Egypt Nets Billions in Investment

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APRIL 2015

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AFFORDABLE HOUSING HEATS UP

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WHAT THE VAT MEANS FOR YOU

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Landslide Egypt nets billions in investment

APRIL 2015

VOLUME 32 | ISSUE 4

36 Cleaning up The March economic summit in Sharm el-Sheikh netted Egypt around $38.2 billion in deals as well as another $12.5 billion in aid from the Gulf. Officials successfully marketed the country to the international media as a business-friendly destination on the rise, despite ongoing economic challenges.

Cover Design: Nessim N. Hanna

Inside 28 20 Editor’s Note 22 Viewpoint

The Newsroom 24 In Brief The news in a nutshell 28 Region Notes News from around the region

© Copyright Business Monthly 2015. All rights reserved. No part of this magazine may be reproduced without the prior written consent of the editor. The opinions expressed in Business Monthly do not necessarily reflect the views of the American Chamber of Commerce in Egypt.

Business Monthly – 16 I April 2015 APRIL 2015

VOLUME 32 | ISSUE 4

33 52

56 Market Watch Executive Life 44 52 Stock Analysis Dining Out Market pulls back in run-up to Genghis Khan serves up authentic economic summit Chinese food 45 Capital Markets 54 A glance at stocks & bonds Fashion Art & Sole 47 Money & Banking Forex and deposits 48 Key Indicators The economy at a glance The Chamber In Depth 49 Egypt-U.S. Trade Imports and exports 30 58 Affordable housing megaprojects Corporate Clinic Events may not be affordable for most Developers eye “middle-income” 50 62 Six degrees Member News market Cairo tech map shows that success 66 33 depends on connections Announcements Mulling the pros and cons of the VAT 67 How the tax switch could affect SMEs Classifieds 68 Media Lite An irreverent glance at the press

Business Monthly – 18 I April 2015 Editor’s Note

Director of Publications & Research Khaled F. Sewelam

Editor-in-Chief ROOTS Rachel Scheier ast year, a writer friend of mine, seeking a more affordable place to raise her two Contributing Editor children, moved with her family from New York City back to her native state of Tamer Hafez Michigan. Like other creative professionals, she was also intrigued by a nascent urban renaissance taking place in Detroit, an American city that has long been Staff Writer Eric Knecht synonymous with crime and blight. In the second half of the 20th century, the Motor City, as it’s known, went from an industrial powerhouse—home of the auto industry and the Art Director Lfourth-largest city in the United States—to a burned out shell with minimal public services Nessim N. Hanna and littered with abandoned homes. As American car companies lost ground in an increas - ingly global industry, jobs—and eventually the city’s middle class—fled, and with it went Contributing Writer Detroit’s tax base. Decades of corruption and racial tensions helped conspire to bring about Kate Durham the city’s downfall. But even as it became the largest American city to file for bankruptcy in 2013 after rack - Advertising Director ing up $18 billion in debt, a steady stream of artists and entrepreneurs was trickling back Amany Kassem to Detroit, opening coffee shops and boutique hotels, hatching start-up incubators and sus - tainable urban gardens. While people compared the formerly teeming metropolis to a failed Photographers Soha El Gabi state—unable to pay to police its streets or educate its children—young professionals and Said Abdelmessih businesses bought up and renovated cheap downtown real estate, spurring a 21st-century economic boomlet. A few years ago, Dan Gilbert, the billionaire founder of mortgage giant Production Supervisor Quicken Loans, moved the company’s headquarters there. With other capitalists large and Hany Elias small, he set about rebuilding central Detroit, providing services that had previously been the job of the government. Business owners and local residents cleaned up storefronts, Advertising & Circulation Assistants hired private security companies—even installed their own street lights. Tasneem Abo El Ezz In some ways, Detroit’s story would seem to have little in common with Cairo’s. After all, the former is a dwindling metropolis of barely 700,000 people—down from nearly 2 Market Watch Analyst Amr Hussein Elalfy million in 1950—with swathes of abandoned houses, while Cairo is a megacity of nearly 20 million and one of the most densely populated municipalities on the planet. Still, both Chamber News Contacts are faded urban centers long past their heydays whose gritty personas seem to inspire a cer - Nada Abdalla, Farida El Gueretly, tain pride among their longtime residents. Their administrations are both struggling to find Azza Sherif ways to turn them into livable cities. In a way, Cairo’s informal neighborhoods and net - work of microbuses are as much an answer to the Egyptian government’s failure to provide affordable housing and adequate public transportation as Detroit’s privately-run security companies and self-administered street lights are filling that city’s public-sector void. Obviously, neither is a perfect solution. The point is that sustainable urban development comes about organically—from the bottom up rather than the top down. Cairo’s traffic, pollution and unemployment won’t be solved by megaprojects or moving people to a shiny new capital in the desert. As in downtown Detroit, the kinds of efforts most likely to bring about change in Egypt’s millennia-old metropolis are those that involve residents them - selves. Fixing Cairo needs to be done by Cairenes. U.S. address: 1615 H Street, NW • Washington, D.C. 20062 Please forward your comments or suggestions to the Egypt editorial office: RACHEL SCHEIER Business Monthly American Chamber of Commerce in Egypt 33 Soliman Abaza Street, Dokki 12311 • Cairo • Egypt Tel: (20-2) 3338-1050 • Fax: (20-2) 3338-0850 E-mail: [email protected] www.amcham.org.eg/bmonthly

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Business Monthly – 20 I April 2015 Viewpoint THE CHARM OF SHARM

or three days, Sharm-el-Sheikh witnessed an Given the present circumstances, Egypt needs to use these unprecedented momentum characterized by cash injections and economic support mechanisms to come the high caliber of speakers as well as the out of the bottleneck, bearing in mind long-term plans. number of attendees to the Egypt Economic The Charm of Sharm is behind us; the ball is in our Development Conference. The event also court. The question becomes how do we run with it? ended with an emotional patriotic speech by Presidents and foreign dignitaries do not carry magic President Abdel Fattah el-Sisi that set Egyptians on fire wands. The administration in collaboration with business and clearly defused all allegations of dictatorship and top- organizations must create a monitoring mechanism to heavy governance. The president definitely has popular ascertain first that changes to the regulatory framework, support and can lead his country out of the turmoil of the promised during the conference, are fulfilled; that the past four years. funds received are well managed, and that the business FThe Egypt Economic Development Conference started community remains engaged and motivated. Egypt will out with a political day. The active participation of African not get a similar boost any time soon. countries, the Palestinian leader and other “non-obvious One of the highlights of the EEDC was the John Kerry investors” together with U.S. Secretary of State John breakfast organized on the first day of the conference by Kerry, the heads of Arab states and a solid European pres - AmCham Egypt, the U.S. Chamber of Commerce, the ence created a platform giving Egypt a pivotal position in U.S.-Egypt Business Council and the Egypt-U.S. Business the Middle East. Council. The secretary’s keynote speech clearly empha - The second day clearly stood out as a first-rate econom - sized the importance of bilateral collaboration, the ic development forum. Through well-orchestrated panels, unequivocal appreciation of the efforts of the newly-elect - important strategic topics were discussed, giving both ed president and the common goals of both countries con - guidance and hope for a brighter future. The message was cerning stability and regional peace. clear. The attributes of success exist. Use them. A week after the EEDC, Sharm el-Sheikh hosted anoth - The third day was divided into sectorial panels, making er crucial meeting of the League of Arab States, which will common interests the foundation of tangible business col - be headed by Egypt in the coming term. One of the most laboration based on well-studied, lucrative projects. critical outcomes of this Arab League session was the cre - I purposely did not focus on the financial pledges of ation of an Arab military joint force that will combine the Arab countries. Although they are most welcome econom - efforts of all willing Arab countries to help stabilize the ically and politically meaningful, they are not what Egypt area and fight terrorism. should depend on for its future advancement. Growth has Sharm el-Sheikh has made History. We will all build the to come from within; it must be the fruit of sustainable future. ANIS A. A CLIMANDOS activities away from windfalls and individual transactions. President, AmCham Egypt

Business Monthly – 22 I April 2015 In Brief

of a floating natural gas import terminal, which is scheduled to allow Egypt’s first imports of LNG to begin in April. The deal comes on top of recent agreements made by Egypt’s state-owned gas compa - In Brief ny with global trading houses to supply 49 LNG shipments over the next two years, a deal with Algeria’s Sonatrach to supply six shipments and an agreement currently under negotiation with UK- based BP to supply 21 shipments. S E V I H C R

No more visas at A Gov’t sets ambitious Y L H T N

airport for individuals O

fiscal goals M

As of May 15, independent foreign

The Ministry of Finance laid out an ambi - S S E

tourists and business travelers will no N I

tious set of goals in its Pre-Budget S U Statement for the 2015/16 Fiscal Year. longer be able to buy visas upon their B INDIVIDUAL TOURISTS TO EGYPT WILL NO LONGER BE ALLOWED TO BUY VISAS AT THE AIRPORT. The statement comes ahead of an official arrival in Egypt. In a circular dated March 13, Egypt’s Tourist Authority said draft budget, which was scheduled to be for the index, producers are facing ready by April 1, 90 days ahead of the that individual travelers would have to apply for visas at Egypt’s diplomatic mis - Inflation accelerates sharp declines in both orders and out - beginning of the new fiscal year in July, puts and rising costs due to the devalu - although the continued absence of a par - sions before they travel. Tour groups will in February Annual headline inflation rose to 10.56 ation of the Egyptian pound. As a liament leaves the exact process for dis - still be granted visas on arrival, with the percent in February, up from 9.66 percent result, companies said they were cussion and debate about the budget assistance of the Egyptian tourist agen - the month before. Meanwhile, the month - employing fewer workers. unclear. The pre-budget statement does cies arranging their trips. Security offi - not include specific figures on anticipated cials told Reuters that the move is meant ly rate accelerated to 1.86 percent, up spending and revenue but does lay out the to give intelligence services more time to from 0.99 percent in January. The Central Egypt to pay more ministry’s general goals, in particular its assess prospective visitors to the country. Bank of Egypt attributes the monthly aim of balancing growth-oriented policies The move has drawn protests from mem - increases mostly to regulated items, to foreign gas firms

M bers of Egypt’s tourist industry, such as which went up by 3.31 percent in In a series of recent deals with multina - with fiscal discipline and measures to pro - O C .

