Hostess inks distribution deal in Egypt

by World Grain Staff
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CAIRO, EGYPT — Edita Food Industries SAE, a leader in the Egyptian packaged snack food market, has reached an agreement with Kansas City, Missouri, U.S>-based Hostess Brands LLC to acquire the manufacturing rights of 11 new products and expand distribution.
 
Edita acquired ownership of the Ho Hos, Twinkies and Tiger Tail brands in Egypt, Libya, Jordan and Palestine in April 2013. Under terms of the new deal, Edita’s full ownership of the brands will extend to new markets, including Morocco, Algeria, Tunisia, Syria, Lebanon, Iraq, Bahrain, Oman, the United Arab Emirates, Kuwait, Qatar and Saudi Arabia.
 
Additionally, Edita has acquired the license, know-how and technical assistance from Hostess across current and expansion territories that will allow Edita to manufacture and market 11 other Hostess products. Edita said it will not own the trademarks to the new brands.
 
“Hostess is pleased to have expanded its relationship with a longtime licensee,” said Bill Toler, president of Hostess Brands
 
Founded in 1996, Edita manufactures, markets and distributes a range of branded baked snack products, including packaged cakes, croissants, rusks (baked wheat), and wafers as well as selected confectionery/candy products. The company’s local brand portfolio includes Todo, Molto, Bake Rolz, Bake Stix, Freska and MiMix. The company debuted as a publicly-traded company earlier this month.
 
“Our ability to swiftly capture this opportunity as it became available just weeks after trading commenced underscores not just the strength of our management team, but also our commitment to create new shareholder value through expansion opportunities,” said Hani Berzi, chairman and managing director of Edita. “The extension of our (Ho Hos, Twinkies and Tiger Tail brands) ownership footprint beyond the existing four markets, and the roll out of new Hostess Brands products, will help Edita further consolidate its position as the leader in the packaged snack food market both locally and regionally.
 
“Indeed, this transaction marks a very new and exciting phase in our regional expansion strategy as we look to grow the contribution of MENA sales and operations to our revenues beyond the 6% for which they accounted in 2014. We will do this not just through growing our exports, but by seizing opportunities as they present themselves to establish meaningful direct presences on the ground in key target markets across the region.
 
“Moreover, the acquisition will allow us to introduce new products to our home market that will sustain our strong momentum in the core cakes segment, with domestic production allowing us to seed future export markets in advance of our direct entry.”
 
Edita said it has the No. 1 position in Egypt in the cake and croissant segments and the No. 2 position in rusks. The company had 2014 sales of 1.918 billion Egyptian pounds ($255 million), EBITDA of 463.1 million Egyptian pounds ($60.7 million), and net profit of 265.9 million Egyptian pounds ($34.9 million).
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