Interviews – Daily News Egypt Egypt’s Only Daily Independent Newspaper In English Sun, 23 Jun 2019 21:51:31 +0000 en-US hourly 1 South Korea seeks more opportunities in Egypt’s major transportation projects Mon, 17 Jun 2019 19:42:24 +0000 Egypt emerges as important destination, partner in Africa, says ambassador

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South Korea is seeking more opportunities in Egypt’s major transportation projects to contribute to the improvement of the living conditions of the Egyptian people, South Korean ambassador to Egypt, Yeocheol Yoon, said.

“We have actively engaged with Egypt to develop the urban transportation infrastructure, including the Cairo Metro and railways,” the ambassador affirmed, adding that Korea has shared its expertise with Egyptian counterparts on the application of the automated fare collection system for the public transportation system in Cairo and Alexandria.

The visit by the Deputy Minister for Economic Affairs of South Korea’s Ministry of Foreign Affairs (MoFA), Yun Kang Hyeon, that lasts from 18 to 21 June, will help improve the understanding of the Korean government and businesses on the potential of Egypt’s economy and its strategic importance, the ambassador added.

Daily News Egypt interviewed Yoon on the occasion of the deputy minister Yun’s visit to shed light on the diversified aspects of cooperation with South Korea with special focus on the business areas, the transcript for which is below, lightly edited for clarity:


Initially, what do you think of the recent economic reforms in Egypt?

The economic reforms adopted by President Abdel Fattah Al-Sisi are showing signs of success. There is a noticeable improvement in the country’s economic indicators, supported by higher GDP growth rates, increased investments and exports, and a pickup in tourism. The deficits are under control and unemployment rates are coming down. The inflation of May surged, but the core inflation rate went down, and I think the government can manage it.

The reform is not an easy path, but rather full of challenges, however Egypt is moving on the right track for development. International organisations and financial institutions are in tune to recognise Egypt as one of the world’s fastest growing economies.

The Korean government and businesses are following these developments with great interest and admiration, which I believe was not possible without a strong leadership as well as the great support of the Egyptian people.


How do you assess Egypt’s investment climate, and what are your recommendations to attract more foreign direct investments (FDIs)?

The investment climate in Egypt has significantly improved over the past few years, which is reflected in upgrading Egypt’s credit rating and more investment inflows.

The Egyptian government has been exerting its utmost effort to overhaul the business practice and address investors’ difficulties. Yet, there are areas that can be further improved for more FDIs to come into Egypt, most notably facilitating issuance of work permits and visas for foreign business people, streamlining customs procedures and clearance processes, enabling access to information, and updates on legal and regulatory changes.

In this context, Korean companies, namely Samsung SDS and LG CNS, have expressed willingness to take part in the projects which aim to improve the efficiency of tax systems and customs process.


What is the significance of Beni Suef governorate to the Koreans?

If Egypt is a gateway to Africa, as often described, we see Beni Suef as a cradle of skilled technicians in the country. Located in the Upper Egypt, Beni Suef used to be one of the most underdeveloped governorates in the country. However, now it is becoming an emerging manufacturing hub of Egypt through strategic cooperation with Korea.

In line with the Egyptian government’s plan to stimulate industrial growth in the Upper Egypt, two major Korean companies, Samsung Electronics and Ulhwa Textiles, built factories in Beni Suef in 2013 and 2017, respectively.

Samsung Electronics exports electronic products “Made in Egypt” to 36 countries in the Middle East, Africa, and Europe, including Saudi Arabia, the UAE, Mali, Ivory Coast, and Russia. Ulhwa also exports its production to the Middle East. The operation of these factories contributes to providing thousands of job opportunities in the region.

To facilitate the operation of the two major companies and the industrial development of the region, the Korea International Cooperation Agency (KOICA) is establishing the Korean-Egyptian Technological College in Beni Suef. Once established, the college will contribute to creating the base of more qualified labour forces equipped with the right skills and expertise.

We hope our Beni Suef project will be a successful model of bilateral cooperation which can be replicated and spread across the country.


Can you elaborate on the Korean-Egyptian Technological College?

During President Al-Sisi’s visit to South Korea in 2016, the two countries agreed to establish the Korean-Egyptian Technological College in Beni Suef. Since then, the Korean government, through the KOICA, has provided $5.83m for the establishment of the college.

As the college is scheduled to open in September this year, the KOICA is looking ahead in preparation for the opening. The KOICA will be responsible for developing curriculums for two faculties (Mechatronics and ICT), delivering equipment for college operations, and providing training for teachers. Student recruitment, also, will be started soon, following the discussions between the KOICA and the ministry of higher education and scientific research.

As a mismatch between education and skills needed in the labour market has been one of the critical challenges in Egypt, the college aims to support higher vocational education and strengthen linkages between education and industrial needs. In that regard, Samsung Electronics in Beni Suef is an excellent partner to achieve this goal. The KOICA and Samsung Electronics in Beni Suef have recently shared common understanding on the project and will continue the discussion on the possible opportunities for creating connection between vocational training systems and employment of the graduates from the college.


What is the size of Korean investments in the Egyptian market?

Korean investments in Egypt show an upward trend, reaching around $570m in 2018, mostly in the areas of electronics, textiles, and petrochemical industries. We have around 40 Korean companies operating in Egypt, and this number is expected to increase in view of Egypt’s great potential and its improved investment climate.

Korea as well is adopting a new investment approach by reaching out to new markets, beyond the US, Japan, China, and the East Asia region. In that sense, Egypt emerges as an important destination and partner in the African region and we are encouraging Korean companies to come and expand their businesses here.

We have several success stories. Last year, for instance, two Korean companies produced and exported ‘Made in Egypt’ products of around $700m.

This fact has been highlighted in South Korea, encouraging other Korean companies to come to Egypt. That’s why I always ask for the support of our friends in the Egyptian government for the Korean companies here, as their smooth businesses in Egypt, in turn, strongly influence investment decisions of other Korean companies.


What was the size of Egypt-Korea trade exchange in 2018?

The trade exchange between South Korea and Egypt reached $2.2bn last year. Exports from Egypt to Korea surged almost 250%, while Korean exports to Egypt increased merely by 39.4%. There was a big increase of gas exports to Korea. The Zohr exploration and production comes into effect in our trade as well.

There is one item to which we need to pay attention. More than $30m worth of bagasse were exported last year to Korea.

Bagasse is the residue that remains after sugarcane stalks are crushed to extract their juice. South Korea makes animal food from it. It is a win-win trade.

Korea’s exports to Egypt have a wide variety of goods and materials from cars, electronics, and chemicals. A big portion of our exports are used by Korean factories to add value to them in Egypt and export to the region. Korean electronics companies such as Samsung and LG exported more than $700m in 2018. This takes more than 90% of Egypt’s exports in electronics and home appliances.


What about the Egypt-Korea trade exchange in the first quarter (Q1) of 2019?

Our trade exchange with Egypt in Q1 of this year has been sluggish. It is mainly due to the global trade slowdown. Notably, there is a decrease of our exports to Egypt in cars. It is viewed that the Egypt-EU free trade agreement (FTA) affected our exports of cars. This is a clear case of negative impact of trade diversion from the FTA because the Egyptian people cannot buy Korean cars of good quality and competitive price. The tariffs difference between Korean cars and those of the EU’s – 135% vs 0% – is a significant block which needs to be addressed as soon as possible to give a level playing field to Korean companies.


Can you please elaborate on Korea’s cooperation with Egypt in the field of transportation?

Korea has been actively engaged with Egypt to develop urban transportation infrastructure, including the Cairo Metro and railways, as we believe development of the transportation sector is highly linked with the safety and convenience of the citizens of Egypt.

Starting from Korea’s supply of 20 air-conditioned trains to the Metro Line 1 in 2012, which was worth around $350m, Korea took on the project for the modernisation of the railway signalling system on Nag Hamady and Luxor corridor in Egypt in 2016. In 2018, the Korean government decided to financially support the supply of an additional 32 trains for Metro Line 3 as well.

We have also extended our cooperation to capacity building and knowledge sharing in the field. From 2016 to 2018, the KOICA has offered training programmes to 90 Egyptian officials on railway and metro management. And from 2017 to 2018, Korea has shared its expertise with Egyptian counterparts on the application of automated fare collection systems for the public transportation system in Cairo and Alexandria.


What is the Korean company that implements the oil refinement project in Egypt?

GS Engineering and Construction, a Korean company specialised in construction with high engineering, has been undertaking the Egyptian Refinery Company (ERC) project, one of the largest construction projects in Egypt.

Through the ERC project, for the first time, Egypt will have locally produced diesel meeting international standards. It will produce approximately 4.2m tonnes of transportation fuel per year including 2.3m tonnes of diesel and 0.6m tonnes of jet fuel.

Accordingly, Egypt’s dependency upon imported petroleum products will be reduced dramatically. The Egyptian government will also benefit from this over EGP 1bn each year by reduced transportation and insurance costs, eliminated product shipment losses, and generated revenues through storage and processing fees.

Moreover, the project has provided over 11,000 jobs during the construction phase. Even after construction, more than 700 permanent positions will be created over its 25 years of operations.

From the environmental perspective, this project will reduce the amount of sulphur dioxide (SO2) released into the air by 186,000 tonnes/year, lowering the overall amount in Egypt by 29%.


What about the business missions between Korea and Egypt in 2019?

The February business mission from Egypt to Korea was very successful. With two ministers, one from finance, Mohamed Moeit, and Sahar Nasr from investment and international cooperation, in addition to Mohab Mamish, chairperson of the Suez Canal Economic Zone (SC Zone), they successfully attracted the attention of Korean business people to the Egyptian market.

From our side, the Korean Chamber of Commerce and Industry is preparing a business mission. But they would like to create a business council first which can work as a counterpart of the Egypt-Korea Business Council currently chaired by Khaled Nosseir, chairperson of Alkan Holding.

In this regard, the visit by Yun Kang Hyeon, will improve the understanding of the Korean government and businesses on the potential of Egypt’s economy and its strategic importance as well.


What are the latest Korean tourist arrival figures?

More than 20,000 Korean tourists visited Egypt in 2018, compared to only 15,600 in 2017, which is a big leap. Among many tourist attractions, Koreans, so far, love to visit Cairo, mainly for the Pyramids, the Sphinx, and Luxor/Aswan, the home of intact ancient Egyptian temples. Recently, Red Sea diving spots are gaining more attention in Korea, prompting many young Koreans to visit Egypt.

In response to the recent tourist boom, I have noticed that Korean Air is planning to operate 13 more charter flights to Egypt from September to February in 2019/20.

The Egyptian government’s continuous efforts to enhance stability and eliminate terrorism will encourage more Koreans to visit the country and, hopefully, the resumption of regular direct flights between the two countries by the near future.

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Masary targets doubling POS to reach 150,000 POS end 2020, has 30% market share: Chairperson, CEO Mon, 17 Jun 2019 11:28:42 +0000 FinTech forefront of financial inclusion in Egypt, we aim to process 2m transaction daily end 2019, says Nagy

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In Egypt, cash is king, when it comes to different financial transaction. Out of the 100 million population, the World Bank estimates that just 10-15% have a bank account, which is considered to be one of the lowest global penetration rates. Over the past few years, financial inclusion has been brought to the forefront in Egypt as a means for financial sector growth. Along with the increasing need for innovation and the shift toward digitisation, plenty of FinTech startups have emerged in the country.

According to the International Monetary Fund (IMF) Egypt has tremendous potential to expand in FinTech due to its large economy and mature banking industry. One of the most notable Egyptian FinTech startups is Masary, a provider of e-payments through more than 70,000 locations.

According to the Chairperson and CEO of Masary, Mohamed Nagy, the company has completed the first transaction in 2009, and Masary currently processes 1.5m transactions daily.

As per the Arab Youth Survey 2019, just 35% of youth in north Africa prefer to pay via credit card online. But with the high mobile penetration rates, more and more start-ups are relying on mobile phone payments to make the user’s experience easier and financial services more accessible.

Daily News Egypt interviewed the Chairperson and CEO of Masary, Mohamed Nagy, to find out how would Seamless bring the financial inclusion target a step closer, and the company’s latest updates, the transcript for which is below, lightly edited for clarity:



As a company, what do you plan to achieve from your participation in Seamless North Africa 2019?


The Seamless conference is considered to be the premier forum and conference when it comes to bringing together the brightest minds from across payments, FinTech and banking. Almost a year ago in 2018 the first edition of Seamless North Africa came to the first time in Egypt, under the under the patronage of the Central Bank of Egypt (CBE).


2018’s edition had a spectacular engagement, and participation of all industry leaders. As a company, we strive to support, and play an active role in the development of the e-payment sector in Egypt, that’s why we decided to participate in the conference, to have a discussion with industry experts from across the globe, as well as banking experts.


We have been operating for almost 10 years in the Egyptian market. Masary managed to become the country’s second largest player in e-payments.


How do you evaluate the e-payments sector in Egypt, and how can we achieve high penetration rates?


The e-payments sector is unique in every country, although it started in developing nations, where economic development is dependent on financial transactions, technological advancement in the last few decades allowed the facilitation of such transactions.


In Egypt’s case, although we are a developing country, but our case is different, as we have a strong banking sector.  Unlike other countries our e-payments development was not chaotic, it was regulated in a very well-mannered fashion as the Central Bank of Egypt (CBE) has learned from other countries’ experiences, to avoid any set-backs.


You can say that this allowed Egypt to start where the others ended.


I believe that the turning point for the industry in Egypt was the 2017’s Sharm El-Sheikh Accord on Financial Inclusion, under the auspices of the President Abdel Fattah Al-Sisi and the CBE, which tackled the need to raise awareness and advocate for financial inclusion policies and regulatory approaches, and implementing financial inclusion policy solutions that have positive outcomes.


Since that day the authorities’ political will to support digitalisation and e-payment increased and 2018 witnessed a remarkable development in the fields of electronic payment and the transition to a cashless society. The Egyptian market is highly competitive according to professional standards, encouraging many companies operating in the market to improve their services and focus. Masary has an ambitious vision aimed at the expansion of the Egyptian market, aiming to boost financial inclusion.


Where does Masary currently stand, and what are the company’s future expansion plans?


In 2019 more than 20 million people benefited monthly, and currently we have more than 70,000 outlets across the country, including 5,000 points of sale (POS) supporting prepaid electricity cards.

Also we aim to that all our POS to be compatible with the ‘Meeza’ card, and we are currently studying  partnering with more than one bank to activate this feature as a means of payment.
Our company’s share reached 30% of the Egyptian payment market. Also we aim to increase the number of services provided by the company. Presently, more than 1.5m transaction go through Masary on a daily basis, and we aim to bring that number up to 2m by the end of 2019.
Regarding the POS, we target to more than double our POS to reach 150,000 POS by the end of 2020.

We currently provide 120 services through Total services 120, up from a Total services 90 across Egypt in 2018, as we put customer satisfaction and service and achieving financial inclusion as our priority.


As a company we provide an efficient solution to everyone, companies, merchants, and consumers. Everyone is benefiting from the system and it is cheaper for them to use that service.


Collaboration with e-finance for the government related payments, boosted the company’s growth rates and contributed to a growing customer base.


How does the company target the micro finance and micro insurance segment?


We collaborated with various micro-financing institutions who provide credit for micro-enterprises, to allow their beneficiaries to pay their loan instalments through our company’s outlets, to ease the process,  enhance payment channels, and that’s what would play a role in enhancing inclusion.


The company believes in the role that financial achievement can play in driving economic development, as well as the role that Masary can play as a purely Egyptian company in supporting the country’s direction in this field.
Ease of use, feasibility, low services charge, and accessibility, are the most important factors of the success of the system of financial inclusion.


Any plans to collaborate with telecom companies, and banks for mobile wallet services?


The company seeks to expand the base of cooperation with the Egyptian banks in several areas, for example adding credit and withdrawals from the personal cash portfolios and transferring funds via mobile phone, which received all the support from the CBE and other services aimed at supporting the government’s direction. Also, spreading awareness and financial integration among citizens by providing services in a simple, safe and cost-effective manner.

New services provided by the company are in support of the expansion of government services to citizens in cooperation with e-finance, while continuing to work with private sector companies to support them in the service of our customers and to simplify and accelerate the collection process.
Masary also cooperates with banking and non-bank financial institutions to provide services to the largest base of citizens dealing with these institutions.

Masary Electronic Payment Solutions is holding semi-final talks with the three entities: Vodafone, Orange, and Etisalat mobile operators to provide cash in & out services through their nationwide outlets.


Does the company target the B2B segment?


It is not our main focus, but we are definitely working on it, but our main goal is to make a difference in e-payment in the society, which is more concerned with b2c.

Allowing users to pay for utilities, buy merchandise, pay for tuition etc with ease, would help economic growth.


B2b market has great demand, we are definitely working on it but it’s not our main goal.


We plan to include further utilities and government services, and of course electronic payments, such as the ‘Meeza’ card, through our collaboration with e-finance.

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Fawry considers entering field of IPO payment in EGX offerings through company’s outlets next year Mon, 17 Jun 2019 11:24:58 +0000 We have achieved great success in funding traders who previously contracted with Fawry, we plan to expand this: Okasha

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Managing Director of Fawry Payment Services, Mohammed Okasha, has reviewed the company’s expansions in the coming period. He also presented his vision of the future of the non-monetary services sector and the digital transformation, in addition to opportunities this transformation offers the company. Daily News Egypt interviewed Okasha to find out more, the transcript for which is below, lightly edited for clarity:

How do you see the future of ePay services as the country moves toward digital transformation and obliges companies in non-banking financial sectors to use non-cash payment methods in their financial transactions?
The future is still great for the growth of electronic payment services, especially with the implementation of the state strategy for digital transformation and obliging companies operating in non-bank financial activities to use non-cash payment methods, which would add a wide range of different financial sectors to transform toward non-cash transactions through companies providing these services, such as Fawry. It is expected to attract a segment of mortgage finance, financial leasing companies, factoring companies, microfinance companies, and any non-banking financial body.

What are the new sectors that the company intends to enter into during the coming period?
The company intends to enter the field of Egyptian Exchange (EGX) during the coming year by providing the possibility of paying initial public offerings (IPOs) through Fawry outlets. However the current market conditions, the low volumes of trading and the reluctance of companies to register at the EGX makes Fawry wait for trading and offerings to recover next year to launch the service.
The company is also investing heavily in the technological infrastructure that enables it to maintain in its competitive position, and it is also betting on many services such as mobile payment services, which are expected to develop well in the coming period.

What new services are prepared by Fawry for immediate release?
The new services that the company intends to offer in early August is to make the status of orders of goods available through Fawry, making the registration of orders electronically through the company “Fawry FMCG” for sale, easy. Three months ago, the company started being active. The company has also contracted with P&G and Unilver to carry out experiments on the new service.
Fawry FMCG allows e-payment for merchants to purchase consumer goods, as well as lending traders who deal with Fawry. These loans should be used for electronic payments to pay for consumer products purchased by merchants such as Chipsy, Coca Cola, Juhayna, and other companies. This came after we recently obtained the microfinance license from the FRA, to be used for the purpose of paying the value of traders’ purchases electronically rather than lending. The balance of financing remains in the trader’s account for use in e-payment operations.
We have achieved great success in a very small time in terms of financing small traders and the company is seeing a high demand on these facilities, which the company intends to expand and provide to all traders who contracted with the company.
We are always looking for everything that offers an added value and new opportunities in related fields, which requires investing in companies that provide excellent solutions for the complementary services of Fawry. The company has made several successful investments such as investing in companies like “Waffarha” , “Tazkara” and “Bosta”, in parallel with government services that the company succeeded in attracting and increasing over the coming period.

What is the target volume for traders who contract with Fawry by the end of 2019?
Fawry targets 125,000 traders (with active transactions) by the end of this year compared to 104,000 contractors currently with the company. There would also be regional expansions in the UAE, Saudi Arabia, and Kuwait, which would increase the volume of Fawry’s contracts, which would specifically be clear next year with the implementation of a strategy to oblige companies in the financial non-banking sector to use non-cash methods in their transactions.

What are the most prominent concerns that may hinder the growth of the e-services sector?
I see that the most important challenges that must be addressed to reach the digital transformation and deepen the electronic payment market is dealing with the reluctance of many important government agencies to deal with electronic payment services. These bodies include the Tax Authority and the Land Registry Authority, in addition to many other bodies. There is a strong need for changing the work culture of these entities in addition to raising awareness on the importance of these services in the development of the governmental work system.

What is the volume of Fawry’s business and its most prominent clients?
The volume of the company’s transactions increased by three time during the past period especially as Fawry dealt with many ministries and government sectors, as well as the private sector, which was faster and easier in terms its response to electronic payment services, unlike the government, which hesitated to enter the field, but with the establishment of the National Payments Council, the entry of the government sector into e-payment services happened at a much faster pace.
Currently, Fawry deals with almost all ministries, such as the ministry of culture, in the booking of opera tickets, the ministry of interior in the process of paying fines, and the ministry of housing in paying instalments of housing units, in addition to the ministry of justice and the ministry of electricity.
Fawry is also the only company in Egypt that is connected with all the banks through electronic payment and is the only company to provide the mobile wallet service of banks, as well as making payments using cards in Fawry machines that are available in the market.

What are the latest developments in the company’s IPO plan?
Currently, there are comparisons between investment banks that will be managing the offering. These banks are being addressed and the perfect timing for the offering is being discussed based on the market circumstances, as the main purpose of the registration process is availability and allowing shareholding of the company for a wider segment of clients. The offering will be available for individuals. Regarding offering with the purpose of funding, it is very easy for the company to provide funding through funds and strategic investors.

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New Swedish firms likely to begin operations in Egypt during 2019 Sun, 16 Jun 2019 14:43:22 +0000 ‘We have seen rapid improvement of Egypt’s business climate,’ says Swedish ambassador

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Most of the major Swedish companies are present in Egypt and hopefully 2019 will witness more companies being launched into the Egyptian market in different sectors, such as retail, insurance, and water technology, the Swedish ambassador to Egypt, Jan Thesleff, said.

“Many of the companies here are now using Egypt as a hub and increasing its footprint locally. In February 2019, Ericsson announced establishing a digital services hub in Egypt for the region. Late 2018, IKEA announced its first expansion since established in New Cairo in 2013,” the ambassador added.

Volvo Buses increased its cooperation with its local partner GB Auto in its assembly of buses locally while in June 2019, ABB is inaugurating their new regional headquarters in New Cairo, the ambassador highlighted.

Daily News Egypt interviewed Thesleff, on the occasion of the Swedish National Day that the embassy is celebrating on 17 June, the transcript for which is below, lightly edited for clarity:


What are the updates of the Business Sweden’s plans to establish an office in Egypt?