E the Tourism Federation, which was nei - tional energy firms operating in Egypt, tect Egypt’s most vulnerable citizens. The R February. In particular, butane gas cylin - U T

U ther consulted nor informed in advance the Ministry of Petroleum has agreed to

F ders soared by 16.6 percent—shortages

government’s macroeconomic goals aim E H

T of the new regulations. Although the bulk pay higher prices for natural gas. The T have been a problem for months—and

for a growth rate of 4.5 to 5 percent for P Y

G ministry announced it increased the 2015/16, reaching 6 to 7 percent by E of visitors to Egypt do come with tour new tobacco pricing guidelines increased 2018/19; as well as a budget deficit of 9.5 OFFICIALS WANT TO BOOST GROWTH TO 5 PERCENT AND SLASH THE DEFICIT TO 10 PERCENT OF GDP. groups, particularly those visiting the prices of local and imported tobacco by amount it pays for gas produced in the to 10 percent of GDP in 2015/16, down to Red Sea, the move will affect indepen - 10.2 percent and 11.4 percent, respective - Disouq concession in the Nile Delta to praised by analysts, who say it will 8 to 8.5 percent by 2018/19. The ministry Development Conference in Sharm el- dent cultural tourists and business travel - ly. Prices for fresh vegetables and other $3.50 per million British thermal units, up encourage investment and job creation added that it expects a deficit of 10.5 to 11 Sheikh, the Ministry of Finance ers from places like North America, food items also increased, as did core CPI, 40 percent from the previous purchase more than compensating the treasury for percent of GDP this financial year com - announced the introduction of a unified Russia, most of Europe, Australia, New which saw a monthly hike of 1.10 percent price of $2.50 per million Btu. In return, any tax losses. pared to 12.8 percent in 2013/14. It also 22.5 percent income tax. Executive regu - Zealand, Korea and Japan, none of whom in February, compared to 0.52 percent in the Egyptian unit of Germany-based aims to bring public debt down to 91 or 92 lations for the new tax code had not been previously needed to apply for visas in January. DEA, which operates the Disouq conces - percent of GDP in fiscal 2015/16 and released as of press time, but once in advance. The new rules also come at a sion, promised to increase its natural gas down to 80 to 85 percent of GDP by place, they will overturn a June 2014 deci - Egypt seals import deal time when Egypt’s tourist industry is production rate from 145 million cubic 2018/19. Debt is expected to reach 93 to sion that imposed a 30-percent tax rate on with Russia’s Gazprom struggling to recover from the twin blows PMI hits 17-month feet per day to 210 million cubic feet per 94 percent of GDP in the current fiscal businesses earning more than LE 10 mil - Gazprom, the Russian gas giant, will pro - of the 2011 revolution and the 2013 over - day by this summer and to 300 million year, compared to 95.5 percent of GDP in lion per year and individuals earning more vide Egypt with 35 cargoes of liquefied throw of President Mohamed Morsi, both low in February cubic feet per day by the summer of 2016. HSBC’s Purchasi ng Manager’s Index, 2013/14. than LE 1 million annually. They will also natural gas, according to a March 17 of which saw tourism drop sharply. The In a separate agreement, the domestic off- roll back a 2013 decision that increased announcement by the Ministry of industry began a fragile recovery last which measures operating conditions for take price for the long-awaited $12 billion the top bracket for individuals and busi - Petroleum. The shipments will be deliv - year but has been on a downturn since Egypt’s non-oil private sector, hit a 17- West Nile Delta offshore gas project led nesses from 20 to 25 percent. At the time, ered over a period of five years, beginning November. According to the latest fig - month low in February. The index fell to by U.K.-based BP has been set at between Income tax capped tax increases were presented as necessary in the second half of this year. The Russia- ures from state statistics agency CAP - 46.8 that month, down from 49.3 in $3 and $4.10 per thousand cubic feet, at 22.5 percent measures to narrow the deficit and Egypt deal has been in the works for MAS, 667,500 tourists arrived in January and 51.4 in December. Readings according to industry publication Platts. As part of a package of reforms passed in achieve social justice. However, the intro - months, and the signing of the contract January, down from 781,602 in below 50 indicate deteriorating condi - Egypt has priced expected shale gas pro - advance of the Egypt Economic duction of a 22.5 percent tax cap has been came along with the long-awaited arrival December . tions. According to executives surveyed duced by Apache and Shell Egypt at

Business Monthly – Business Monthly – 24 I April 2015 April 2015 I 25 In Brief

STREET SENSE

Would you move to a new capital? Why or why not?

I like the Red Sea, and being close to it sounds appealing. But there are massive considerations. I own an advertising firm, and it’s important for me to stay close to my clients. I also don’t want to lose my employees because they can’t get to work. If all my clients went to the new capital but my employees couldn’t follow, I think I would just open a second office in the new capital with me and maybe one other aide. Tarek Nadim, 49, business owner

Almost definitely not. I don’t think my company would close S E

its office in Cairo. So it makes zero sense to me to move to such V I H

a faraway place while I have a job so close to where I live. My C R A

work revolves around focus groups and consumer surveys, Y L

and I believe our target market will mostly remain in Cairo. H T N

Dina Abdel-Allah, 29, marketer O M

S S E

I would definitely relocate if I am still with the same compa - N I S U

ny. I work for a shipping company in Suez, and I work there B 24 consecutive days out of the month. Then I travel back to SUEZ CANAL REVENUE DROPPED TO $382 MILLION IN FEBRUARY. Cairo for a debriefing. My family lives in Cairo because there are better services, schools and entertainment. But it’s a hec - $5.45 per MMBtu, according to Reuters, revenues helped achieve a services sur - tic lifestyle. A new capital where they promise it will be, and which also reports that prices for offshore plus of $3.9 billion, a marked improve - with the services they say it will have, would be fantastic. I just hope I can afford to buy an apartment there. developments could go as high as $6 per ment over the $463 million deficit record - Yassin El Rawy, 32, project manager MMBtu, up from a previous cap of $2.65. ed at the same time last year, but not These price increases go some way enough to push the current account into I wouldn’t want to live there, even if I could afford to. Cairo toward meeting the demands for higher the black. The capital and financial will always be Egypt’s central city, home to the majority of Egyptians and therefore most of the businesses and services. prices among international firms, which account saw net inflows of just $883.8 Whether they like it or not, the government will have to con - need to have sufficient motivation to put million, compared to $3.2 billion in the tinue spending money on it. This new capital will be for very up the large amounts of capital necessary same period a year earlier. A small bump rich people who can afford to move their businesses there. to explore and extract Egypt’s natural gas in net foreign direct investment, up to $2.7 Right now I live in an informal home. Will the new capital resources, particularly in risky and expen - billion from $2.1 billion the year before, provide us with a better alternative? That seems highly unlikely. I also don’t think there will be opportunities there sive offshore fields. was not enough to counterbalance a $2.1 for someone who sells flags and cheap posters. The busi - billion net outflow of portfolio investment nesses and services there will cater to rich people. and a $525.5 million net outflow in CBE Hassan Ramiz, 25, amateur painter and street peddler BOP deficit hits $1 billion liabilities. That city will not be for people like me. We are fighting to get in first half of fiscal year our salaries raised to the national minimum. From what I’ve Egypt ran an overall balance of payments read and watched on the news, the new city will be for the Suez Canal elite, where they will live in complete isolation from the rest deficit of $1 billion in the first half of the of the country. They talk about moving the government over 2014/15 financial year compared to a sur - revenues down there. Somehow, I don’t think they will move something like plus of around $2 billion in the same peri - Egypt’s income from the Suez Canal the Mogamma, but they might move ministers’ offices and od the year before. “This attests to the dropped to $382 million in February, staff who take the fat salaries. commitment and ability of the Egyptian down from $434.8 million the month Badria Rashid, 36, civil servant economy to honor its external obligations before, reports Reuters. Despite the I would definitely relocate there, if what they’re promising on a timely basis,” declared a statement monthly decline, Canal Authority head comes true. I am in the import-export business. So the clos - from the Central Bank, explaining that the Mohab Mamish said he expects that er I am to Egypt’s business center, the better. I currently live widening deficit was due largely to $3 bil - annual revenues will exceed LE 40 bil - and work in Mohandseen. The new capital will be, I’m sure, a breath a fresh air, with all those green, open spaces and lion worth of payments for bonds and the lion. According to the State Information parking facilities. I am sure it will have the best Internet in return of CBE deposits. Meanwhile, the Service, Mamish added that LE 16 billion Egypt as well as unbelievably huge networking opportuni - figures show the current account deficit has been spent so far on dredging opera - ties. Also, the mockups of the architecture look stunning, yawned to $4.3 billion, up from $866 mil - tions as part of the expansion plans for the unlike the dark grey concrete jungle that is Mohandeseen. lion the year before, an increase largely canal, which are scheduled to be complet - Tarek El Nashar, 41, importer/exporter driven by a $20 billion trade deficit. Net ed in August. Meanwhile, about 94.8 per - unrequited transfers fell as well, shrinking cent of the dry digging for the new canal COMPILED BY TAMER HAFEZ to $12 billion as official transfers fell from is said to be finished■ since the project $6.2 billion to $2.6 billion. Tourism launched last August.

Business Monthly – 26 I April 2015 In Brief Region Notes

Caspian Black Sea Sea

TURKEY

CYPRUS SYRIA IRAN TUNISIA Mediterranean Sea LEBANON IRAQ MOROCCO ISRAEL JORDAN KUWAIT SYRIA PALESTINIAN Persian Gulf ALGERIA LEBANON TERRITORIES BAHRAIN QATAR LIBYA ISRAEL EGYPT UAE OMAN JORDAN SAUDI ARABIA

Red Sea

YEMEN SUDAN Arabian Sea

SOUTH SUDAN Map intended for illustrative purposes only and may not accurately SUDAN depict national boundaries or disputed territories.

Atlantic Ocean

■ ■ Twitter to set up shop in Dubai Corruption trial begins for Sonatrach Iendxiaenc Oucteiavn e told the Algerian oil officials Popular social media platform Associated Press that Algeria loses $3 Twitter plans to open its first Middle After a five-year delay, officials from to $6 billion annually to corruption in East office in Dubai, aiming to Algerian state-owned energy firm the oil sector. improve service in the Arab world Sonatrach went on trial March 15 on ■ and tap into regional markets. a raft of charges including corrup - Saudi Arabia declared world’s According to Gulf Business , the tion, embezzlement of public funds, biggest arms importer announcement came, fittingly, via money laundering, inflating contract With its weapons spending increasing Twitter during the Arab Social Media prices and taking millions of dollars to $6.5 billion last year, Saudi Arabia Influencers Summit in Dubai last in bribes in exchange for awarding surpassed India as the world’s biggest month. “Twitter is coming to Dubai,” contracts to foreign firms. However, arms importer. According to esti - tweeted a company official. As of the trial was postponed after more mates by arms trade analyst IHS, the March last, the California-based than a third of the 108 witnesses figure will likely rise to $9.8 billion microblogging platform had around failed to show up. Corruption in in 2015, amounting to almost 15 per - 5.8 million Arab world users, who Algeria’s oil sector came to light in cent of the world’s total weapons produce an average of 17.2 million 2009 after an investigation by imports. An analysis by the tweets per day, according to the Arab Algeria’s Department of Intelligence Associated Press attributes the Social Media Report. That includes and Security. Former Sonatrach CEO increased spending to political frac - many officials and government agen - Mohamed Mesian and two of his tures across the region, the rise of the cies, which often use the service to sons are among the 19 defendants in Islamic State, concerns about sectari - make official announcements. In the case. Italian oil company Saipem an conflict and Iran’s rising influence 2013, as Twitter’s regional user base and Germany's Funkwerk were also and a desire to reinforce ties with the expanded, the company began selling implicated. A related 2010 investiga - United States, which is the biggest ads. Twitter follows in the footsteps tion led to charges being filed against beneficiary of Middle East arms con - of U.S.-based social media compa - then-energy minister Chakib Khelil tracts. On March 26, Saudi Arabia nies LinkedIn and Facebook, which and his close associates, but they and its regional allies launched air have both opened Dubai offices. have yet to stand trial. A former strikes against rebels in Yemen.

