseed, gum Arabic

livestock (million): asses: 0,7 / camels: 3 / cattle: 37 / goats: 38 / poultry: 37 / sheep: 46

Percentage share of food commodity group in total DEC in Sudan

Following the former market data about Sudan, with regards to the geographical border with Egypt, also

the absence of food and beverage trade fairs in Sudan. Egypt’s location will attract Sudanese

manufacturers to visit Afro Packaging and Afro food Exhibition in order to be updated with the latest

food and beverage technology.

The food and beverage market in Algeria

Algeria is the tenth-largest country in the world, and the largest in Africa With a total area of 2,381,741

square kilometers (919,595 sq m) and in the Mediterranean.[10] The country is bordered in the

northeast by Tunisia, in the east by Libya, in the west by Morocco, in the southwest by Western

Sahara, Mauritania, and Mali, in the southeast by Niger, and in the north by the Mediterranean Sea.

Food Industry is the second largest industry in Algeria and also Africa’s number one food products

importer. Nearly %75 of its food products is imported.

Algeria has a small agricultural sector, which contributed 8% of GDP in 2010 and it is unable to meet the

needs of the food and beverages processing sector. As a result, approximately 45% of food is imported.

According to UKTI (2012) 27% of the Algerian population is below the age of 14, creating a market for

sugar and confectionery products such as biscuits, crisps, chocolates and soft drinks.

Algeria ranks the 3rd worldwide from milk, and dairy products. One person in Algeria consumes around

2.5 kg biscuits per year. Average 900gr bread is consumed by one person in one day. It is also a

significant importer of cheese for processed cheese manufacture. 27% of the Algerian population is

below the age of 14, creating a market for sugar and confectionery products such as biscuits, crisps,

chocolates and soft drinks.

According to Euro monitor Packaged food witnessed a dynamic value performance in 2013 following a

price rise in all categories. Higher purchasing power, development of niche premium products and

consumers’ willingness to spend more on added-value products boosted greater spending on non-staple

food. Although price rises have triggered a little slowdown in volume performance due to careful

spending by consumers, increased demand has sustained volume growth.

New product launches, advertising, promotional campaigns and the flourishing of hypermarkets and

supermarkets have resulted in higher consumer awareness and spending. With a higher purchasing

power and more retailing outlets, consumers of all income groups have become more sensitive to

quality and price. This trend has been recognized by domestic producers through the introduction of

quality new products, which has helped them reinforce their competitive position.

In most of the categories, domestic production from domestic companies or multinationals leads sales

of packaged food. Innovative packaging designs and formats with improved quality have encouraged

consumers to favor local products. Besides this, domestic production’s positioning on economy to

standard platforms has led to volume growth despite the higher cost of raw materials. Despite the

increasing prices of ingredients, domestic production is still able to offer prices lower than any imported

brand, which is a major determinant in Algerian consumers’ decisions.

A solid performance is expected for both value and volume growth in 2013-2018. However, the maturity

of some categories will affect their volume growth rates, which will be caught up by the growth of niche

products. In this respect, although the government is expected to keep on subsidizing the two largest

categories in packaged food, artisanal/unpackaged bread and fresh/pasteurized milk, added-value

products such as premium-quality bread and UHT fresh milk will positively impact on overall value

performance.

Major food and beverage products in the Algerian market:

Baby food

Bakery

Canned and preserved food

Chilled processed food

Confectionery

Dairy

Dried processed food

Frozen processed food

Ice cream

Meal replacement

Noodles

Oils and fats

Pasta

Ready meals

Sauces, dressings and condiments

Snack bars

Soups

Spreads

Sweet and savory snacks

BMI View: We have revised upwards our forecasts for economic growth in Algeria, and now

expect to see nominal GDP growing at a compound annual rate of 10.9% between 2014 and

2018 (up from a previous forecast of 8.3%), as we are more positive about private consumption.

We continue to view inflation and political unrest as the biggest risks to consumption.

Source BMI, 2014

HEADLINE INDUSTRY DATA (Local Currency)

Indicator 2014 forecast Forecast (CAGR) to 2018

Per capita Food Consumption +6.87% +6.51%.

Mass Grocery Retail Sales +28.66% +23.19%.

Alcoholic drinks value sales grow +9.31% +7.94%.

Algeria’s global trade in food and beverages:

The graph below shows Algeria’s trade in food and beverages from 2002 to 2011. As

demonstrated, Algeria is a net importer of food and beverage products. Imports totaled

ZAR13.5bn in 2011, an increase of 51.6% from 2010, while exports totaled ZAR2.2bn,

increasing by 15.7% in 2011.