The role of Business Sweden is to facilitate trade and help Swedish enterprises grow. Egypt is an important partner to Sweden. It is our second largest trading partner in both Africa and the Middle East, and we therefore see a Business Sweden office in the country as important. It is our hope and goal that a Business Sweden office in Cairo will be re-established, until then the office in Dubai is doing a great job in continuing and increasing their focus in covering the Egyptian market, including recurrent visits.


What is the size of Swedish investments in Egypt, and how many companies are operating in Egypt?


Egypt is rapidly picking up pace thanks to the ongoing reform process and Swedish companies are increasingly eyeing Egypt, and we can see that investment is picking up, both from already established companies and new entries.

We hope to have several companies launch into Egypt during 2019 in different sectors, including retail, insurance, and water technology. Many of the companies here are now using Egypt as a hub and increasing its footprint locally.

In February 2019, Ericsson announced establishing a digital services hub in Egypt for the region. Late 2018, IKEA announced its first expansion since established in New Cairo in 2013. Volvo Buses increased its cooperation with its local partner GB Auto in its assembly of buses locally. In June 2019, ABB is inaugurating their new regional headquarters in New Cairo.

More than 40 Swedish companies are currently active in Egypt. Our prudent estimates are that more than 10,000 jobs in Egypt are directly created by Swedish companies. These are to a very high degree highly-skilled jobs. However, thousands of jobs are created indirectly via suppliers, consultants, or franchisees.

Most of the major Swedish companies are present in Egypt. One of the latest big entries being IKEA a few years back, now announcing further expansion and investment. We have seen their entry to Egypt as a success, and hope that they will be able to continue expanding in Egypt since each store employs almost 1,000 individuals.

Both Electrolux and ABB have manufacturing facilities in Egypt with exports to Europe, the Middle East, and Africa.


Ericsson are also investing heavily. We were happy to hear their announcement of the placement of their regional digital service hub in Egypt proving many dozens of new highly-skilled tech jobs in a cutting-edge sector of crucial benefit to Egypt, as well as providing Egyptian service exports to the region.


What do you think of Egypt’s investment climate and economic performance?


We have seen the rapid improvement of the business climate in Egypt during the latest years. The ministry of investment and international cooperation is making great efforts in opening the door for more investments in the country. This is very encouraging and inspires Swedish companies to come to the Egyptian market.

The reform programme has to a large extent been a success in order to provide the basic variables that are conducive for investments. This can be seen in the World Bank (WB) Doing Business Ranking where Egypt gained eight points 2018 (rank #120). Also, if we look at the current macro-economic figures the economic reform programme has so far been a success, with a current growth rate of around 5.5%, and higher projections going forward.

Egypt, with its diversified economy, large domestic market, a tradition of education, geographical location – and now with a reform agenda focused on private sector growth – provides interesting opportunities for Swedish and international enterprises. Egypt is strategically located both on the African continent and in the middle of the MENA region. It is an excellent base for business and manufacturing in both regions.

We have supported the International Monetary Fund (IMF) programme, and we have taken note of the praise that Egypt has received from the IMF, and the WB for the implementation of the reforms – work that needs to continue in order to allow for continued private sector growth. We believe that the main driver of growth for the Egyptian economy needs to be the private sector.

The impressive work that the Egyptian government has done on infrastructure is creating a backbone for investment and industrial development. For example, we have noted the achievements by Egypt in developing its energy sector in recent years. The ambition of Egypt on becoming an energy hub is fast being realised on many fronts. Moreover, road and transport infrastructure has also developed rapidly, which will also aid investors when looking for places that have the right factors for investment. In both these sectors, we see Sweden as a crucial partner for Egypt through our reliable experience and innovation.

Of course, there are always hurdles that remain to be faced, but the trend is positive. A global business environment relies heavily on a free flow of goods to function well, and Egypt is a crucial part of that global value chain, not the least because of the vital Suez Canal.


What about the latest trade statistics between Egypt and Sweden for the first quarter (Q1) of 2019?


During Q1 of 2019, Sweden’s exported goods to Egypt increased by 33%, compared to the corresponding period in the previous year. Trade must go both ways and we encourage Egyptian exports to our market.

From the statistics, we can see that the composition of both exports and imports are quite diverse.  Sweden mainly exports raw materials and high-tech manufactured products, while it mainly imports finished goods, such as textiles, machinery, and petrochemical products but also agricultural products such as vegetables and fruits.

Last year, trade between the two countries exceeded $600m. The Egyptian economy remains strong. Egypt is our second market in the MENA, as well as in Africa.


What are the main commodities traded between Egypt and Sweden?

The main commodities Sweden exports to Egypt are of two extremes, raw material and high-tech manufactured products. In the first category, we find timber in the form of sawn soft wood and iron ore, which together represent over 40% of our exports. Egypt is Sweden’s second biggest market worldwide in regard to wood export.

This sector is a perfect example of the symbiosis between Swedish quality raw materials and Egyptian industrial production. The raw materials are being used in the Egyptian market in construction, furniture, and steel industry.

These quality materials are being finished for use by domestic consumers, or exported as refined goods, which generates export income for Egypt.

In the second category, we find high-tech equipment supporting Egypt’s economic development such as telecommunication equipment, which is providing infrastructure for the mobile operators locally; vehicles that support the logistics and transport sectors, as well as water purification technology to provide clean water for the local population.




Are there any business missions between Egypt and Sweden in 2019?

We were very happy to receive the Swedish Prime Minister Stefan Löfven at the EU-LAS Summit earlier this year. It was an important sign of the bilateral strong relations.

Representatives from our trade and investment council, Business Sweden, are regularly in Egypt to promote Swedish companies locally and to explore increasing Swedish investments in Egypt. The embassy is working very close with Business Sweden, and we have jointly seen several successful delegations and visits lately.


What about touristic cooperation with Egypt, and how many Swedish tourists did visit Egypt in 2018?


Tourism is a key industry for Egypt, and it has the best possibilities to be a major destination. However, we should not overlook the softer aspects of tourism, as the contact between peoples and cultures is inherently beneficial for the mutual understanding of each other.

Egypt has had a remarkable increase of tourist arrivals. Basically, we are seeing three-digit growth of the number of tourists, and we continue to see that there is also a strong increase with regards to Swedish tourists that are finding their way to Egypt.

The Nordic travel market is integrated with airports serving several Nordic countries. Some 200,000 Nordic tourists are estimated to visit Egypt this year.

Egypt is the second biggest tourist destination, after Thailand, outside of the EU for Swedish travellers. This trend is likely to be further reinforced in the coming season. Egypt’s Minister of Tourism, Rania Al-Mashat, has tirelessly worked to promote Egypt as a prime destination.

Several new hotels have opened which cater to Swedish and Scandinavian tourists on the Red Sea coast.

This winter season, Egypt was a top destination for Swedish tourists, due to the comparative proximity and its mild climate and price levels. Egypt has something to offer anyone from its historical sites and sunny weather. It is this fantastic combination that makes Egypt unique for visitors.


What about cultural cooperation and the future cultural events that the embassy will organise?


The cultural cooperation between Sweden and Egypt is of course very important, as can be seen through the extensive focus from the embassy on the culture field. I would like to highlight the Swedish and Egyptian Dads Photo exhibition that was held both in Cairo and Alexandria, where we showcased the importance of active fathers. In April, we hosted the first in a series of events we titled “Science Talks”.

At that occasion, we highlighted the importance of biodiversity and inaugurated “the Vivi Täckholm Sustainable Garden” which commemorates the late Swedish botanist Vivi Täckholm who spent most of her life in Egypt and published the important work “Flora of Egypt”.

Seeing the cinematographic heritage and Egyptian excellence still in that field, we have also focused on showcasing Swedish films in Egypt. Yearly we participate in the film festival “Panorama of the European Film”. Last year, we also took part in El Gouna Film Festival, which we also plan to do this year.


Can you please elaborate about the Swedish experience in achieving welfare and prosperity? What are the latest indicators of the Swedish economy?


Sweden takes great pride in having one of the most extensive welfare systems in the world. Free education including higher education, low-cost healthcare and a widespread social safety net for the most vulnerable are some of the services that Sweden offers its citizens.

Simultaneously, Sweden is one of the most innovative countries in the world, being second only after Silicon Valley for start-ups and investing at the global top when it comes to research and development (R&D).

The WB considers Sweden’s overall regulatory business environment to be among the most business-friendly in the world and the country is ranked 12 among 190 countries in the ease of doing business. Sweden is a living proof that a generous welfare system does not exclude or compete with an innovative business climate.

In Sweden, the key has been the introduction of an efficient tax system, a fair labour market, free and good education, and gender equality combined with favourable conditions for the Swedish business and industry.

As for the Swedish economy in general, it is performing well. Last year we saw a growth rate at 2.4% and during 2019, the economy is expected to continue to grow. The Swedish unemployment levels are among the lowest in Europe. Sweden has furthermore seen several large investments in the last years including from tech companies such as Facebook.

The post New Swedish firms likely to begin operations in Egypt during 2019 appeared first on Daily News Egypt.

“We intend to double size of our fleet in Egypt during upcoming 2 years”: UTEET Managing Director Sat, 15 Jun 2019 14:23:04 +0000 Since inception of Breakbulk Europe, UTEET has been participating with its own large booth

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During 2018 and 2019 there has been a general decline in the size of government infrastructure projects in Egypt compared with the period between 2014 and 2017 where there were huge projects, such as the Suez Canal expansion and the Siemens mega power plants. Daily News Egypt interviewed the Managing Director of Universal Transport Egypt (UTEET), Hisham El Dahshan to explore their upcoming plans and reveal how they handled those challenges, the transcript for which is below, lightly edited for clarity:

How did you face this decline that affected the results of many companies operating in the project services industry?

As one of the leading heavy haulage operators in Egypt, we have seen a decline in the volume of cargoes, yet we have been able to secure many smaller projects which we have executed with great success.  Hence we have not really been negatively affected by market conditions.

What is your investment plan for 2019 and 2020?

We intend to double the size of our fleet in Egypt during the upcoming two years as we aim to position ourselves among the top three heavy haulage operators in Egypt in terms of capacity.  The outlook for 2020 looks very promising and we are confident that it will be record year for us in terms of turnover.

We would like to know the major accomplishments and results of Universal Transport Egypt in 2018.

We have executed power generation, renewable energy, oil and gas, and infrastructure projects with great success.  We have managed to double our customer base and tackle new industries.

How do you perceive the Egyptian market during the next five years?  Is the Egyptian market still attractive and does it offer opportunities?

We believe that the outlook for the Egyptian market for the next five years is positive and there are surely several opportunities for investment. We have built our aggressive expansion plan in Egypt based on the encouraging feedback we have had from our customers.

Does the development of the Suez Canal Economic Zone (SCZone) present an opportunity for you?

The new SCZone is a very exciting prospective project.  We aim to be involved in it via our customers who are already active there.

Are you interested in participating in this year’s Break Bulk Europe Exhibition 2019 in Bremen? Do you aim to establish new partnerships? Do you intend to purchase new equipment?

Since the inception of Breakbulk Europe, the Universal Transport Group has been participating with its own large booth. We will be present again this year, where we look forward to meeting all our partners and international customers.


Do you see any legal obstacles/red tape curtailing your planned investments?

We don’t see anything major in that respect and we are going ahead with our planned investments.

Does the lack of uniform pricing for toll stations by Wataneya present a problem?

This is a complicated subject matter which has made our life quite difficult during the last couple of years but we are optimistic that things will become more transparent in the future.

Have you prepared for the upcoming liberalisation of fuel prices in mid-June 2019? Do you expect an increase in costs and road freight prices?

We have thoroughly studied and prepared for it.  We are not expecting a major impact as fuel prices don’t affect heavy haulage the same way they affect normal road transport.  Nevertheless, transport prices will increase but only to a limit.

Do you have any existing business or expansion plans outside Egypt? Are you currently bidding for any projects outside Egypt?

Universal Transport Group’s head office is located in Paderborn, Germany, and we have offices covering all of Europe.  Hence we have projects in over 20 different countries which we are currently handling successfully.

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Egypt-Ukraine trade exchange likely to remarkably hike by end of 2019 Thu, 13 Jun 2019 15:04:52 +0000 Both countries’ economic reforms to positively reflect on development of joint cooperation, says Ukrainian ambassador

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Egypt’s trade exchange with Ukraine is expected to remarkably hike by end of 2019, Yevhen Mykytenko, the Ukrainian ambassador said, adding, “the trade in goods was $1.65bn in 2018. I was astonished to know that Ukrainian exports to Egypt increased by 26.8% reaching $652m in the first quarter (Q1) of 2019.”


The Q1 statistics put Egypt in the third position of world’s importers of goods from Ukraine, the ambassador noted.


Ukraine considers Egypt as a key country in maintaining peace and stability in Africa and Middle East region, the ambassador further asserted, noting, “as a country that suffers itself from terrorists’ criminal acts and bears heavy losses, Ukraine is in solidarity with the Egyptian government in its determined action against violent extremism and terrorism, aimed at complete eradication of this evil that threatens today’s world order.”


Daily News Egypt interviewed Ukrainian ambassador to Egypt, the transcript for which is below, lightly edited for clarity:



What do you think of Egypt’s investment climate right now?

Initially, I am a new comer as I was appointed as a new ambassador to Egypt less than 2 months ago. Now, I study Egypt from the beginning as I am a former ambassador of Ukraine to Egypt from 2006 to 2010 then I left Egypt and worked in my country and abroad before I came back here at end of April 2019.

I knew Egypt very well, yet there are many changes and updates that I am eager to know more about.

The economic reforms in both countries will reflect positively on development of the joint cooperation between Egypt and Ukraine and improving the investment environment, which encourages Ukrainian companies to increase their investments in Egypt, stressing the deep relationship between Egypt and Ukraine.

The company NJSC “Naftogaz of Ukraine” implements the largest investment project in Egypt. Since the beginning of its operations, investments amounted to several hundred million US dollars.



What is the size of Ukrainian investments in Egypt? How many Ukrainian companies are operating in Egypt? Which sectors are attractive for the Ukrainian companies?

There are many Ukrainian companies investing in the Egyptian market including the small and big ones but not all of them want to announce their plans. The amount of Ukrainian investments in Egypt aren’t exactly calculated.

Egypt is a very special country for investments for the past three or four years. Egypt is a country that is open for business.

Both governmental and private sector Ukrainian companies are interested in investing in Egypt. I am sure that the amount of Ukrainian governmental investments in Egypt are more than $100m and it should be boosted to more than double.

I have already met with representatives of Ukrainian companies that are based in Egypt to know more about their plans, expansions, and how business is doing.


What about your meetings with Egyptian officials?

I met with some of Egyptian friends in the ministries including undersecretaries, ministers’ assistants including Egypt’s Ministry of Foreign Affairs as this is my first duty.

I had a very warm meeting with Egypt’s minister of Tourism, Rania Al-Mashat and we discussed different plans. Ukraine is ranked number two of the tourist’s numbers that visited Egypt in 2018 following Germany that seized the first rank.

I also discussed with Al-Mashat boosting the numbers of Egyptian tourists who visit Ukraine annually.


What about your future meetings with Egyptian officials?

I plan to have many meetings with Egyptian officials over the coming couple of months before the summer holidays in August, yet I can’t reveal the names of ministers as the meetings are still under preparations.



What do you think of Egypt’s economic performance?

Egypt has implemented a number of critical economic reforms that have helped the country restore economic stability and allowed the private sector to invest and grow.

The reforms have also contributed to creating jobs and reducing unemployment, and the financial and monetary reforms have reduced both the budget deficit and inflation.

These reforms have also created challenges for Egyptians at the lower end of the income scale, which is one of the reasons the World Bank has focused on social security projects that support the most vulnerable.

Egypt is making progress with economic reforms and is “open for business.” The government repositioned Egypt as a global investment destination so country moved forwards with comprehensive improvements in the business environment.

As a result, Egypt has seen an increase in new companies coming to its shores.


Are there new Ukrainian companies consider entering the Egyptian market? Or expansions for already investing companies?

Egypt is a good investment destination and is likely to remain so in the near future. Significant investments in ports, airports, highways, and railways are planned which will lead to more efficient movement of goods.

Many Ukrainian companies are already doing business in Egypt, including NJSC “Naftogaz of Ukraine”, amongst many others.

In my opinion, Egyptian market strength is in its young workforce, strategic geographical location (the Suez Canal is the hub for world maritime traffic), and is one of the largest economies in Africa, with free trade agreements and arrangements etc.


What about the latest trade statistics between Egypt and Ukraine for Q1 of 2019? Compared to same period of 2018? Distribution of exports and imports? What are the main commodities of trade exchange?


According to the State Statistics Service of Ukraine, in 2018 the total trade turnover with Egypt reached $1.85bn.

In 2018, the trade in goods was $1.65bn and decreased by 19.6% compared to the previous year.

Exports made $1.55bn and decreased by 15%, while imports, $96,8m, and increased by 25,6%. Positive for Ukraine trade balance in goods was $1460.3m.

The main exports from Ukraine to Egypt were: cereals (42,8 %) and ferrous metals (39,3 %).

In Q1 of 2019 Ukraine’s export to Egypt increased by 26,8% and reached $652m. This puts Egypt in the third position of world’s importers of goods and services from Ukraine. I was astonished to know that the Ukrainian exports to Egypt reached this figure. I think that trade exchange will continue to grow by the end of the year.

There are some Egyptian vegetables that are very well-known by their quality in Ukraine such as the Egyptian potato. Ukraine is very famous with its potato but many Ukrainians love the taste of the Egyptian potato. Additionally, I would like to mention that Egyptian handcrafts are very popular in Ukraine.


Are there any business missions which will visit Egypt from Ukraine in 2019, or Egyptian missions to Ukraine?

We are working to enable our countries’ businesses to have more contact. In this regard, the organisation of business missions is a priority for the embassy. However, there are about five to seven Ukrainian business missions which will visit Egypt monthly, some of them ask for the embassy’s help while others don’t.


What about touristic cooperation with Egypt? And future plans to boost this kind of cooperation?

Every year hundreds of thousands of Ukrainians travel to Egyptian Red Sea resorts for rest and recreation and are admiring architectural and historical masterpieces in Cairo, Alexandria, Luxor, Aswan, Abu Simbel etc. thus demonstrating their unfeigned admiration and interest towards rich and unique history, culture, and traditions of Egyptian people.

Ukraine came in second place, after Germany, in the list of top 10 exporters of tourism to Egypt in 2018. The number of tourists amounted to 1.174 million tourists.


How do you assess the political cooperation between both countries?

We hail the climate of religious freedom and tolerance in Egypt, as well as the promotion of inter-faith dialogue, the upholding by the Egyptian state of the principles of citizenship, pluralism, and acceptance of the other, as well as renewing the religious and cultural discourse.

I am confident that Ukraine and Egypt have a huge potential for intensification of our political dialogue at all levels, including the highest one.

Moreover, we are convinced that all states that support terrorists must be held accountable and it does not matter whether terrorists operate in north Sinai, eastern parts of Ukraine or in Libya.

As a country that suffers itself from terrorists’ criminal acts and bears heavy losses, Ukraine is in solidarity with Egyptian government in its determined action against violent extremism and terrorism, aimed at complete eradication of this evil that threatens today’s world order.


What about cultural cooperation and future cultural events that the embassy will organise?

Ukraine and Egypt have a long history of successful bilateral relations which have to been nourished and further developed.

We hail and cherish close ties binding Ukraine and Egypt in various domains, including the political, economic, and cultural areas.

Hundreds of Egyptian school graduates go to Ukraine every year to obtain higher-education diplomas in various fields including of the medicine, engineering, agricultural sciences, and other spheres which are of great importance for Egyptian economy and society.

To make Egyptians more familiar with the rich and multi-faceted Ukrainian culture, we are planning to hold two major large-scale cultural events in autumn this year. The first one will be “A Week of Ukrainian Culture in Hurghada”. This city is very popular among Ukrainians who spend their vacation there.

On October 24, 26, and 28 the “INSO-Lviv” Orchestra (International Symphony Orchestra) and the National Academic Choral Capella “Dumka” will take part in staging in Luxor Giuseppe Verdi’s “Aida” opera which had its première in Cairo’s Khedivial Opera House on the 24th of December in 1871. Oksana Lyniv, also from Ukraine–who is the first female chief conductor of the Graz Opera and the Graz Philharmonic Orchestra (Austria)–will conduct the opera.

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“Our major advantage is diversified setup… we aren’t dependent on specific industry”: KML Chairperson Sun, 09 Jun 2019 09:58:35 +0000 Company has several new projects, investments to improve quality of services offered to customers in Breakbulk Europe 2019

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During 2018 and 2019 there has been a general decline in the size of government infrastructure projects in Egypt compared with the period between 2014 and 2017 where there were substantial projects, such as the Suez Canal expansion and the Siemens mega power plants. Daily News Egypt interviewed the Chairperson of Khedivial Marine Logistics SAE (KML), Mohamed El Dahshan, to discover their plans regarding the issue along with their anticipated results from participating in Breakbulk 2019, the transcript for which is below, lightly edited for clarity:

How did you face the decline which affected the results of many companies operating in the project services industry?

We have been very lucky to have played a major role in many of the megaprojects in Egypt during the past four years and we are looking optimistically toward the future.  We are currently involved in many ongoing projects in Egypt especially in the power generation and renewable energy markets.  Our major advantage is our diversified setup as we aren’t dependent on a specific industry.

What is your investment plan for 2019 and 2020?

As usual we have a very ambitious investment plan for 2019 and 2020 which we aim to fulfil.  Apart from investing in new facilities and equipment, most importantly we are investing in our people.  Our most valuable asset is our highly experienced team of project logistics experts.

We would like to know the major accomplishments and results of KML in 2018.

We have been very busy with several power generation and infrastructure projects.  Over and above we have transported a large number of production lines for the manufacturing industry, fertilisers, cement, steel, and FMCGs.

How do you perceive the Egyptian market during the next five years?  Is the Egyptian market still attractive and does it offer opportunities?

The policies of the Egyptian government have had a very positive impact on the economy.  We are very optimistic regarding the future, and strongly believe that the Egyptian market is moving in a very good direction. The next five years will feature many government-driven investments in infrastructure, power generation, oil and gas, as well as heavy industry.  This will definitely have a positive effect on our business.

Does the development of the Suez Canal Economic Zone (SCZone) present an opportunity for you?

The new SCZone surely presents an opportunity for us and other logistics providers in Egypt and the Middle East.  We aim to invest in warehousing operations in that area where we plan to offer our customers tailor-made state-of-the-art third-party logistics (3PL) solutions in accordance with international standards.