Business Monthly – 28 I April 2015 In Depth In Depth

niche’s potential. Last March, as then average middle-class Egyptian,” agrees General Abdel Fattah el-Sisi prepared to Ahmed Anis, former head of the REAL ESTATE run for president, officials announced Egyptian Association for Real Estate they would partner with Arabtec, the Appraisers. Emirati construction firm behind the 23- Nonetheless, according to the housing storey luxury Nile Towers in Maadi, to ministry’s Farahat, the aim of Dar Misr AFFORDABLE HOUSING NOT build one million affordable homes “for is to undercut market housing prices by Egypt’s youth.” But with basic-calcula - 30 to 40 percent. “Dar Misr is targeting tions on the LE 280 billion project indi - people who have decent jobs and sav - cating that homes would work out to a ings. It is their right to own property and SO AFFORDABLE FOR MOST wholesale price of LE 280,000, we are offering them this chance,” says BY TAMER HAFEZ observers questioned at the time just Farahat, of the housing ministry. But how affordable the homes would end up industry analysts say Dar Misr’s pricing being. Then in November, the housing is not much lower than what’s already ministry launched Dar Misr, a project available on the lower-end of the hous - that aims to build 150,000 middle- ing market. The problem is that leaves income homes on the outskirts of satel - people like Amar out in the cold. lite communities like 6 October and 10 Meanwhile, developers will likely wait Ramadan cities. Officials say the project to see whether the Dar Misr apartments is meant to set a market standard for are nice enough to stack up as genuine Egypt’s booming middle-income hous - competition—which could drive down ing market, ultimately bringing prices prices across the board, as the govern - more in line with what middle-income ment hopes. Another possible scenario, Egyptians can afford. “These apart - however, is that Dar Misr could inad - ments are sold at cost,” explains vertently drive housing costs up instead, Farahat. “The price of Dar Misr, in par - says Ahmed El-Zeiny, head of the con - ticular, will be a benchmark for private struction materials division at the Cairo middle-income developers.” Chamber of Commerce. He predicts that The news of Dar Misr was music to “current prices will receive a noticeable Amar’s ears when he heard it six hike,” simply because developers can months ago, even though construction, offer a comparable product to the gov - estimated to take 18 months, hasn’t even ernment’s, but with much less hassle. started yet. But his hopes quickly dissi - Though Egyptians have a constitu - pated when the housing ministry tionally guaranteed right to affordable announced the prices—LE 255,000 for housing since 1952, the reality is that a 100-square-meter, two-bedroom in the government has a pretty dismal Badr City to LE 550,000 for a 130- record when it comes to providing it. amal Amar wears a saving before I can afford one of these the need for so-called medium-income square-meter three-bedroom, two-bath - Most people of limited means are forced discouraged expres - cheaper apartments. I have been saving housing among Egyptians who earn too room flat in New Cairo. “I am sure the to find a place to live however they sion as he sits in a for 11 years now. So what’s another one much to qualify for state-subsidized government was not targeting anyone can—often by building informal, illegal Maadi coffee shop or two?” developments for the poor but can’t who was standing in line when we were settlements on land they don’t own. In poring over real As Egypt’s population has tripled in afford to pay market-rate real estate buying the application from the Housing response, the pattern has been that offi - estate brochures. At the last half century to nearly 90 million, prices. “There is a massive gap in the and Development Bank,” says Amar bit - cials periodically make high-minded 42, Amar and his wife and two kids the vast majority of its citizens continue middle-income segment,” says Magdy terly. Applicants pay LE 200 to enter the declarations about housing the poor share a crowded, 200-square-meter flat to live crammed together in the Nile Farahat, vice president of the housing lottery for the units He says the prices while simultaneously treating informal in Zahraa el-Maadi with his brother and Valley, on just five percent of the coun - ministry’s New Urban Communities are far out of the range of someone settlements like a social blight. Before his family. But Amar dreams of one day try’s land. While the private sector has Authority. “The private sector has been attempting to support a family on his the 2011 revolution, the two most recent owning his own place. “My kids have produced a glut of luxury apartments moving more upmarket and demanding salary, which nonetheless falls squarely such projects were the National Housing Gnow come to an age where we need to and upscale developments, there are few unreasonably high prices. We had to within the range the government defines Program, started in 2005 and better have a separate home,” he says. Over options for ordinary working people like intervene to bring balance to the market of middle income. That is anyone who known as Iskan Mubarak, and the Social the years, he has saved up enough of his Amar. Seeking to address Cairo’s chron - and create feasible alternatives for the earns between LE 3,000 and LE 10,000 Housing Project, otherwise known as LE 7,200-a-month salary as a clerk at a ic shortage of affordable housing, the middle-income class.” per month, regardless of whether the “million unit” project. Both have local law firm that he thinks he will soon government has recently announced The government isn’t the only one to they’re a singleton or supporting a fam - fallen well short of delivering homes at be able to afford to buy a modest flat. “I several splashy mega-developments. In recognize the need for middle-income ily of five. “These prices are definitely a the pace and quality promised. might require one or two more years of particular, these projects purport to fill housing. Private developers, too, see the notch or two above the means of the Affordable housing advocates say that

Business Monthly – Business Monthly – 30 I April 2014 April 2014 I 31 In Depth

many of those units that were built were According to the housing ministry, the for growth and for house prices to shoddily constructed or lacked basic project will consist of gated compounds increase,” explains Galal. On the other amenities like water connections. with green areas, garages and services hand, more established, slower-growth Moreover, much of the government’s including supermarkets, clinics and communities like 6 October City saw affordable housing efforts since 2004 schools. Minister of Housing Mostafa just 6,000 applicants for 12,000 avail - have targeted low-income households— Madbouly told reporters that it may able units. “Dar Misr seems to be more individuals who make LE 1,250 or less even have swimming pools. Some about people capitalizing on opportuni - and families making a maximum of LE 41,000 Egyptians entered the drawing ties than having a real need,” says Galal. 3,000—who are eligible to apply for for Dar Misr’s first 30,000 units, which Whether government-built units subsidized, low-cost homes and financ - required a 20 percent down payment. affect the pricing of private develop - ing via the government’s Mortgage Madbouly promised that applicants who ments will depend on whether develop - Finance Fund. Those unable to qualify didn’t get a home in the first round will ers perceive Dar Misr as a competitor, for government housing because their automatically get apartments in the pro - says Jamal Afifi, managing director of income exceeded the fund’s threshold— ject’s second phase, to be announced Dallah for Real Estate Investments. If and those unable to prove their earnings this month. However, with proof of the project lives up to the promises because they were among the many income requirements relatively lax, made by the housing ministry, then pri - Egyptians who earn a living informal - some say that the project is likely to end vate developers building middle-income ly—often headed to new satellite cities up mostly benefiting traders and specu - homes may have no option but to lower such as 6 October City and Sheikh lators—or others who can clearly afford their prices to compete. “Middle income Zayed, where land was relatively cheap, to buy market-rate homes—rather than housing pricing will definitely cool off,” and developers were catering to indus - actual middle-income Egyptians. “What says Afifi, who believes the project trial workers and other middle-income is wrong with this project is that the could force developers to lower their Egyptians. “This is what created the marketing blurb and government speak prices by LE 300 to LE 400 per meter. concept of new cities, and with it, real don’t match what is happening on the Meanwhile, the much-touted Arabtec development started,” said Salah Hegab, ground,” says Anis, formerly of the real project that promised to begin building a a freelance architect and landscaper and estate industry group. million middle-income homes before the former head of the Egyptian the end of 2014 had been suspended as Businessmen Association’s construction of early March. According to the origi - committee. “THE MARKETING nal deal, the military was to donate 160 Real estate prices inched upward as BLURB AND GOVERN - million square meters of land for the the economy picked up steam. Coupled project, mostly on the outskirts of Cairo, MENT SPEAK DON’T with corruption and lax building regula - while mortgages and construction were tions, fixed-price plots intended to spur MATCH WHAT IS to be financed with loans “from affordable development and alleviate HAPPENING ON THE Egyptian and foreign banks.” The gov - crowding in the capital were often ernment changed those terms mid- GROUND.” bought and simply flipped at a profit a stream, however, saying Arabtec must few years later, undeveloped. “It became obtain all the funding from abroad. It a trade” says Hegab. The real estate also changed its mind about giving away boom increasingly left ordinary Farahat acknowledges that while a the land, saying that it would sell it to Egyptians behind. The World Bank clas - handful of speculators may have slipped the developer via NUCA and the hous - sifies Egypt as a low-middle income through the cracks, “We have deliberate - ing authority. Reporters quoted housing nation, with a per capita GDP of less ly made prices and payment conditions ministry sources in mid-March saying than LE 12,000. CAPMAS maintains expensive to prevent traders from buy - that the parties had arrived at agree - that the average Egyptian income is ing or applying for multiple units and ments on some of the disputed terms, around LE 3,000. By the World Bank’s therefore depriving someone who really but at press time, no formal new deal calculations, the gross national income needs the unit from getting it.” But Ehab had been announced. per capita— which divides the net Galal, project manager at the Sawa Co. In the meantime, there remains an income from products and services for Real Estate Marketing, says Dar enormous unfilled need among the minus taxes of the entire economy by Misr is in fact attracting a segment of the Amars of Egypt—working Egyptians the population and is an indication of the population that’s above average, one who earn too much to qualify for low- average income of citizens—was LE that’s “choosy about where they want to income housing but can’t afford Dar 1,960 per month in 2013. By either def - live.” The more expensive units in Misr. “This segment of society, whatev - inition, the housing prices of Dar Misr booming New Cairo, for example, got er it might be called,” says Afifi, needs would appear out of range for the aver - 24,200 applicants vying for 7,000 units. partial housing subsidies from the g■ov - age Egyptian earner. That community has “a lot of potential ernment rather than at-cost prices.”

