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  • Food Processing Export Strategy Preliminary Review

    Working Document Not for Circulation

    Project: Trade Enhancement Programme A (TEP-A Lot 2, Comp 4)

    Assignment: 4.15.3 Policy and Capacity Building: Food Processing Export Council

    Author: Paul Baker Date: March 2007

    Disclaimer: The views and propositions expressed herein are those of the expert (Paul Baker) and do not necessarily represent any official view of the European Commission or any other organisations mentioned in the Report

  • Export Strategy for Processed Food - Review

    Paul Baker 26-Nov-07 i

    Preface This report has been produced as part of an assignment to support capacity building of the Food Processing Export Council (FPEC) in order to ensure that the Council is able to perform and act as a qualified partner for the Ministry of Trade and Industry (MTI), representing and serving the development of the Egyptian food processing (EFP) sector. The report concerns Task 4 of the assignment, which has as its objective:

    Check the FP Export Strategy and draft an Export Plan listing and prioritizing objectives, activities and suggesting stakeholders’ contributions.

    Under the terms of reference (ToR) for the assignment, the activities for Task 4 include:

    Overview the sector situation (markets, used technologies, human resources, financial data, etc.)

    Check the coherence and consistency of the policies set out in the Export Strategy and designed to improve the FP sector’s export performance (e.g. marketing, investment, training and skill development needs etc.)

    Outline recommendations for improvement Propose a matrix with priorities, objectives, activities, needed resources, expected

    results, and actions to be undertaken by the public and/or private sectors to achieve export development goals

    Suggest organisational structure (role and responsibilities) to ensure adequate implementation of activities

    Identify a set of activities to be undertaken by the FPEC Draft a specific action plan for the FPEC activities with time table, with needed

    resources, and key performance indicators Propose a control mechanism to verify operational advancement

    On the basis of the above ToR, the consultant undertook a review of the Food Processing Export Strategy1, and the main findings are documented in Section 1 of this report. On the basis of the findings from the review of the Food Processing Export Strategy, and in consultation with the beneficiary (i.e. FPEC), a revised programme of support activities were agreed. These are outlined in Section 2 of this report.

    1 “Food Export Strategy Study – PS137 – Final Report”, STEM-VCR, May 2006

  • Export Strategy for Processed Food - Review

    Paul Baker 26-Nov-07 ii

    Table of Contents

    1. Summary of the Food Processing Export Strategy................................................ 1 1.1. Overview of export strategy development.............................................................. 1 1.2. General approach of strategy development studies .............................................. 1 1.3. Overall assessment of current situation and future export potential...................... 2 1.4. SWOT analysis ....................................................................................................... 2 1.5. Main conclusions and strategy recommendations ................................................. 7 1.6. Main identified ‘action areas’ .................................................................................. 8 1.7. Outline action plans .............................................................................................. 10 1.8. Comments and conclusions ................................................................................. 11 1.8.1. Structure and focus of the Food Export Strategy Report............................... 11 1.8.2. Overall evaluation and identified key issues .................................................. 11 1.8.3. Final remarks .................................................................................................. 15 2. Outline revised programme of support activities.................................................. 17 2.1. Overview ............................................................................................................... 17 2.2. Detailed sub-sector action plan: ‘olive oil’ ............................................................ 17 2.3. New product development action plan: ‘dried fruits’ ............................................ 18 2.4. FDI attraction for the food processing sector ....................................................... 18 2.5. Relationship between revised support programme and assignment activities.... 19

    Appendix 1 EFPS Export Strategy – Action Plans ...................................................... 21 Appendix 2 Strategy development framework............................................................. 23 Appendix 3 Extracts from Business Today Egypt ....................................................... 26

  • Export Strategy for Processed Food - Review

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    Index of Tables Table 1 Identified EFPS ‘strengths’ and recent changes ............................................ 4 Table 2 Identified EFPS ‘weaknesses’ and recent changes ....................................... 5 Table 3 Identified EFPS export ‘opportunities’ ............................................................ 6 Table 4 Identified EFPS export ‘threats’ ...................................................................... 7 Table 5 Export Strategy: general policy and ‘multi-sector’ action areas..................... 9 Table 6 Export Strategy: sector orientated and intra-industry action areas.............. 10 Table 7 Overview of correspondence between activities.......................................... 20 Index of Figures Figure 1 Strategy development framework................................................................. 25

  • Export Strategy for Processed Food - Review

    Paul Baker 26-Nov-07 iv

    List of Acronyms CAP Common Agricultural Policy (European Union)

    EFPS Egyptian Food Processing Sector

    EGP Egyptian Pound

    ESR Export Strategy Report (“Food Export Strategy Study – PS137 – Final Report”, STEM-VCR, May 2006, for IMC)

    FDI Foreign Direct Investment

    FP Food Processing

    FPI Food Processing Industry

    FPEC Food Processing Export Council

    FSR Food Sector Review (“Egyptian Processed Food Sector Review – Final Report” ECORYS-NEI, May 2005, for IMC)

    GCC Gulf Cooperation Council

    IMC Industrial Modernisation Centre

    MTI Ministry of Trade and Industry

    SWOT Strengths, Weaknesses, Opportunities, Threats

    TEP-A Trade Enhancement Programme A

    ToR Terms of Reference

  • Export Strategy for Processed Food - Review

    Paul Baker 26-Nov-07

    1

    1. Summary of the Food Processing Export Strategy

    This section provides a brief summary of the current status of the Egyptian Food Processing Sector (EFPS) Export Strategy, its development and methodological approach, together with main conclusions and recommendations.

    1.1. Overview of export strategy development

    The most recent attempt to define an export strategy for the food processing sector is set out in a report for IMC: “Food Export Strategy Report” (May 2006)2. This study built upon an earlier report for IMC: “Egyptian Processed Food Sector Review” (May 2005)3, which had a somewhat broader scope but that, nonetheless, gave particular emphasis to enhancing export performance4. These two documents provide the basis for articulating the ‘current’ export strategy for the food processing sector5. It should be noted, however, that the two studies/documents are consultants’ reports rather than a strategy for enhancing export performance developed and adopted by the national government or the industry itself. Notwithstanding the support that may exist among the relevant stakeholders and authorities for the objectives and recommendations set out in these reports, it would be inaccurate to describe them representing the ‘official’ export strategy for the food processing sector.

    1.2. General approach of strategy development studies

    The two aforementioned reports are broadly similar in their approach and overall structures, with each providing:

    Global assessment: demand-side and supply-side factors shaping development, global trade environment, and regulatory environment;

    Local assessment: production and trade (export) performance, demand-side and supply-side factors shaping development, trade environment, regulatory environment;

    Benchmarking analysis: with comparisons of Egyptian situation for key performance indicators, and for key product categories against important competitor and sector ‘best performer’ countries;

    SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis and conclusions; Strategy recommendations: for enhancing (export) performance.

    The reports provide a considerable volume of analysis of both global developments in the food processing sector and of the current situation of the sector in Egypt. In fact, one major contribution of the studies is to bring together information from disparate source in

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