Affiliates of the Holding Company for Food Industries (HCFI) made net profits of EGP 523 million in FY 2008/09 compared to some EGP 552 million in FY 2007/08, due to the global financial crisis, said Chairman of the Company, Ahmed Rakaybi.
Mr. Rakaybi added that the company has injected new investments worth EGP 231 million into affiliates during FY 2008/09 for the purpose of development. The investments helped replace old assets in order to maintain the companies' production capacity and improve their operational efficiency.
The investment plan included the completion of existing projects in order increase their capacity. Some projects were expanded, in addition to establishing the Egypt Fund for Finance & Investment Company.
Rakaybi was addressing an HCFI ordinary general assembly meeting, chaired by the Minister of Investment, Dr. Mahmoud Mohieldin, and attended by the Minister of Manpower and Immigration, Mrs. Aisha Abdel Hadi; representatives of the Central Auditing Agency; the HCFI general assembly and board members, as well as senior officials from the Ministry of Investment.
"The Injection of new investments is a basic component of the Asset Management Program, which targets to upgrade assets, increase production capacity and improve operational efficiency," Dr. Mohieldin said.
Companies are expected to achieve significant returns from these investments, which need to be monitored to ensure the achievement of their set goals, he added.
"The decision to appoint an assistant for the affiliates' chairmen for investment affairs reflects the Ministry's interest in providing permanent oversight of the large amount of investments being injected into such affiliates " Dr. Mohieldin said.
"Investments into some companies are sometimes bigger than those required to found new companies or factories," he explained.
Rakaybi presented HCFI efforts to develop the consumption outlets nationwide. Some 332 outlets need to be improved using some EGP 112 million. A total of 176 outlets have been improved since 30th June 2009, at a total cost of EGP 34 million, he noted.
The plan includes the establishment of new outlets in governorates across the country. 112 outlets are needed nationwide: 59 in Lower Egypt and 53 in Upper Egypt.
Rakaybi presented the efforts that have been exerted to settle affiliates' debts within the Ministry's plan to correct companies' financial positions.
Companies' debts to Banque Misr and the National Bank of Egypt (NBE) significantly decreased from EGP 782 million to nearly EGP 41,000 in June of 2009, after the debt-settlement payments began.
Moreover, with regard to labor conditions in affiliate companies, HCFI raised workers' monthly food allowance from EGP 60 to EGP 90 as of the 1st July, 2009.
In FY 2008/09, the gross salaries of 63,718 workers in these affiliates hit EGP 1,163 million; compared to EGP 1,041 million for 65,140 workers in FY2007/2008.
The average annual salary per worker rose to EGP 18,239 in FY 2008/09 from EGP 15,988, during the previous year.
The meeting reviewed HCFI's efforts to enforce the corporate governance principles, which included reshuffling and/or renewing companies' management, giving opportunities for young leaderships, organizing training courses and monitoring the companies' abidance by the rules of disclosure.
Financial indicators of the holding company and its affiliates for FY 2008/09 were also presented.
Revenues of current activity in affiliates reached EGP 13.9 billion in FY 2008/09 compared to EGP 11.4 billion during the previous year.
Affiliates achieved net profits of EGP 523 million in FY 2008/09, down from EGP 552 million in the previous year.
Total investments implemented in affiliates reached EGP 231 million, compared to EGP 241 million in the previous year.
Total exports reached about EGP 385 million, compared to EGP 506 million in the previous year, up by 76 percent.
HCFI made gross revenues of EGP 419 million in FY 2008/09; compared to some EGP 414 million in FY 2007/08.
Its net profit climbed to EGP 169 million in FY 2008/09; up from EGP 120 million a year earlier.