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revenue is much less than the LE 1 mil - ly come down to traders’ greed or market economy—will have legal access to the lion minimum tax threshold set by the manipulation from producers,” says informal sector. “This will allow them to currently proposed VAT law. But an audi - Abdel Khalik. “That’s where the govern - get much cheaper inputs than their for - tor told him that businesses that are ment needs to step in.” mal competitors,” says Bahi. required to pay VAT may not want to do The VAT is also expected to push more Genedy says this creates unfair compe - business with unregistered companies businesses onto the tax rolls. VAT-paying tition because SMEs don’t necessarily tar - under the new system, because the businesses will only want to deal with get the low or middle income segment. authority will not recognize their receipts. other legally registered businesses, “The smaller firms will have a legal Hassan fears if he registers with the Tax because their receipts for purchases, “are advantage over their registered competi - Authority, however, he will have to raise as good as cash,” says Bahi. “This is the tion,” he notes. “This is not good for his prices up to cover his tax burden. “I way toward achieving equality. Everyone Egypt’s business environment.” Bahi would therefore lose many of my regular will be operating in the formal sector.” thinks that the high minimum tax thresh - clients in favor of a few more lucrative According to government forecasts, old could encourage businesses to forge ones,” he says. annual VAT revenue is expected to reach receipts to remain below it. “Receipt trad - A comprehensive VAT would greatly LE 14 billion to LE 20 billion compared ing is already used by some small pro - simplify the sales tax structure, which to around LE 6 billion currently. ducers to pay fewer taxes,” he says has been changed over the years in an ad Hassan, the Sheikh Zayed electrician, hoc fashion to satisfy the demands of will have to choose between his high-pay - businesses and consumers. Presently, in “THIS IS THE WAY ing but infrequent clients and the more addition to exemptions for things like TOWARDS ACHIEVING frequent small jobs that generate little food staples and books, there are a con - cash. “The lower end of the market is very EQUALITY. EVERYONE fusing array of special tax rates. This price sensitive. If I charge more because I labyrinthine system leaves plenty of WILL BE OPERATING IN pay VAT, that part of the market will not opportunities for would-be tax evaders THE PRIVATE SECTOR.” come to me,” says Hassan. “The big play - to commit fraud. “Overall, the cost of ers will want me to give them taxable living will increase just because people receipts. That means I would have to reg - are paying taxes on stuff that was never However, factory owners have reserva - ister as a formal business and pay VAT. taxed in the past,” says Ghawy. In early tions about the VAT’s proposed minimum It’s one administrative hassle I prefer to March, Mostafa Abdel Kader, the newly- tax threshold, which says that only com - stay away from.” Egypt’s lack of a receipt appointed head of the Tax Authority, said panies earning at least LE 1 million in culture is a sticking point for implement - that to protect the poor from VAT-related annual revenue are liable. Under the cur - ing the VAT, and Hassan points out that price hikes, the authority is exempting rent system, the minimum sales threshold many small businesses do provide certain products and services—for is LE 54,000 for producers and LE receipts, even if it’s only to track their example, perishable goods, public 150,000 for traders. The Tax Authority’s expenses. healthcare and education. rationale is that companies with annual Bahi predicts that this will change as Assuming the VAT rate stays at 10 per - revenue of less than LE 1 million usually the VAT takes effect. “Other than educat - cent, the same as the current sales tax, cater to the lower end of the market, ing the public about the importance of products that are currently taxable should which is in line with their policy of receipts, we have to change the entire not increase in price, according to exempting products targeting low and concept upon which people are taxed in Mohamed Al Bahi, head of the Federation middle-income consumers. Mohamed Egypt,” says Bahi, who explains that cus - of Industries’ taxation committee. “There Genedy, the Industrial Investors Union tomers need to be able to get tax rebates if has been a lot of rumors about this hap - chairman, says that the minimum revenue they have receipts in their hands. “This pening,” he says. requirement actually creates a bigger way everyone will demand a receipt when “Applying this tax should actually playing field for informal businesses to buying a product or using a service. And lower prices,” says Osama Abdel Khalik, exist and cooperate with each other. “I am business that don’t offer them will simply a finance professor at Ain Shams sure this is not the intention of the state not sell.” University. That’s because the sum of the when it decided it wanted to switch to Despite these concerns, the business taxes remitted at each stage of production VAT,” he says community believes that the VAT is a is equal to the tax paid by the end con - The informal sector is estimated to must, especially as the government tries sumer for the product or service. The gov - comprise at least 40 percent of the econ - to attract foreign investors from nations ernment collects its 10 percent, but in omy, and those companies are complete - with similar tax systems. “The idea of increments across the supply chain. With ly self-sufficient, says Bahi. The LE 1 VAT will definitely work in tandem with a straight sales tax, the entire bill is taxed million revenue minimum means that the government’s attempts to attract FDI every time there is a transaction. “Under the overwhelming majority of SMEs— and the n■ew investment law,” says Abdel the VAT, any price increase will most like - which make up the backbone of Egypt’s Khalik.

Business Monthly – 34 I April 2014 COVER STORY

Last month’s three-day economic summit in Sharm el-Sheikh netted Egypt some $38.2 billion in deals and potential deals worth $92 bil - lion in addition to $12.5 billion from our deep-pocketed friends in the Gulf. Most of the money was pledged by multi-nationals like BP, Cleaning up Siemens and General Electric and was concentrated heavily in the energy sector, with real estate and infrastructure projects also drawing significant interest. At the close of the three-day conference, Egypt had successfully marketed itself to the world as a business-friendly desti - nation on the rise. Despite near-daily media reports of low-impact explosives in and around Cairo in recent months, around 2,000 dele - gates from 112 nations, including 30 heads of state and numerous executives attended the conference. In his closing speech, President Abdel Fattah el-Sisi promised to make the summit an annual event and invited everyone to visit again next year.

Business Monthly – Business Monthly – 36 I April 2015 April 2015 I 37 Cairo New Cairo Emirati mall operator Majid Al Futtaim has committed to spending some LE Some $6 billion in real estate projects are planned for the satel - 5 billion to build eight new malls in Egypt over the next five years, four in lite city by developers like Egypt’s Palm Hills and Mountain new residential developments the government has yet to build and four in View, Saudi Arabia’s Sisban and UAE-based Bloom Properties. greater Cairo. Coca Cola said it would spend $500 million to expand its manufacturing, distribution, sales and marketing capabilities. 6 October City As well as an MOU between Palm Hills and Emirati investment outfit Aabar to sponsor a $19.7 billion real estate development, North Coast/ South Marina 6 October City may soon be getting a $4-billion “tourist town,” As part of the government’s plans to Alexandria thanks to a preliminary deal among a consortium of Arab firms. develop the Mediterranean coastline, Among some $2.2 billion worth housing minister Mostafa Madbouly of planned ports and railway Damietta signed an MOU with Emirati tycoon projects around the country, The UAE’s al-Sweidan Group agreed to invest Mohamed Alabbar to develop the China’s state-owned Aviation $6 billion in the government’s proposed effort South Marina project on the North Industry Corp. will finance and to turn Damietta into a global grain trading Coast. The $3 billion project is sup - operate a $700 million electric hub and the Suez Canal megaproject. posed to create 14,000 jobs. train from Alexandria to Abu Qir. The 22-kilometer route Suez Canal promises to move an estimated U.S.-based General Electric will invest $200 1.5 million passengers monthly. Western Desert million in a manufacturing and training facility Eni, the Italian oil giant, signed an initial in the proposed economic zone around the deal with the Egyptian government to newly-renovated Suez Canal. The firm has also invest some $5 billion over the coming delivered 34 of 46 gas turbines as part of a $1.9 Beheira four to five years. Oil minister Sherif Ismail billion deal to boost Egypt’s power capacity. said the investments will span concessions Beyti, the milk and juice company owned in the Mediterranean, the Nile Delta and Ain Sokhna by PepsiCo and Saudi Sinai as well as the Western Desert and Egypt’s transport ministry signed a deal with Arabia’s Al-Marai, will could generate some 900 million standard Dubai Ports International to build a $415-mil - invest $525 million to cubic feet of natural gas. A subsidiary of lion station for liquid bulk on 400,000 square build a new factory in ENAP, Chile’s state-owned energy firm, meters. also said it would spend $30 million on the governorate. U.S.- building a 90-kilometer gas pipeline. based PepsiCo also said it would invest $500 Sharm el-Sheikh million to expand its A $450-million expansion of the Sharm el- Egyptian operations in Sheikh International Airport aims to nearly double its capacity to 18 million passen - West Nile Delta 2015. gers annually by 2025, which would make BP plans to sink $12 billion over four it Africa’s third-biggest airport after those of years—the single biggest foreign investment Cairo and Johannesburg, South Africa. in Egypt’s history—into developing 5 trillion cubic feet of gas resources and 55 million Upper Egypt barrels of condensates in the West Nile Delta German industrial giant Siemens agreed to Assiut Red Sea coast as well as the exploration of the East Nile invest $10.5 billion in wind farms and power Saudi Arabia’s Islamic Development Bank A consortium led by Nassef Sawiris’ Orascom Delta and the Gulf of Suez. Production is set plants. The centerpiece of its plans is a 4.4 will fund a $198 million petroleum refinery Construction plans to build a 3,000-megawatt to start in 2017 and could reach 1.2 cubic gigawatt combined-cycle power plant in Beni for the production of high-level octane in coal-fired power plant near El Hamrawein Port. feet of gas daily, according to BP. Suef. Together, the projects should create one of six financing agreements worth a Saudi Arabia’s ACWA Power has also agreed to around 1,000 jobs and 500 apprenticeships, total of $3.875 billion. build a power plant on the Red Sea, an invest - says Siemens CEO Joe Kaeser. ment worth $3 billion.