Are you interested in participating in this year’s Breakbulk Europe Exhibition 2019 in Bremen?  Do you aim to establish new partnerships? Do you intend to purchase new equipment?

As usual we will be present with our own booth at Breakbulk Europe 2019 in Bremen where we will meet our friends, business partners, and customers.  There are several new projects and investments in the pipeline which will help us improve the quality of services we are offering our customers.

Do you see any legal obstacles/red tape curtailing your planned investments?

Though the investment climate is far from ideal, we have witnessed that it is gradually improving and we are optimistic that the government is moving the right direction.  There is still a lot to do but it is obvious that things are improving.

Does the lack of uniform pricing for toll stations by Wataneya present a problem?

This is surely one of the biggest problems that we face in our industry.  But customers are now well aware of the situation and have accordingly adapted themselves.

Have you prepared for the upcoming liberalisation of fuel prices in mid-June 2019?  Do you expect an increase in costs and road freight prices?

This is an extremely challenging matter as it is almost impossible to come up with an accurate estimation for the repercussions of fuel price hikes. It is understood that all transport prices will be affected by such increases but most customers in Egypt have become accustomed to the situation.

Do you have any existing business or expansion plans outside Egypt?  Are you currently bidding for any projects outside Egypt?

Although we don’t have any offices outside Egypt, we are currently handling projects in the UAE, Iraq, Uganda, and Tanzania for some of our international customers.

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Egypt is a very important market for us, we are committed to the success of our Egyptian franchise: Renaissance Capital Sun, 02 Jun 2019 15:00:14 +0000 Emerging markets (EM) have been confronted by several near-term challenges, resulting in valuations that were approaching crisis levels by November 2018

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Our South African investor client base is one of the most active on the continent. Outside of South Africa, Egypt has one of the most liquid markets. Bringing Egyptian corporates to meet South African clients given the latter’s interest in investing in a liquid market like Egypt is the most important reason for us to hold the North Africa Investor Conference.

Emerging markets (EM) have been confronted by several near-term challenges, resulting in valuations that were approaching crisis levels by November 2018. To better understand how EM will perform in 2019, and to unearth the prospects of African capital markets, Daily News Egypt interviewed Ruslan Babaev and Anna Vyshlova, Co-Chief Executive Officers of Renaissance Capital.

What is the importance of this year’s conference, taking into consideration South Africa’s reforms, including pensions and investments?

Babaev: This is the fourth year in a row that we have held our North Africa Investor Conference here in Cape Town. The biggest reason, besides the reforms, is the South African client base, which is one of the continent’s most active. Outside of South Africa, Egypt has one of the most liquid markets in Africa, ahead of Kenya and Nigeria. Egypt trades between $40mn and $60mn a day, while the other two markets trade, on average, between $10mn and $20mn only.

Considering this from an investment point of view, you would always want to be invested in a liquid market. If you look at the activity on the banking side, it is very important to bring Egyptian corporates to meet the investor client base in Cape Town, given their interest in opportunities in North Africa.

Ruslan Babaev

In the wake of the 2018 EM crisis and Fed interest rate hikes, how do you view 2019 for EM?

Babaev: In trading, all the markets are interconnected. Last year wasn’t rough for emerging markets only – the S&P fell almost 20% peak to trough. However, the beginning of 2019 has overall been more positive. Dollar strength has been more muted, the Fed and ECB have become more dovish generally, which has supported EM currencies. If you look at tech names, they are up by 30-100% in Europe and the US, therefore the global market backdrop has been positive so far.

Obviously, China has been implementing stimulus measures, which is helping to create more positive momentum. For example, the amount of deals coming from EM on the debt capital markets (DCM) side has increased compared to last year, when there was no single initial public offering (IPO) or secondary public offering (SPO) in Nigeria or Russia. This year, we have already seen a number of SPOs and DCM mandates, and the IPO season in the US and Europe has kick-started. There are always risks, and we go through ups and downs, especially in EM, but it is difficult to generalise as each EM country has its specific story.

So, in your opinion, which EM is set to outperform this year?

Babaev: Egypt has been performing strongly this year, Russia as well, but if you look specifically at Egypt, its performance is dependent on reforms, a recovery of the economy, interest rate cuts and expectations for industrialisation and the consumer market given Egypt’s large population. With Russia, for example, investors like the economic orthodoxy and low valuations but are monitoring the risk of further sanctions; and for Turkey, economic policies are causing some concern, which have clearly not been positive for investor sentiment. South Africa has just gone through elections, as well as Nigeria, and some investors are taking a wait-and-see attitude until the new cabinets are formed in both countries.

Egypt is quite well positioned, as long as it can maintain momentum, continue reforms, get companies into the market and continue privatisation.

How do you view the Egyptian economy following reforms? What does Egypt need to attract more FDI?

Vyshlova: I think that Egypt is probably the best reform story coming out of EM. This is driven by the fact that the government made very bold economic reforms and did not just address short-term issues with short-term solutions. It addressed structural issues with long-term fixes, such as subsidy reform. Examining the key economic indicators, in terms of GDP growth, unemployment, deficits and foreign investor appetite, improvements are visible across the board.

In terms of FDI, we need to distinguish between FDI into the oil and gas sector, which historically has been strong, and other FDI. In oil and gas, FDI has been strong recently, while other sectors are likely to gradually improve.

Can you rank EM from your perspective?

Vyshlova: In frontier markets, we are overweight on Vietnam, Kazakhstan, Georgia and Egypt. The top-performing EM countries so far this year are Egypt, Russia, Saudi Arabia, China, Colombia and South Africa. The recent move upwards in oil prices is positive for Russia. For South Africa, we are cautiously optimistic on the equity market for 2019, and the new cabinet is the next event to monitor post election.

As a firm, we are 100% focused on frontier and emerging markets, which have always formed the core of our company’s DNA. These are fast-moving markets and the most important thing here is to seize opportunities once they emerge. It is more about diversification rather than ranking.

Does Renaissance Capital plan to enter new markets in 2019?

Babaev: We are always opportunistic, so we never say categorically that we are not going to enter any market, but it needs to make sense and fit our core strategy. Currently, we are not looking at any particular new market.

Vyshlova: We have sufficient resources and expertise to quickly decide whether to have a local presence if we see an opportunity. We are focusing on where we can add value and where we have an edge.

How do you view the Egyptian market and what are your company’s plans there?

Vyshlova: Egypt is obviously a very important market for us, and we are committed to the success of our Egyptian franchise on a long-term basis, which is why we have established an on-the-ground presence. We have already strengthened our Egyptian team with Amr Helal, CEO of Renaissance Capital in North Africa. We have Ahmed Hafez leading our local research. Among our most recent hires are Nancy Fahmy, Financial Services research analyst, and Omar Gaafar, Vice-President, Investment Banking.

We are very excited about our prospects in the Egyptian market. We already have several active mandates on the ECM side and in mergers and acquisitions (M&A). As a firm we have the best of both worlds: we offer the international expertise and the local perspective and insight, so we believe that we can add a great value to our clients as one of the few frontier-focused investment banks.

In light of the US April job reports, do you think the Fed will maintain or even cut interest rates?

Babaev: One needs to consider more numbers than the job reports. Historically, it has been hard to predict the Fed’s next interest rate move due to the impact of global economic factors. If you look at the global economy it has been weakening, so people expect interest rates to go lower, in line with most of Europe where zero percent interest rates prevail.

Relative to European interest rates the US rates seem quite high, but again the US economy has been booming. I believe it is premature to debate whether the Fed will start lowering interest rates. Currently, it appears that the Fed will not implement any more hikes this year. And if it does not, it would be supportive for EM, particularly if the US and China are able to agree on trade. 

What history has taught us is that even if interest rates are trending higher or lower, that does not mean that EM will necessarily go one way or the other. In 2004-2007 we saw spectacular returns for EM equities during a time when the US raised rates from 1% to 5.25%, so it’s more about the pace of rate moves and the underlying economic backdrop. Look at Turkey for example, it does not matter what happens with interest rates as this wouldn’t help the economy for other reasons.

What is Renaissance Capital’s target market share in Egypt and other African markets in the next five years?

Babaev: It differs from country to country: in Kenya we are currently the number one broker; in Nigeria we are the number two broker (as of FY18), and in Egypt we maintain leading positions with our international institutional clients. In these markets we aim to always maintain a top-three position, while in other markets we focus on adding value first and foremost.

Do you plan to launch brokerage activities in the Egyptian market?

Vyshlova: We trade out of London as well as via local brokerage partners, which is enough for now, but we can always change this approach at any time, depending on markets, clients and progress. Our on-the-ground team in Egypt is now mainly focused on investment banking services.

How do you assess competition within the Egyptian market?

Vyshlova: There are a number of local home-grown players in the market who have been there for 20-30 years. In our view, they will continue to have market-leading positions. However, Renaissance Capital also has a lot of value to add. We are an international frontier-focused investment bank with a unique role to play in the market. In some cases, we can be complementary to some of the local players, in other cases, it is inevitable that we will be competing with them. But I believe there are abundant business opportunities for everyone in the market.

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Fawry getting ready for EGX offering: CEO Wed, 29 May 2019 10:00:22 +0000 Technological culture strongly prevalent in Egypt, allows building strong digital financial system

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Fawry is preparing to join Egyptian Exchange (EGX) over the upcoming period after 10 years since launching the company. Some of the investment funds with shares in its capital include Helios, IFC, Responsibility, and the Egyptian American Fund.

With the company’s strong growth rates over the past years, it is seeking to increase its presence directly through smartphone applications as well as expand its presence in payment operations to be available for traders and clients.

Daily News Egypt interviewed Ashraf Sabry, the CEO, about the upcoming period and growth opportunities as well as the progress of the company and reducing cash payments. He stressed that since 2014 the company has had an interest in smartphone applications and that is when it launched its application. Additionally, 22 banks adopted its infrastructure through smart wallets, and soon two mobile operators will do that as well.

Sabry said that the company was one of the first to put the mobile application as one of its strategic aspects.

Cash is still dominant in Egypt

He pointed out that the current statistics for the banking card rates showed that 91% of users utilise it for cash withdrawal transactions on ATMs, and only 9% to pay through e-platforms and payment networks.

Furthermore, Sabry believes that awareness campaigns are not the solution to spreading the culture of electronic payment especially since the digital world welcomes applications that facilitate its work or saves time and effort. There is a greater role for companies and the financial community to create value and benefit to the consumer in using cash.

Moreover, one of the solutions is to create a full payment cycle, starting from income to all financial operations regardless of their size, he added.

The company’s CEO pointed out that there is a presence for an e-payment platform for the company on the majority of ATMs in an attempt to create that full cycle, especially after annual growth rates of e-payment platforms showed an annual growth between 70-80% compared to cash payments which only grow by 25% per annum.

Sabry denied that any means of payment in the future could end even in the world’s most advanced countries. Cash, electronic payment, card payment, telephone applications, and other methods will continue to work side-by-side. Market share for each route varies according to growing trust and acceptability.

There is no reason that may force people to adopt a method of payment instead of another, as this is up to everyone and the benefit they receive, especially that electronic systems may be more expensive for people than cash sometimes, he explained.

Additionally, he added that a number of developed countries, such as Switzerland, Germany, and Japan, still have a relatively large share of cash transactions, as consumers rely on prepaid cards and payroll cards, especially since traders and consumers do not accept payment of mediation fees to payment companies, banks’, and card issuers, unlike the countries where credit cards have been used to finance consumer purchases. The latter has helped spread the culture of electronic payment in the United States market, where shopkeepers see an opportunity to increase sales by giving away a share of profits to financial intermediaries.

On the other hand, Sabry says he sees great opportunities in the spread of smartphones, with the possibility of using electronic wallets anytime and anywhere, but its services are limited to digital transactions such as e-commerce and payment of fees and invoices, expecting to see a boom in e-payment operations through smartphones.

Over and above, Sabry pointed out the success of the company’s experience in launching the service of payments of car license fees and delivery to customers since 2014, which benefited about 370,000 customers, all of which embodied one of the facilitation ways for customers and was therefore attractive for grabbing a share of this market.

Reducing costs is key for further penetration

With regard to the cost of operations, there is no single indicator that can measure the difference in cost. The more the payment service offers a cost advantage, the higher the number of its users, so the future cost of services cannot be predicted, according to Sabry.

When asked about the difference in the cost of services between the Egyptian and Chinese markets, as e-payment services reach all users, Sabry said that the infrastructure of the Chinese market is different from Egypt and companies such as ‘Alipay’ and ‘WeChat Pay’, targeted since its launch expanding the user base by passing small value transactions without commissions or costs borne by the user, to increase the spread of electronic payment services to ultimately contribute to “closing the circle” from income sources to all channels of expenditure and savings.

Sabry also pointed out that accepting electronic transactions between individuals encourages their increased spread. Whenever the circle is closed, all people accept dealing with e-transaction and there becomes a need to liquidate money, which can also be optional and therefore the desire to make transactions more easily increases.

On the expectations of the electronic payment market after the passing of 10 years since the establishment of the company, Sabry said “Surely Fawry has become a popular name in e-payment,” pointing out the market research carried out by the company which shows that 95% of the sample used know very well the services Fawry offers. “The company has also managed to cover 100% of the Egyptian market in 10 years, with the society’s various classes and age groups, added Sabry.

The CEO of Fawry said that the other achievement for the company is reducing the cost of transactions for classes with a low income, as the cost of transactions is invariably proportional to the level of income. The richer the person is, the more facilities he has to obtain service at a lower price, however, for some lower-income classes, there are Fawry outlets in villages and informal housing areas that contribute to reducing the cost for them.

He noted that the multiplicity of places to provide services, whether through ATMs, points of sale (POS), e-wallets and mobile applications, has put ‘Fawry’ at the top among e-payment companies globally.

The current government interest in spreading financial coverage and digitising services was a greater opportunity for the company’s growth and services, he added. “We needed the government to save time and effort to facilitate subcontracting procedures with subsidiaries, which took about four years in some authorities. The achievement could have been greater and faster, to help accelerate the cycle of funds and growth of the GDP,” he said.

Noteworthy, Fawry obtained the approval of the ministry of finance to collect funds through its platform in May 2012, and it succeeded to collect the first electricity bill by the end of 2013 and provided a service delivery of home licenses in 2015.

Sabry sees better opportunities at the present time as the Egyptian state is moving toward electronic payment, especially since the last meeting of the government which focused on digitising services.

He called for the need to raise government ambitions more than normal rates, stressing that the rapid and successive developments in the contemporary world do not make the objectives of traditional development achievement and may even cause more delays compared to other countries.

In addition, he said an example is the appearance of Google and Amazon applications that respond to voice order to pay bills and debts.

Sabry revealed that the Africa Cup of Nations 2019 (AFCON) will be using Fawry as a portal for the electronic payment of the tickets of the matches which will be held next month in Egypt.

Furthermore, he said that his company focused on investing in 2014 and 2016 on applications related to the future more than natural investments in its activities such as mobile applications and some companies in the complimentary business sectors.

He added that the company would not have reached that stage of growth if it were not for a team of nearly 200 developers and programmers, working to find solutions to all problems on an ongoing basis.

Egyptian market has strong growth potential

In the same context, Sabry said he believes that the chances of growth of the Egyptian market are still great, especially that about 50% of the phones sold in the market are ‘smartphones’, additionally, there are about 58 million mobile phone users in the market, including 40 million users surfing the internet through their phones and about 44 million that have accounts on social media sites, which indicates the spread of digital culture. This enables e-commerce operations to grow, provided that companies can invest this momentum in providing services suitable with the needs of people, and is one of the main strategic trends of the company during the upcoming period.

He considered that the acceptance of electronic payments by merchants either through websites or within shops is the company’s second strategic focus, as the company’s first focus was becoming the first company to obtain licensing for opening merchant accounts in Egypt.

He believes that the chances of the company entering and expanding its dealings with traders are great, especially since some traders’ transactions do not qualify them to deal with banks, which opens the door for Fawry to enter the field.

The company has launched a service for merchants to pay directly to suppliers. Some of the clients include Coca-Cola, Juhayna, Almarai, and Heinz.

With regard to the final consumer, Fawry has expanded by providing bus and cinema ticketing services as well as the delivery of syndicate subscriptions to enrich the use of Fawry services.

The company has also launched the ‘Ebeneh Matgarak’ service to provide an integrated platform for e-shops including payment services to achieve greater success rates.

Sabry stressed that cooperation with banks was the source of the company’s strength in the past and will continue to be a strong catalyst for the company’s future role. The current challenge is to increase the number of customers with banks to complete the cycle.

On the other hand, Sabry believes that the role of the International Finance Corporation (IFC) has contributed to increasing dealing with international experiences and exchanging experiences with institutions that perform the same role in other countries.

He said that Fawry Plus has dealt with seven banks to launch its services, as the company plays the role of the agent in providing financial services to banks subscribed for the services for millions of customers who are not included in the banking sector. The services provided include registration and application services, loan repayment and credit card receivables, as well as cash deposits and withdrawals from individual e-wallets, in addition to delivery and collection services, ATM services, and cash deposits.

Fawry Plus for banking services was established in 2017 through a partnership between the Commercial International Bank, Banque Misr, Fawry and ACIS.

Sabry revealed that the shares of the company will soon be offered in the EGX as a necessity for the company’s business to put it into a governance frame. He did not reveal the exact date of the offering which would require internal arrangements and preparations before the actual offering. He also added that a final plan for the percentage of the offering has not been determined, however, it must be attractive for foreign investment fund capitals.

In addition, Sabry said that the company is growing 40% annually in terms of business volume. This means that other indicators will have higher growth rates.

He revealed the volume of invested funds invested annually ranges between EGP 250m to EGP 300m, and the funds are self-financed and the company has sufficient resources to cover its own investment needs.

Recently, the company has taken a strategic approach toward completing the financing circle through investment in technology start-ups. Fawry has invested in three emerging companies, including ‘Tazkarah,’ which offers bus tickets booking services via telephone or through the website, and relies on the infrastructure of Fawry in collecting funds. Another company is ‘Bosta’ which works to deliver electronic products to customers with the possibility of tracking the shipment route from the start until it reaches the customer.

Fawry is an integrated financial network through which cash transactions can be converted into electronic ones, with 85,000 POS, filling the gap in the spread rates of banks’ ATMs.

As for ‘Meeza’ cards, Sabry revealed that the company has completed the tests for the operation of the cards, as well as the documentation of its technical identification certificates, its shipment and what remains is deciding the date of beginning its operations.

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Sales of gold jewellery reached 9.6 tonnes in 2018: MD of New Egypt Gold Group Wed, 29 May 2019 09:00:24 +0000 Group owns 6 companies, accounting for 30% of local production

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The New Egypt Gold Group is one of the leading Egyptian companies in the gold and jewellery industry. It has six different companies under its umbrella and accounts for 30% of the gold industry in Egypt. The company is studying the products and specifications of its products in order to adjust them to the low purchasing power of citizens after the floatation of the exchange rate.

A mechanism has been put in place to protect the duplication of its products and protect consumers’ rights, as the company, like its peers, suffers from lack of market control.

Daily News Egypt interviewed Managing Director of the New Egypt Gold Group, Khalid Khalil, to learn of the company size, investment and acquisition of the market and the most important problems they are exposed as investors in the Egyptian market, the transcript for which is below, lightly edited for clarity:

What is the size of companies’ acquisition of the Egyptian gold market?

The group accounts for 30% of the volume of local production according to the stamp and balance sheet data. Production in 2018 reached 9.6 tonnes of gold through eight operating cycles, as the company owns 1.2 tonnes of gold. Since its inception, the group has been reorganising and arranging the gold industry in Egypt through a two-pronged strategy, the first of which is the manufacture of a local Egyptian product of foreign quality, and it has imported expertise and technology to produce similar products manufactured abroad. The second axis is to invest in the human element, through the rehabilitation of employment and training by foreign experts, to create cadres capable of manufacturing a distinctive Egyptian product and compete with importers.

When was the New Egypt Gold Group established? How many companies are under its umbrella?

The New Egypt Gold Group was founded in 1935 by Abdel Razek Nassar. It began with the retail trade of gold jewellery in the city of Suez. The family moved to the Cairo gold market in 1960, and established a small factory for the production of goldsmiths in 1980. In 2003, the company established the Iram diamond jewellery brand. In 2007 BTC was established in Dubai, a company specialised in investing in pure gold and trading on behalf of investors in Egypt and the Arab region. In 2014, EG Diamond launched a wholesale diamond sale and collaborated with HRD International Laboratories to organise international diamond training and certification courses. The group has six diversified companies: Egypt Gold for Gold Works; Egypt Diamond for wholesale diamonds; Iram for retail diamond jewellery; BTC for bullion and gold coins trading; Egypt Silver for silver jewellery, and Egypt Concept for packaging and decorations.

Do you have new expansions?

In the framework of the expansion plan to acquire the largest sales in the Egyptian market, two factories were opened: Egypt Silver for silver jewellery with investments of EGP 150m in the first phase, whose workforce could increase in the coming period to 350 workers. Toward the end of last year, the group opened the Egypt Concept factory, specialised in the gold and jewellery industry, including the packaging of bullion and gold coins, with the manufacture and packaging in line with the quality of the produced parts, as well as buildings’ facades, exhibitions, and other supplies. The investment value of the first phase of the factory is EGP 25m with 75 employees. The investment value could exceed EGP 50m in the current year and raise the number of workers.

Was Egypt Gold Factory the first integrated gold and jewellery factory?

The Egypt Gold Factory is considered a transformation in the industry from the concept of the workshop to an integrated factory which includes all the production stages on an area of 20,000 sqm with 1,600 employees working with the latest technology that meets international quality standards adopted in the field of gold and jewellery.

Does the company depend on bank financing?

The group has not received any bank financing since its inception and relies on its investments and production.

What about the role of the Training Centre?

Egypt Gold Group has a training centre which was opened in 2000, which includes the best foreign expertise to educate and qualify Egyptian workers at all stages of production in order to manufacture a product similar to products manufactured abroad. The centre is one of the activities of the company within the professional responsibility toward the industry, to pump qualified and trained labour to add to the market. The number of trainees from the time of its establishment until 2017 is about 3,500 trainees. Most of the workers within the gold market are graduates of the training centre. The group has entered into a partnership with the Industry Modernization Center in the ministry of industry and trade. The company is currently developing a plan to maximise the utilisation of the centre in the rehabilitation and training of local workers in the gold industry.

Have you thought of putting the company on the Egyptian Exchange (EGX)?

We have prepared a study for listing the company’s shares on the EGX but the plan was deferred for the current period.

How does the float of exchange rate affect the cost of gold jewellery production?

The production cost and employee wages increased.

