Mena food Market / Media Info 2010

Continuous Expansion and Openness: A Market with Endless Opportunities In the Middle East and North Africa, food industry continues its dynamic evolution: in the Gulf cooperative council, governments are taking proper measures to increase food security and companies are expanding both locally and regionally. In the Levant, despite the drought, agriculture is keeping its expanding rhythm. In northern Africa, Egyptian food business is fizzing while Tunisia and Algeria continue their opening up to foreign investments.
Business expansion continues in the gulf
	In Saudi Arabia, Savola Group lately announced its ambition to increase its world market share in cooking oil from 2% to 10%, and double its global sugar refining production capacity to 4 million tons over the next five years; it also earmarked at least US$ 100 million for the purchase of stakes in existing agribusiness firms to secure sugar and edible oil supplies.Al Rabie also launched an expansion program to build up its local and export markets through investments aimed at enhancing distribution networks.
Almaral, which is the Gulf’s largest dairy firm by market value recorded a 42.3% rise in second-quarter net profit thanks to continued sales growth and reached two acquisition agreements, with Egyptian dairy and juice manufacturer Beeaty and with Jordanian drinks firm Taibah’s Investment and Advanced Food Company. The United Arab Emirates is the second largest market for food products in the Gulf Cooperation Council, after Saudi Arabia and has a US$ 5.52 billion worth food services market. Efficient infrastructure, large free trade zones and a strong business orientation help provide the tools to make Dubai an important commercial center for the Middle East and beyond. In order to deal with the recent food prices hike, the government announced that it is considering building a strategic food reserve as a means of controlling supplies and curbing inflation, then two of the UAE’s leading MGR operators, Emke Group and Carrefour, agreed to price caps with the government. Kuwait is expected to have the third largest supply of retail space in the Gulf, and reach a growth of 10% by the year 2010. The average retail space per person in Kuwait is expected to rise to 0.32 meters, compared to an average of 0.66 meters for the GCC as a whole according Colliers International.
Future looks good despite recent drought
	In Lebanon, Danish company Arla’s sales at its Lebanese joint venture Arla Kalassi Foods have got off to a good start in 2007, following a difficult first year and is now planning to further increase its sales and launched new products, including a low-fat variety of Puck processed cheese. Syria’s construction of extensive irrigation systems in the north and the northeast in recent years as part of a plan to increase irrigated farmland by 38% over the next decade has enabled it to become aprominent
exporter of foods such as vegetables, cotton and fruits. But the country is experiencing the worst drought in the past 18 years and the United States Department of Agriculture estimated a 50% fall down in 2009 in the Syrian wheat production from last year; in other words, expecting the total wheat production to reach 2 million tons only during 2009.

Northern Africa opens up to foreign influence
Food processing is key contributor to output in Egypt, representing 50% of total manufactured output and registering 20% in annual growth. Flour milling, sugar milling, dairies, vegetable and meat processing, edible oils, biscuits, confectionary, pasta, and snack production are the major processed food industries. Local dairy producer Juhayna Food Industries has announced its plans to establish two new subsidiaries that will have a combined capital of US$ 84 million. The first will specialize in marketing and distribution and will have a capital of US$ 37.3 million, while the second will specialize in agricultural development.
American company Kraft Foods has been expanding its reach in the Egyptian market, following its acquisition of Danone Group’s biscuit and snack division in a deal worth US$ 7 million. Kraft has been present in the Egyptian market for a number of years and has a strong foothold in the country’s snack foods division, while Danone entered the Egyptian market in 2002 when it established Danone Mashreq Fine Biscuits as a joint venture with the Rachid Group in Alexandria. According to the Annual Algerian Dairy and Products Report 2008, the Algerian dairy products imported from Europe (France, Poland, Germany and Netherlands) reached 56% in the first eight months of 2008, whereas, 44 percent of them originated from countries such as New Zealand, Argentina, the United States and Ukraine. Algeria is the largest dairy consumer in the Maghreb with 110 liters per capita for milk and 6 kilograms per capita per year for other dairy products. According to Euromonitor International’s Packaged food in Tunisia, several factors such as improving product quality, sophistication of the Tunisian consumer, more television advertising and improving economic stability contributed strongly to growth in 2008. Confectionery, frozen processed food and sauces, dressings and condiments were the fastest growing packaged food sector in terms of total volume sales. It is estimated that over 85% of the market is controlled by domestic players which have established themselves well over the past 20 years.
Sources
Euromonitor International Business Monitor International USDA Reuters FAO Middle East Food (MEF) magazine is your ticket to the lucrative MENA Food market Contact us at info@mefmag.com for more information