Building a Procurement Function for a Company Entering the Egyptian Market

Building a Procurement Function for a Company Entering the Egyptian Market
Structure, Key Departments, and Roles
When a company starts operations in Egypt, Procurement is not just a transactional function. It is a strategic pillar that directly impacts cost control, supply continuity, quality, compliance, and scalability.
Establishing a well-structured Procurement function from day one enables organizations to avoid operational chaos, manage risks effectively, and build a sustainable competitive advantage in a dynamic market like Egypt.
Below is a practical framework for building a strong Procurement organization, highlighting its core departments and responsibilities.

1. Procurement Strategy & Governance
   This function sets the foundation for all procurement activities and ensures alignment with corporate objectives.
   Key responsibilities:
   Developing procurement policies, procedures, and approval matrices
   Defining procurement KPIs (Cost Savings, Supplier Performance, Lead Time, Compliance)
   Ensuring governance, transparency, and internal controls
   Aligning procurement strategy with business goals (Cost, Quality, Cash Flow, Risk)
   This role is critical in new organizations to establish discipline and consistency.
2. Strategic Sourcing & Supplier Development
   This department focuses on long-term value creation rather than short-term price reductions.
   Key responsibilities:
   Identifying and qualifying local and international suppliers
   Conducting supplier evaluations and audits
   Negotiating long-term agreements, pricing models, and payment terms
   Developing local suppliers to improve quality, reliability, and competitiveness
   Reducing supply risk and dependency
   In the Egyptian market, supplier capability varies significantly, making this function essential.
3. Operational Procurement (Buying)
   This is the execution arm of the Procurement function.
   Key responsibilities:
   Issuing and managing Purchase Orders (POs)
   Following up on deliveries and lead times
   Coordinating with Planning, Warehousing, and Production teams
   Ensuring compliance with approved contracts and pricing
   Managing urgent and spot purchases
   Operational excellence here ensures continuity of production and services.
4. Foreign Procurement & Import Management
   For companies relying on imported raw materials, machinery, or spare parts, this function is vital.
   Key responsibilities:
   Managing international suppliers and contracts
   Selecting appropriate Incoterms
   Coordinating shipping, customs clearance, and banking activities
   Managing risks related to currency fluctuation, lead time, and regulatory changes
   Calculating and optimizing total landed cost
   Any inefficiency in this area can significantly impact cost and delivery reliability.
5. Contract & Commercial Management
   This function protects the company commercially and legally.
   Key responsibilities:
   Drafting, reviewing, and managing supplier contracts
   Standardizing commercial terms and conditions
   Managing contract renewals and amendments
   Handling commercial disputes and claims
   Ensuring balanced agreements that support long-term supplier partnerships
6. Procurement Analytics & Reporting
   Data-driven procurement is a key differentiator for mature organizations.
   Key responsibilities:
   Spend analysis and cost breakdown
   Tracking cost savings and value creation initiatives
   Monitoring supplier performance KPIs
   Supporting management decisions through accurate reporting and insights
   Leading procurement organizations manage by data, not assumptions.
   Conclusion
   Building an effective Procurement function for a company entering the Egyptian market requires:
   A clear organizational structure
   Well-defined roles and responsibilities
   Strong governance and strategic alignment
   A balance between operational execution and long-term value creation
   A successful Procurement organization does not simply purchase goods and services—it creates value, mitigates risk, and enables sustainable growth.

Bassem Amin
Foreign Procurement Manager | EFCO | OW Group