By how much did the company raise the gold craftsmanship fee?

The company raised the value of wages of gold processing by only EGP 1.5 per gram of gold 21k, according to the company’s reduction of profits to overcome the recession and low purchasing power of citizens, as gold currently is a low priority for consumers and the increase in salaries will remove gold from consumers’ priorities.

How did you face the recession experienced by the gold market, and keep the company’s market share?

We prepared a study of internal costs and the development of economic solutions to save as much as possible and avoid burdening citizens. We also conducted several studies aimed at transforming threats into investment opportunities to maintain the company’s market share. The product specifications were changed. Lightweight gold products were introduced. In addition, the cost of production was cut. The company utilised the Italian Electron Form Technology to produce bigger hollow light pieces which match consumers’ taste and budgets.

What are the most important problems facing gold companies in Egypt?

There are problems in the provision of real data and statistics on the gold market, as the proliferation of smuggling and increased stamping operations outside the concerned authorities has created a parallel informal market. Manipulating gold carat is also one of the most difficult problems facing manufacturers. Companies buy a 21-carat gold as 875 shares. After analysis and examination, it turns out that they are 860 shares, which increases the company’s costs. There is also a problem of trading forged gold coins, as the carat is reduced by 18 shares. These coins are not exhibited at shops to avoid inspections.

Do you have a problem with the duplication of Egypt Gold trademarks on counterfeit products?

The company’s exposure to campaigns organised by some workshops to the trademark of Egypt Gold led the company to improvise ways to protect its products and put some marks that make it easier for consumers to identify genuine products, including an Egypt Gold sticker. This sticker is a barcode not only a trademark, which carries all details of the jewellery and cannot be removed. The jewellery are also stamped EG, next to which are the details of the pieces’ carats engraved by laser or glued to out stand. Next to the logo is the company that manufactured the piece, such as Ecat. Labella, or Amor.

Does the market need a mechanism to control the price of gold?

Gold prices are subject to speculations, and the market declares unrealistic prices but no sales or purchases are made. The company’s responsibility propels it to try and control the market and put a mechanism to price gold, as prices change according to global prices and the exchange rate while market prices are unreal.

Does the Egyptian consumer accept gold for investment purposes?

The Egyptian consumer has a saving culture and accepts the bullion and gold coins in order to preserve the value of money, due to the low craftsmanship. The group hence launched BTC to invest and trade in gold and silver bullion to regulate the market and transfer workshop products from unconsolidated alloys to a product of high quality. Moreover, the company is currently considering a plan to develop and use the latest safe packaging systems for alloying and pounds to reduce chances of duplications or changing carats. Packaging also saves the products from scratches.

What about offering low-karat gold crafts? Will the Egyptians accept it?

Egypt Gold is the first Egyptian company to manufacture gold jewellery of 18 karat, and suffered heavy losses when it put them in the market for the first time, and through importing modern technology and experience to operate production lines, it became a real competitor of the standard 18 imported from abroad. The change in the culture of the Egyptian society and its turn to the gold jewellery of 18 karat, which is known as foreign gold, and accounts for 50% of the market, but this ratio, however, changes according to the place. Upper Egypt and the countryside still prefer 21 gold by 70%. But in Cairo and Alexandria, 21 gold is only 30% of the market, while 18 gold is more favourable.

What do you think of the 14-karat experience offered by rival companies?

The experience of offering 14-karat jewellery was unsuccessful but could be implemented. We need time for the Egyptian community to adapt to it, especially as the new generation’s perception of gold changes.

The 9 and 12-karat gold bullets are the most heavily traded in European societies, and western women do not accept high karat.

What do you think of the Egyptian gold stamp?

The Egyptian stamp reduces the chances of exporting gold products abroad, by distorting the products through using traditional stamping methods. However, we anticipate improvement of the stamp with the change of the current system and applying a barcode and laser marking.

Do you have retail stores?

The company relies on wholesale and has a large base of customers, while retail shops often include diamond jewellery only through Iram. The company has several branches for wholesale and retail across Egypt in Cairo, Alexandria, Tanta, Mansoura, Hurghada, and Assiut, as well as in Dubai. The company will not establish retail stores to sell gold to avoid conflict of interest with traders and to keep its wide range of wholesale customers.

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DOJA markets 50% of Aurora project within nine months Mon, 27 May 2019 12:09:45 +0000 Company plans to deliver project in May 2022, says sales manager

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DOJA Developments implements the first administrative, medical and commercial project on 6,300 sqm in the New Administrative Capital (NAC) on the Al Amal axis, the main entrance of the NAC.

During an iftar on Wednesday, the company announced the official launch of the Aurora project.

Daily News Egypt interviewed the project’s officers and its designer Eslam Khater, sales manager of Doja Developments, Mostafa Anbar, engineering director at the company, Raef Fahmi Architects- RFA founder Raef Fahmy, and Tamer Mostafa Mito, chairperson of Mito Consult, to know Aurora project’s details, the transcript for which is below, lightly edited for clarity:

Please tell us more about the Aurora project.

Khater: The project includes commercial, administrative, and clinic units in MU23, which is located on the main entrance of the NAC and close to central business district (CBD) that will comprise of skyscrapers, as well as its proximity to the Green River area.

The project is built up area on 30% of the total project’s space which encompasses two basements, a ground floor, nine floors, and a roof. Additionally, we deliver the project fully-finished with a payment plan over six years and a 10% down-payment.

Moreover, we designed a distinctive project to attract multinational companies, restaurants, and international medical centres.

The project comprises of commercial shops, cafes, and restaurants in the ground and first floors which will be leased not for selling but to preserve the community and attract class A residents and maintain that level. Furthermore, the third to the sixth floors will be allocated for medical units and the seventh to the ninth floor will be administrative units.

Who will manage the project after operation?

Khater: We are still negotiating with several international operators to manage the project.

Why did the company decide to launch such a commercial project?

Khater: The market orientation and potentiality are toward investing in the NAC, and the return on commercial investment is equivalent to three or four times the return on other activities, whether in leasing or resale. Additionally, we expect a growing demand for commercial units in the coming period in the NAC.

The project is very close to the CBD and inside MU23 which contains 50,000 fully-finished residential units will be delivered in 2019 and early 2020 that guarantee that the area will be vital and inhabited soon. Moreover, transferring the governmental agencies and ministries will boost commercial and administrative units’ sales for companies that have daily deals with these ministries and agencies.

What is the project’s marketing situation?

Khater: We have managed to market about 50% of the project since its launch in July 2018.

When will the company complete the Aurora marketing?

Khater: We plan to complete the project marketing by the end of 2020. 

What are the units’ sizes? And what is the price of a square metre in the project?

Khater: commercial and administrative units start from 45 sqm to 180sqm, and smart clinics have sizes starting from 28 sqm to 1,900 sqm.

For medical and administrative units, the price of a square metre starts from EGP 36,750 and commercial square metre starts from EGP 50,000 in the second floor.

When will the company deliver the project?

Khater: The project delivery will be within three years in May 2022.

What is the construction situation of the project?

Anbar: We have begun earthworks and will begin the construction after two months.

What is the value of investments to be directed toward the project’s construction?

Anbar: We will direct EGP 40m to EGP 60m in construction works.

What is the total project’s investments?

Khater: Aurora’s total investments is worth EGP 1.2bn.

What is the value of targeted sales in 2019?

Khater: The company plans to achieve EGP 200m in sales by the end of the current year.

What distinguishes the project?

Raef Fahmy: The Aurora project’s design is characterised by its distinctive location from several angles as we considered the availability of areas to be used and our keenness in the administrative buildings to have an outdoors, bridges, and balconies area.

The clients will enjoy the design, approach, and location and its interior design is simple and comfortable. Moreover, the building itself is simple although it is a small area but it includes all needed services and its internal space is flexible.

In this project, we insisted on applying socio-economic sustainability, which means flexibility in changing the unit activity according to market needs, which is not easy to adopt in any design but our office has adopted that for six years now.

Is your role designing the project only or designing and supervising?

We supervise the project implementation and follow-up on all phases of implementation until we deliver the project to the client.

What is the role of Mito Consult in Aurora project?

Mito: As a group of engineers and professionals, we contribute to the world of design. We adopt a policy of nurturing innovative ideas that exhibit high standards of professional skills.

In the Aurora project we design plumbing systems for all building types, design firefighting systems for all building types, design water supply, irrigation systems, sanitary drainage networks, pump stations, storage tanks, water, and sewage treatment plants.


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WorldFish, EFAD to announce new project for fish farming in Africa Mon, 27 May 2019 08:00:29 +0000 Project coincides with Egypt’s presidency of AU, says source

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WorldFish Cairo’s office will announce a new project to boost fish farming cooperation in Africa soon, a source at WorldFish told Daily News Egypt on Saturday, adding that the project will be implemented in collaboration with the European Federation of the Associations of Dietitians (EFAD).

“There is a huge demand for fish farming in Africa,” the source noted, adding that WorldFish will train Africans on fish farming and share its research outcomes with African countries.

WorldFish pays great attention to cooperation with African countries in light of Egypt’s presidency of the African Union (AU), the source affirmed, adding that WorldFish has recently celebrated the closing of a Swiss-funded two projects.

The closing of the Sustainable Transformation of Egypt’s Aquaculture Market Systems (STREAMS) and the Youth Employment in Aswan Governorate (YEAG) projects took place on 22 May in Cairo, in the presence of the Minister of Agriculture and Land Reclamation, Ezz El-Din Abu-Steit, Vice Minister of Agriculture, Mona Mehrez, and Deputy Swiss ambassador to Egypt, Adrian Hauri.

These projects have improved food and nutrition security and economic opportunities for low-income Egyptian citizens through sustainable intensification of the aquaculture sector and the creation of job opportunities for the youth via better management of fisheries resources, a statement by WorldFish said.

During the closing event, project results and future opportunities for the aquaculture and fisheries sectors were highlighted to beneficiaries and local partners, added the statement, noting that participants at the closing ceremony agreed that despite increasing fish production in Egypt, further growth needs to take place in the upcoming years to meet growing market demand for fish.

“The STREAMS and YEAG projects are cornerstones for the development of aquaculture and fisheries in Egypt. There is rising demand in the country for nutritious animal-based protein food,” the Deputy Swiss ambassador to Egypt, Hauri, said.

Value addition to lower-market-valued fish creates new opportunities for youth and women entrepreneurs, he noted, adding that both projects are positive models for food security and income generation.

Nearly 4,000 fish farmers were trained by WorldFish on best management practices, leading to the increase of farms’ profitability by 13%, reduced feed use by 20%, and decreased water consumption by 10%, the statement added.

Increased profitability was mainly achieved through cost-savings brought on by more efficient feed management rather than increased production, the statement affirmed, noting that this resulted in reduced environmental impacts such as greenhouse gas emissions and nutrient discharges.

New technologies were also introduced to fish farming to multiply production and ensure better use of water resources and feed.

WorldFish introduced the in-pond raceway system (IPRS) technology for the first time in the Middle East and Africa under the umbrella of the .

The new climate-smart culture system was tested and promoted among extension service providers and local aquaculture investors with technical support from the US Soybean Export Council USSEC.

Positive impact of STREAMS project

More than 1,000 women fish retailers benefitted from the STREAMS project in Fayoum and Kafr El-Sheikh. Informal women retailers play a dominant role in supplying low-value fish products to low-income consumers in rural areas.

Women were provided with equipment including iceboxes, tricycles, weight scales, and cleaning equipment in addition to training on cooking and post-harvest practices, project management, and advocacy, among others.

As part of raising capital for women fish retailers, they were organised into saving groups. This resulted in the following total number of loans: EGP 1,600,610 in Fayoum and EGP 1,172,220 in Kafr El-Sheikh from 2017 until April 2019.   

As part of improving the linkages between fish supply and demand chains, an online market platform was established ( with the aim of improving marketing and online extension services to reach all fish farmers nationwide, in coordination with the General Authority For Fisheries Resources Development (GAFRD).

With the community closure event of the YEAG project that took place early last week in Aswan, beneficiaries expressed their appreciation of the project, which gave them new skills to improve their businesses and livelihoods.

Benefits of YEAG project

The YEAG project benefitted 1,976 fishermen, fish farmers, women fish retailers, and young entrepreneurs. The project supported the creation of job opportunities for youth and women through the development of aquaculture and fisheries’ management practices, as well as improved post-harvest handling, and fish processing practices in Lake Nasser.

Egypt’s political leadership is interested in filling the gap of rising demand on nutritious animal-based protein food, said the statement, noting that a committee was recently formed chaired by Abu-Steit to develop lakes after a stakeholders’ agreement to implement a management plan of fisheries resources of Lake Nasser, an effort led by WorldFish under the auspices of the YEAG project.

Establishing an independent authority for lakes supervised by the prime minister is being studied, a critical step that will help push forward the fisheries sector.

The YEAG project introduced training for women in Aswan on fish leather tanning for the first time, a primary step for producing fish leather products.

Fish farming was introduced in Minya and Aswan under the STREAMS and YEAG projects to support fish supply to Upper Egypt inhabitants who have little intake of fish. A number of 840 feddan in Wadi El Sa’ayda, Aswan, that are not suitable for agriculture can be used in fish farming activities.

Training has helped build capacities of local fish farmers and hatchery owners thus increasing their profitability and reducing production costs.

WorldFish, SDC to continue to boost Egypt’s fisheries sector

With the presence of donors, government representatives, local authorities, private sector investors, and small and medium size farmers, women retailers and other stakeholders, WorldFish and the Swiss Agency for Development and Cooperation (SDC) office affirmed their keenness on sharing lessons learned from their long experience in boosting the fisheries sector in Egypt and discussing the way forward for aquaculture and fisheries development in the country.

“One of the major lessons learned is the fact that change can come quite quickly when the focus is on empowering the people,” Harrison Karisa, WorldFish country director for Egypt and Nigeria said, adding that the success stories of aquaculture in new areas as exemplified by Nasser Abdelatty from Aswan are a clear testimony of what training and research can do.

The support of the Swiss government for fisheries and aquaculture and more specifically in the area of Best Management Practices training and research, is one of the biggest contributions to aquaculture development in the country,  Karisa mentioned, noting, “more ground is yet to be covered in increasing efficiencies and policy support, but we are making good progress.”

The Swiss embassy has supported the aquaculture sector in Egypt since 2011 with an initial study of the Egyptian aquaculture value chain funded by the SDC office.

This first output of cooperation between WorldFish and the SDC identified limiting factors hindering the aquaculture development in the country. Based on this study, the SDC funded the first phase of the project called “Improving Employment and Income through Development of Egypt’s Aquaculture Sector (IEIDEAS)” from December 2011 to November 2014, implemented by WorldFish and CARE International, in collaboration with the ministry of agriculture and land reclamation with a total project fund of $4.33m

After a successful first phase, the SDC continued its support to Egyptian aquaculture by granting CHF 2,000,000 for the second phase of the project called STREAMS for 3 more years. In July 2017, the SDC supported the extension of fisheries value-chain component of youth employment in Aswan governorate for an additional 18 months ending in 2018, with a total budget of $0.586m.

Furthermore, WorldFish is an international, non-profit research organisation that works to reduce hunger, malnutrition, and poverty by improving fisheries and aquaculture. With a 40-year track record of leading-edge science, WorldFish generates research evidence and innovations to inform sustainable practices and inclusive policies that enable better livelihoods and healthier diets for millions of poor people, particularly women, who depend on fish for food, nutrition, and income in the developing world.

WorldFish is a member of the Consultative Group for International Agricultural Research (CGIAR), the world’s largest global partnership on agriculture research and innovation for a food secure future. Headquartered in Penang, Malaysia, and with regional offices across Africa, Asia, and the Pacific, WorldFish leads the cross-disciplinary CGIAR Research Programme (CRP) on fish agri-food systems.

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Kazakhstan offers huge investment opportunities: AIFC Wed, 22 May 2019 15:00:21 +0000 Among the priority goals of the AIFC are the development of the human resource potential of local financial market specialists, the popularisation of international professional certifications, and boosting investment.

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The Astana International Financial Center (AIFC) is a financial hub that serves the countries of Central Asia and the Middle East. Daily News Egypt interviewed Sheikh Bilal Khan, a member of the panel of arbitrators at the AIFC International Arbitration Center and a member of the AIFC Advisory Board on Islamic Finance, to understand the centre’s main areas of activity, investment opportunities, development of the capital market, most promising sectors, and the IPOs programme.

Among the priority goals of the AIFC are the development of the human resource potential of local financial market specialists, the popularisation of international professional certifications, and boosting investment.

What is your advice for Egyptian, Middle Eastern, and African investors?

Regarding the opportunities in AIFC, I can say that this place is open for business. What I mean by that, is as an investor or institution, you can have the comfort or the luxury of AIFC, giving you a gateway to the entire central Asian market, or even the Chinese and Russian markets.

When you are registered in the AIFC, you will not fall under the jurisdiction of local laws in Kazakhstan or Central Asia. In fact, you will be registered and regulated by the English common law system.

AIFC has British courts, and judges here, my self being one of the judges in the international arbitration court here.

Additionally, the centre gives you 50-year tax exemptions, simplifies your visa regulations, offers free office spaces, and the license costs only $200, not $100,000. Even if you get your license today and didn’t open your business immediately.

Unlike Dubai, where you have to be physically on the ground, here you don’t have to be, you can get the licence and still set somewhere in Egypt for example, and this as a branch, and all you need is one local Kazakh to take care of it.

Opportunities and return on investments are huge, there is so much privatisation going on in Kazakhstan, and infrastructure development.

If you are an investor or a financier, you want to be able to take a piece of this cake, before somebody else comes.

From your point of view, what are the most promising sectors in the country?

Kazakhstan has huge opportunities in different sectors. Education and health sectors are also available for business.

However, the major area would be agriculture, and the Arab world needs that a lot, it could provide for an excellent opportunity for importing and exporting of agriculture products.

Also, the financial services sector, if they come here, they would be able to attract a lot of investments, they can even set up an Islamic financial institution or bank here, as there are hardly one or two.

So, if an Egyptian Islamic bank or financial institution, or takaful company opened here, they will get an excellent return, as there is a huge demand.

Could you elaborate on the privatisation and the IPO programme?

There are huge IPOs because Kazakhstan is a natural resource country, every element in the periodic table you can think of, is located here.

The country aspires to be part of the Organisation for Economic Co-operation and Development (OECD). To do so, state-ownership of all assets needs to be reduced to 15%. It cannot be more than that.

Another reason is the fact that the government doesn’t want to rely just on one area, they want to diversify the economy away from the energy and the mining sector, that’s why there is an opportunity for financial services to grow here.

We have an independent stock exchange called the Astana International Exchange (AIX), which has its own listing rule, based on international rules, allowing dual listing, allowing you to list in Dubai and AIX simultaneously.

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Why Egypt dominates squash: juniors’ training plans, says Khalifa Tue, 21 May 2019 12:00:02 +0000 We rely on Ministry of Youth, Sports for funding

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Egyptian squash occupies a significant position in the world at the present time, where the top 10 rankings in early May included five Egyptian players, comprised of four players in the top five ranks, namely Ali Farag, Mohamed Shorbagy, Tarek Moamen, and Karim Abdel Gawad, in addition to Mohamed Aboul Ghar in ninth place.

On the women’s level, the list of top 10 players in the world includes four Egyptian women, among them are the first three players, Renem Al-Waili, Noor Sherbiny, and Nour El Tayeb, along with Nouran Gohar in seventh place.

With this great distinction and clear Egyptian control of the game in the world, Daily News Egypt spoke with Assem Khalifa, head of the Egyptian Squash Federation, about the reasons for the success of the game in Egypt, and the plans of the federation to maintain this excellence, the transcript for which is below, lightly edited for clarity:

What explains the superiority of the Egyptian squash globally during this period?

Squash in the whole world happens to be controlled by some countries, such as sometimes England, Australia, and Pakistan. Egypt is one of the oldest unions established in 1931. There was Egyptian control over intermittent times, such as Abdul Wahid Abdul Aziz, Abdel Fattah Abutaleb, and others. With the current federation, we put a plan based on the continuity of generations, started 10 years ago. We dealt with squash as a product that needs a lifecycle to reach the production stage. The main dependence in this plan is spending on the juniors’ sector, as developing squash champions needs seven years, starting with youngsters who are 10-years-old.

What are the sources of funding?

We rely on plans with the ministry of youth and sports. We present a study to the ministry against results. With these results, we are fully committed to the ministry. This has happened with all ministers who took the post, even the current minister, Ashraf Sobhy.

How much is the squash federation’s budget?

The budget is EGP 4-5m per year. We look at plans which require expenditures. We are working to provide private resources. We do not rely solely on government support. What happens is that we send out our plan for the size of the activity and the expenses involved–not a fixed figure. Sometimes, we continue what we did to maintain our plans with sponsors. We, however, have a fixed sponsor, namely the Commercial International Bank (CIB), which helps with many tournaments and plans at variable numbers. Dealing is done through specific suggestions we present to them in order for them to study and either approve or decline them based on the study. The CIB has been our strategic partner.

What are the preparations for the Women’s World Cup in October?

The organisation of the Women’s World Cup in October in Cairo is funded by the International Federation through its committees which work in cooperation with the Egyptian Federation, because these competitions require a substantial effort and spending which burdens the Egyptian Federation. The establishment of stadiums is beyond our capabilities, which focuses only on the players. In previous times, Al-Ahram has been organising competitions for 15 years. It was of great benefit to the game and pushed it forward. Under the current circumstances, no one can replace it except for the attempts of some businessmen such as Naguib Sawiris in the El-Gouna Championship, Hisham Talaat Moustafa with the Madinaty Championship, or Ahmed El Abd with the Black Ball Competition. These are the developments of what Al-Ahram did. Presentation only focuses on football, and it generates their revenues and plans. Those who organise squash tournaments do not earn much but do it for the love of the game.

How much does it cost to organise a tournament?

The cost of organising a tournament for squash is EGP 6m. Egypt is not a rich country but we are proud to have four major competitions like the United States despite the huge economic differences between the two countries.

Why is squash described as the game of the rich?

The shift from hobby to professionalism is what makes some feel that the game is dominated by the rich since spending has grown. The racket alone costs EGP 3,000 and players need special shoes, a good trainer, and other requirements. The lack of infrastructure for the game also limits where it can be practiced.

Does the federation use foreign trainers?

The federation does not rely on foreign coaches at all. Egypt exports trainers abroad. The salaries for top notch trainers could reach EGP 50,000 per month.

How much time is needed for training?

The good player would spend six hours of training per day. Good players know how to organise their time well.

Is squash a financially profitable game?

