Factor proportions in ensuring the economic resilience of the Egyptian sugar industry

Abstract

The sugar industry plays an important role in ensuring the economic and food security of Egypt. However, when elaborating plans for its development, it is not taken into account that the decisions made may affect the factor proportions that link the resource potential and production capabilities of the system, and lead to a violation of resilience. As part of our study, we consider the issues of providing resilience to the sugar industry, which enables us to focus on its ability to ensure the continuity of reproduction processes on a constant or increasing scale in the face of changing environmental factors. This article aims at presenting a toolkit for measuring how a change in factorial proportions in the sugar industry will affect the level of its economic resilience. The study proposes the use of a parametric relative break-even model to calculate break-even production conditions. In this paper, we considered factorial proportions between the three main parameters (price, cost, sales volume) that determine the relative break-even of production. We identified factors, which carry both risks and opportunities for the Resilience of the Egyptian sugar industry: changing world demand for sugar; world sugar prices adjustments; etc. The results show that the put-forward model enables to anticipate the after-effect of managerial decisions at the stage of elaborating plans for the development of the sugar producing industry in terms of their impact on resilience in altering market conjuncture.