The new factory will be based near Edita’s existing “E07” plant. It will produce the firm’s existing own-brand and licensed Hostess products, as well as the new Hostess snacks the company recently acquired the rights to manufacture in the Middle East.
Capacity increases
“The roll-out of these new Hostess Brands products will be supported by an agreement we finalised in May to acquire 55,000 square metres of land in Sixth of October’s Polaris Al-Zamil district,” said Hani Berzi, chairman and managing director of Edita.
“At the same time, we have added 32,000 tons of new production capacity in 1H2015 in addition to the existing 2014 capacity of 101,100 tons/annum. The latest addition was a croissant line that came into service in April and that is still in the ramp-up phase,” he added.
Edita bought the rights to produce an expanded range of Hostess products in April, in a US$12m deal. The agreement extends its distribution rights for Twinkies, Hohos and Tiger Tail products across the region, as well as giving it rights to produce new Hostess products.
“This is a platform year for Edita: new contracts, new products and our investment growing production capacity will help us deliver sustainable growth. Key in this respect will be the signing of two contracts with Hostess Brands LLC. One agreement gives us ownership of our core HTT brands in 12 additional countries across the MENA region, while another gives us the know-how and technical assistance to produce a further 11 Hostess brands across the expanded region. Moreover, not all products are cake-based,” said Berzi.
The announcement came as part of Edita’s second quarter financial report, which saw the company’s revenues grow 13% to US$65.7m, but profit flat at US$8.6m. The company said the lack of profit growth was a result of investment in new production lines, a new marketing campaign, and costs from its IPO earlier this year.
Croissants, Rolz and Strudel
Discussing the firm’s new product lines, Berzi said: “Earlier this month, we launched a new and more premium variant to our croissant segment, Molto Mix, a double-filled croissant with two fillings, bringing our total number of SKUs to 71. Our new Bake Rolz and Strudel lines are also scheduled for commissioning by December 2015 and 1Q2016, respectively.
“New brands, new products and new capacity to flexibly respond to market demand for our core products sees us increasingly confident not just in our ability to capitalise not just on improving consumer sentiment in Egypt, but also to capture prospects in high-potential export territories,” he added.