Good players earn well, but they have to dedicate their lives to the game. The currency floatation contributed to maximising the value of the awards. One of the reasons why squash is successful is the presence of role models like Aly Farag, Nour Sherbiny, Tarek Moamen, Nour El Tayeb, and Ranim El Walily among others.

Does the federation have a role in the sponsorship contracts?

The federation is not a party to private sponsorship contracts between players and companies, but it is a party to the contract between the player and the club. The federation has a limited role for ranked players and focuses on juniors. We already cared for professional players until they reached their current positions.

What is the difference between the Squash Federation and the other federations?

The administration is prudent and wise to manage squash, based on a strong history. It can be said that the success of the Squash Federation may have not occurred if the administration was focused on other games. Squash has some advantages, as the federation continues to develop plans to stay atop the global ranking.

Are there plans for your sports investment?

So far, there are no plans for sports investment. After the new rules, there are new clubs which we came up with. We have economic ideas which we are studying and we need the right time and climate.

How did Egyptian women excel in squash?

Women know how to adapt their own lives, the federation does not intervene, and treats all equally. This is shown by the fact the both men and women are excelling on global rankings. 

The post Why Egypt dominates squash: juniors’ training plans, says Khalifa appeared first on Daily News Egypt.

thyssenkrupp’s to build new fertilizer complex in Egypt for NCIC by 2022: Country CEO Mon, 20 May 2019 10:52:45 +0000 Sales generated by group reach €42.7bn in FY 2017/18

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thyssenkrupp’s global sales reached €42.7bn in fiscal year (FY) 2017/18, according to the Country CEO, Thore Lohmann, who is responsible for the Industrial Solutions business in Egypt.

Daily News Egypt interviewed Lohmann to learn more about the company’s activities and expansion plans, in addition to the firm’s five years plan in Egypt, as well as the details of their last major order for a fertiliser complex in Egypt from El Nasr Company for Intermediate Chemicals (NCIC).

What is the firm’s five-year strategy plan in Egypt?

Egypt is one of our core markets. Therefore, we are marketing our full technology portfolio in the segments of mining, cement and chemicals starting from small engineering and licensing up to full EPC lump sum projects.

Secondly, we are bringing our full service knowledge to the country, providing original spare parts, field services up to operation and maintenance of entire plants.

We have a strong local presence with more than 200 employees, mainly engineers. With fostered stability in the country and the gas discoveries, we see huge opportunities in Egypt. Additionally, there is not only a big consumer market, but also export opportunities to neighbouring countries.

These are the main elements that drive our growth strategy for the next years.

The recently signed project with NCIC is underlining the market potential and at the same time the trust of our customers in thyssenkrupp as a reliable partner in the country.

Daily News Egypt interviewed Lohmann to learn more about the company’s activities and expansion plans, in addition to the firm’s five years plan in Egypt, as well as the details of their last major order for a fertiliser complex in Egypt from El Nasr Company for Intermediate Chemicals (NCIC).

Can you tell us more details about this order?

thyssenkrupp’s plant engineering business has won a major order from the Egyptian chemical and fertiliser manufacturer NCIC (El Nasr Company for Intermediate Chemicals). The order for the engineering, procurement and construction (EPC) of a new fertiliser complex was signed in Cairo in March 2019. thyssenkrupp is realizing the project in a consortium with the Egyptian company PETROJET. The order value for thyssenkrupp is in the mid-three-digit million euro range.

The new fertilizer complex will be built in Ain El Sokhna, around 100 km southeast of Cairo, close to the existing NCIC phosphatic and compound fertiliser complex. It is expected to go into operation in 2022 and produce up to 440,000 tons of ammonia, 380,000 tons of urea and 300,000 tons of calcium ammonium nitrate (CAN) every year. The new plants are part of NCIC’s plans to expand its current product portfolio to include high-quality nitrogen fertiliser for local and export markets. Nitrogen is a key nutrient for plant growth and of critical importance for industrial agriculture.

When will the project be completed?

The project will be completed in roughly three years from now. We started in January, so start of production is expected by early 2022.

How will this project provide job opportunities for the youth in Egypt?

We expect new jobs to be created not only at our organization but also at various local suppliers. Accordingly, there is a huge impact on the employee side in the country. We are carrying out this project with our partner Petrojet, who is also undertaking several jobs during construction. Typically, hundreds of workers are involved in the construction of such a large project.

What is the importance of having this project in Egypt?

The new plants will turn natural gas into ammonia. This intermediate product will be turned into three different types fertilizers. They will be either used by the local farmers or exported to the markets around the world. The added value of turning the natural gas into high-quality fertiliser is huge.

What attracted the firm in Egypt to do such a great project?

Egypt’s ideal conditions are the reasons for this attraction. In addition of abundant gas resources, Egypt has land availability and the country enjoys a strategic location.

Finally, Egypt has a history of industrialization with a large base of skilled workers who can operate such plants. The Egyptian government was the first to start the fertiliser business in the region.  Most of the other neighbouring countries in the Middle East followed this path.

To sum it up, the resources of the country are very good in terms of natural resources as well as human resources, in particular qualified engineers.

What is the value of thyssenkrupp’s investment portfolio in Egypt?

As thyssenkrupp, we are here with two different business areas, one is the Elevator Technology business area, and the second one is Industrial Solutions.

In the elevator technology business area, we work in the metro, airport, and large residential projects. We have roughly 450 employees, thereof almost 400 are field staff (workers on the ground), who are all Egyptians. They are working on the installation and maintenance of elevators, escalators, and passenger boarding bridges.

In the Industrial Solutions business area, we have roughly 200 people on the ground, undertaking engineering, construction, as well as human resources services. We believe that our most valuable asset are our people. We invest in our employees, for example by conducting trainings and granting them the chance to travel abroad.

In your opinion what are the challenges that Egypt faces in the petrochemicals sector?

In the past years, the whole industry was suffering from the shortage of gas. But the situation has improved a lot this year. New discoveries in Egypt are now in production and connected to the gas grid.

The gas resources are fostering Egypt’s position as an energy hub as well as a hub for chemical products.

Do you think that Egypt could be a hub for exporting gas?

Yes, it is possible. But the value chain of what can be built up in the country is much longer than selling the gas. The production of chemical base products is quite important for the promotion of an industrial backbone. Using the gas in the country for manufacturing of goods and exporting them, is creating more benefit for the country and its people. Natural resources can be used to produce all kinds of petrochemicals, including fertilisers, polyethylenes, and all the substances which can be produced out of natural gas.

Therefore, the chemical industry, especially the petrochemical industry, is very important for the country. 

How can you evaluate the reform programme in Egypt?

We see the economic reforms that the government agreed with the IMF as necessary and positive. Particularly the cutting of the subsidies in the oil & gas sector and the free float of the currency brought financial stability back to Egypt. Additionally, the measures in the security sector brought the tourism back and increased the financial situation of the country. This is quite important for the country and for the people, and also good for the country’s economy.

How can you evaluate the economic conditions in Egypt?

I have been here in Egypt for five years. The economic conditions have largely improved since then, and we now have a quite stable business environment.

During that period, did you lay off any of the workers?

During the period from 2011 until now, we have not dismissed any of our workers, and we kept them all. From 2014 onwards, we even hired people. To be exact, we have hired 70 new engineers, and we are still in a growth mode and want to hire more people.

The people are our main asset.

Do you think that the government has to take specific procedures to enhance the investment environment?

The country is focusing on foreign direct investments, and I think that investment in general should be enhanced and supported.

The people, the government, and the companies in Egypt need to reinvest in the country. thyssenkrupp is doing this.

The post thyssenkrupp’s to build new fertilizer complex in Egypt for NCIC by 2022: Country CEO appeared first on Daily News Egypt.

Thales plans to turn Egypt into regional technical hub to provide company’s services Sun, 19 May 2019 12:00:04 +0000 Thales plans to increase investments in Egypt

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Thales, a global leader in aerospace, defence, security, space and transportation, owns offices in 80 countries and 80,000 employees, out of which 30,000 employees work in research and development (R&D) at the company and about 400 employees in the company’s offices in Egypt.

The company has acquired Gemalto, an international digital security company providing software applications, secure personal devices such as smart cards and tokens, and managed services.

Country Director-Egypt at Thales International, Sherif Barakat, said that the company operates in six main sectors in military and civil services. In civil services the company works in the transportation sector through developing railways, signal technology, and metro development. Additionally, the company owns the most landing and take-off control space technology and comprehensive digital transportation. 

Barakat noted that Thales had a longstanding track record of providing fully integrated solutions for Cairo’s Metro since the implementation of the first line (Line 1) in the late 1980’s. Since then, the group has been awarded several contracts for the manufacturing, supply, building and maintenance of the Automatic Fare Collection system of Lines 1 and 2 of the Greater Cairo metro.

Daily News Egypt interviewed Barakat to discuss the company’s strategy in the Egyptian market, the transcript for which is below, lightly edited for clarity:

How do you see Egypt’s current ICT Strategy?

Egypt’s information and communications technology (ICT) has recently risen in Egypt, with the adoption of President Abdel Fattah Al-Sisi of the national strategy of artificial intelligence (AI), which would turn Egypt into a regional centre for digital technology and AI, especially in light of Egypt’s success in building a giant network of modern infrastructure and roads. In addition, this technological renaissance prepares for the development of urban communities according to smart cities technology.

What is the size of AI in Egypt and in the world?

With the increasing regional trends to rely on digital economy, investment in AI will play an important role in enhancing the regional strategic position and its investments will reach more than $320bn by 2030. With Egypt’s interest in the national strategy of the President Al-Sisi in this field, AI techniques in Egypt in particular may reach more than $40bn.

Do you think that Egypt is eligible for being a regional centre for digital technology and AI?

Egypt has begun to develop its technological infrastructure for years, through modernising its transport networks to include railways, metro, main and interior roads, and airports.

The development processes that Egypt has witnessed during the past five years made it one of the most important countries in the Middle East and Africa region as an investment target for many companies in various fields. The investments of Thales in the last five years exceeded the size of its activities of what it has done over the past 35 years.

What are the fields of cooperation between Egypt and Thales?

There is great cooperation between the Egyptian government and Thales in infrastructure fields, namely depending on the most sophisticated technology in train and railway signals, early warning systems for accidents, and communication networks between trains and metro lines.

Egypt is one of the very few countries in which the company is present in all the activities it operates in. It includes fields of road transport through the development and modernisation of railway systems, metro and space lines through cooperation with Nilesat-the Egyptian Satellite Company- in addition to the development of defence systems, technological insurance, digital identity and navigation.

The company has been in the Egyptian market since 1973, in several areas, most notably transport, which is the development and modernisation of the first and second metro lines, in addition to, the third Imbaba line-Cairo airport, where the company provides monitoring and signal systems, network communication between trains, ticketing technology, money collection, and electronic gates.

Do you plan to increase your business in Egypt?

The company seeks more cooperation with the Egyptian government in the light of the recent economic reform processes and the great economic activity reflected in the form of huge megaprojects in various fields, including giant road networks and new cities such as the New Administrative Capital (NAC), New Alamein, New Mansoura and new airports, according to the latest technologies, which led the company to double its investments in the Egyptian market, over the next few years.

Over and above, Thales is keen on further cooperation with the Egyptian government in its quest for digital transformation, AI and cyber security in light of the promising opportunities that Egypt has in the areas of smart cities, electronic payment, and the modernisation of education.

What is the value of the company’s spending on R&D?

The volume of the company’s spending in the field of technological research during the four years has reached $7bn, increasing its ability to transfer the best technologies in various fields to the promising Egyptian market.

What are recent projects the company committed in Egypt?

The National Authority of Tunnels (NAT) chose Thales to supply a contactless fare collection system as well as an integrated supervision and communication system for various phases of Line 3.  Thales also won a contract from the Egyptian National Railways for the modernisation of the signalling systems on the Cairo-Alexandria corridor, which is the busiest section of the Egyptian Railways network. It was the first contract issued with a company under Egypt’s modernisation plan.

The company also contracted with the Egyptian government to develop and modernise the railway lines of Cairo-Benha which transfer about 25-30 million passengers annually and the Assiut-Nagaa Hammadi, where the company implements the latest technologies in the world in the field of control towers, communications, signals, and electric sliders insurance. We are working hard to accelerate the completion of these projects as soon as possible. We do about 95% of the railways’ development in Egypt.

Additionally, the company also provides, through agreements with the ministry of civil aviation, systems for observation towers and aircraft landing and take-off systems, according to the latest technologies in the world. In addition, Thales provides technology for banks through the online payment and e-commerce technology, as we work with about 80% of Egyptian banks to provide them with secure banking and bank card security systems.

The TransCity™ solution, which uses Web 2.0 technologies secured by Thales, offers the best guarantees for the management of Cairo’s fare collection system. It supervises all data generated across the existing network and will accommodate future network evolutions and extensions.

Arab International Optronics, a joint venture of Thales with the National Service Products Organisation, promotes the local production of optical and optronic equipment. Thales has an established partnership with National Air Navigation Services Company (NANSC), Egypt’s Air Navigation Service Provider, to deliver state-of-the-art Thales products, ranging from air traffic surveillance radars, modern navaids, air traffic control simulators for the Egyptian Aviation Academy, the Air Traffic Management (ATM) system, and the tower system for Cairo International airport.

Thales provides sensors and communications for the four Gowind Corvettes purchased in 2014 by the Egyptian naval forces. In 2015, Egypt purchased 24 Rafale with Thales equipment representing 25% of the total value of the contract, while Thales equipment also represents 20% of the value of the contract for the FREMM multi-mission frigate which was purchased by the Egyptian navy. In the aerospace sector, the group has supplied radars, control centres, and navigation aids for Egypt’s civil aviation authorities since the 1980’s.

Contributing to enhanced security, Thales has equipped the Electronic Exchange with solutions to secure Cairo and Alexandria’s trading systems.

What kind of cooperation with Egypt exists in the field of space?

Egypt is one of the most advanced countries in the field of space technologies in the Middle East and North Africa region.  Moreover, the company has signed an agreement with the Nilesat- thee Egyptian Satellite Company to develop NileSat-201, associated services, and ground stations to provide direct digital TV services to homes, broadcasting and high-speed data services for users in North Africa and the Middle East, including the GCC region.

Do you plan to have or launch business in Egypt’s megaprojects such as the NAC and its monorail or electric train?

We are looking forward to working in Egypt in all the specialised fields and in new smart cities which have been launched recently by the Egyptian government.

As a new country director- Egypt at Thales International, what are your main priorities regarding Egypt?

I’m keen on transforming Egypt to become a regional hub for the provision of technical support for the company’s services in the region,.

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Safety, trust: 2 main challenges toward autonomous vehicles roll-out Wed, 15 May 2019 08:00:17 +0000 The Future of Autonomous and Urban Mobility project seeks to advance leading-edge thinking and drive adoption of innovative solutions based on autonomous vehicles and their impact on urban mobility.

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Autonomous vehicles (AV) or self-driving cars have the potential to improve road safety, decrease pollution levels, reduce congestion, and transform the design of our cities. The last few years, AV have been the centre of research and studies. However, transitioning to AV involved a disruptive shift that is bound to reshape public and private transportation systems, leaving many players behind if they fail to keep pace with emerging technologies.

The Future of Autonomous and Urban Mobility project seeks to advance leading-edge thinking and drive adoption of innovative solutions based on autonomous vehicles and their impact on urban mobility.

To reach a better understanding about AV, and the main challenges facing the commercial roll-out, Daily News Egypt interviewed Michelle Avary, head of the Autonomous and Urban Mobility for the World Economic Forum’s Centre for the Fourth Industrial Revolution, the transcript for which is below, lightly edited for clarity:

What are the biggest challenges facing the roll-out of AV?

Right now the two main challenges are safety and trust. The technology still needs to mature in order to produce on the promise of safety, or any of the other promises of efficiency and other outcomes, that’s obviously the first one.

The second one which is very closely related is trust. There has been a lot of hype about AV and when it is going to become into reality at scale, and what to expect from it. I believe that we need to be more transparent on what the technology can do, what is it actually going to be like, as well as how much is it really going to cost. We need to start having these discussions so society can decide how they want to adopt these technologies to create the lives they want.

Michelle Avary, head of the Autonomous and Urban Mobility for the World Economic Forum’s Centre for the Fourth Industrial Revolution

How can government regulate the AV industry?

Regulations are essential, and they need to be at the right phase of the technology deployment.

As I mentioned AV technology is in the early days, there are fundamentals that haven’t been completely solved, such as: perception, ability to recognise an object, predict how it is going to behave, and make a decision based on that prediction.

It too early for regulations, however, when you think how you can share safety data, it is good to have the government encourage these activities, as it will be beneficial for both the society and the companies developing the technologies.

When it comes to safety, the questions of accountability rises, who would be accountable for crashes and accidents?

Liability and culpability concerns must be addressed, and there are insurance companies right now which are writing policies for AV.

We are actually taking on a study, looking at the United States, China, Japan, the United Kingdom, and Germany, to find out what has to be changed ahead of commercialisation.

The big question that needs to be solved is how do you assign proportional responsibility, and the automotive industry knows how to do this very well, because they do them now, as they do have various suppliers contributing to the manufacture of the vehicle.

What makes the liability and culpability framework more challenging is the computer code aspect of it, bringing in more consumer protection laws, that historically do not exist around software.

That’s something we in the Centre for the Fourth Industrial Revolution are actively working on helping to define.

What about the ethical dilemmas, such as MIT Media Lab’s design of an experiments about who should a self-driving car prioritise in cases of collisions?

There are a series of mistakes that need to be made before you get to a situation like that, as it is kind of talking about how can we develop telepathy. What you are really asking about, there is a really low tolerance for mistakes by machines, that’s the core of it. We are willing to forgive each other more as humans.

There is a legitimate fear about how do we prosecute a computer code, which ultimately is where the responsible lies. It’s more important to address these questions properly so we can set realistic expectations, other than the trolley question.

When can AV become a commercial reality, what other technologies AV are dependent on such as 5G?

Technically, an AV doesn’t need a wireless connectivity to function, as it has many redundant systems for safety, that do not rely on wireless connectivity.

However, wireless connectivity is very important for a couple of different things, such as the ability to call the car to your location, and downloading maps and other information.

When the 5G really comes in place it is for entertainment, when you are not driving!! So it can happen before 5G.

In terms of infrastructure, you need a good road infrastructure, and assuming all of AV are electrical we will also need charging systems and a grid.

What about data privacy concerns, who will have access to the vehicles trip data etc?

There is a great place for regulators to get involved, and I think each location needs to define what they view is important in data privacy. A lot of the data that the AV will use to operate is not personally identifiable information. It is actually perception and sensory data, and a lot of that data will be used in real-time and discarded.

When it comes to personally identifiable information such as your trips, you have your Uber now which have a lot of information about you. You need to decide if that is ok or is it not, and if it is not you need to work with your government to assure your privacy, it is not only an AV related problem.

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Orascom to direct EGP 2.5bn in investments during the current year Tue, 14 May 2019 08:00:09 +0000 ODH’s sales to foreign customers represents about 10% of total sales achieved during Q1, says CEO

The post Orascom to direct EGP 2.5bn in investments during the current year     appeared first on Daily News Egypt.

Orascom Development Holding (ODH) has released its consolidated financial results for the first quarter (Q1) of 2019 recording an EGP 111.332m increase in its consolidated profits during Q1 of 2019, compared to EGP 83.087m during the same quarter of 2018, with an increase of 34%.

The company’s revenues rose to EGP 837.646m during Q1 of 2019, compared to EGP 654.910m during Q1 of 2018.

Gross profit increased to EGP 201.428m during the Q1 of 2019 compared to EGP 179.270m in the Q1of 2018.

Khaled Bichara, CEO of ODH, said that the net real estate sales increased by 166.1% to reach EGP 1.5bn in Q1 of 2019, compared to EGP 397.6m in Q1 of 2018.

Bichara told Daily News Egypt that ODH plans to achieve EGP 6.5bn -EGP 7bn in sales of the company’s projects during the current year, constituted of EGP 430m from El Gouna, EGP 130m from the Makadi Heights project, and EGP 930m from the O West project.

DNE interviewed Bichara to discuss the company’s development and extended plans, the transcript for which is below, lightly edited for clarity:

Khaled Bichara, CEO of ODH

First of All, please tell us the reason behind decreasing the losses and turning to profit.

We have changed the company strategy so that each project is a focus, therefore, we have achieved higher revenues for the third year in row. The company was netted from a loss to profitability recording a net profit of EGP 27.487m during Q1 of 2019, compared to a net loss of EGP 45.955m in Q1 of 2018.

Moreover, we have achieved an increase in sales to record 280% increase compared to the same period last year. The net real estate sales increased by 166.1% to reach EGP 1.5bn in Q1 of 2019 compared to EGP 397.6m in Q1 of 2018.

What is the size of the company’s land bank? Additionally, what is the size of unexploited land bank?

The total land bank of the company is about 43msqm, including the projects of El Gouna, Makadi Heights and O West. The El Gouna project is 36msqm, of which 14msqm have been developed and 22msqm have not yet been developed. Makadi Heights is spread over 3msqm, of which 500,000sqm have been developed and the rest has not yet been developed.

Additionally, the company is co-developing the O West project in collaboration with New Urban Communities Authority on 4msqm.

I think that we have a big land bank and it will take about eight years to complete its development.

When will the company begin the O West implementation?

It is scheduled to begin the project implementation in the current year.

What is the value of achieved sales of O West in the current year?

With regard to sales of the O West project, the company has achieved total contracted sales amounting to EGP 936.3m in Q1. Moreover, the total value of reserved units is worth EGP 1.3bn.

We launched two phases, the first phase mainly included villas and the second phase included a different range of apartments. Capitalising on the huge demand and success, more inventory was added in April 2019 with a total value of EGP 696.4m. To date, ODH managed to sell approximately 85% of the launched inventory.

It is worth mentioning that in 2019, only the land portion of the villas that were sold will be recognised as revenues, yet no positive margins will be reflected due to the upfront marketing and sales expenses that will be paid out this year. Revenues and positive margins will start to kick in starting from the year 2020 and onwards.

What is the company’s expansion plan?

ODH’s expansion plan focuses on east Cairo and the North Coast, and the company is still looking for an area of not less than 3m sqm for development in both regions, whether to be developed by the company itself or in partnership with the state.

Because we care about developing integrated urban communities, we plan to expand in land areas not less than 3msqm to make sure that the project will be an integrated residential project not be less efficient than previous company projects.

What is the value of investments that will be directed in the company’s projects in the current year?

We aims to invest EGP 2.5bn in the company’s projects during the current year, including construction works, which are estimated at approximately EGP 1.2bn.

What is the value of the company’s targeted sales in 2019?

