EGYPT: Egypt's Kabo restructures eyes doubling sales by 2013.

Kabo has been reorganising itself since it was privatised and listed on the stock exchange in 1997, and has further trimmed its labour force and streamlined operations since Chairman Amr El Sharnoubi was appointed in September.

"Over the coming period, we will be focusing on increasing sales, improving efficiency, and cost control," Sharnoubi said.

Kabo, which produces underwear, nightwear and outerwear for men, women and children in the middle-end market, earned revenue of 135 million Egyptian pounds in fiscal 2008/09. The firm focuses mainly on men's products, he said.

"It's expected that the sales closing this year will be 15 percent up from last year," he said. Earnings for fiscal 2009/10, which ended June 30, will be released in August.

Kabo downsized its labour force to 4,600 employees from 5,100 in September 2009. Sharnoubi said wages constitute around 50 percent of the company's costs.

"We're controlling our wages, which is one of the key cost elements," Sharnoubi said.

Kabo is 49 percent owned by Amwal Al Arabia, the textiles arm of Arab Cotton Ginning Co and sister company Egypt Ginning, Sharnoubi said.

Kabo lost 6.9 million Egyptian pounds in the nine months to end-March, the bourse said in May.

RESTRUCTURING, RAISING PRODUCTION CAPACITY

Sharnoubi said he has been restructuring operations since taking up his post, and that a new chief executive officer, John Deprendergast, was appointed in June.

"We are trying to improve the capabilities of middle management and top management to actually achieve what we want," Sharnoubi said.

The Alexandria-based company exports 28 percent of its product. Twenty percent of exports are sold in non-Arab countries, mainly the United Kingdom, Germany and France, under private labels such as Britain's Tesco, he said.

The remaining 8 percent of exports are sold in Arab countries under the company's flagship brand Jil. Kabo has a chain of 40 retail outlets in Egypt under the Jil name, he said.

The firm is operating at 50 percent capacity utilization in its knitting and dyeing segments, but hopes to increase this to 70 percent by the third quarter of 2010. It hopes to raise its garmenting output by 50 percent in the same period.

"We are trying to expand our production range in terms of garments to utilize the idle capacity, and, after doing that, to see how we can subcontract this capacity to others in the market if possible," El Sharnoubi said.

Kabo owns Wave, a local apparel retailer, and has a 44 percent stake in Alexandria Spinning and Weaving (Spinalex). Kabo's shares closed 3.4 percent higher on Tuesday. The main index closed up 1.3 percent.