The top exports of food and beverage products from Algeria in 2011 were cane or beet sugar and

chemically pure sucrose, non-alcoholic beverages (excluding water, fruit or vegetable juices and milk)

and molasses resulting from the extraction or refining of sugar. Exports of cane or beet sugar and

chemically pure sucrose increased by 1,936.8% in 2011.

The top imports of food and beverage products by Algeria in 2011 were cane or beet sugar and

chemically pure sucrose, malt extract and food preparations of flour, meal, starch and malt extract as

well as food preparations. Imports of cane or beet sugar and chemically pure sucrose increased by

70.6% in 2011, while imports of sugar confectionery (including white chocolate) and not containing

cocoa increased by 52.6% in 2011.

Top 10 exports from food and beverage from Algeria, 2011.

The top exports of food and beverage products from Algeria in 2011 were cane or beet sugar and

chemically pure sucrose, non-alcoholic beverages (excluding water, fruit or vegetable juices and milk)

and molasses resulting from the extraction or refining of sugar. Exports of cane or beet sugar and

chemically pure sucrose increased by 1,936.8% in 2011.

Source: Trade Map, 2012

Rank

HS6

CODE

PRODUCPRODUCT

VALUE 2011 (ZAR)

% GROWTH 2010/2011

1

1701

Cane or beet sugar and chemically

pure sucrose, in solid form

1 936. 8

14.87%

2

2202 Non-alcoholic beverages (excl. water,

fruit or vegetable juices and milk)

190.9 -2.04%

3

1703 Molasses resulting from the extraction

or refining of sugar

23.1 41.65%

4

1905 Bread, biscuits, wafers, cakes and pastries

20 .6 119.46%

5

2009 Fruit & vegetable juices, unfermented

11 .2 244.22%

6

1804 Cocoa butter, fat and oil 8 .1 -61.36%

7

2204 Wine of fresh grapes 8 .1 -36.87%

8

2002 Tomatoes prepared or preserved 5 .4 1393.76%

9

1902 Pasta & couscous 3 .6 ------------------

10

2201 Mineral & aerated waters 2 .3 171.11%

TOTAL EXPORTS

2 216.1 13.42%

The top imports of food and beverage products by Algeria in 2011 were cane or beet sugar and

chemically pure sucrose, malt extract and food preparations of flour, meal, starch and malt extract as

well as food preparations. Imports of cane or beet sugar and chemically pure sucrose increased by

70.6% in 2011, while imports of sugar confectionery (including white chocolate) and not containing

cocoa increased by 52.6% in 2011.

Source: Trade Map, 2012

Rank

HS6

CODE

PRODUCPRODUCT

VALUE 2011 (ZARm)

% GROWTH 2010/2011

1

1701

Cane or beet sugar and chemically pure sucrose, in solid

form

8 035.2

70.6%

2

1901 Malt extract; food preparations of flour, meal, starch or malt extract

1 005.4 39.1%

3

2106 Food preparations

999.9 11.6%

4

2102 Yeast

555.9 4.1%

5

1806 Chocolate and other food

preparations containing cocoa 416.4 42.0%

6

2002 Tomatoes prepared or preserved 269.2 -6.4%

7

1704 Sugar confectionery (including

white choc), not containing cocoa 196.0 52.6%

8

2009 Fruit & vegetable juices,

unfermented 183.1 44.8%

9

1905 Bread, biscuits, wafers, cakes and

pastries 175.8 17.2%

10

2103 Sauces mixed condiments &

mixed seasonings 172.9 26.4%

TOTAL IMPORTS

333 832.5 50.9%

Export and Imports markets, Algeria

The export markets for food and beverage products from Algeria in 2011 were Iraq (13% share of exports), Tunisia (10%) and Italy (10%). In terms of export growth in 2011, the top markets were Italy (1,790%) and Iraq (967%).

Source: Trade Map, 2012

RANK

Destination market

VALUE 2011 (ZARm)

% Growth 2010-2011

% Share 2011

1 Iraq 296 295 967% 13%

2 Tunisia 219 708 112% 10%

3 Italy 212 798 1790% 10%

4 Bulgaria 206 326 - 9%

5 Syrian Arab Republic 193 994 -53% 9%

6 Sudan 142 884 -62% 6%

7 Netherlands 123 829 508% 6%

8 Spain 114 589 680% 5%

9 Guinea 88 286 -3% 4%

10 Poland 86 963 - 4%

Total Exports 2 216 134 13.4% 100%

The import markets for food and beverage products to Algeria in 2011 were Brazil (49.7% share of

imports), France (15.4%) and Spain (3.5%). In terms of import growth in 2011, the top markets were

Brazil (76.1%) and Italy (54%).

