One-on-one with CEO of Fine Hygienic Holding

Arab Finance discussed with James Michael Lafferty, FHH’s CEO, the company’s plans for the coming year

  
A truck drives in front of factory chimneys on the outskirts of Cairo, Egypt October 30, 2018.

A truck drives in front of factory chimneys on the outskirts of Cairo, Egypt October 30, 2018.

REUTERS/Mohamed Abd El Ghany
 

ArabFinance: Fine Hygienic Holding (FHH)’s investments in Egypt exceed EGP 4 billion, with EGP 547.3* million ($35 million) invested during 2020. The company which has penetrated 28 markets worldwide, considers Egypt one of its most dynamic and plans to transform it into an export hub.

Arab Finance discussed with James Michael Lafferty, FHH’s CEO, the company’s plans for the coming year, how the pandemic shifted their consumers’ buying behavior, and his outlook of the fast-moving consumer goods (FMCG) industry.

Could you tell our readers a bit about Fine’s investment portfolio and operations history in Egypt?

Building on the trust earned and the ground-breaking success achieved over the past three decades, FHH’s investments in Egypt exceed EGP 4 billion. Recently, the company pumped $35 million (EGP 547.3* million) investments, diversifying its portfolio of high-quality hygienic products in Egypt. With 4 fully-fledged operating plants, around 1,000 seasoned employees, 350 fleet cars, 35 projected distribution channels, FHH’s production capacity reaches 72,000 tons per year of hygienic paper products, 42,000 tons per annum of hygienic paper tissues and an annual production of 625 million diapers.

How does your presence in Egypt compare to your size in other MENA countries?

Egypt is one of the most dynamic markets in the MENA region where FHH successfully maintains a 33% share of the local market.

Furthermore, we are currently pursuing the transformation of Egypt into an export hub. Our exports have successfully reached 28 countries worldwide, and we are currently working on expanding to a number of African and European countries that have inked trade agreements with Egypt.

According to local press, the pandemic hasn’t impacted your $35M-investment plans for 2020. What were your plans and how did you ensure expansion despite the pandemic?

Thanks to our prodigious crisis management that thoroughly guides us in such challenging circumstances, FHH is maintaining full operational capacity at all its factories across the MENA region, giving due respect to precautionary measures.

Manufacturing highly sought-after hygienic products, FHH operations haven’t been affected by the recent happenings and are properly held to ensure consumers have access to sterilized essentials such as our tissue products, which are protected by our patented SteriProTM technology, and our new Fine Guard line that includes masks and gloves, achieving the highest protection standards.

At the same time, we retained our employees, and we gave bonuses and increased their pay throughout the year, believing in their prominent role to overcome the challenging circumstances.

Furthermore, I am proud to say, last year we doubled the number of female employees working at our business unit in Egypt.

Speaking of the pandemic, how has it impacted your operations? And what changes did you implement?

I am proud to say that we had the ability to foresee things. Through my connections with global virologists, we knew that COVID-19 was going to become a pandemic, and so we innovated and ventured into the manufacturing of masks as well as started to stockpile and plan for what that pandemic would entail; shortage in raw materials and supply chain, closing of international borders, and possible lockdowns.

We were able to navigate the situation very well, but we also had a little bit of luck on our side as we made a strategic decision that pivoted towards wellness before COVID-19. We started sterilizing our tissues as part of our responsibility to provide the best quality for such sensitive products.

What about 2021. What are your growth and investment plans for the year, both for Egypt and for the brand as a whole?

FHH strives hard to vastly expand with its high-quality hygienic products portfolio in Egypt throughout 2021. We are working on increasing our market share and reinforcing our leading position as the rising star of the regional’s FMCG industry.

We have recently launched a new line of nutrition supplements called Motiva, which uses all-natural ingredients and have high bioavailability. Motiva supplements are also clinically tested and endorsed by the Medical Wellness Association in the USA. Furthermore, we will be expanding our wellness portfolio further with the launch of a new healthy beverage that will be sold at first in the USA and through our e-commerce platform The Fine Shop.

Moreover, FHH is considering an Initial Public Offering (IPO) on the London Stock Exchange (LSE) in 2022/2023.

How have Fine consumers’ buying habits shifted since the start of the pandemic?