Business Monthly – Business Monthly – 38 I April 2015 April 2015 I 39 Cairo, which has been the country’s seat about the infrastructure that would be of power since 969 A.D., when Fatimid necessary to support such a mammoth invaders built an enclosure for their new city. “It’s more like a scripted media event mosques and palaces that they called al- than a serious proposal, reflecting the Qahera. More than a millennium later, the current government’s obsession with for - sprawling megacity is bursting at the eign, Gulf investments somehow coming seams. Cairo’s 18 million current resi - to Egypt’s rescue,” he tells the Associated dents are expected to grow to 40 million Press. Others say that a shimmering by 2050. Something must be done to desert city modeled on Dubai isn’t appro - relieve the burden on what is already one priate in Egypt, where 42 percent of the of the densest cities on the planet. population are poor. Moreover, building a However, past efforts to relieve Cairo’s shiny new capital would inevitably suck chronic congestion by building satellite much-needed resources from the old one, cities in the desert have not been especial - says AUC Professor Khaled Fahmy on ly successful. In theory, moving people the popular urban planning blog, out of Cairo makes sense in a country Cairobserver. Even if some 5 to 7 million where 96 percent of the population lives Cairenes do in fact relocate to the new on 4 percent of the land. In practice, how - capital, he writes, “What will happen to ever, a dearth of jobs or any viable public the rest of us?” transport to these planned desert commu - But Dan Ringelstein of Skidmore, nities meant that only people with the Owings & Merrill, the American archi - means to own a car could reasonably live tectural firm behind the design of the there. As a result, places like 6 October new capital, told Mada Masr that “We City and New Cairo still house only a tried to make sure that, whatever we do, EGYPTIAN fraction of the millions of Cairenes who the new city is completely connected to were originally envisioned to inhabit central Cairo, obviously through trans - these municipalities. It’s a reality that port links, but more importantly in terms seemed to escape investment min - of character.” He added he welcomed RENAISSANCE ister Ashraf Salman last month people’s feedback on the new city and “WE ARE BEHIND, AND THOSE when he triumphantly proclaimed stressed it was not meant to detract from WHO ARE LATE MUST EITHER the new capital “the new New the old capital. “It is meant to be an Cairo.” extension of Cairo, part of its natural SPEED-WALK OR RUN…EVEN Urban planners are skeptical progression to the east. It is not meant to OR DESERT RUNNING WILL NOT BE about the idea. David Sims, a replace it.” Cairo-based city planner, wonders ENOUGH IN OUR CASE.” RACHEL SCHEIER PRESIDENT SISI MIRAGE? EEDC BY THE NUMBERS Outside estimate of the total dollar value of investment deals and grant agreements signed or announced during the Egypt Economic ernment envisions with its megaproject to The project is being put together by $130 billion Development Conference magine a sleek, well-planned outdo all megaprojects—a brand new Capital City Partners, a real estate fund $200 to $200 billion How much President Abdel Fattah el-Sisi estimates Egypt needs to spark a true economic turnaround new capital city that’s sustain - gleaming capital built from scratch on led by Dubai businessman Mohamed Total amount Saudi Arabia, Kuwait and the United Arab Emirates committed to Egypt in oil shipments, cash grants and deposits since able, pedestrian-friendly and some 700 square kilometers of empty Alabbar, who built the world’s tallest sky - $35.5 billion President Mohamed Morsi’s ouster in mid-2013 filled with well-maintained gar - desert somewhere between the current scraper, the Burj Khalifa. “It’s a natural In what place Egypt’s benchmark EGX 30 ranked globally in terms of performance in 2014 dens and “mixed-use public Cairo and the Suez Canal. Estimated at extension for the city of Cairo,” Alabbar Third squares.” It would offer a central $45 billion, The Capital Cairo, as it’s told the BBC, adding that the new global $4 billion Amount of FDI Egypt brought in during the last fiscal year park twice as big as New York City’s and being called for now, promises 21 resi - city would breed “confidence” and Amount of FDI the government aims to bring in annually by 2018 a theme park four times the size of dential districts, 2,000 schools, 663 hospi - “pride” in Egyptians. A slick new website $18 billion Disneyland. There would be shopping tals and clinics, 1,250 mosques and promoting the project touts it as “the cat - 60 Percentage of foreign investment that ends up in Egypt’s petroleum sector malls, efficient public transport, and of churches and housing for up to 7 million alyst for an Egyptian renaissance.” At the Percentage of Egypt’s total tax revenue that’s contributed by corporate income tax course, plenty of well-paying, 21st centu - residents. In terms of population, that request of Sisi, the initial 10-year time - 10 Iry jobs. People from all walks of life would make it the biggest “planned” cap - frame for the project has been accelerated 4,300 Kilometers of new roads the government announced it will pave to help stimulate the economy would dwell harmoniously in leafy, ital ever built, “nearly as large as to five years, a goal urban planners agree Number of suits and ties South Sinai Governor Khaled Fouda gave out to taxi and minibus drivers ahead of the Egypt diverse neighborhoods. Islamabad (population: an estimated 1.8 is wildly ambitious even under the most 1,000 Economic Development Conference In other words, imagine a city that’s million), Brasilia (2.8 million), and optimistic of scenarios. 45 Percentage increase in March of the average hotel occupancy rate in Sharm el-Sheikh everything Cairo isn’t. That’s precisely Canberra (380,000) put together,” reports For years, Egyptian officials have tried what President Abdel Fattah el-Sisi’s gov - The Guardian . to tackle the problem of overburdened 19 Number of times President Abdel Fattah el-Sisi’s opening speech was interrupted by applause

Business Monthly – Business Monthly – 40 I April 2015 April 2015 I 41 needs a strong bankruptcy law and better protections of November, bringing some 160 CEOs and 70 compa - intellectual property, said the U.S. secretary of state. nies. Egypt’s foreign ministry also announced after The latter is “not a luxury in today’s global market - Kerry’s meeting with Minister Sameh Shoukry that place,” he said. “They are essential to being able to another U.S. delegation of government officials and build confidence and attract capital.” private-sector companies would be visiting Egypt to “The more inclusive and the more diverse and the further strengthen the economic, commercial and more rules-based and accountable the political process investor relations between the two countries. is, the greater confidence the business community will Stressing the country’s appeal to investors, Kerry have,” Kerry added. “More than ever, trade, innova - noted: “Egypt has always had an extraordinary busi - tion, investment are not just the principal engines of a ness corps. Egypt has great capacity. This is not some - strong economy; they’re the principal engines of a thing new. In addition, Egypt has always had a vibrant strong society.” civil society. And it has been there for the hub of Above all, Kerry said, “Entrepreneurs have got to be thinking, of progress, of energy, of direction in this empowered to create jobs and grow their businesses. region—not to mention the fact that it represents a Egypt boasts a lot of very capable entrepreneurs; I’ve quarter of the population of the Arab world. It has met many of them. Too many are still in the diaspora. always, in my judgment, had the ability to demon - They need to come back.” strate entrepreneurial energy.” The job of the secretary of state “is to encourage Kerry warned his audience not to take a wait-and-see investment and help break down the barriers to the attitude toward investing. “You have to commit to make building of confidence that is essential for the move - certain that we’re attracting capital, that we’re investing ment of capital,” Kerry said. “We want to promote in the future,” he said. “Because the more jobs that are around the clock shared prosperity in Egypt and across created, the more people begin to see the movement the region, but particularly, I say, in Egypt.” towards that future, the more opportunities there are for To that end, Kerry pointed to the U.S. Chamber of those young people, the faster all the other things will be Commerce-sponsored trade delegation that visited last taken care of, and the faster things will turn around.”

INVESTMENT Power of the Private Sector

gypt’s economic future is not driven by Business Council and the U.S.-Egypt Business any government, U.S. Secretary of Council “for their belief in this formula and in the State John Kerry told a packed hotel ability of the private sector to make an enormous dif - ballroom at a March 13 AmCham ference,” said Kerry, who was the ranking official in breakfast meeting, “Egypt-U.S. the 100-person American delegation attending the Relations: Investing in the Future” at economic conference. the three-day economic summit in Sharm el-Sheikh. Wisely channeled, “private-sector engagement cre - “It’s the private sector, it’s the innovators, it’s the ates growth that is sustainable,” Kerry said. entrepreneurs, it’s people who are willing to put their Sustainability, he added, “lifts living standards, it capital into an idea and let that idea blossom by virtue helps build bridges to communities that have for too of its acceptance in the marketplace and all that that long been left behind. It’s why I have always said that Ethen brings in terms of jobs, prosperity, opportunity, we must keep in mind this synergy— symbiosis, if education—the next generation doing better,” said you will—between the private sector and government Kerry. today, if government today is doing its job properly.” Speaking before an audience of about 450 business Kerry outlined specific measures the government can leaders, Kerry brought a message of bilateral cooper - take “to improve and sustain a welcoming investment ation, thanking event co-organizers AmCham Egypt, climate.” In addition to bringing back the one-stop shop the U.S. Chamber of Commerce, the Egypt-U.S. to ease the registration process for businesses, Egypt

Business Monthly – Business Monthly – 42 I April 2015 April 2015 I 43 Market Watch Capital Markets

Egyptian price indices - EGX 30

Stock Analysis

Market pulls back in run-up to economic summit

head of Egypt’s long-awaited economic conference in Meanwhile, Egypt’s 2014 earnings season continued with Sharm el-Sheikh, the market cut its gains for the year mixed performances. Some companies have reported better- in the face of declining liquidity. While the bench - than-expected results, while others missed analyst estimates. EGX 30 9726 mark EGX 30 slipped slightly, dropping by 0.6 percent during Arabian Cement posted an 11 percent decline in year-over- Athe period from Feb. 15 to March 15, the EGX 70 and the EGX year earnings on one-offs but still beat the analyst consensus 100 dropped by 6.9 percent and 4.3 percent, respectively. by 26 percent. The stock dropped 6.7 percent to LE 17.29. Declines outnumbered advances by a ratio of 3-to-1. EFG Hermes posted its 2014 earnings as well, posting a prof - Egyptian price indices - EGX 70 Obviously, the market is realizing that despite the much-hyped it of LE 538 million compared to a loss of LE 540 million last economic summit and billions of dollars’ worth of projects in year, thanks to its investment banking operations. The stock the pipeline, investments are unlikely to flow in right away. climbed 3.1 percent to LE 17.46. On the other hand, OTMT Most of the planned projects are of a long-term nature and reported a loss of LE 62 million, falling short of the consensus. which will take years to implement. A case in point is Egypt’s Similarly, Telecom Egypt (TE) posted 57 percent lower earn - new planned capital east of Cairo, the investment cost of ings than the previous year, missing the consensus by more which is estimated at $45 billion over five to seven years. than 40 percent. While OTMT shares slipped 2.4 percent to That said, the EGX 30 got a boost from CIB, its largest com - LE 1.23, TE’s declined 5.8 percent to LE 11.27. ponent comprising around a third of its value. The bank’s stock The market is witnessing some movement involving capital was up another 4.9 percent in the period to LE 58.38. Banks increases, mergers and acquisitions and new listings. GB Auto should be among the first firms to enjoy the fruits of the Egypt plans to raise LE 960 million in April, while Pioneers Holding Economic Development Conference. Indeed, shares of the finally won the takeover bid for Arab Dairy, while Edita for Food Export Development Bank of Egypt (up 6.4 percent to LE Industries will stage a LE 2-billion IPO. However, investors EGX 70 558 10.54), NBK Egypt (up 3.8 percent to LE 23.25), Egyptian seem to be wary of being overly optimistic about the outcome of Gulf Bank (up 3.3 percent to $1.27) and Faisal Islamic Bank the conference A weaker pound could be a deterrent for some for - of Egypt (up 2.5 percent to $7.08) all got a bump. eign investors, but it could also lure in those looking for bargains. Selected sector performance

IN THE SPOTLIGHT Raya Holding

Raya Holding, once merely a mobile phone reseller, has rapidly diversified itself over the past few years. Having added call centers, it went on to branch into recycling and logistics. More recently, the company said it is in the process of conducting financial and technical studies on a prospective foods factory; a feasibility study will be presented to the board in due time. Meanwhile, Raya Holding stock jumped 13 percent in the last period, from LE 5.48 to LE 6.19 with more than 3.5 million shares worth LE 21 million changing hands.