RANK

Destination market

VALUE 2011 (ZARm)

% Growth 2010-2011

% Share 2011

1 Brazil 6 729 899 76.1% 49.7%

2 France 2 077 197 36.8% 15.4%

3 Spain 468 300 32.1% 3.5%

4 China 425 725 -8.6% 3.1%

5 Turkey 422 410 5.5% 3.1%

6 Germany 293 749 8.8% 2.2%

7 Netherlands 276 204 -5.6% 2.0%

8 Belgium 270 243 -32.2% 2.0%

9 Egypt 241 999 9.0% 1.8%

10 Italy 232 687 54.0% 1.7%

Total imports 2 032.87 59.89% 100.00%

Source: Trade Map, 2012

Inward FDI food and beverage to Algeria, 2003-2012

The table provides a listing of all inward FDI projects to Algeria in the food and beverages sector from

January 2003 to June 2012. Seven projects were initiated by French companies. Inward FDI ranged

across various sub-sectors, with the dairy products sub-sector attracting three projects. Five

manufacturing and four retail projects were initiated.

Source: FDI Intelligence, 2012

DATE

Investment Company

Source Country

Sub-Sector

Industry activity

Capital

investment (ZARm)

Jobs

Oct-11 Nestle Switzerland Dairy products

Manufacturing 82.64 50

Sep-11 Irish Dairy Board

Ireland Dairy products

Sales, Marketing & Support

65.46 27

Jul-08 Quick Belgium Food services

Retail 171.00 198

Mar-07 Quick France Food services

Retail 10.80 8

May-06 Lesaffre France Grains & oilseed

Manufacturing 481.92 259

Mar-06 Carrefour Market

(Champion)

France Food & Beverage

Stores (Food &

Tobacco)

Retail 171.00 198

Nov-05 Danone France Bakeries & tortillas

Manufacturing 245.46 231

Sep-05 Carrefour

Market (Champion)

France Food & Beverage

Stores (Food &

Tobacco)

Retail 171.00 198

Jul-05 Danone France Dairy

products

Logistics, Distribution & Transportation

171.00 147

Jan-05 Nestle Switzerland Soft drinks & ice

Manufacturing 272.46 170

Jan-04 Lesaffre France Grains & oilseed

Manufacturing 204.55 123

Outward FDI to Algeria 2003-2012

Algerian companies initiated four FDI projects in the food and beverages sector, from January 2003 to

June 2012. Of these projects, 2 were initiated in Tunisia, while three projects manufacturing activities in

the sugar and confectionery products sub- sector.

Source: FDI Intelligence, 2012

The food and beverage market in Morocco

The Kingdom of Morocco is a country in the Maghreb region of North Africa. Morocco has a population

of over 33 million and an area of 446,550 km2 (172,410 sq mi).

Real GDP/Inflation rate

Agriculture accounted between 12 and 20 percent of the total Moroccan GDP, while Food & Beverage

industry account for 8 percent of the total GDP. Food and beverage industry generates 8 billion dollars.

There are 2000 companies working within the food industry.

DATE

Investment Company

Source Country

Sub-Sector

Industry activity

Capital

investment (ZARm)

Jobs

Oct-11 Cevital Tunisia Sugar & confectionary products

Manufacturing 481.92 259

Oct-11 Cevital United States

Sugar & confectionary products

Manufacturing 247.91 107

Oct-11 Cevital Iraq Sugar & confectionary products

Manufacturing 330.55 127

Nov-09 Cevital Tunisia All other food

Manufacturing 129.28 585

BMI View: We continue to hold a negative shorter-term view on Morocco's food and drink industry

owing to its weak private consumption outlook and the value-added tax and agricultural sector tax

increases for food items introduced in 2014. Moroccan households will be further squeezed by

increasingly limited credit availability and constrained government spending in 2014. Our longer-term

view for Morocco's food and drink industry is more positive, as it will benefit from ongoing structural

reforms, the country's promising demographic profile and sizable investment in tourism.

Source BMI, 2014

Major Food and beverage products in Morocco

Vegetables cans, fruit juice, biscuits, corn cans, fast food Products, pet foods, sauces, corn Flacks, pasta,

product designated to hotels (portion jam..), snack products, and beers.

Morocco export 600 Million Dollars of fish product which represent 40% of Morocco food & beverage

products exportation. The main importing countries are the European unions, USA, Japan.

Morocco is the first exporter in the world of Sardine Pilchards, and the third exporter in the world of

Agar product. This industry has 406 unity inland and 390 boats with refrigeration system and employs

75000 people.

