On October 24, 2019, EFKO signed an agreement with United Oil Processing and Packaging on business development in North Africa and the Middle East at the Russia-Africa Economic forum.
EFKO Group, the largest Russian oil and fat holding, a leading exporter of sunflower oil and United Oil Processing and Packaging, one of the key representatives of the Egyptian oil and fat market, have been cooperating for more than three years. The main areas of joint activity are the export of Russian sunflower oil in bulk and the distribution of specialized fats produced by EFKO.
During the strategic partnership negotiations, the parties decided to create a joint venture with ambitions to build the largest producer of oil and fat products in North Africa. The main objective of the partnership is the development of markets in North Africa, the Middle East and Southern Europe in the product categories – bulk and bottled vegetable oil, as well as in food ingredients – specialized fats.
The agreement between the companies provides for the construction of a new plant for the production of special fats in Egypt, the transfer of innovative technologies by EFKO Group, the creation of an applied research center in Cairo, the expansion of bottled oil production and the launch of the Group of Companies brands in North African markets. Also, the parties plan to build a grain terminal in the Mediterranean for transshipment of 2 million tons of bulk cargo per year.
The investment program of the joint venture will be $ 300 million. Exceptional competencies in fat technology, construction of production assets, branding and construction of management systems by EFKO, as well as in-depth knowledge of the region, leadership in packaged oil and an effective geographical location of assets open up opportunities for companies to build a market leader with an annual revenue of more than 1 billion dollars.
Evgeny Lyashenko, CEO of EFKO Group, noted that the future project with United Oil is rightfully unique.
“The export development strategy, including agricultural products, announced by President Vladimir Putin in May last year, is a natural part of our business model. In 2018, we received $ 475 million in revenue from the export direction. At the end of this year, we expect its growth by 20%. To achieve the goals of a three-fold increase in exports of oil and fat products, we have built and continue to develop port infrastructure in the port of Taman. Besides, EFKO is developing new models of work in distant markets: instead of selling oil or meal on FOB Black Sea, we are looking for opportunities to reach consumers in the markets of the countries importing our products. Partnership with United Oil offers several opportunities in a region with fast-growing numbers and wealth. Firstly, we will become pioneers in the transfer of our innovative technologies in the field of special fats that maximize the use of domestic sunflower oil. Secondly, our brands Altero and Violio will get a chance to become global brands. The first market outside the CIS, where they will be massively launched, is Egypt, with the potential for rapid distribution in the markets of North and East Africa and the Middle East. Thirdly, the participation of the Egyptian side in the project for the construction of a bulk terminal in the Mediterranean allows us to build a sustainable model for the supply of Russian meal, and in the future soybeans, to Egyptian consumers,” – he said.
According to Yehia Zakaria El Shafei, General Director of United Oil Processing and Packaging, cooperation with the Group of Companies will open up new promising areas for development for both sides.
“EFKO” is a dynamically developing company. It is based on innovative technologies, strong brands and a sustainable business model. I want to note that much attention in EFKO is paid to the development of employees and improving their professional level. The main factors in deciding on cooperation for us were, first of all, complementarity at the value level, and secondly, serious business opportunities that our partnership opens up,” – he added.
The Russia-Africa Economic Forum was held from October 23 to 24 in Sochi as part of the summit of the same name. The event was a strategically important step towards creating favorable conditions for the development of trade and economic relations between the Russian Federation and African countries. The summit was attended by the heads of African states, representatives of Russian, African and international business and government agencies, as well as representatives of integration associations of the African continent.