44 Business Monthly – Business Monthly – I April 2015 April 2015 I 45 Market Watch Market Watch Capital Markets Money & Banking

INTEREST RATES Corporate News

EFIC to boost production, add new factory Palm Hills Developments to build the $20-billion Oasis Egyptian Financial & Industrial Company (EFIC) announced October project. Built on 10,000 feddans in 6 October City, it plans to increase the annual production capacity of its fertilizer will include administrative, commercial and housing units. plant in Assiut to 400,000 tons by the end of the year. It plans According to the ministry, the project has an expected return to do this by replacing and renewing old production lines to rate of 25 to 30 percent. increase its annual capacity from 100,000 to 150,000 tons, in CIB and ADIB eye Citigroup’s Egyptian retail business addition to installing a new line with an annual capacity of 250,000 tons. Meanwhile, EFIC announced that it had started Commercial International Bank (CIB) and Abu Dhabi Islamic construction on a 250,000-ton-per-annum fertilizer complex in Bank Egypt, among several other banks, were shortlisted as Ain Sokhna. The firm signed a contract with Canal Power potential buyers of Citigroup's Egyptian retail business. Distribution to provide the project with electricity and it Negotiations were still in preliminary stages. received official approval to provide it with gas. It expects to Regulators ok Triquera’s bid for stake in Minapharm begin construction on the LE 375-million complex by September 2016. Minapharm Pharmaceutical announced that the Egyptian Financial Supervisory Authority had approved a mandatory bid NUCA approves Madinaty settlement submitted by Dutch company Triquera BV to acquire 46.7 per - BANKING & RESERVES (in millions of L E) Egypt’s minister of housing announced that the New Urban cent of the firm at LE 37.5 per share. The bid was to run from March 5 to April 1. Communities Authority has approved a settlement with Talaat 2014 Moustafa Group (TMG) over their Madinaty land dispute. Cairo Poultry shareholders approve stock split End of May June July August Sept. October November December Under the deal announced back in February, the in-kind pay - Reserve Money 347,865 364,473 364,473 370,901 374,619 368,636 363,202 362,922 ment of the built-up area to be delivered to the government was Cairo Poultry got approval at an extraordinary general meeting Int'l Reserves (net, US$ mln) 17,306 16,687 16,737 16,836 16,895 15,905 15,356 15,429 increased by 0.5 million square meters to 3.2 million square for a proposed two-for-one stock split, which would reduce the meters from 2.7 million square meters; in addition, the compa - stock's par value from LE 2 to LE 1 per share. The number of Domestic Liquidity 1,484,420 1,516,591 1,545,032 1,557,379 1,543,756 1,560,327 1,572,950 1,606,505 ny agreed to pay LE 2.9 billion over the next 10 years. The gov - shares would also increase from 174.2 million to 348.4 million, Foreign Assets (net) 126,059 128,425 117,934 1,131,557 1,115,556 1,128,931 1,138,833 1,160,773 ernment will recover almost LE 9 billion (LE 2.9 billion in leaving issued and paid-in capital at LE 348.4 million. Domestic Assets 1,358,361 1,388,166 1,427,098 1,437,647 1,425,945 1,448,684 1,470,645 1,522,143 addition to LE 6 billion from the additional BUA). Orascom-IPIC consortium plans to build coal-fired Dollarization Rate (%) 19.42 18.95 19.01 18.66 18.83 18.50 18.17 17.49

Palm Hills Developments inks deals in New Cairo and power plant Discounted Bills (except CBE) 3,649 3,786 3,519 3,608 3,848 3,755 3,896 4,260 6 October City Orascom Construction (OC) announced that its consortium Bank Loans (except CBE) 575,850 584,066 584,484 584,378 597,394 611,952 614,397 624,961 Palm Hills Developments (PHD) signed a memorandum of with the Abu Dhabi-based International Petroleum Securities (except CBE) 812,226 825,524 830,089 845,896 863,626 866,843 884,375 904,293 understanding with the housing ministry to construct a tourism Investment Co. (IPIC) signed a deal to development a Currency in Circulation 283,716 289,875 305,067 299,073 299,333 295,508 292,653 294,227 project in New Cairo. The project will occupy more than 500 3,000-megawatt coal-fired power plant on the Red Sea feddans and is estimated to cost some $3 billion. The housing coast. The cost of the project’s first phase is expected to be ministry announced that it has also signed a memorandum of around $3 billion. Funding will be through equity and debt understanding with Emirati real estate developer Aabar and of up to $1.95 billion. EGYPTIAN POUND EXCHANGE RATES

Feb. 15, 2015 Dec. 15, 2014 Oct. 15, 2014 March 15, 2014 Currency March 15 Amount change Amount change Amount change Amount change International stock price indices Australian Dollar 5.799 5.904 -1.78% 5.868 -1.16% 6.238 -7.04% 6.266 -7.45% Bahraini Dinar 20.015 20.044 -0.14% 18.8854 5.98% 18.802 6.46% 18.320 9.26% British Pound 11.197 11.712 -4.40% 11.188 0.08% 11.406 -1.83% 11.536 -2.94% Feb. 15 Dec. 14 Oct. 14 Canadian Dollar 5.941 6.109 -2.75% 6.151 -3.41% 6.348 -6.41% 6.260 -5.10% March 15 Chinese Yuan 1.231 1.238 -0.58% 1.163 5.86% 1.161 6.07% 1.130 8.99% value % change value % change value % change Euro 7.972 8.665 -8.01% 8.874 -10.17% 9.048 -11.90% 9.637 -17.28% Indian Rupee 0.121 0.122 -1.57% 0.114 6.04% 0.116 3.53% 0.113 6.68% DOW 18,019.35 17,977.42 0.23% 17,180.84 4.88% 16,141.74 11.63% Japanese Yen (100) 6.256 6.403 -2.30% 5.993 4.39% 6.660 -6.07% 6.834 -8.46% Jordanian Dinar 10.687 10.688 -0.01% 10.055 6.29% 10.017 6.69% 9.788 9.18% NASDAQ 4,893.60 4,929.51 -0.73% 4,605.16 6.26% 4,215.32 16.09% Kuwaiti Dinar 25.253 25.746 -1.91% 24.313 3.87% 24.651 2.44% 24.614 2.60% Lebanese Pound (100) 0.502 0.503 -0.20% 0.470 6.81% 0.465 7.96% 0.455 10.33% S&P 500 2,096.99 2,081.19 0.76% 1,989.63 5.40% 1,862.49 12.59% Russian Rouble 0.122 0.120 1.52% 0.124 -1.91% 0.465 -73.78% 0.455 -73.20% Saudi Riyal 2.025 2.028 -0.15% 1.897 6.70% 1.900 6.56% 1.851 9.38% FTSE 100 6,873.52 6,804.08 1.02% 6,182.72 11.17% 6,211.64 10.66% Turkish Lira 2.874 3.094 -7.11% 3.094 -7.10% 3.136 -8.37% 3.110 -7.59% UAE Dirham 2.068 2.071 -0.15% 1.939 6.63% 1.941 6.54% 1.890 9.42% NIKKEI 225 17,913.36 19,246.06 -6.92% 17,099.40 4.76% 15,073.52 18.84% US Dollar 7.597 7.612 -0.19% 7.124 6.65% 7.131 6.54% 6.942 9.43%

Business Monthly – Business Monthly – 47 46 I April 2015 April 2015 I Market Watch Market Watch Key Indicators Egypt- U.S. Trade

DEMOGRAPHICS EGYPTIAN EXPORTS TO THE U.S. EGYPTIAN IMPORTS FROM THE U.S. 2006 2007 2008 2009 2010 2011 2012 2013 (in millions of U.S. $) (in millions of U.S. $) Total Population (millions) 73.6 77.5 79.1 83.5 84.5 88.0 90.2 92.2 Labor Force (millions) 19.4 23.9 24.7 25.4 26.2 25.8 27.0 27.6 Labor Force / Population (% ) 31.8 32.5 32.8 33.1 33.4 33.0 32.7 32.7 Unemployment Rate (% ) 10.6 8.9 8.7 9.4 9 12.0 12.7 13.2 SOURCE : C ENTRAL BANK OF EGYPT

BALANCE OF PAYMENTS ( in millions of U.S. $)

012/13 2013/14 2014/15 Q4 End of Year Q1 Q2 Q3 Q4 End of year Q1 Trade Balance -7,724.6 -31,542.0 -7,687.1 -7,752.3 -9,742.7 -9,607.2 -33,702.7 -9,742.1 Exports 6,152.1 25,971.3 5,939.2 6,631.2 6,252.1 6,564.0 26,119.0 6,469.2 Imports -13,876.7 -57,513.3 -13,626.3 -14,383.5 -15,994.8 -16,171.2 -59,821.7 -16,211.3 Services (net) 1,178.4 6,692.0 135.8 36.8 1,155.2 560.3 978.5 2,109.8 Receipts 4,953.0 22,220.9 3,965.3 4,027.1 4,832.1 4,806.9 17,631.4 6,448.8 Payments 3,774.6 15,528.9 3,829.5 3,990.3 3,676.9 4,246.6 16,652.9 4,339.0 Balance of Goods & Services -6,546.2 -24,850.0 7,551.3 -7,715.5 -8,587.5 -9,046.9 -32,724.2 -7,632.3 Transfers 4,850.8 19,267.9 8,308.3 6,202.7 9,110.6 7,233.7 30,367.9 6,188.6 Balance of Current Account -1,695.4 -5,582.1 757.0 -1,512.8 523.1 -1,813.2 -2,356.3 -1,443.7 Capital & Financial Account 5,413.2 9,686.7 3,978.7 -992.4 546.1 1,984.6 4,934.5 811.4 Foreign Direct Investment 1,628.6 3,004.7 1,246.4 1,602.7 1,840.6 1,045.0 4,119.3 1,773.2 U.S.-EGYPT TRADE DEFICIT Overall Balance -2,327.2 -237.0 -3,746.7 1,747.4 -218.2 -738.9 -1,478.6 410.0 (in millions of U.S. $) SOURCE : C ENTRAL BANK OF EGYPT

