Egypt Gaining Ground in Organic Peanuts

Awareness of ecologically produced foods has been steadily growing in industrialised countries. The market for organic foods is booming in Germany too. In 2017 it achieved double-digit growth. In the ingredients list it often says: origin in EU/non-EU countries: Germany is dependent on imports for many products. As far as peanuts are concerned, they have mostly come from China. But that could change soon. A producer from Egypt is looking to conquer the German market with organic legumes. With his commitment to the project he is also contributing to the development of new agricultural land in other African states.

Cairo. Mostafa Salem knows peanuts. He was himself a peanut farmer for many years before founding Kernile S.A.E. in 2013. The business produces and processes peanuts from seven African countries and employs 55 people. Since mid-2016 the 30-year-old biotechnologist has been increasing his attempts to get his goods on the European market. But it has proven difficult. “There’s no trust in African products as far as quality and production processes are concerned”, he says.

With the help of the MP he managed last year to close a long term supplier agreement with one of the leading natural food providers in Germany. The German firm will now replace about 50 per cent of the peanuts that used to come from China with nuts from Kernile. As a result, Salem estimates a 20 per cent increase in sales over the previous year with the new deal making up ten per cent of his revenue. His new partners had visited the business before signing the contract and personally inspected the production conditions. “The business was looking for alternative suppliers because the quality of the Chinese goods didn’t always meet their requirements,” reports the Egyptian CEO. Plus, the organic food providers fear bottlenecks in the future because global demand is increasing and the growing middle classes are demanding high-quality, health foods, also in China. To be able to deliver a consistently impeccable level of quality, Salem has recently added new equipment and purchased a metal detection instrument for the processing stage. His partners form Germany helped advise him during the selection process.

“One Hundred Per Cent Organic by 2022”
Half of Kernile’s peanuts still come from conventional agriculture methods, though. Salem would like to change that: “One hundred per cent organic by 2022 – that’s our goal.” Therefore, together with the German firm, he is supporting farmers in Africa in the development of ecological agriculture, for example in Tanzania. Peanuts from Africa have the advantage of growing with two harvests. Depending on the country, there is a first harvest in October and another one in April to July. Competitors from China and the US can only offer a single harvest season. “By making more farmland in Africa fertile and by farming ecologically, we can contribute to guaranteeing global nutrition with foods that are healthy and environmentally friendly”, explains the entrepreneur. At the moment, only a quarter of the agriculturally viable land has been cultivated in Africa, while in other countries, like the US, 85 per cent is already being used for agriculture, reports Salem.

Trade experts realise that the world of organic foods is small. Once you’ve managed to gain a good reputation, the customers will come to you. Especially getting a key customer in Germany is like a seal of quality that will attract new customers. Salem has just signed another contract and delivered samples to six new potential customers. “Every month we get new requests”, he happily notes. The peanut market in Germany is estimated to be worth about auf 200 million euros. The manger plans to achieve a market share of five per cent by 2020. But to do that, Salem also needs to expand his capacities. He is now in negotiations for a new roaster, because the firm can currently only produce 12,000 tonnes per year. With the recently completed plant he would expand his capacities to 35,000 tonnes.