The company targets achieving EGP 6.5bn -EGP 7bn in sales of the company’s projects during the current year, driven by the new offerings in the company’s projects, and the robustness of Egypt’s real estate market constituted from EGP 430m from El Gouna,  EGP 130m from the Makadi Heights project, and EGP 930m from the O West project.

Moreover, I believe that there is a real demand based on population growth, which is a real safety compass for the local real estate market.

Additionally, what is the value of targeted revenues in the current year?

The targeted value of the company’s revenues is estimated at approximately EGP 4bn.

What is your expectations of the real estate price increases after the scheduled increase in fuel prices next month? Additionally, do you think that the price hikes that will follow that decision will lead to market deceleration?

Property price spikes can be calculated only after the percentage of increase in fuel is announced, but even with these increases there will be no slowdown in the performance of companies and their sales during the current year, as there are about 900,000 marriages annually which require the provision of residential units, along with the shortage of commercial and administrative units and projects in the market.

Do you plan to increase the company’s capital?

The company has no intention to increase its capital during the current period because it is too cumbersome for shareholders.

What is the value of increase in hotel revenues in Q1?

Hotel revenues rose by 20.5% to record EGP 357.3m and hotel operating profits increased by 25.1% to register EGP 158.7m in Q1 of 2019

Do you plan to launch business in New Alamein?

The development of the New Alamein City is characterised by the state’s endeavour to operate one of the most important areas throughout the year and not only during the summer season. The accelerated implementation rates of New Alamein project reflects a strong interest in quickly taking advantage of this place and its operation.

How do you see partnership projects, and do you plan to repeat the O West co-developed project?

The partnership system between developers and the state is important in accelerating development rates and providing a renewed return of lands to the state instead of selling them once, in addition the developer can inject his monetary liquidity in the project implementation and not in the instalment of land value.

What is the percentage of the company’s sales to foreigners?

Exporting Egypt’s property does not mean selling units for Egyptian customers working abroad,. Meanwhile, exporting takes place through selling local property to a non-Egyptian customer, but there are challenges, namely, the absence of  mortgage financing and the difficulty in registration units, which are not present in the Egyptian real estate which in turn represents obstacles to implement the state strategy in property export.

The percentage of our sales to foreign customers represents about 10% of the total sales achieved during Q1, which the company seeks to increase to reach 50% as it was in 2010.

Over and above, I appreciate the state’s cooperation with developers to market Egypt and real estate projects abroad.

Most of the company’s revenues in the US dollar range from 75 to 85%, whether through hotel revenues, city management revenues, or real estate revenues, which are all the revenue structures of the company.

Our company participates in the Berlin Tourism Expo (ITB Berlin) and participated in Cityscape Dubai last year, and has a plan to market its projects in Europe in the coming period.

In my point of view, the government has to work on the unit’s registration issue as the foreign client needs a legally registered unit to guarantee his right in this property, especially considering the local mortgage finance system in Egypt. However, the developer has the burden of financing the client through an instalment period over seven or eight years but it does not help the developer in growing his business.


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Saudi alfanar eyes $1.6bn worth renewable energy projects until 2021 Mon, 13 May 2019 07:00:48 +0000 Company intends to launch a wind farm in Egypt with investments of $250m

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Saudi Arabia’s alfanar aims to launch new solar and wind power plants with total capacity of 1.6GW and investments of $1.6bn until 2021, including a $250m worth wind farm in Egypt.

Daily News Egypt interviewed Jamal Wadi, CEO of alfanar Global Development; Ahmed Ibrahim Soliman, division manager at alfanar; and Mahmoud Abdel Fattah, regional manager of the company, to learn about its investment plans in Egypt, the size of the projects it aims to implement, and the challenges the company is facing.

Jamal Wadi, CEO of alfanar

What is the total capacity of the energy projects your company is building?

alfanar signed contracts to implement energy projects with total capacity of 1.4GW, including a 720MW project in Spain, another 600MW project in India, a 50MW solar power plant in Egypt’s Benban, and a 30MW power plant in Britain. alfanar aims to sign new deals for 1.6GW energy projects to bring its projects’ total capacity to 3GW until 2021.

What is your strategy regarding renewable energy projects in Egypt?

Wadi: alfanar has completed the inauguration of its solar power plant in Benban, Aswan, as part of the feed-in tariff programme. It was the company’s first project in the Egyptian market, especially in the renewable energy sector. The company aims to invest the project’s revenues in implementing further projects.

Ibrahim: The company seeks to implement a wind farm with a capacity of 250MW and investments of $250m. We are still negotiating with the Egyptian Electricity Transmission Company (EETC) over the contractual system. The company will begin arranging the required funding for the project after signing the agreement.

What is the contractual system that the company seeks to follow?

Wadi: The company aims to implement its projects under the independent power producer (IPP) system to sell energy directly and pay the EETC for using the national grid. If the legislations and controls are completed, the company will implement its projects under this system, as Saudi Arabia has many similar projects.

How do you evaluate the investment and legislative climate of energy projects in Egypt?

Ibrahim: The new energy legislations issued in Egypt and the government’s strategy to attract long-term investments and produce 20% of the country’s electricity from renewable sources by 2022, have encouraged the company to establish new energy projects in the country.

alfanar aims to expand in establishing renewable energy projects in the coming years after the success and completion of its 50MW solar power plant in Benban.

What challenges did the company face in Egypt?

Abdel Fattah: The most prominent challenge faced by the company in the implementation of energy projects in Benban was the timetable of implementing the project, linking its production to the national grid, and start the commercial operation of the plant, which enabled alfanar to sell its production to the EETC.

alfanar owns a group of companies specialised in the construction works, civil engineering, and manufacturing steel, electric cables, control panels, transformers, and electric pistons.

What is the size of the company’s sales? Do you have any intention to acquire companies?

Wadi: alfanar achieved sales of $1.2bn in 2018 and plans to increase it this year, as the company seeks to expand in the Arab and European markets. alfanar has recently acquired $250m worth companies. The companies include ZIV in Italy, Safa in Turkey, and Contactum of Britain. All these companies operate in electrical equipment field. We will soon acquire a construction company in India.

Do you plan to acquire an Egyptian company?

Wadi: We are already following several small and medium Egyptian companies whose sales range between $100m and $150m per year to match the financial capacity of the company.

It is also possible to acquire a company that works with us at the solar power station in Benban.

He pointed out that the political and economic stability and the high credit rating of Egypt and the legislation and regulations governing investment, encouraged alfanar to invest in Egypt, expand its projects, and plan to implement several stations in the energy sector.

What are the most important features of the company’s investment plan in Egypt?

alfanar is studying investment in the field of energy-from-waste, especially since we have three similar projects in Britain. We are waiting to prove the success of these projects and the technology used to implement them to inaugurate them in Egypt. But, firstly, a suitable legal framework is required to control this field.

He pointed out that the company welcomes cooperation with the alliances eligible for the establishment of new and renewable energy projects in accordance with the procedures and rules followed, excluding the idea of listing the company on the Egyptian Exchange.

What is the difference between renewable energy legislation in Egypt and Saudi Arabia?

Wadi: There is a difference between the legislation and laws governing the investment in Egypt and Saudi Arabia. Egypt preceded Saudi Arabia to put forward a comprehensive plan on a large scale to implement plants to produce electricity from renewable resources.

alfanar also participate in the civil engineering works and civil works of the NEOM project in cooperation with the international companies and alliances involved in its implementation.

The Saudi Crown Prince Mohamed bin Salman announced in October 2017 a plan to establish the NEOM project with investments of $500bn, located northwest of the kingdom on an area of 10,200 sqm.

The project overlooks from north and west on the Red Sea and the Gulf of Aqaba, along 468 km, surrounded by 2,500m high mountains from the east. The project will focus on nine investment areas and will be completed by 2025.

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World Bank’s cooperation with CBE to issue fintech sandbox is conditional: Mohieldin Sun, 05 May 2019 09:30:10 +0000 Municipalities in Egypt should have clear detailed budgets first to be qualified for issuing bonds

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There is nothing that would prevent cooperation between the World Bank and the Central Bank of Egypt (CBE) to issue Egypt’s fintech sandbox within the framework of the bank’s role to support and develop capital markets, Mahmoud Mohieldin, the World Bank Group’s senior vice president for the 2030 Development Agenda, United Nations Relations, and Partnerships, told Daily News Egypt.

However, he said the World Bank’s cooperation is conditional and depends on the presence of three factors. First is the ability of that funding tool to meet the local and international regulatory standards and rules. Second is the application of these standards and rules to maintain financial solvency and the ability to commit to paying dues. Third is their ability to continue financial development.

Mohieldin added that this tool allows people with ideas and emerging projects to launch their products according to conditions and regulations that are less stringent, especially with banks’ reservation to offer funding to innovative products.

He added that for the third time in a row within 18 months, the World Bank reduces its forecast for the growth of the global economy, the last of which was in April. The forecast was lowered by 0.3% to 3.3% in 2019.

Mohieldin attributed the drop in forecast to three main reasons. First is the impact of the measures adopted following the financial crisis of the developed countries and the uncertainty associated with trade disputes. Second is the lack of clarity regarding the monetary policies of central banks. Third is the political unrest and conflicts that have erupted in a number of countries, leaving a negative impact on growth rates.

He suggested that such countries should adopt policies that drive economies in different sectors through investing in human capital, education, health care, technology, and digital transformation. He pointed out that there is a need for directing more investments towards technology localisation and infrastructure development to encourage the private sector to enter these fields, especially that most of the required investments can be made through the local, regional, or foreign private sector.

He added that there should be a better arrangement for international relations regarding trade and investment in the so-called “fair rules of the game” in the trade and investment movement.

As for the Egyptian economy, Mohieldin advised that it is necessary to diversify the sources of finance as the yield levels among most of the financing instruments, such as bonds, became close and are no longer tied only to their yield, but to the characteristics of bonds and the investors’ objectives. Currently, there are around 12 types of bonds globally, including green bonds, blue bonds, and gender bonds.

Mohieldin added that it is necessary to connect bonds and their new innovative types to the local economy and the different sectors of the development of a particular region or important economic sector within the state, such as education, health, environment, and infrastructure, as the issuance process is not the only attractive factor to investors, but it has also become important that these issuances are promising given their history in other countries, which reduces their risks.

Mohieldin also advised that the Arab stock exchanges should adopt the influential investment approach with its nine new standards, which make these exchanges part of the international dialogue that saw the participation of 58 large international institutions with assets worth $350bn as a start, launched two weeks ago.

Regarding the development of Egypt’s ability to attract foreign direct investment (FDI), Mohieldin said that FDI has dropped globally to $1.4tn, however the share of countries has not been affected and they are still able to attract investments.

Mohieldin said that there are three important elements to promote FDI, the most important of which currently is the digital transformation process at the level of many important economic sectors, which requires huge investments. The second element is continuous education and health. The third is linked to demographic distribution in some cities which are more populated than some medium-sized countries, attracting large investments to establish infrastructure, airports, universities, schools, and clubs in these regions, in addition to creating large economies that push growth rates forward.

“There are huge funds in many governorates in Egypt, but they are not utilised for funding development or direct investments. They are only used in real estate and gold speculations, and simple trading operations,” Mohieldin said.

He added that municipalities and governorates in Egypt depend on financial allocations in the state’s general budget, in addition to some of the fees obtained from the utilisation of some real estate, however, there are about 27 sources of funding for municipalities globally, and they still get priority in the proceeds of real estate taxes.

“In Johannesburg, South Africa, blue bonds have been issued to build the city itself,” he said. “When municipalities in Egypt reach this level, they will be able to attract investors,” he added.

Mohieldin believes that municipalities in Egypt can reach that level when they have a clear detailed budgets for several years that show their revenues and expenses. He pointed out that issuing legislations to control bonds issuance or other funding tools is not enough, but the municipalities must have clear budgets.

Another way to reach that level according to Mohieldin is for municipalities to resort to the ministry of finance to obtain a guarantee for these bonds, which is an undesirable method.

As for the financing needed to establish infrastructure projects, Mohieldin sees it’s necessary to consider the state’s resources, such as the advantage of owning lands and issuing licenses, all of which is sufficient to build a strong financial model through participation with the private sector.

Mohieldin expressed his satisfaction with the leadership and the Egyptian government’s interest in moving eastwards to successful experiences in China, Korea, Japan, and now Vietnam, which led successful experiences and strong stories in the transformation.

He added that Egypt has missed many opportunities due to the long discussions on centralisation and decentralisation, and with time, it was discovered that the centre must be strong, and the rest of the countries must be given sufficient flexibility. Discussions now are about the need to localise investments and technology to make districts and governorates compete among themselves to attract investment.

Regarding concerns over public debt in Egypt, Mohieldin said the government really works on controlling the budget deficit, which is the main reason of borrowing. He insisted the need to increase domestic investment to fill the funding gap in the country.

Mohieldein believes that in order to double the national income for a certain number of years, the growth rate should be between 7-8%, which would require saving according to the usual growth models of 27%, as each point of growth needs four points in terms of investment, therefore, the smaller the domestic savings, the less the country would resort to bridging the gap of foreign savings, whether in the form of debts or foreign direct and indirect investments. Mohieldin stressed that it is important to increase the reliance on local savings for investment and driving growth.

Mohieldin pointed out that there is a very strong market in the Arab countries to attract investments, especially that about 10% of the population get 60% of income, referring to the need to improve the distribution of income to increase the size of financial markets.

On the other hand, Mohieldin praised the improvement in international reports on Egypt, which is due to the relative improvement in economic growth rates following the procedures of the economic reform process and the seriousness in its implementation, adding that these reports also look to the future and take into account certain economic, political, and social aspects. These credit ratings with their forecasts, whether positive or negative, should be placed within an applicable framework. Mohieldin added that these credit ratings are concerned with the ability of the state to pay and meet the required dues, therefore it cannot be taken into consideration as indicators of other matters. He condemned what happens often through the excessive use of those reports and relying on them in many aspects. He added that these reports are created for a certain type of investors who collect their dues after a specific period in international bonds.

He concluded there is confusion about these reports and the World Bank’s Doing Business report, pointing out that it is not an indicator of the investment climate, but an indicator of the investment measures for local SMEs, which cannot be used to measure the FDI climate.

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Etisalat is first operator to announce advanced solution Cloud-AIR from Huawei: CTO Tue, 23 Apr 2019 18:08:31 +0000 Egyptian market is hungry for mobile broadband, says Murshed

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The mobile technology scene has witnessed great developments in the last couple of years and the Egyptian telecommunication market has steadily grown with mobile broadband traffic doubling every two years.

To find out about the industry’s latest news, and Etisalat Misr’s latest plans, Daily News Egypt interviewed the company’s Chief Technology Officer Khalid Murshed.

What is your perspective about the mobile broadband?

In the past few years, we have seen mobile broadband traffic doubling every two years. We expect that this trend will continue for the coming few years. We are very proud that the Egyptian market is hungry for mobile broadband and the Egyptian user is striving for the best service. Etisalat Misr is always aiming to provide the best in class network to cater for the customer expectations. We aimed to be ahead of the curve, and that was what drove us to adopt new technological features and collaborate with the world leading suppliers aiming to guarantee the highest customer satisfaction.              

You mentioned your partners as world leading, we would like to know more about Etisalat suppliers and who are they? And your plans after launching 5G?     

Etisalat has a wide portfolio of partners and suppliers that include the market leaders as Huawei, Ericson, Nokia, ZTE, Cisco, and others. Etisalat counts on its partners to deliver the state of art technologies. We are known to be a technology leading company in providing business solutions and satisfying customer needs. We provide new innovative tailored solutions for different categories and age groups.         

In Egypt, what are the upcoming challenges that we will witness with the existence of new technologies?

Needless to say that we are always working on overcoming all challenges that we face in Egypt such as:

Scarcity of resources in terms of spectrum in Egypt. To clarify, the four operators in Egypt have the spectrum resource of one operator in neighbor countries. This is imposing several challenges while the customers are looking for a distinguished experience.

In addition, to stay ahead of the technology, sites need periodic maintenance. Infrastructure versatility is necessary to address the Egyptian market.

We are always adopting advanced technology in order to resolve business challenges; this is the culture and DNA of Etisalat. We transform every challenge to an opportunity. We were the first operator to announce an advanced solution from Huawei, “Cloud-AIR”, in which we will not need to allocate spectrum to a specific technology. We always come up with solutions to overcome market challenges. Our agility makes a difference.

Based on your expectations from MWC and Huawei booth visit, how do you see Huawei providing a better value to your business in different areas such as 5G, cloud, data centers, future solutions for business clients?

Huawei and Etisalat have been collaborating for many years. Huawei is a reliable partner in providing cutting-edge technologies and a leading supplier to the whole industry because they are always pushing the envelope. They are always challenging the status quo and moving the bar higher than expected. We see new technology from Huawei every quarter and that is in line with our vision, which is providing the state of art technology and best solutions to our customers.        

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Security, confronting terrorism are common challenges facing Egypt, African continent: Ramdan Orny Tue, 23 Apr 2019 17:51:09 +0000 Last January, the African Union (AU) announced that Egypt would head the AU summit’s upcoming round in 2019, following the closing meeting of African leaders. During his participation in the 30th AU summit in the Ethiopian capital Addis Ababa, President Abdel Fattah Al-Sisi praised the efforts exerted by the Guinean President Alpha Condé, head of …

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Last January, the African Union (AU) announced that Egypt would head the AU summit’s upcoming round in 2019, following the closing meeting of African leaders.

During his participation in the 30th AU summit in the Ethiopian capital Addis Ababa, President Abdel Fattah Al-Sisi praised the efforts exerted by the Guinean President Alpha Condé, head of the current round of the AU summit, on the issue of institutional reform.

In his speech before the African leaders, Al-Sisi said that despite Egypt’s agreement that the summit of African leaders has absolute authority, he also believes that the decision-making process should pass through lower levels before being discussed at the summit in order to undergo reviews and improve accuracy, so that problems in implementation do not surface.

Ramdan Orny, an expert on African affairs and editing manager for the African Perspective magazine said that “Egypt’s presidency of the AU in its new session marks the culmination of the efforts of recent years in African work, Egypt’s historic effort also with Africa, and to complement the developmental and political role Egypt played in the continent–it is Egypt’s fourth presidency of the AU. Egypt is building its presidency over five steps to implement the 2063 agenda.”

Daily News Egypt interviewed Orny to discuss the future vision for Egypt’s presidency of the AU, the transcript for which is below, lightly edited for clarity:

What will Egypt focus on as the AU chair?

We should be aware that Egypt’s presidency of the AU is a practical application of the AU’s 2063 agenda, in cooperation with the AU Commission and all African friends. This highlights the many files Egypt will be working on this year, in cooperation with African partners. Perhaps the most important of which is the African free trade file and an attempt to address the structural imbalances in this aspect, as well as the development of the infrastructure in Africa in major continental projects, the structure of peace and security in the African continent, and Egypt will also focus on the anti-terrorism file during its presidency of the AU.

What will benefit Egypt after becoming president of the AU?

The Egyptian vision of Africa looks at the gain in a different way which is the direction of a gain for all. When Egypt deals with African issues, it has different starting points.

The most important challenges facing Egypt during its presidency of the AU is the exploitation of human capacities and cadres, its international relations in achieving the greatest benefit to the African continent, to achieve maximum expansion, and activate the African-Egyptian cooperation. This is the Egyptian message of the idea of ​​the Egyptian benefit from the presidency of the AU.

Egypt’s presidency of the AU comes amid challenges; can you explain these challenges?

There are common challenges facing Egypt and the African continent in general, mainly the security challenge and the challenge of confronting terrorism. Also, the issue of sustainable financing sources and problematic contributions to the structural reform of the AU lies with five countries: Egypt, Angola, Nigeria, South Africa, and Algeria. There is also the 12% of the budget of the AU without a fair distribution to the countries of the AU.

The AU needs sustainable mechanisms to finance its activities with regard to the settlement of political conflicts. Among the issues faced by Egypt is political cooperation in resolving conflicts in the African continent. Although many conflicts have been resolved, there are still conflicts in a number of African countries, such as Burundi, Central Africa and the Congo. Conflicts are an important issue, especially as they cause phenomena that affect Africa in full, such as the issue of asylums and displaced persons.

How does Egypt’s presidency of the AU open the door to decisive action in the war against terrorism?

The Egyptian vision is consistent with the African vision on the issue of terrorism and it is an essential element against the development of the African continent. When we face terrorism in Africa, we face it politically, economically, security-wise, culturally, and religiously.

Egypt began with Africa to activate many tools in the face of this phenomenon, perhaps the most important of which is the adoption of international resolutions of the security council, especially during Egypt’s membership of the security council represented by the African continent, and the phenomenon of terrorism must also include countries which support and sponsor terrorism.

We recognise that there is a gap in the exchange of information between African countries. If Egypt can succeed in this file, this will be a significant gain for the continent, especially as the issue of terrorism has become like the belt surrounding the continent, including the Shabaab al-Mujahideen in Somalia, Boko Haram in Nigeria, and Ansar al-Din in Mali, and they are based in north Morocco, and Daesh are in the north of Libya. If there is cooperation, we will succeed according to my knowledge to exterminate the phenomenon.

What is Egypt’s vision for the development of the African continent and positioning it globally?

Egypt’s vision is to develop the continent and make it a globally-cantered cultural and a civilizational solution to eliminate terrorism which is a gain for all. It protects Egyptian national security and saves Africa from this phenomenon. It is a gain for the continent in supporting the development process, and establishing an African Common Market for Trade, noting that the Free Trade Organization is one of Egypt’s top priorities in the AU, and working on sustainable development and utilising the wealth enjoyed by the continent.
Achieving this will lead to the continent’s development.

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British companies’ interest in transport, renewable energy sectors increasing: BEBA Tue, 23 Apr 2019 11:12:14 +0000 At least couple of British business missions to visit Egypt this year, says BEBA’s Chairperson

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British companies’ interest in Egypt’s transportation and renewable energy sectors is remarkably increasing, especially in megaprojects, Chairperson of the British Egyptian Business Association (BEBA) Khaled Nosseir, said, adding, “The most recent is a British company which is investing in the Benban Solar Park and other big companies which seek to invest in the monorail project that links the New Administrative Capital (NAC) with Cairo.”

There are at least couple of UK business missions that are expected to visit Egypt in 2019, Nosseir noted, asserting that the BEBA still awaits their final confirmation.

Daily News Egypt interviewed Nosseir to explore BEBA’s plans, British companies’ new interests in the Egyptian market, and learn further about BEBA’s recent activities, the transcript of which is below, lightly edited for clarity:

Do you have a plan to increase the BEBA’s members?

