Originally published on Arab Finance

Henkel, one of the world’s mega fast-moving consumer goods (FMCG) brands, plans to grow its Egypt operations to become its main export arm to the African market.

To reach this goal the company has invested EGP 1.6 billion over the past 10 years.

To get a better understanding of the company’s plans for the coming period, Arab Finance sat down with Vice President of Africa and Marketing MEA, and President Henkel Egypt Ahmed Fahmy to discuss the changes in buying trends, the company’s environmentally-focused initiatives, and their overall market outlook.

What is the size of Henkel’s investments in Egypt? Are there any near-future investment plans?

Egypt is one of the key strategic countries for Henkel and we aim to continuously grow our business, catering to the emerging Egyptian market while well-establishing it as an export hub for Africa.

Our investments in the last 10 years exceeded EGP 1.6 billion. Currently, we have two production sites, one for Powder Detergents in Port Said and another for Liquid Detergents in the 6th of October City, both fully-fledged with cutting-edge technology.

Compared to your presence in the MENA region, where do your investments, growth plans, and size in Egypt stand?

We look at Egypt as an export hub, and a country complemented with huge capabilities. Henkel is committed to play a significant role in unlocking Egypt’s potentials by reliably and efficiently thriving with production. In Egypt, our dominating business is laundry and homecare, with powerful existence in the beauty care market.

We can’t compare our presence in Egypt to different countries, as it depends on the type of business in which we are engaged in. Our investments are directed to different streams, investing in production sites, new product innovations, advanced formulas and technologies, and above all investing in our people.

Currently, Henkel Egypt employs close to 700 employees, in addition to more than 3000 indirect employment opportunities generated through our value chain. I believe that Egypt has a unique and huge potential amongst the MENA Region, with the exceptional pool of talents we have.

To give you an example; today and as we speak, we have more than 20 Egyptian calibers working on international assignments in key positions at Henkel in different countries. Personally, I find great pride in that.

How has COVID-19 impacted your near-future investment plans?

Since the beginning of 2020, the world has been in the firm grip of the pandemic, challenging societies, economies, businesses, and every single aspect of life across the globe. Henkel’s highest priority remains the well-being of our employees, customers, and partners. We did and are doing everything we can to ensure their safety and health, while in parallel ensuring the continuity of our businesses.

To efficiently address this unprecedented challenge, Henkel launched a new range of products like GENERAL Disinfectant, Pril Hygiene, and Persil Hygiene with powerful formulas that kill 99.9% of germs to help our consumers competently fight COVID-19.

We have also collaborated with the Egyptian Cure Bank and launched ‘They Protect Us, We Support Them’ campaign to support the Egyptian healthcare providers in their fight against COVID-19. Throughout the campaign, we provided 10,000 families of Egypt’s white army with their needs of Henkel’s personal and household hygienic products in addition to donating medical ventilators to the public hospitals.

Henkel Egypt has never ceased any of its operational practices amid the COVID crisis. On the contrary, our operations proceeded in full capacity and we committed ourselves to supply the Egyptian markets with the hygienic and disinfecting products needed to curb the spread of the virus.

Did you notice any changes in buying trends as a result of the pandemic?

I believe that at some point there was panic-buying, where people wanted to secure their basic needs of food and medicine. With time passing by proving stability in supply, urging demands started to decline. Because of the pandemic, people are now spending generously on personal protection products; like face masks and sanitizers.

We have also witnessed a surge in the demand for detergents. At Henkel, the equation has never reached Quality versus Cost, we have always wanted our products to offer our consumers high-end value and finest quality with a reduced environmental footprint.

Has there been any shifts in your marketing approach?

Generally speaking, Henkel is always keen on understanding the consumers’ needs, fully determined to make their everyday life much easier. Consequently, new innovations and advanced formulas have been introduced in different areas. The choice of proper marketing communication platforms has been something we continuously look to make sure we reach our targeted consumers in the best and most efficient way. With one COVID-19 wave following the other, there was a strong focus on gaining more consumer insights and on digitalization in general.

