05 December, 2019

Egypt's Obour Land plans production capacity expansion in 2020

Expansion plan includes new production lines, greenfield dairy farm

Obourland handout by the company, added by zawya arabic

Obourland handout by the company, added by zawya arabic

05 December 2019

Egyptian dairy producer Obour Land is planning to increase its annual production capacity to 150,000 tonnes in 2020, the company's vice chairman and CEO told Thomson Reuters Projects.

Established in 1997, Obour Land produces different types of white cheese, UHT packaged milk and juice with a total capacity of 103,000 tonnes a year, according to company fact sheets.

Ashraf Mohamed Hamed said the expansion plan includes a greenfield dairy farm and four new energy-efficient production lines supplied by global food processing and packaging firm Tetra Pak.

During a press conference marking the announcement, he had disclosed that the company had signed an agreement with Catalyst Leasing for a 200 million Egyptian pounds ($12 million) credit facility from the National Bank of Kuwait (NBK) to finance the expansion.

In a separate statement in September, Catalyst had announced that it had signed a 135-million-pound ($8.4 million), five-year leasing contract with Obour Land to provide high-tech machines from Tetra Pak to the dairy company.

Hamed told Thomson Reuters Projects that the 44-acre dairy farm at Belbes in Sharqia Governorate is being developed at an investment of 250 million pounds ($15.5 million), which includes a $7 million loan from the European Bank for Reconstruction and Development (EBRD).

He said the 4,000-head capacity dairy farm would produce of 36,000 tonnes of milk annually and is expected to commence operations in the second quarter of 2020 subject to completion of licensing formalities.

The company is also studying the potential to export its products to African countries, he added.

Meanwhile, company chairman Mohamed Hamed Sherif said in a related press statement that the company has invested in Egypt to date around 600 million pounds ($37 million) over the past four years. The statement also noted that the company had a 42 percent share of the domestic market for white cheese products.

(1 US Dollar = 16.12 Egyptian Pounds)

(Reporting by Eman Hamed; Editing by Anoop Menon)

(anoop.menon@refinitiv.com)

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