Sure, we always try to increase member numbers, to offer novel and positive services. We are keen on enlarging the platform of members to have a wider diversity of members, yet it is not a matter of increasing the members’ numbers as it is a matter of quality. We stand now at almost 800 members. Moreover, we are a platform for the British and Egyptian businesspersons to meet, interact, and have one-to-one business interest. The BEBA board meets on a monthly basis where we organise monthly events. Often there are up to three events per month for the members and for the officials both from the Egyptian and the UK government. Sometimes we include incoming British business missions in our events.

How do British companies assess Egypt’s investment climate?

British companies are perceiving a very favourable business climate in Egypt. The challenges that British companies face here are the same challenges that all other companies are facing in Egypt, so there aren’t specific issues that exclusively face British companies. Like other organisations, we are giving the same recommendations to the government on how to improve business climate and attract investments.

Are there new British companies who want to invest in Egypt?

Of course, many British companies are seeking to enter the Egyptian market. British companies are mostly interested in Egypt’s health care, transport, education and of course the oil and gas sector. There are a lot of British investments in the field of oil and gas, financial services, and the Communication and Information Technology (CIT) sector. We see increasing the interest of British companies to cooperate with Egyptian counterparts and governments in providing technical assistance and knowhow, to share knowledge and experiences both in the healthcare and education fields.

What about British companies’ interest in the country’s megaprojects?

British companies are very interested in Egypt’s megaprojects, especially in transport and renewable energy. For example, the Benban Solar Park and monorail project which links the NAC with Cairo.

What about bilateral missions?

We started a tradition four years ago of organising business missions to the UK, and they were quite successful year-over-year. We will have our business mission by the end of the year. We also welcome incoming sectorial business missions from the UK. We organise bilateral meetings for them with Egyptian counterparts and the concerned governmental entities. The healthcare conference of the 1st April was one example of our efforts to promote new areas of the economy. The conference was well attended and very successful. The panel discussion was very informative for all participants including Egyptian and British companies who were visiting Egypt on business mission from the UK. The event shed light on the government’s plans to restructure the entire health care sector in Egypt and the Universal Health Care Law, and plans of how it will be run. Additionally, at least a couple of UK business missions will visit Egypt and we are awaiting their final confirmation.

What about your upcoming events and the ministers which you will host in 2019?

In 2019, we had the Minister of Finance, Mohamed Moeit, the Minister of Higher Education, Khaled Abdel Ghaffar, as well as officials from the General Authority for Investment and Free Zones (GAFI). We plan to host several ministers and governmental officials until the end of the year. In due time we will announce who will attend and what the programmes are. Furthermore, we will continue our trend in creating innovative ideas and offering topics of interests of the new economy. We help members to develop their contacts, with UK companies and allow them to have direct contact with Egyptian and UK officials. The BEBA’s mission is basically to act as a platform for UK and Egyptian businesses to build bridges between both countries in order to enhance economic activities and partnership, as well as to provide services for its members. We also act as the voice of our members to promote their interests and assist in solving any challenges they face.

What do you think of the Egyptian economy’s performance?

The economic structure changes which took place in Egypt positively reflected on the economy’s stability, which was very important for economic activity. GDP growth is increasing well. We noticed the improvement in the rating of the Egyptian economy by rating agencies. The recent economic developments are all positive and we need to continue and build upon them. The country is facing some problems in its educational system. However, the government is taking serious steps to solve them, yet it takes time for them to be completely resolved because one of the main country’s challenges is the rapid population growth which can both be a blessing or a problem. If you educate the people and train them, then it’s a blessing as it become an asset, but if you don’t, then it’s a problem.

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Vodafone Egypt to inject new investments worth of €250m in Egypt in 2020 Tue, 23 Apr 2019 11:02:22 +0000 Company likely to reveal revenues amount of full FY 2018/19 by mid-June, says Alexandre Froment-Curtil

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Vodafone Egypt seeks to invest about €250m in Egypt over the next year, the company’s CEO Alexandre Froment-Curtil, said, adding that his company has already invested about EGP 45bn over last 20 years in the country.

“Egypt’s 2030 Vision is going digital. There is a worldwide race and rush in the digitalisation, Egypt cannot be left behind,” he noted, pointing out that Vodafone Egypt’s role focuses on enabling the digitalisation of Egypt.

“We are looking at all the possible solutions in infrastructure, investments, and IT solutions to support the country’s digitalisation plans,” he declared.

Daily News Egypt interviewed Froment-Curtil to learn more about the company’s activities and future plans in various aspects including investments, revenues, corporate social responsibility (CSR) projects, as well as a comprehensive view of the Egyptian economy updates and its impact on the communication and information technology communication and information technology (CIT) industry, the transcript for which is below, lightly edited for clarity:

Initially, how do you assess Egypt’s investment climate in general and telecommunications sector in particular?

We are very confident about the macroeconomic dynamics of Egypt including the country’s overall state such as GDP growth, population, and the very strong economic reforms that have been undertaken in the last three or four years. We view those reforms as tough reforms but now there are very positive economic outlooks for the country. The reforms promoted the business confidence in the market. As Vodafone Egypt, we invested about EGP 45bn over the last 20 years in the country, and for our annual investment next year we will invest about €250m in the country- and this is not a small sum-which reveals that we are confident about the overall climate in our sector.

One of Egypt’s business tycoons criticised investments in the CIT sector saying that it is unprofitable, how do you see the sector’s profitability?

As a group, we have been here for the last 20 years, and we’re here to stay.

What about your plans to provide 5G services?

Worldwide, we have been making a lot of first 5G activities, such as in the research and development (R&D) aspect. Recently we launched the first 5G call between two 5G phones in Barcelona. We have a lot of innovations in 5G services in the UK, Italy, so we are really keen on the 5G R&D activities. For Egypt, it is still too early, as it requires both the technology and infrastructure and all of these things aren’t yet on Egypt’s agenda. Fundamentally we have launched 4G since 2016, so we need more time to spread 4G to everybody. Until everybody has 4G in their hands-and I mean the whole population not only in Cairo-we shouldn’t be worrying too much about 5G.

I know that Vodafone requested additional frequencies from National Telecom Regulatory Authority (NTRA) for 4G, what are the updates?

Yes, we already requested, because we see a significant demand. As soon as our customers switch to 4G, they will really get heavily engaged in the internet about knowledge, access to opportunities on that basis, and we need to be able to cope with the massive demand that is happening on the data infrastructure. Additional frequencies will allow us to cope that demand.

When is the NTRA expected to approve your request? 

We can’t expect a date because it’s the NTRA’s decision. We will wait and see.

How much are the revenues of Vodafone in fiscal year (FY) 2018/19 which ends in March?

We will reveal the results of the financial performance by mid-June, yet we can’t announce our plans for the next FY now.

How did the reforms and the Egyptian pound flotation reflect on your activities?

Actually, we were affected by many elements including the value added taxation (VAT), the Egyptian pound devaluation, then we were affected by inflation and people salaries and energy prices–these were big challenges in many different ways but we deal with it, and as long as we believe that these reforms are for the good of the country, we will keep in dealing with it.

So, have you recovered from those challenges?

Not yet, but we are dealing with the situation. We see a positive impact on the country’s economic performance including the GDP positive growth. We also see the enthusiasm of the small and medium-sized enterprises (SMEs) as well as the increase of the entrepreneurship sector.

How do you assess cooperation with Telecom Egypt?

Telecom Egypt is our supplier and they are also our shareholder. Sometimes they are a customer, and in a very specific part of the business, they are competitors. So it is a very challenging relationship because it is multifaceted relationship. I would like to confirm that it is not negative at all. The agreement we have signed recently in February with them is a significant milestone of the quality of our relationship. Earlier in February, Egypt Telecom and Vodafone Egypt signed an agreement in the field of messaging, infrastructure, and distribution of profits in the presence of the Minister of Communications Amr Talaat. Talaat elaborated that the first agreement is about the distribution of profits of Telecom Egypt at Vodafone, which amounts to EGP 5.5bn. The profits will be disbursed by EGP 4.8bn in March 2019 and EGP 700m in June 2020, according to a past statement of the ministry. We have fulfilled our shareholder duties to release evidence to our shareholders and vice versa. Telecom Egypt has shown a great vision in the way they are supplying us with the fixed infrastructure which is a long-term agreement.

How do you see the competition climate with other operating companies in Egypt?

Egypt’s telecommunication industry is very competitive. That is something which is very health. The more competition there is, the more we will innovate new services, promotions, growth opportunities, with very positive industry dynamics.

What about the company’s CSR activities? And what are the plans in this regard in terms of projects numbers and funds?

We launched the Vodafone Egypt Foundation, which is an non-governmental organisation (NGO), 15 years ago. It is the only telecom NGO in the country, and over the years, we have invested more than EGP 450m. Historically, there were many proud times of the foundation. One topic was an illiteracy programme where we taught reading and writing to over 400,000 women, mainly, in Upper Egypt. It had a significant impact. We have other activities with our partners to improve 100 schools in three governorates in Sohag, Fayoum and Luxor. OVER 60,000 children benefited from improving the infrastructure of the schools, and we encourage other NGOs to come up with programmes to improve curriculum activities including the theatre, music, sports, and others. We help the managers of schools to engage with the community. We deeply believe that schools are successful when the whole community helps schools. Education has been the heart of what we do at the Vodafone Egypt Foundation. Additionally, sustaining 100 schools is a big undertaking, you can’t go to a school, paint the wall and leave it. We are sustaining the efforts we have made and the investments we are injecting. So we will focus on that and for future CSR projects, we will wait and see.

What about Vodafone’ strategy for the next five years?

The way to look at Egypt is that the country has to digitalise swiftly. The country’s 2030 Vision is going digital. There is a worldwide race and rush in the digitalisation, Egypt can’t be left behind. We see that our role is enabling the digitalisation of Egypt is our strategy. We are looking at all the possible solutions in infrastructure, investments, and IT solutions.

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Egypt qualified as economic capital of MENA: ex-petroleum minister Osama Kamal Sun, 21 Apr 2019 09:00:15 +0000 Exploiting our wealth of mineral resources can record $10bn within five years, says Kamal

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Egypt has been preparing itself recently to be a regional centre for energy especially after recent natural gas discoveries, in addition to other efforts being conducted to deal with other petroleum and mineral resources.

In an exclusive interview with Daily News Egypt, former minister of petroleum and mineral resources, Osama Kamal, unveiled several facts about this sector, explaining the potential that Egypt has and what qualifies it to become the economic capital of the Middle East.

The transcript of the interview is below, lightly edited for clarity:

How do you evaluate the Egyptian economy and investment scene in recent years?

I can say that Egypt has all the potentials that qualify it to be an economic capital for the entire MENA region. My vision is based on that the biggest targeted markets in the world for trading are Europe and Africa which together include 2.5 billion inhabitants. At the same time, Egypt is linked with these two giant markets with vital agreements, such as avoiding double taxation treaties (DTTs) with Europe and Africa. In addition, Egypt plays a key role for the global trading movement thanks to the Suez Canal and its new extension.

Furthermore, Egypt has plenty of the technical qualified labour that is required for any project or investment to be established. Thus, Egypt has a competitive edge among other markets, especially when we know that all the previous potentials which I clarified make the product price of any project in Egypt lower by between $150-200 per tonne of products, compared to other projects established in other countries.

So, Egypt has an attractive investment market?

All these factors are reasons behind the already existing investments in Egypt now, although the presence of several negative issues like bureaucracy, slowness of registration procedures, and problems related to investment conflicts for instance. All these positive aspects are not available in other markets.

Then, how do you see the role played by the ministry of investment in this regard?

It plays an important role, but, let me point out the experience of a country like India which considers real investment attraction is the ‘practicing not the theory,’ and consequently cancelled the ministry of investment on the basis that investment needs a good atmosphere and practical procedures without devoting a portfolio to organise it.

In the same vein, Egypt needs the ministry of investment to ease the mission and stabilise investment policies before investors, and to play a regulatory role in which it introduces all facilities to them, paving the way and preparing the environment to a healthy business investment atmosphere.

But, big steps have been taken by the ministry of investment such as drafting a new Investment Law and opening new investments centres to deal with such troubles?

It is right that there is a new Investment Law and its regulatory frame, in addition to other efforts that are done, but, practicing is not that easy, it must do more to attract more foreign direct investments (FDIs). That is a key issue.

Do you mean that the value of FDIs is the point in this regard?

Exactly. The key factor here is the volume of FDIs that Egypt has attracted since the new law has been in effect. The volume of FDIs is seemingly not enough compared to the efforts that the state is introducing to attract more investments, especially through the president’s visits to meet officials from all over the world, meeting with remarkable businesspersons in this regard. 

Yet, what about Siemens in electricity generating and the new investments in the oil and petroleum field? Are these not considered as FDIs that Egypt has succeeded to recently attract?

In this regard, such investments are not subjected to the ministry of investment. These investments were attracted thanks to direct negotiations hold by President Abdel Fattah Al Sisi.

How do you see the role of the investment ministry in the future?

It certainly has an important role, they can only play a regulatory role. The investment need a suitable atmosphere that focuses on the payoff at the expense of regulations or laws. For instance, the Suez Canal economic zone is a good example.

Another important issue I want to mention, the ministry of investment is not doing business itself, but others do. When Egypt embarks on attracting new investments in the solar energy sector it offers three key incentives in this regard, including allowing the transfer of investor’s profits outside Egypt, giving them the right of recourse to arbitration and getting a sovereign guarantee. But, investors were shocked when the final draft of the contract cancelled all these incentives. Such an action impeded the growth in this field, thus the result was that all these projects attracted only one domestic investor.

Therefore, what should be done?

Investment is related to policy stability, and economy and investment policies and strategies which cannot be changed when officials leave their posts. Investment is a normal response to stability.

Meanwhile, we need to track project and investment returns– not regulations as a solid structure. Obligation to regulations and legislations strictly curbs any effort to depend on the private sector or attract foreign investors to help the state benefit the most from its potentials. So, this situation is constraining the state from generating new job opportunities and, consequently, improve the living standard of all Egyptians.

In addition, we must turn into toward electronic system, cancelling any face to face contact. This is the followed system in all thriving countries all over the world. Countries like India, South Africa, Burundi, Ethiopia, and the UAE are all following this lead. The investor in these countries gets his project required permissions in just three days.

How can we follow these countries’ experiences lead?

Egypt needs to adopt models of successful countries through establishing cities which represent the models of economic and investment successful countries such as the UAE, Singapore, and China to inspire their experiences in Egypt. This will help us to learn the methods and techniques that are followed there, and on the other hand attract new investments in an easy way.

Let’s talk about the mining industry in Egypt, and how this sector is really suffering now.

Unfortunately, the terms that were set to explore gold ore in 2016 didn’t help a lot. This sector and its laws and regulations need to be totally restructured in way that can attract investors in similar countries like Australia, South Africa, and Morocco.

Is that relates to the report that the ministry of petroleum and mineral resources mandated to Mackenzie to draft, putting an integrated vision, and making use of mineral wealth in Egypt?

Yes, Mackenzie has already drafted its report and handed it to the ministry of petroleum. I guess the report assured the application of tax and royalty as the best way to explore gold ore and establish a real gold mining industry.

Is that due to the terms were set for exploring oil?

It is completely true. The mineral resources cannot be organised under a frame of oil and petroleum field, there is an vast difference between the two.

According to your experience, what are the benefits that our economy can reap from exploiting our neglected wealth of mineral resources?

Egypt has a wealth of mineral ores. According to a recent study the outcome of our mineral resources for the national economy ranges between an annual EGP 800m and EGP 900m. But, this average could jump to record $10bn within five years, if this wealth started to be tapped.

What about our reserves of natural gas and its ability to cover our consumption and to be exported?

Egypt has 88tn cubic feet of natural gas reserves after the Zohr field started to work. The volume of our consumption, including the local consumption and what is prepared for export, records about EGP 3tn cubic feet as an outcome. Our reserves in the frame of our consumption now covers our needs for the coming 30 years.

From your perspective, how do the projected constitutional amendments overshadow the economy and investment scene in Egypt?

I expect that Egypt is to experience massive structural changes after the constitutional amendments are in effect, as it paves the way to more stability in the economic, political, and social aspects, causing the stability that the investment atmosphere requires.

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Presidential advisory council unanimously prioritises reforming education: El-Nokrashy Tue, 16 Apr 2019 08:00:17 +0000 Council's recommendations have been introduced in developing education

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Global renewable energy expert Hany El-Nokrashy, the son of Mahmoud Fahmy El-Nokrashy, Egypt’s former prime minister during King Farouk’s reign who was assassinated by the Muslim Brotherhood in 1948. Hany El-Nokrashy inherited a vendetta against the group which made him pray to God that MB fall when they came to power. 

El-Nokrashy has a vision to generate energy in Egypt from heat available in deserts. It is a clean source of energy that can supply Egypt and the world with energy needs, away from coal and its negative environmental impact.

He is also a member of the president’s advisory council of Egypt’s scientists and experts, which includes the most prominent scientists in all disciplines and fields. This council is charged with studying the files of national projects and development in all state sectors.

The advisory council was established in 2014, but it has not made headlines since then. Has it been dismantled?

No, it is still ongoing. We meet periodically but we have no expertise with the media or public relations. It is not a priority for us. We have a specific task: to provide the required advice to the state in all matters related to scientific issues and development projects. We have specific mandates from the president, the most important of which is studying the government’s visions regarding Egypt’s future since the beginning of the council’s formation. This comes after we have identified the most important issues which represent an obstacle or a stumbling block in the development process, and the need to deal with them and solve them.

What are the most important obstacles the council has identified?

All of us in the council unanimously agree on the priority of reforming education, because it is the greatest stumbling block and enfolds our renaissance.

Does this mean that you are involved in education development now?

Of course we are. The president was interested in the recommendations we provided, and he forwarded them to the Minister of Education Tarek Shawky. The minister has a great and positive vision that has already been presented to the members of the advisory council and we recognised the quality and validity of its implementation in Egypt. He already began to implement his new plan for developing education.

And when can we see the results of this plan?

The final results will appear in 20 years. The initial results of educational development will appear in a few years. We are working on a long-term plan, which is what developed countries do in such files.

Regarding the energy sector, do you have any comments on the previous government’s performance?

The main reason was its lack of interest in benefiting from the renewable resources of energy available in Egypt, especially solar energy which God gave us in abundance. Meanwhile, it was purchasing coal, which I objected for many reasons. Coal is expensive to import and its environmental impact and carbon footprint are terrible. We also achieved new gas discoveries, so we should limit the use of coal.

Where are the best locations for establishing solar plants in Egypt?

Aswan is a typical choice for us, for the availability of solar energy there as well as the purity of its atmosphere, which means pure sunlight more than any other place.

How many solar power plants should we have to achieve energy self-sufficiency?

The capacity of a solar power plant should not be less than 20MW to be feasible. I think it is necessary to standardize capacities of power plants between 20-50MW to recover costs in five to six years. I also think we should focus on establishing small stations and link them in sub-networks to provide energy to small villages or cities in the desert. This would enable us to close one or more plants for maintenance in winter when consumption declines by 20%. When the summer begins, these stations can resume work at full capacity. This proposed system supersedes the unified grid and ease the load we suffer during peak hours as we would rely on internal sub-networks.

But experts say the cost of establishing thermal power stations is equal to traditional power stations?

This is true, but considering the subsidy cost paid by the government annually which is large, the total cost would be reflected on the final price of selling electricity, which is currently subsidised. To identify the real price, we have to calculate it without the value of fuel subsidies. That way it will then come in favour of solar power plants compared with the cost of energy from traditional plants, which will be realised in the first period of repaying debts, especially considering that the government or investors do not have enough funds to build new stations, but rather borrow their cost from banks with high interest rates and repayment period up to 20 years. Meanwhile, solar power costs in 20 years will drop by one-third due to saving fuel, compared to traditional stations with same capacity and performance. It also enables us to repay loans, as the cost of electricity from a traditional station will drop from $0.095  (about EGP 1.56) to $0.085 (about EGP 1.39) while the cost of electricity from thermal power stations will be $0.01 (EGP 0.17) which is the lowest price for electricity in the world in the first 20 years of building the stations. It means we will not bear any additional costs, except for wages, spare parts, and maintenance.

Can we manufacture thermal stations in Egypt?

Only 7% of these stations’ components can be made in Egypt, including mirrors and their holders, and we will import other components.

Have these studies been submitted to the president or competent authorities?

The ministry of electricity is concerned with this file, and it is clearly heading toward volatile renewable energy (wind and photovoltaic panels), although it does not give us 24-hour energy continuity and the costs of generation or storage are high due to the reasons I mentioned earlier. They are also going for coal-fired power plants as they are the cheapest option, although, in reality, considering the high cost of the machinery and the negative impact of its pollution effect and health impact, it is by far not the cheapest.

Do we have experience in establishing thermal plants?

The first thermal power plant was built in Maadi in 1912 by an American engineer and was actually operational in 1913, with the aim of raising the Nile water to irrigate the cotton crop as an important crop at the time. However, given the British control of the Egyptian economy at the time, they saw that this station would save Egypt from importing coal from England. They seized the chance of the first world war, broke and closed the station, and dismantled it components and then sold them. But this is easy as Egyptian scientists worldwide are working on this file.

How do you see power projects recently implemented in Egypt?

What has been achieved in the energy file is a very big leap because the years before president Sisi witnessed a negligent failure to build electric stations. It might have been for a lack of resources or the steady market increase and social development due to the increasing population and its electricity requirements. The electricity current was disturbed several times. When president Sisi took office, he changed this painful reality and raced against time to sign agreements with major companies to build several stations– thus reducing the cost of establishing individual stations.

How do you assess the electrical connection projects in surrounding countries and Europe?

Egypt will, of course, benefit from the export of a high-value product, namely electricity instead of exporting gas, which will be of great benefit to us. The most important was the fossil fuel power station developed by the German company to reach a 61% efficiency standard. This is a significant amount in converting the thermal energy stored in gas when it is burned into electrical energy. In order to estimate the worth of this value, it is enough to compare it with the efficiency of conventional power plants globally which operate with oil or coal, ranging between 30-40%, or about the half.

Far from scientific matters, and as the son of the former Egyptian prime minister, how do you view the Brotherhood?

My father hated the British colonialism and was known for this. And this is the reason they assassinated him, unlike the Brotherhood who was established by the colonialists and was used as their tool. When they came to power in Egypt, I knew they would fail because they were not accustomed to public work. I prayed to God that they fall until 30 June incidents saved us from them. This was natural, and their terr acts that followed were expected.