NON-PETROLEUM TRADE ( in millions of U.S. $)

Exports (Q1 14-15) Imports (Q1 14-15) Balance (Q1 14-15) Total 6469.2 16211.3 U.S.A 682.0 822.4 -9,742.1 E.U. 2,328.4 4,392.6 -2,064.2 Other European countries 365.4 1,130.1 -764.7 EGYPTIAN EXPORTS TO THE U.S. Russian Federation & CIS 305.2 631.8 -326.6 DURING JANUARY 2015 Arab countries 1,512.6 4,747.0 -3,234.4 Asian countries (non Arab) 773.4 3,260.4 -2,487.0 African countries (non Arab) 123.7 123.6 0.1 Australia 10.6 82.9 -72.3 Other countries 367.9 1,020.5 -652.6 SOURCE : C ENTRAL BANK OF EGYPT

INFLATION GDP GROWTH TOURISM VISITS

EGYPTIAN IMPORTS FROM THE U.S. DURING JANUARY 2015

The CPI (Consumer Price Index) Gross Domestic Product (GDP) growth Year Tourists Change and PPI (Producer Price Index) rates are based on 2001-02 prices. 2013-14 7.97 million -34.7% are based on the results of surveys 2012-13 11.96 milion 9.2% of expenditure and consumption and 2011-12 10.95 millon -8.2% 2010-11 11.93 millon -12.9% relevant baskets of goods and weights. 2009-10 13.7 millon 11.4% SOURCE : C ENTRAL BANK OF EGYPT SOURCE : C ENTRAL BANK OF EGYPT SOURCE : C ENTRAL BANK OF EGYPT SOURCE : US I NTERNATIONAL TRADE COMMISSION (USITC)

Business Monthly – Business Monthly – 48 I April 2015 April 2015 I 49 Entrepreneurship

SysDSoft are among Egypt’s most influential tech outfits. capital. But Morris insists that “Cairo should be comparing Their founders and employees have started dozens of other itself to the best tech centers in the world.” While the Egyptian enterprises since the 1990s. This sort of spin-off is encourag - capital naturally has far fewer firms than New York, the Tech Entrepreneurship ing, as the people that leave these firms “are taking with them Maps of the two cities show that in recent years, they have seen some of the magic, connections, ideas and managing tech - similar growth rates both in terms of start-ups and connections. niques for running a company,” making these start-ups more The key difference between the two cities’ tech sectors, as the likely to succeed, says Rhett Morris, the global director of maps illustrate, is that Cairo’s companies tend to invest far less Endeavor Insight, at a recent AmCham launch event for the in one another than do their Manhattan peers. Moreover, just Cairo Tech Map. one in 10 Cairo start-ups received venture capital funding, Gamal explains that the success of major tech ecosystems in whereas in New York more than half did. This piece of data is SIX DEGREES places like Silicon Valley and New York were built on the simply more evidence of the dearth of investment capital cur - shoulders of “mafias”—groups and institutions that fostered a rently available to Egyptian entrepreneurs. “We know that hav - Cairo Tech Map shows that success depends on “hub of mentorship and investment” and a culture of reinvest - ing angels invest who have already been successful is an indi - connections ment. This leads to a multiplier effect, in which the output of cator that your company is likely to be successful,” says Morris. each entrepreneur is “basically “These connections are important Published by Endeavor Insight and Mercy Corps Egypt quadrupled” thanks to their to an ecosystem, and unfortunately Analysis by Eric Knecht connections. PayPal, the The output of each entrepreneur we’re not seeing as many in Cairo.” online payment service, is a is “basically quadrupled” But as Heba Ali, Mercy Corps’ classic example of a company senior entrepreneurship advisor, whose founders and employ - thanks to their connections. points out, “Most companies on the ees went on to spark an extra - map are between the seed and take - ordinary number of other suc - off stage.” In other words, they’re cessful, high-profile ventures including LinkedIn, YouTube not yet developed enough to require large-scale infusions of and 500Startups. “When I see all the connections and influ - new cash. What they really need, argues Ali, is good “top mid - tep within earshot of any start-up-related event It provides a visual for the intricate ways in which small firms ence arrows going back and forth, it gives me the positive dle management” that can help them take their companies “to and you’re bound to get a big dose of jargon. that are just getting started interact with more established reinforcement that we are building a collaborative ecosys - the next level.” Endeavor’s research bears out this conclusion. “Scalability,” “leveraging” and “bootstrapping” companies. To draw the map, Endeavor surveyed 200 entre - tem,” says Gamal. When entrepreneurs were asked to name the greatest obstacles are some of the industry’s favorite shopworn preneurs about their links to other technology companies in The map also tells the story of the Cairo tech sector’s incred - they faced, lack of capital was conspicuously absent from the terms. For an ordinary English-speaker, the five basic categories: mentorship (Did they mentor or were ible growth over the past two decades. The infographics can be top of the list. Rather, most listed political instability, lack of buzzwords can be bewildering, requiring furtive they mentored by other firms?); inspiration (Did they inspire broken down by time periods. Highlight the earliest period qualified managers and technical talent and corruption as their smartphone consultations in order to keep up. But perhaps or were they inspired by others?); investment (Did they invest available, 1991 to 1998, and you’ll find a lonely handful of biggest concerns. “When firms talk about lack of talent, this none of these phrases has been more overused over the past in other start-ups or receive investments from others?); companies with a meager four connections linking them. As means they are growing—it’s a good sign,” says Morris. few years than “start-up ecosystem.” The term refers to the employment (Where did employees work before they joined you move forward into the 2000s, however, the number of start- That Cairo’s tech sector is extremely well-connected should - ups explodes, along with the lines connecting them, quickly n’t be taken for granted. A densely connected network “is not network of companies, investors, organizations and individu - the firm and after they left?); and founding (What other com - growing too messy to count. From 2010 on, the map shows that always the case in other parts of the world,” notes Morris. In als that support, interact with and feed off local entrepreneurs. panies did their founders start?). Different colored “influence the sector has been growing at an average pace of 35 percent Cairo though, there seems to be “a strong tradition of entrepre - SGoogle’s Ngram Viewer, which measures how frequently arrows” denoting the different types of connections string every year. Roughly every two and half years, the number of neurs reinvesting their success in other companies.” There’s a words and phrases appear in written form, shows how the use together the various companies on the map. companies doubles, making Cairo “among the fastest growing whole host of reasons why this might be the case. As Heba of “start-up ecosystem” has spiked since the mid-2000s. And Understanding these links is vital to an organization like tech networks in the world,” says Morris . Gamal points out, part of this is a testament to the small army of like all hackneyed phrases, its overuse eventually wore out the Endeavor, which seeks to identify and provide support like The study also yields a profile of who Cairo’s tech sector organizations that have rapidly emerged in recent years to help threads out of its meaning. So what is a start-up ecosystem? training and funding for “high impact” enterprises, those with entrepreneurs are and how they compare to their counterparts link up and support start-ups, whether they are incubators and And what does Cairo’s look like? the greatest potential to push the sector—and the society—for - elsewhere in the world. Cairo’s tech denizens are relatively accelerators like Flat6Labs or investor networks like Cairo In March, the local arms of two international development ward, explains Heba Gamal, managing director of Endeavor young: In Egypt, the average tech entrepreneur is between 21 Angels. And as Morris points out, the collaborative environment organizations—Mercy Corps Egypt and Endeavor Insight— Egypt. Before they drew the map, only rudimentary raw data and 26; in New York, they tend to be closer to 30. Ninety per - can also be credited to the early founders in the sector, who set sought to solve a piece of that puzzle with their Cairo Tech was available to inform the group’s assessments of which cent of Cairo’s start-up founders are male, but New York’s the tone by being actively involved in other young companies. firms were generating the most revenue or creating the most Map. Endeavor has done other tech maps for cities such as gender balance isn’t that much better, with 80 percent of its All this connectivity also spawns jobs. The tech sector ecosys - jobs. Moreover, they were missing another critical indicator. New York, Buenos Aires, and Bogotá. They employ interac - tech firms started by men. And though some have criticized tem the Cairo map studied, for example, currently employs 5,000 tive online infographics using concentric circles to illustrate “We felt that the triangle was missing one of the angles, and Egypt’s start-up culture for being an elitist bubble, the Tech people. But if the growth rate continues at its current pace, this the ways in which tech companies, their founders and employ - that was influence,” says Gamal. Map shows that around one-third of Cairo’s entrepreneurs number will reach 20,000 by 2020. Of course, that’s not going to ees overlap and connect. The infographics resemble dense, The map shows that a handful of local firms have become went to a public high school, which indicates that “the sector put much of a dent in Egypt’s unemployment figures, but still, miniature solar systems, in which younger companies orbit engines of growth. Not only have these start-ups made money is relatively meritocratic,” says Morris. these “are well paying jobs with good benefits that enable people around older ones. and created jobs, their founders have gone on to help start New York, of course, is a far more established technology who are well educated and want a career to stay in Cairo■,” says The map’s data tell several stories about Cairo’s tech sector, other firms and provided mentorship and inspiration else - hub that has the benefit of being located in the world financial Morris. “This is is important for the city in the long run.” but the overarching narrative is one of increasing connectivi ty. where in the sector. Firms like ITWorx, LINKdotNET and

Business Monthly – Business Monthly – 50 I April 2015 April 2015 I 51 Dining Out

restaurant is on a leafy residential block off Degla Square that I’m told once housed another authentic Asian restaurant called China Winds, where they served things like braised camel Dining Out hooves and lily bulb soup. Anyway, this two-storey converted house near CAC is now home to Genghis Khan. Apart from the red lanterns hanging out front and the preponderance of lurking stray cats, you wouldn’t guess that this gated building painted in gaudy shades of Dreamsicle orange and cream housed a restau - rant at all. Inside it still looks more I B

or less like someone’s living room— A G L E

albeit with tables where the couch A H O would be. There’s even a second S floor, with more tables and a terrace, but it wasn’t open the night we went. at Genghis Khan—which was so the plain Steamed Rice (LE 4), which The décor is plain, perhaps even a lit - good that I remembered it from my comes perfectly cooked, steaming and tle drab, owing especially to the flu - first trip there three years ago—was sticky in small, individual white bowls. orescent lighting. But then again, the Tiger Style Salad (LE 30). It’s Chinese restaurants aren’t really people don’t come to this place for just a simple mix of cucumbers, car - about dessert, in my experience, but I the wonderful ambience. Apparently, rots, red onions and plenty of corian - must admit that the Golden Crispy word has spread about the food at der, chopped fine and mixed together Taro (LE 38), pictured on the restau - Genghis Khan. Even on a Tuesday in a sesame oil dressing with salty rant’s Facebook page, looks intrigu - evening, there was a decent crowd. roasted peanuts. This last ingredient, ing. They’re little fried fingers rolled Like many authentic Chinese of course, is what makes the dish, in some kind of crunchy stuff and