In your opinion, what will be the difference in FMCG market dynamics in the coming years?

I believe that strong innovations will play a key role. I don’t only mean innovations in terms of formulas but also sizes, packaging, functionality, and sustainability. We are fully committed to offering consumers real added value, improving the quality of their lives by providing strong sustainable brands, products, and services.

For example, our laundry and homecare mission is: Together Creating Clean Living. This sets a solid foundation for our sustainability strategy which has the clear goal of reducing plastic and promoting social progress. Thanks to our partnership with the Plastic Bank, Henkel can now ensure that our offerings are sustainable and have a long-term positive impact on the environment and on society.

Speaking about your partnership with Plastic Bank, can you tell us more about it?

We are keen to foster a circular economy in all countries in which we operate, whether by implementing an ecosystem to collect plastic waste, or by making Henkel product’s packaging recyclable, reusable or compostable.

Henkel is adamant to apply its global sustainability strategy in Egypt; thus, we were the first FMCG company to collaborate with Plastic Bank globally in 2017 and locally in Egypt in 2019. Our goal was to introduce a joint vision to prevent plastic waste from being disposed of in the environment while making a long-term social impact on the local population.

Through our partnership with the Plastic Bank, we will lead a social movement that supports the company’s commitment towards fostering a circular economy and achieving social progress in Egypt. Joining forces with sustainability’s golden triangle—government, private sector, and civil society—we can position Egypt as one of the key players in the plastic waste management and exporting field. Hence, securing foreign currency and providing job opportunities.

The partnership aims to launch a supply chain through establishing a number of plastic waste collection centers across Egypt, the first three of which have been recently inaugurated in Mansheyet Nasser. The ecosystem will enable Henkel and Plastic Bank to initially collect around 3000 tons of plastic waste to reach a collection capacity of 5000 tons in 2023. Moreover, the partnership will create 1000 jobs over a two-year period to directly impact around 4000 Egyptian citizens.

What is Henkel’s CSR and sustainable development Strategy in Egypt?

Henkel has more than 29 years of successful history in Egypt, which is considered a strategic key country for the company. Since our very first days in the Egyptian market back in 1992, Henkel has been committed to operating sustainably while being a responsible corporate citizen that invests in the community where it operates. The company’s commitment has been reflected via various initiatives, focusing on two key pillars: environmental sustainability and social development.

Regarding environmental sustainability, we have recently announced our partnership with the Plastic Bank to introduce their ecosystem for the first time in Egypt. This partnership is considered as one of our continuous efforts to give back to the Egyptian community through protecting the environment, reducing plastic waste making a long-term social impact on the local population.

As for social development, Henkel, on one side, is very committed to empowering women, and to that end, Henkel launched Bedaya program in 2019 to provide vocational training to women and eventually helping them to find jobs or start their own small businesses and generate stable income. On the side, the company has different volunteering programs for our employees through which the company supports different organizations like Helm Foundation that supports people with special needs.

Generally speaking, what are the challenges you face in the Egyptian market? And what would be a suitable solution?

We see Egypt as a country of huge potential. We believe that a lot is yet to be tapped. The government has paid remarkable endeavors in enhancing the business environment, strengthening growth while reducing unemployment.

During the first wave of COVID-19, the world trade movement and the global economy have been affected. However, Egypt was fortunate due to the state’s good crisis management and sound strategies, which helped the local market to recover and revived the economic movement.

How do you project the local market outlook for the next two years?

We strongly believe in the sound strategies and measures undertaken by the Egyptian government and successfully limited the proliferation of the COVID-19 Pandemic. Despite COVID-19 affecting the whole world trade movement; Egypt’s economy will continue its positive growth over the next two years which will help companies operating in the Egyptian market to overcome the consequences of the coronavirus pandemic.

By Nadine Abou el Atta