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Egypt has discipline, adheres to economic reforms with no need for another IMF loan: Ghali Mon, 15 Apr 2019 08:00:03 +0000 ‘I am trying to solve the problems and cases raised against me and I hope to return to Egypt,’ says Egypt’s ex-Finance Minister

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Washington, DC- Youssef Boutros Ghali, former Egyptian finance minister, said Egypt is not in need of another loan from the International Monetary Fund (IMF) but the country’s government, though it is not weak, needs competencies and experienced people which is much more important than financial resources.

Ghali elaborated: “The IMF’s procedures are difficult but necessary, and the Egyptians absorbed the shock, but we have to concentrate on other important issues now.”

Daily News Egypt interviewed Ghali to discuss his perspective regarding the assessment of Egypt’s economic reform programme, the transcript for which is below, lightly edited for clarity:

How do you view the IMF programme and to what extent did it succeed?

The IMF programme in Egypt has produced positive results, but at the expense of the poor. It is necessary to deal with the fund from an Egyptian point of view, and the recipe cannot be taken as it is, to ensure that the poor do not suffer. However, the IMF is not tasked with verifying the adherence of the poor, but it is tasked with re-establishing the financial balance of countries that are in trouble. Most governments that are in trouble resort to borrowing from the IMF. The fund recommends some measures for these countries, and they have the right to approve or reject them.

Do you think that Egypt needs a new IMF loan or extend the current one?

Egypt has the ability to discipline itself and adhere to the economic reforms without the need for another loan from the fund. President Al-Sisi has the firmness and ability to do what he wants, and he does not fear reform, but he needs help from the government and his ministers. Egypt is not in need of another loan from the IMF because Egypt’s government is not weak, but it needs competencies and experienced people, which is much more important than the presence of financial resources. The fund’s procedures are difficult but necessary, and we absorbed the shock but we have to concentrate on other important issues now. The IMF expected in its World Economic Outlook (WEO) in April 2019 that the Egyptian economy will grow by 5.5% this year, and by 5.9% in 2020.

How do you see the performance of the administrative body in Egypt?

The administrative body in Egypt are still suffering from some bureaucracy that may affect the smooth inflow of foreign direct investments (FDIs). On the application of the one stop shop recently in Egypt, I think that the country needs some time to implement it, but it is not presently effective, which may have a significant impact on FDIs. The idea is not to create a single window for all competent authorities, but rather to facilitate the procedures for investors through a single authority or agency, and not a single window. And, since many agencies do not want the withdrawal of any authority from them, this is the main cause of the problem of multiple procedures and bureaucracy.

Do you think that there will be an imminent devaluation of the pound?

I do not think there is a future depreciation in the exchange rate, so there is no need to move prices, as I believe it will be stable. I see that our problem in Egypt is not how we lower prices, but how we provide incomes to face the high prices and inflation.

How would the receding global economy affect Egypt’s growth?

The problem facing economists today is that all indicators in all countries which lead world growth are negative, therefore there is nothing to prevent the global economy from deteriorating. Hence, there is fear that global growth rates will continue to decline, which will have a significant impact on the Egyptian economy because it is a member of the global economy and the country’s FDIs will be lower.The IMF’s WEO, which was released early last week, projects a slowdown in growth in 2019 for 70% of the global economy. Global growth softened to 3.6% in 2018, and is projected to decline further to 3.3% in 2019. The downward revision in growth of 0.2 percentage points for 2019 from the January projection is also broad based. It reflects negative revisions for several major economies, including the euro area, Latin America, the United States, the United Kingdom, Canada, and Australia.

What is the solution?

The solution is to activate economic recovery policies at the level of countries and complement each other in different countries. China, for example, has a declining growth rate, thus it has not depended on export development to revive its economy because its export development will reflect on another country, therefore the external sector will pressure the domestic economy, but it has to encourage its domestic consumption. Germany, too, has a surplus in its public budget, and it has to turn it into deficit to encourage consumption which would stimulate other European and developing countries. The current discussion is to follow policies to restore growth rates so as to become homogenous among different countries, which requires coordination between these countries’ decision-makers. These policies’ success depends on the knowledge of the problems and the procedures required to resolve them. Second, is knowing other decision-makers and the convergence of state policies.

What are the promising economic sectors in Egypt?

Tourism sector is one of the Egyptian sectors that has started to recover recently but it is taking some time to reach 2010 levels. I expect the Egyptian real estate market will witness a significant deceleration in the coming period, but the demand will continue because it is a safe haven for investment in light of the deterioration of individual investments in some other sectors. With regard to the new oil discoveries, I think that the energy sector is the most promising in terms of attracting FDIs and applying the mechanism of one stop shop.

How do you see the performance of the Egyptian economic ministerial group?

Some Egyptian ministers are consulting me on a few economic issues. Nevertheless, the ministers in Egypt must work together. The economic group under Mubarak’s era was homogeneous and cohesive. I had an insight into the period of my ministry through moving to take precautions before facing several economic problems in the presence of the political will, rejecting any change, or movement in prices at the time.

How do you deal with the cases filed against you?

I’m working on these problems and I hope to return to the country. By the way, I did not exploit the printers of the ministry of finance in the service of my election propaganda in 2010.

Prosecutors’ investigations said that Ghali took advantage as a finance minister to exploit the printing centre of the ministry of finance to print large quantities of electoral advertising materials for his candidacy for parliament in 2010.

In February, the Cairo Criminal Court sentenced him to 15 years in prison in absentia and required him to return EGP 35.8m to the government. Ghali has not returned home since he fled to Britain in 2011 after mass protests toppled Mubarak’s regime and his cabinet. He was consequently fired from his position over charges of corruption and abuse of power.
The former finance minister requested a reconciliation deal with the government, after which the Illicit Gains Authority (IGA) formed a committee, and estimated his wealth at EGP 300m with unexplained inflation. Ghali rejected the value as incomprehensible for not including salaries of his previous jobs as economic advisor for the cabinet during the period from 1986 to 1998, as well as an advisor for the United Nations office in Cairo for 10 years, where he was paid in dollar. 

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USAID, FEI to announce ‘3R’ project for development of CSR activities Mon, 15 Apr 2019 07:00:08 +0000 Strategy to develop human resources management in 120 companies, says Torky

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The Federation of Egyptian Industries (FEI) along with the Unites States Agency for International Development (USAID) will announce on Monday a new corporate social responsibility (CSR) project called ‘3R’, Senior Advisor at the FEI, El Sayed Torky, said.

“Recruitment, retraining, and retention, is abbreviated to ‘3R’. We have already signed the project’s memorandum of understanding (MoU) in the past few days, and we will announce it today during the fifth conference on CSR and boosting regional partnership for development,” declared Torky.

Daily News Egypt interviewed Torky to learn more about the FEI’s CSR activities, in cooperation with several financial institutions, on the occasion of holding its CSR annual conference on Monday, the transcript of which is below, lightly edited for clarity:

Would you please elaborate on the importance of the 3R project with the USAID?

The ‘3R’ project aims to limit the employment turnover through the development of human resources management in 120 FEI member companies. We will hold several workshops with the companies which we will choose during the fifth conference on CSR and boosting regional partnership for development.

The FEI believes in the importance of CSR, in cooperation with international partners, and the Egyptian government’s plans in terms of the 2030 Vision. We would like our CSR projects and initiatives to be implemented in parallel with the country’s ones. Five Egyptian ministries are supporting our conference as we believe that we should not work separately.

Does the FEI cooperate with the USAID in any other projects?

Yes, we have also signed a Workforce Improvement and Skills Enhancement (WISE) partnership. Our partnerships guarantee the projects’ sustainability, and the USAID is entirely funding the ‘3R,’ which will be implemented immediately after the conference.

Which ministries collaborated with the conference?

The conference is held under the patronage of ministries of investment and international cooperation, social solidarity, trade and industry, education and technical education and planning, monitoring and administrative reform.

Did you cooperate with international organisations?

We have started our international cooperation with the International Labour Organisation (ILO), and then we expanded with many other esteemed foundations.

Would you please elaborate on this year’s version of the conference?

What is special about this version is the focus on regional partnerships, including the African participation, which is in line with Egypt’s presidency of the African Union (AU). We feel proud of the conference’s convention since 2014. About 250 persons participated in the 2014 version which was a good number as a start, and then in 2015’s edition the number was almost doubled to about 500 participants, and last year there were 1,700 attendees. Over the past years, the conference was able to achieve great success toward raising awareness about the importance of the CSR concept, including eliminating illiteracy, offering training, and job opportunities, among other issues. Participation in the conference is free of charge for companies and interested youth as we receive the needed support from our international partners which mainly are the ILO, the International Organization for Migration, and the United Nations Population Fund (UNPF).

We aim to increase the businesspersons’ awareness of CSR as effective activities toward development. CSR does not only provide financial assistance to people, but also help employees to be well trained.

We invited all the African ambassadors as well as the International Organisation of Employers in Geneva, Switzerland, to participate in our conference. The regional and international participation will be obvious during the conference sessions. The inaugural session will be quite diversified.  We believe that cooperation between non-governmental organisations (NGOs), the government, and companies is required to enhance knowledge about the importance of CSR. Companies can implement several CSR activities including fighting corruption, stopping environmental pollution during company operations, and training employees. We are happy to discuss our CSR experience with African countries to exchange experiences.

What about your future programmes?

We began with PepsiCo and Alex Bank to build the competency of the youth in order to qualify them for the labour market through their appointment as distributors in villages across Egypt. Our partners will provide the youth with the needed technical training, facilities, and grants in order to be able to manage their businesses.

We agreed with several training organisations to guarantee the youths’ positive response regarding the training sessions. We pay great attention toward Upper Egypt. We signed a MoU with the UNFP to support 5,000 young men on an annual basis through offering them the necessary training to qualify them for the labour market. Additionally, we also started a project with Helwan University on labour market skills and digital manufacturing, in partnership with a FEI member. Furthermore, we will train 400 students and trainers on digital manufacturing, which will revolutionise businesses.

How do you assess the government’s efforts in supporting CSR activities?

The ministry of investment and international cooperation is taking positive steps toward supporting CSR projects. The FEI is quite convinced about the importance of CSR, therefore it established a CSR unit, with the support of the ILO, and then it became self-operational.

Our unit is diversifying its partnerships. We have several partners such as Alex Bank, the Sawiris Foundation for Social Development, the ILO, the UNFP, and others, which reflects the confidence in our projects and initiatives.

Would you please elaborate about your cooperation with the UNFP and Helwan University?

We have a new project with the UNFP to train youth, in cooperation with the youth ministry, as we will train about 1,000 young men this year. Helwan University has very good facilities, but its nearby area lacks various necessities, so we will be coordinating the matter so that we have a positive impact on the disadvantaged areas through CSR projects.

Additionally, we have a project with International Organisation of Migration to limit the numbers of migrants from rural areas into major cities through offering them decent training by partnering with companies.

Do you think that further development of the business climate will help support CSR projects?

Yes, we need the general business climate to support companies and all the stakeholders to increase their CSR activities, as companies are not the only pillar of CSR projects. The government needs to support companies in order for them to perform their roles.

What are your other projects in Upper Egypt?

We will also work in four villages in Sohag, in cooperation with a number of associations, to implement several diversified projects including sanitation, children’s welfare, and eliminating illiteracy.

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Elsewedy Industrial Development’s total land bank reaches around 25m sqm in 2019 Thu, 11 Apr 2019 09:00:35 +0000 Firm to receive an area of 5.4 m sqm in 10th of Ramadan, Sadat City in April

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Elsewedy Industrial Development’s land bank in Egypt increased by 15.4 m sqm in 2019, reaching around 25 m sqm as a total,  which is the largest land portfolio owned by an industrial development company in Egypt, the CEO of Elsewedy Industrial Development, Mohamed Al Kammah, told Daily News Egypt in an interview.

He added that more than 70% of the firm`s lands are sold.

DNE sat down with Al Kammah for an interview to discuss the company’s plans regarding land acquisition. The transcript for which is below, lightly edited for clarity:

How many factories have you established in your industrial zones?

Currently, Elsewedy Industrial Development’s industrial zones have more than 150 contracted factories.

The company has several industrial zones; could you please tell us more about their spaces and the number of factories in each one?

The firm’s-owned industrial development portfolio includes: 10th of Ramadan (PI Parks) which is on an area of 4 m sqm. The second one is Al Oula Park in Sixth of October on an area-of 1 m sqm. The third one is located in the Sadat City on an area of 1.4 m sqm. Then there is Al Alamein on an area of 2.6 m sqm. As for the Suez Canal Industrial Zone, it is established on an area of 10 m sqm (acquired on a usufruct basis).

Concerning the number of factories, I could say that the number of the contracted manufacturers to set up factories in our industrial zones, either with their factories already established or still under construction, amounted to 41 in the Sixth of October industrial zone (Al Oula).

While the contracted manufacturers in 10th of Ramadan recorded 98 manufacturers in PI Parks East, while in the PI Parks West we have 33 manufacturers.

Did the utilities enter all your industrial zones?

No, only 7 m  sqm of our industrial zones’ land have witnessed the entrance of the utilities, while the majority of the rest of the lands are not utilised as we still did not receive them.

Are there any promises from the IDA about the date to receive the rest of the lands?

There are promises to receive in April an area of 5.4 m sqm of which, we will receive 4 m sqm in the 10th of Ramadan, in addition to 1.4 m sqm in Sadat City.

Has the firm withdrawn land from non-serious investors?

Most of our investors are serious and committed to the timeframes and the periods allowed by the Industrial Development Authority (IDA). Yet, the case was different with only two investors thus we have took back the lands from them and re-offered the lands again due to the huge demand and requests.

Could we estimate the space of the withdrawn lands?

We have withdrawn over 20,000 sqm in the 10th of Ramadan, in addition to 18,000 sqm in the Sixth of October.

Who are the most prominent investors in your industrial zones?

The company has attracted a number of international companies such as L’Oreal Paris for cosmetics, Jotun, KAPCI Coatings, Mintra, Iskraemeco, Nissan, Padico International and many others to set up factories at the company’s industrial zones.

Through the firm’s industrial zones, how many direct and indirect jobs did it provide?

Elsewedy Industrial Development provides about 125,000 direct jobs and 250,000 indirect jobs to the local market through its current industrial areas.

Moreover, I want to mention that the firm is expected to provide around 100,000 additional jobs through the industrial zones that are under construction.

What are your new projects?

The company started to expand horizontally by contributing to the establishment of industrial projects in different regions within Egypt. In the city of 10 of Ramadan, we have an integrated industrial city on an area of 4 m sqm. In addition to that, we plan to establish an industrial zone on an area of 1.4 m sqm in Sadat City. Also in Ain Sokhna (Suez Canal Zone), we plan to establish an integrated industrial city on an area of about 10 square kilometres.

What are the firm’s targeted areas?

The industrial development sector targets the developmental axis in Ain Sokhna as well as the Suez Canal and Ismailia.

In the next phase, it aims to study and target the development axis in Upper Egypt between the new cities, in order to provide them with an integrated industrial and residential backbone.

Furthermore, the company aims to develop the logistical infrastructure in all governorates of Egypt, through studying and establishing the logistics and commercial centres at all Egyptian governorates.

In general the firm took its lands as a usufruct (right to benefit) or through licences?

All the company’s lands are free owned except the new project of Ain Sokhna, which is on area of 10 m sqm.

Concerning the new project in Ain Sokhna, what are your targeted industries in this area?

In general, Ain Sokhna targets the heavy and medium industries. Therefore, through this area, we aim to attract more foreign investments.

Did the decision of the pound flotation increase the prices of the utilities entrance?

Yes, the pound flotation doubled the prices in general, but the company bore part of this increase, and raised the prices of its lands by only about 25% after the pound flotation.

What about the prices increase this year?

This year, I think the price increase rate is normal due to the inflation. We increased the prices of the lands this year by about 10% to 15%, compared to 2018.

I want to highlight that this increase rate is normal given the monetary policy that has modified the situation and limited the dealing in parallel markets. The Egyptian pound also expresses the actual purchasing power and a natural result of the current inflation rates. The state is now adjusting the current situation, through providing expansion projects and ensuring a moderate investment climate, which in turn will improve the economic climate in Egypt.

Finally, how do you see the state of the Egyptian market?

The Egyptian market is a promising market and a catalyst for domestic and foreign investment, especially in light of controlling the exchange rate’s volatility and the direction of the rise of the Egyptian pound against the dollar, and in light of the successful policies followed by the monetary policies of the Central Bank of Egypt.

The rise in Egypt’s credit rating is a guarantee of investment inside Egypt and a safe haven for foreign investors to invest in Egypt.

Also, the availability of energy sources, especially electricity and renewable energy, promotes this, as well as the lower energy consumption tariffs than those of neighbouring countries.

Moreover, I want to highlight that the new Investment Law is aligned with the decision of the pound flotation, with both aiding in attracting foreign investments.

On the other hand, I think that the government could attract more foreign investors if the concerned bodies would announce a clear plan for the offering of the lands, in addition to implementing some modifications regarding some points in the new Investment Law, as investors need some clarifications or have suggestions on some points. Moreover, there should be more coordination between the private and the public sectors.

The post Elsewedy Industrial Development’s total land bank reaches around 25m sqm in 2019 appeared first on Daily News Egypt.

IFC invests close to $200m in Egypt, eyes opportunities in infrastructure, manufacturing sectors Mon, 01 Apr 2019 14:03:33 +0000 The International Finance Corporation (IFC), a World Bank Group member, invested close to $200m in the Egyptian market over the last eight months, the IFC Country Manager for Egypt, Libya, and Yemen, Walid Labadi, told Daily News Egypt (DNE). The IFC chose Egypt earlier as a model for its investments in Middle East and Africa. …

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The International Finance Corporation (IFC), a World Bank Group member, invested close to $200m in the Egyptian market over the last eight months, the IFC Country Manager for Egypt, Libya, and Yemen, Walid Labadi, told Daily News Egypt (DNE).

The IFC chose Egypt earlier as a model for its investments in Middle East and Africa. It announced in the beginning of the current fiscal year (FY) 2018/19 that it aims to invest up to $1bn over the FY. DNE interviewed Labadi on the updates of the IFC’s plans in the Egyptian market. 

The interview also focused on the IFC’s efforts in supporting the private sector by facilitating access to finance, improving crucial infrastructure services, and promoting gender diversity in the workforce.

You announced earlier that the IFC would invest $1bn in FY 2019, how far have you achieved from this target?

Egypt is a priority country for the IFC in the region. Over the last several years, we have scaled up our programme in Egypt. I believe we will have another strong year in Egypt, especially in the manufacturing sector. To-date we have already committed close to $200m. We launched several important initiatives on supporting entrepreneurship. Moreover, we are committed to supporting critical infrastructure, especially in the renewables sectors.

What are the targeted sectors in FY 2019?

Egypt is a core country for the IFC. We think Egypt has a promising market with good economic growth rates. Notably, the government has embarked on a brave road on the reform programme, which should help the private sector to have a bigger role in the Egyptian economy. Therefore, we see opportunities in real estate, manufacturing, medical care, pharmaceutical, banking, and infrastructure sectors.

One of the IFC’s target investments in Egypt is the renewable energy sector; can you elaborate about the corporation’s investments in this area?

Our biggest investment in renewable energy is the Benban Solar Park, the largest in the world. We invested in 13 projects there. Some of these power plants are completed, while others are still under-construction.

The project’s labour force is mainly provided from the local community in Aswan.

We are also working with the ministry of electricity on developing solar energy tenders, so they will basically give the opportunity for the private sector to get involved in the solar energy field.

In FY 2018, the IFC invested $1.5bn in Egypt’s private sector in order to help create jobs, improve local infrastructure, and boost economic growth. That figure, which includes funds mobilised from other investors, represents a record for the IFC in Egypt. The investments have been geared towards helping private sector companies grow, expand, and create jobs. This included a landmark investment of $653m in Benban Solar Park, which once completed, will be the largest solar park in the world.

the IFC Country Manager for Egypt, Libya, and Yemen, Walid Labadi

Did you recently receive any requests from banks operating in Egypt to finance SMEs?

The IFC sees great potential in the SMEs market in Egypt. Supporting small businesses is one of our strategic priorities in Egypt, as we believe that small businesses can drive economic growth and job creation in the country.

We invested in several banks including the Commercial International Bank (CIB), Arab African International Bank, Bank of Alexandria, and the National Bank of Kuwait – Egypt, to help them extend loans and credit facilities for small businesses.

Also, we signed an agreement with Banque Misr in order to support women-led businesses within the bank’s SMEs portfolio, as part of the IFC’s wider plan to boost financial inclusion for women entrepreneurs in Egypt. We aim to help more banks to tap into this sector.

Do you consider entering in any private equity platforms for SMEs?

We have investments in Flat6 labs, in partnership with the British government to support fintech start-ups. We also have investment in Algebra Venture that looks primarily on Series B and C investment.

Do you plan to increase financing in local currency in Egypt?

Last year, the IFC has provided its first investment in local currency and we are looking for more opportunities. I think we have to find investments where the IFC can play a particular role without resorting to local banks, for example in areas like education and medical care. The revenues in those areas are typically in local currency, and their risk profile is one that more local banks are less comfortable in getting involved in, so we are looking at opportunities in such sectors. So, we are interested in finding more opportunities like that and we will continue to pursue them.

What about the IFC’s other projects?

This year, we are looking for a strong year especially in the manufacturing sector. Last year, we had an active period in the infrastructure sector with the Benban project, and we are looking forward for more opportunities.

Do you think Egypt’s reform programme is moving in the right track?

I think the reform programme is absolutely moving in the right track. A lot of really good things have been made and still there are a lot of things to do.

For example, it is very difficult to register a mortgaged land because of the land registration’s difficulties in Egypt. I think it is an area where they need to improve, so that land owners can get financing and grow their business.

Egypt has made progress in doing business sector, but they still need to do more particularly in training. The logistics and training in commerce will take some time to move forward. This country has a pivotal place in the global economy which would allow it to be an international trade hub, and we would like to see it achieve its full potential. We all need to do more, not just the government.

What are your expectations for Egypt’s growth in the current FY?

I expect economic growth to reach 5%, or a little bit more than 5%. I think it is a good rate.

We are very optimistic about growth in Egypt, and we continue to see that the private sector should contribute more in the growth.

In your opinion, what are the sectors that will drive this growth?

There are three areas that could really help facilitate growth in Egypt, one is the logistics for goods and services, and we think more investments are needed there and we would like to be part of that.

The second is the ICT sector, as I think the state’s agenda goes to efficiency of payments and creating opportunities for people to pay for goods and services electronically. They also focus on developing smart systems which would allow the economy to function effectively.

The third area is agribusiness because the agenda is also concerned with developing the supply chain.

I think the last fundamental aspect of Egypt’s growth is to become an energy hub. We think there is a lot of potential for Egypt in gas exports.

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