Since FHH’s core is selling hygiene products, our products were not as economically sensitive as other categories. On the contrary, consumption levels peaked, as the pandemic urged people to increase usage of hygiene products and pay greater attention to their quality. They are no longer considered a commodity, but a necessity and people have become more aware of the need to use sterilized tissues.

In terms of innovation, what is the latest technology Fine is using both in terms of material and process?

In 2015, we established a cross-functional product development team, which helped introduce a number of exciting innovations into the market at lightning speed. Some of our most notable product innovations over the years include: SteriPro, a patented technology and one of our proudest achievements. It allows us to provide our consumers with exceptionally sterile products. SteriPro uses an ultraviolet sterilization process, which kills 99.9% of germs. Furthermore, all of our products are untouched by human hands, adding yet another layer of germ prevention and care.

We also developed our DermaPro technology to improve the safety and comfort of our adult incontinence products. DermaPro products are designed to help consumers avoid skin complications, which is especially important for those confined to bed or have limited mobility. All DermaPro products are pH-balanced, gently lotioned, sterilized using our SteriPro technology, and feature highly effective odor-control agents.

Another product we are proud of is WetPro. As a leader in environmental sustainability, we were the first to introduce this technology in the region. With WetPro, our toilet tissue products are designed to stay intact during use, even when exposed to large amounts of water, but disintegrate when flushed.

Last but not least, our Fine Guard line, which offers long-lasting germ protection by using a patented technology that kills 99.9% of germs. Our masks are anti-viral and re-usable, meaning they can be washed up to 30 times and used for a whole year.

Moreover, FHH’s R&D department focuses not only on adopting new, advanced technologies, but centers around the addition of user-friendly and economical features.

Recently, the company was proud to launch Fine Duetto Kitchen Towels in the Egyptian market, giving consumers the most value for money, while highlighting FHH’s pioneering position in terms of innovation and consumer care. Fine’s one-of-a-kind design optimizes the advantage of wasted space, and rather than an empty carton, Fine Duetto Kitchen Towels come with an additional and free small roller of kitchen towels in the center.

You spoke earlier about concerns regarding disposable masks. Fine has since introduced its reusable mask as a means to protect the environment. Could you elaborate on your opinion regarding the topic?

FHH has consistently invested in R&D to safeguard its customers and their families against infection. As for COVID-19, we did our research to provide the ultimate solution while protecting the environment from the harm caused by disposable masks, which exploit resources and create immense amounts of unrecyclable waste.

Accordingly, we launched the region’s first anti-viral and re-usable masks. Our mask can be washed for 30 times and used for a whole year. This not only preserves the environment but also provides value to the consumer. FHH’s revolutionary Fine Guard face masks gained recognition for their innovative anti-viral technology that kills 99.9% of Coronavirus from world-renowned institutions like The Free University of Berlin, RWTH Aachen University’s Institute of Textile Technology, the University of Arizona along with the Medical Wellness Association.

Fine adopts several CSR initiatives. On a personal level, which is your favorite and why?

I have always appreciated FHH’s CSR initiatives in all fields and I absolutely believe in the prominence of each and everyone to empower community and reinforce development.

FHH considers social responsibility as a way of life. From the very beginning, we recognized the importance of supporting the communities in which we operate via sustainable initiatives. Wherever we operate, you will find us engaging with local communities, addressing important social issues, and working to help those in need. Our strategy is to focus on the grounds related to our industry such as hygiene and wellness. But also, we take part in an initiative that is sustainable and has a social impact.

For years now, we launched unceasing illiteracy programs to empower underprivileged citizens in Upper Egypt, enlightening them on how important it is to be educated. We are also currently finalizing an agreement with a reputable organization in the country to support women and provide them with income-generating opportunities.

What are the main challenges you face in Egypt vs the rest of the region?

The Egyptian government has undertaken considerable efforts to become an investment hub, while constantly ratifying laws to modernize and reduce barriers to how international companies invest and operate in Egypt. However, some of the challenges we face are related to new products’ registration, but we are currently working with the authorities on getting some of our products registered. We have high hopes that it will be finalized soon.

How do you evaluate the potential and limitations of the hygiene market in Egypt vs the region?

Since Egypt’s population is over 100 million; FHH has huge potentials for its products’ consumption. With a retail universe reaching more than 450,000 stores, we continually see that Egypt is one of our most promising markets across the region. Moreover, we are always adjusting our marketing strategies to make our products available to as many consumers as possible to benefit from them.

*At press time $1 = EGP 15.64

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