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Crello

Halawa
TABLE OF CONTENTS

1. COMPANY HISTORY / PROFILE
2. PREMINARY FINDINGS AND
OBSERVATIONS
2.1. Marketing
2.2. Production
2.3. Finance & Accounting
2.4. Management Organisation
and Human Resources
2.5. Quality System
3. SWOT ANALYSIS
4. RECOMMENDED ACTIONS
:UMU Team & company visit date
.9th of December, 2004
Mr. Mohamed E Al Bakry
:Company Representative
Mr. Wagih Karam
Chairman
Mr. Mina Karam
Vice Chairman
Pre-assessment & Validation Report prepared by
Mr. Mohamed E Al Bakry
On:11th. of December, 2004
CRELLO HISTORY / PROFILE
The company is located in the
populated district of Agamy –
Alexandria. Crello halawa is not
very far from main Agamy traffic
police headquarters. It is a few
walking yards from the main
street linking Alexandria sea port
to northern international high way
to North Africa .
The company is managed by the owners themselves
Mr. Wagih Karam and his son in law Mr. Mina
Karam.
This is a typical small family business where
decisions are made by the president or the head of
the family and implemented by executives and
assistants. The company is specialized in
producing and marketing Halawa sweets with
different flavours and tastes for the local market.
This is a food sector industry where the company has
to meet regulations of food safety from various
inspection governmental bodies.
Crello is producing high quality products
based on innovations and change of
packages. Ingredients like sugar,
sesame oil, glucose and flavours enter
into the production process.
The owners are aware of quality
procedures and hygienic standards.
Corrections take place from time to time if
problems happen to arise incidentally.
The production is manual and semi automatic in its final packing
stages.

There are 30 workers (mostly males) and 4 administrators who
man power Crello. There is hardly any division between sales
and marketing functions. There is hardly any division between
the main duties of accounts, human resources, and
administration.
The owners share supervision among the over all group. The
visitor may witness the owner receiving calls from inspection
bodies of several ministerial levels representing health, safety,
standardization, industry registration, home supplies as well as
many others. The owners are not assigning public relation
officers or legal department personal to attend to these
inspection visits.
Crello existing markets are Alexandria and
neighbouring states. There have been
few attempts and few deals took place
to export to Italy, however; these were
halted due to absence of continuous
direct follow ups.
It seems also that owners were influenced
by the power of middlemen who
orchestrated such deals and felt to
squeeze further on margins. Such a
thing Crello could not attain.
Mr. Mina Karam, a young enthusiastic
businessman is keen to develop
exports to hypermarkets and
supermarket European chains.
In doing so, he surfs the internet
occasionally looking for prospective
buyers and associate business
houses who might be interested to
push his product in the EU.
Crello turnover nearly doubled since
inception in 1992. Overall increase
(taking 1992 as base point till date)
is nearly 175%.

The strategic objectives of Crello are
to preserve leadership status of its
brands in the local market and push
production & sales simultaneously
from 3-5 tons per day to 10 tones
per day in 3 years time.
Crello is suffering for illegal
competition. There seems to be
unfair price war and dilemma in
the halawa sweets markets.
These irregularities are a by
product of unhealthy work tax
and legal environments that
restrain SME s in Egypt.
Crello conduct casual market day to
day research based on information
gathering and interaction with
dealers.

Crello maintains strong dealer net work
in Alexandria and neighbouring
states. However; there are still gaps
not covered in Cairo, Upper Egypt
and remote areas.

Crello wishes to expand operations to
GCC and North Africa as well. The
company maintains a web page with
SFD / SEDO. The company also
participates in exhibitions under the
sponsorship of SFD.
Crello received favourable feedback
from local exhibitions. The company
is concerned to parallel its production
expansion with sales. The company
pegs its production quality program
also with sustained increase in
demand. The company is taking
major steps to implement HACCP
and ISO 9001/2000.

The company is fully geared to
certify HACCP on all items in
order to receive recognition from
government and clients abroad.
Competition to Crello means not only
small producers but also big ones like
Al Rasheedy, Al Nakleeteen, Halwani,
Al Mizan and others.
Competition takes place always on price
neck cutting. Crello with its smart and
conservative policy never be dragged
to price wars or challenges that may
destroy or exhaust its working capital.
The comparative advantage of Crello is
the flavour and taste. Continuous
innovations take place on blends.
Crello market share is almost 15-20 % in its
territories. Advertising is conservative where
there are no TV commercials. Posters are
preferred and direct contacts with shops and
super markets take place.
There is room to employ 4 sales executives cum
drivers. Crello maintains its own vehicles for
distributions. Crello keeps special clients for
direct follow up like special hypermarkets
Fatteh Allah, Zahran, Metro, City Centre and
others.
Pricing is traditionally done here with systematic build up of
direct and indirect expenses plus opportunity costs. Risks
are also added.
Reasonable margins are built here in the pricing formula thus
getting the best possible price in line with other marketers.

Costing is vertically shaped where all cost elements fixed or
variable are accounted for.
Break even analysis is protective. GAAP is followed.
No credit is given to dealers nor enjoyed from
suppliers. Credit may be very minimum and
with certain limits in few cases.

Bankers are friendly with Crello and no major
loans are reported. LE 100,000.00 is invited
from SEDO / SFD to refresh working capital.
There is a conservative credit policy that is based
on DVP cash versus payment on all Crello
transactions.
The company administration and the factory
facilities are located together in 1st and
2nd consecutive floors of residential
building.
There seems to be hardly any complains
from the environmentalists or / and the
residents of neighbouring apartments.
The labour turnover is considered low
to average 3-5 years. Some workers
feel confident staying over 10 years.
Average salaries LE 400 per month
for one shift. Two shifts are
implemented 8:00 AM -3:00 PM /
5:00- 9:00 PM.
workers get their training from the
chairman him self. In case the
employee wishes to leave, the
member of the organization gets
certificate of experience and letter of
good conduct.
There is also room for employing 3 labours in the
packaging section.

The production manager and the chairman noted
they may invite “ Mubarak – Cole “ program
students to receive training and work in various
departments of the factory.

“ Mubarak Cole “ program students will get the
proper exposure and skill at very young age.
SWOT ANALYSIS
Strengths
• Product Quality.

•Effective Decisions.
Weaknesses
•Market Irregularities.
•Price Competitions.
•Multiple Inspections from Governmental Bodies.
Opportunities
Open markets and easy export regulations with Europe.

Threats
Inability to grow under disturbed work environment.

Inability to meet market demands.
RECOMMENDED ACTIONS

1. Urgent trouble shooting project
– HACCP Certification
– TQM Orientation
– ISO 9001/ 2000 Certification
2. Strategic development project
– Review Market Strategy
– Review growth opportunities

3. Side development project
– Review expansion plans and new location
– HR development
– IT developments
– Corporate finance schemes catering for expansions