24 October 2019
«EFKO» Group together with «United Oil» create an enterprise in the north of Africa
24 October 2019, Sochi, Russia – At the economic forum «Russia - Africa» «EFKO» signed an agreement with «United Oil» on development of business on the territory of North Africa and the Near East.
«EFKO» Group, the largest Russian Fat&Oil holding, a leading exporter of sunflower oil, and one of the key representatives of the Fat&Oil market of Egypt «United Oil» have collaborated for over three years. Main directions of the joint activity are export of Russian sunflower oil in bulk and distribution of specialized fats produced by «EFKO».
Within the negotiation on strategic partnership, the parties adopted a decision to create a joint enterprise with ambition to build the largest producer of Fat&Oil products in North Africa. The main goal of the collaboration is development of the markets of North Africa, the Near East and South Europe in the following product categories – bottled vegetable oil and in bulk and in food ingredients – specialized fats.
The agreement between the companies includes building of a new plant producing specialized fats in Egypt, transfer of innovative technologies of «EFKO» Group, creation of a center of applied research in Cairo, expansion of production of bottled oil and launching of brands of the Group at the markets of North Africa. Besides, the parties plan to build a grain terminal in the Mediterranean for transshipment of 2 mln tn of cargo in bulk per year.
The investment program of the joint enterprise will amount to $300 mln. Exclusive competencies in technologies for fats, building of production assets, branding and organizing of management systems of «EFKO» as well as deep knowledge of the region, leadership positions in bottled oil and effective geographic location of the assets give the companies opportunities to build a leader of the market with annual earnings over $1 bln.
Evgeny Lyashenko, CEO of «EFKO» Group, mentioned that the future project with «United Oil» is unique.
«Export development strategy, including products of agro-industrial complex, declared by President Vladimir Putin in May last year, is a natural part of our business model. In 2018 we received $475 mln of earnings from export direction. We look forward to their growth by 20% in the end of this year. To achieve the goals to increase triply export of products of Fat&Oil industry, we have built and continue to develop the port infrastructure in Taman port. Besides, «EFKO» develops new models of work at distant markets: instead of selling of oil or meal to the Black Sea FOB, we are in search of opportunities to enter consumers at the markets of countries importing our products. Partnership with «United Oil» gives several opportunities in the region with fast-growing population and welfare rate. Firstly, we will become pioneers in transfer of our innovative technologies in the sector of specialized fats that maximize using of national sunflower oil. Secondly, our «Altero» and «Sloboda» brands will get a chance to become global brands. The first market out of the CIS, where they will be mass produced, is Egypt with potential of fast expansion to the markets of the countries of North and East Africa as well as the Near East. Thirdly, participation of the Egyptian party in the project on building of embankment terminal in the Mediterranean gives us an opportunity to build a steady model of supplies of Russian meal and in the future soybean as well to consumers of Egypt», - he emphasized.
According to El Shafei Yehia Zakaria, CEO of «United Oil»
, collaboration with «EFKO» Group will open new promising directions of development for both parties.
«EFKO» is a dynamically developing company. It is based on innovative technologies, strong brands and a steady business model. I would like to emphasize that «EFKO» pays great attention to development of its employees and raising of their professional level. Complementarity at the value level and business opportunities that our partnership gives became for us main factors at the time of taking of a decision to collaborate», – he added.
The economic forum «Russia - Africa» took place from 23 to 24 October in Sochi within the namesake summit. The event became a strategically important step towards creation of favorable conditions for development of trade and economic relations between the Russian Federation and African countries. Among participants of the summit there were Heads of African governments, representatives of Russian, African and international business and government structures and representatives of integration associations of the African continent.