According to Euro monitor Packaged food in Morocco continued to experience positive growth, despite

toughening economic conditions. Moroccan consumers proved to be reluctant to drastically reduce

spending on basic foodstuffs. Instead, they opted to cut their expenditure on non-basic goods and

services that are not prime necessities. However, price-sensitive buyers are shifting towards economy

brands and, in some cases, private label due to decreasing purchasing power. With regard to

manufacturer activity, leading companies are gradually increasing their spend on new product

developments and promotional activities, which is also helping to sustain growth within packaged food

categories.

HEADLINE INDUSTRY DATA (Local Currency)

Indicator 2014 forecast Forecast (CAGR) to 2018

Per capita Food Consumption +1.3% +1.7%

Mass Grocery Retail Sales +7.1% +7.9%

Soft drinks Growth +1.6% +2.2%

The leading producers of packaged food in Morocco continued strengthening their competitive edge

through the introduction of healthy and convenient products. This was largely due to the increasingly

sophisticated demand patterns of Moroccan consumers, many of whom are becoming more health

conscious. Moreover, Moroccan consumers are gradually becoming more accustomed to reading the

nutritional information labels that are printed on all packaged food packaging in Morocco. Examples

include St Dalfour sugar-free jam by Foods & Goods SA, Pralinutta sugar-free chocolate spread by

Madico PM Casablanca, Yawmy 00% by Centrale Laitière Maroc Lait and Duetto vegetable-based

whipping cream, free from cholesterol and trans fats by Extraport Company SARL, in order to cater to

the demand of Morocco’s health-conscious consumers.

The food and beverage market in Tunisia

The republic of Tunisia is the northernmost country in Africa and, at almost 165,000 square kilometers

(64,000 sq mi) in area, the smallest country in the Maghreb region of North Africa. It is bordered

by Algeria to the west, Libya to the southeast and the Mediterranean to the north and east. As of

2013, its population is estimated at just fewer than 10.8 million.

Tunisia has an association agreement with the European Union and is a member of La Francophone,

the Arab Maghreb Union, the Arab League and the African Union. Close relations with Europe – in

particular, with France – have been forged through economic cooperation, privatization and industrial

modernization. Tunisia is recognized for non-metallic mineral products, food and beverages.

According to Business monitor international The Tunisian consumer was badly affected by the political

crisis that has engulfed the region since 2011.With inflows of foreign investment and tourism being hit

by the uncertain security situation, activity in the private sector was sluggish throughout 2011 and 2012.

Unemployment remains stubbornly high, running at over 15%, while the anticipated pickup in foreign

investment will take time to feed through to consumer spending. Moreover, much of the foreign aid

that has been pledged to the government will likely be tied to specific infrastructure projects. Although

this will have benefits in terms of employment, it will also limit the government’s room to implement

populist spending policies such as public sector wage hikes or increased subsidies for food and fuel,

which would boost consumer spending more directly.

Source BMI, 2014

HEADLINE INDUSTRY DATA (Local Currency)

Indicator 2013 forecast Forecast (CAGR) to 2017

Per capita Food Consumption 10.4% 7.9%.

Mass Grocery Retail Sales 15.9% 11.7%.

BMI: Key Regional Company Trends Casino and Al-Meera Investing In Retail: In February 2012, French retailer Casino signed a joint venture (JV) agreement with Qatari retail group al-Meera Holding with plans to open outlets in North Africa and Jordan. The JV, called ALGE Retail, is looking at expansion in Tunisia, Libya and Egypt. It will be head quartered in Geneva, with Casino owning 49% and al-Meera owning 51%. Spanish Dairy Firm Investing: In December 2011, Spanish dairy firm Kaiku announced the purchase of Tunisia-based CLM-Vitaliat, the country’s second-largest dairy producer with revenues of aroundEUR70mn. Kaiku and CLM-Vitaliat previously collaborated on yoghurt products for five years, and the acquisition will give Kaiku increased exposure to the immature Tunisian market.

The table below provides the industrial evolution from 1995 to 2005 (%) in food and beverages,

machinery, manufacturing, and electronic equipment in Tunisia.

Pattern of specialization: evolution from 1996 to 2005

Industries

Evolution between 1995-2005 %

Food and beverages -0.23%

Non metallic mineral products 0.31%

Machinery 0.01%

Manufacturing 0.14%

Electronic equipment --------

Source market research

Over all the Tunisia food and beverage market has not been stable post Tunisian revolution, however,

the latest market reports indicated a potential growth in the food and beverage market as the political

and economical state is becoming stable.

The previous market data is dedicated to provide the information of the potential growing market in

Egypt, with regards to its relation with the North African region. Afro packaging and Afro food exhibition

is the major food and processing exhibition in North Africa, accordingly, by cooperating with Messe

Munchen there will be great opportunities for food manufacturers to explore the latest beverages

technology as well as exchanging ideas and exploring the numerous opportunities in the Egyptian, and

North African markets.