I restaurants, the menu at Genghis adding protein, flavor and extra served with a little dish of condensed B A G L

E Khan is a bit cryptic. “stir-fry chick - crunch. milk for dipping. (If you’ve never

A H

O en with green paprika” or “flavoured Not every dish on the Genghis tried sweetened, condensed milk, go S eggplant” are the most detailed Khan menu is a hit, however. to the supermarket and buy a can of GENGHIS KHAN SERVES UP descriptions you’re going to get. If Wanting some kind of seafood and it right away and eat it with a spoon.) you ask the friendly Chinese waitress remembering the tangy Szechuan- Actually, there are quite a few things what’s good, she’ll recommend the style prawns I used to order in San on the Genghis Khan menu that I AUTHENTIC CHINESE FOOD standard favorite of Westerners at Francisco and New York, I tried one plan to order on my next visit. It’s Chinese eateries around the world— more time to ask the waitress for one of the those places where you BY RACHEL SCHEIER General Cho’s Chicken. (LE 68). guidance, but again, she wasn’t much have to eat there a half a dozen times (That’s what she recommended to help. Finally, I chose the Tomato or so before you get the hang of s a kid growing up eign country—just without marked English. Then we’d sit down and eat me, an American, anyway.) Even Sauce Prawns (LE 88), which turned which dishes are really delicious and just outside San borders. Suddenly, you’d cross the plates and plates of food. Often times though I don’t particularly love this out to simply be a row of jumbo which are just generic, half-hearted Francisco, Sunday street and the romantic outdoor cafés they were delicious, others they were dish of what are essentially Chicken prawns, which I had the feeling came attempts to appeal to Western tastes. afternoons were of North Beach (the city’s Italian scary, but it was always an adventure. Nuggets in sauce, I ordered it any - from a bag in the supermarket freez - Another option is to invite a bunch of when my father neighborhood) would give way to red The closest I’ve come in Cairo to way, and it was the best version of er section, battered and deep fried your friends and make it a party— would take my paper lanterns and outdoor bazaars those authentic, hole-in-the-wall the dish I’ve ever tried. The sauce and served with a ramekin of that way■ you can try everything in mother, my sister and me out to lunch packed with all manner of tiny Chinese restaurants of my youth is was heavily infused with ginger and ketchup. The Spicy Cabbage with one go. “in the city.” Food, in my family, was Buddhas and cheap plastic knick - Genghis Khan in Maadi. Someone chili, which managed to balance the Chili (LE 30) was much better, if a not something you consumed for fuel knacks. It was to one of these streets took me there during one of my first sweetness. My friend and I also little greasy, consisting of braised Genghis Khan or had on the way to something else— that my dad would lead us, skeptical weeks in Egypt, when it was still decided to start with Sichuan Hot and white cabbage leaves in a spicy soy Street 208, Villa #5, off Degla it was the day’s central activity. And and complaining about the weird located in a tiny storefront on Road Sour Soup (LE 25). A thick, spicy, sauce. All this is meant to be eaten Square, Maadi Amore often than not, the destination smells. “You’re gonna love this 233. Though I remembered the place vinegary broth with egg, Chinese with rice, of course—and Genghis 010-6926-6502 was Chinatown. Then as now, San place,” he’d say, shepherding us into fondly, I didn’t go back for three mushrooms and tofu, this stuff would Khan offers the usual assortment of Open daily, 11:30 a.m. Francisco’s Chinatown, which is the some questionable looking establish - years, partly because I couldn’t find be a godsend to anyone with a cold. fried rice with vegetables, chicken, to 10:30 p.m. largest outside of Asia, felt like a for - ment where the menus weren’t in it. Turns out, it moved. Now the But my absolutely favorite appetizer beef or shrimp. We opted simply for

Business Monthly – Business Monthly – 52 I April 2014 April 2014 I 53 Fashion

ART & SOLE BY ERIC KNECHT

or three generations, Ahmed 2011, he dabbled in graffiti and got soon started selling his footwear on Nage’s family has been mak - himself arrested for political activism. Facebook. “I saw some pairs of shoes ing shoes. Starting in the He saw himself as an aspiring artist. on the Internet that were really expen - 1930s, his grandfather sold But ultimately, like countless other sive, like €150 or €200, and I thought, his footwear out of a shop in Attaba. As young Egyptians, he couldn’t find a Come on, we have the same materials. a child, Nage remembers the elder man job. He flipped burgers at McDonald’s I can make the same thing.” Fwatching with a stern eye as he learned for awhile, desperate to make ends Using an old pair of scissors, to cut out leather patterns. “He’d hit me meet. And then one day it suddenly roundhead knife, awl, last and other with a stick until I got it right,” says occurred to him: “I have skills. I can cobbler’s tools handed down by his Nage, who swore he’d do something make shoes.” grandfather, Nage fastidiously fash - else when he grew up. He hated the So two years ago, he crafted a car - ions each pair to order. Typically, he painstaking work, the way “the glue pet into a pair of shoes for his girl - combines an ordinary leather upper gets all over your hands.” Even his friend. She wore them to Germany, and pairs it with a vamp and toe box father eventually abandoned the family where everywhere she went, people cut from a floridly-patterned craft to become a real estate broker. In wanted to know where they could buy Egyptian carpet—the contrast yields college, Nage studied acting and direct - a pair. “They were all asking her, the same sort of visual pop as one ing at the Giza Academy of Arts. In ‘Who made these?’” says Nage, who experiences when a stoic business

Business Monthly – 54 I April 2014 Downtime

century creative—reed thin, in hip - ster spectacles and a navy blazer Chamber over a paisley t-shirt and jeans. People stroll in and snap photos of the shoes; some inquire about order - news ing. From his little workshop, Nage kneels at the feet of a 20-something fashionista whose tawny, knee-high suede boots suggest a seriousness about her choice of footwear. The scribbles measurements into a small red notepad. “I’m so nervous,” he confesses, after the customer leaves. BOARD But Wells is confident that Nage OF GOVERNORS has a future as a fine artist. PRESIDENT MEMBERS OF THE BOARD Townhouse has a strong track record Anis A. Aclimandos, Transcentury Associates Amr Allam, Misr Sons Development - Hassan Allam Sons Nevine Loutfy, Abu Dhabi Islamic Bank of launching the careers of such EXECUTIVE VICE PRESIDENTS Omar Mohanna, Suez Cement Group of Companies Curt Ferguson, Middle East & North Africa Business Thomas Maher, Apache Egypt Companies unlikely Egyptian artists as Ayman Unit, The Coca-Cola Company Ramadan, a world-renowned concep - Sherif Kamel, School of Business, The American University in Cairo PAST PRESIDENT tual artist who started as a security M. Gamal Moharam, MGM Financial & Banking guard, and Mohamed Sharkawy, a VICE PRESIDENT, MEMBERSHIP Consultants former janitor who is now famous Dalia Wahba, CID Consulting CHIEF EXECUTIVE OFFICER COMMITTEE for his two-dimensional, minimalist VICE PRESIDENT, PROGRAMS Hisham A. Fahmy (July 2014 to June 2015) images. Wells trusts his instincts, Amr Talaat, IBM LEADERS and already he has booked Nage for VICE PRESIDENT, LEGAL AFFAIRS Said Hanafi, Orascom Hotels & Development pant is hiked up to reveal an irrever - creations, painting them in the air a second, larger exhibition in International Cooperation ently-hued dress sock. with his hands as he spoke. Wells, September. “Most magazines will TREASURER Chair: Hanaa El Hilaly, Social Fund for Development ˚ Co-Chair: Rafeh Saleh, CID Consulting At 27, Nage is now a micro- who is interested in the intersection want to be featuring his shoes,” he Sherif El Kilany, Allied Accountants-Ernst & Young celebrity of sorts around downtown between art and design in our hyper- says. “There will be a lot of articles Investment & Capital Market Cairo, where he peddles his unique commercialized age, asked to see about what he is producing, and peo - Chair: Aladdin El-Afifi, board member, ASEC Company for Mining (ASCOM) Entrepreneurship and Innovation Co-Chairs: Hussein El Sherbiny hand-crafted footwear creations Nage’s shoes. “Within three days, he ple will be catching up to the fact Agriculture and Food Security Chair: Alaa Hashim, ECES Sharif El Akhdar, Beltone Private Equity wherever he can—posting images on brought two pairs specifically for that this is going on.” What’s more, Chair: Tarek Tawfik, International Company for Agricultural Production Ç ÇÇCo-Chair: Hashem El Dandarawy, Team 4 Security and Processing Legal Affairs social media, chatting up strangers at me,” says Wells. “He said, ‘These Wells predicts that the newfound Co-Chairs: Seif ElDin Saad ElSadek, Agrocorp For Agriculture Investment Chair: Ahmed Abou Ali, Hassouna and Abou Ali Law Offices Tony Freiji, Wadi Holding Health & Pharmaceuticals G Co-Chairs: Emma El Meligi, Pepsi-Cola Egypt coffee shops and showing off sam - are for you, I measured your feet.’” exposure will bring a whole new Chair: M. Maged El Menshawy, Manapharma Girgis Abd El Shahid, Sarwat A. Shahid Law Firm ples he keeps stowed in a bag slung Impressed by the hodgepodge of fab - layer of influence and sophistication Co-Chairs: Ahmed Ezz El Din, Johnson & Johnson Medical Egypt Banking and Finance Mohamed Roushdy, Amoun Pharmaceutical Company Marketing over his shoulder. “Everybody rics and intricate designs pieced to Nage’s work. Chair: Zeinab Hashim, CEO and Managing Director, Abu Dhabi Islamic Chair: Hisham Ezz El Arab, Danone Egypt knows him as that guy with the together in patterns not usually seen Despite these heady ambitions, for Bank Co-Chairs: Mai Aly, 4PR Communications Co-Chair: Nadir Shaikh, Citibank, NA Egypt Tamer El-Araby, Nielsen Egypt Human Resources shoes,” says William Wells, the in footwear, Wells decided to put the the moment, Nage’s shoes are still Chair: Somaya El Sherbini, Microsoft Egypt Corporate Social Responsibility (CSR ) Real Estate Co-Chair: Maisa Galal, General Motors Egypt executive director of Townhouse imprimatur of his prestigious gallery more of a hobby than a livelihood. He Chair: Mohamed El Kalla, Cairo for Investment and Development Chair: Mohamed Abdalla, Coldwell Banker Affiliates of Middle East Gallery, a downtown contemporary squarely on their soles. estimates he usually sells between five Co-Chair: Shereen Shaheen, Pepsi-Cola Egypt & Greater Africa Co-Chairs: Abdalla El-Nockrashy, Majid Al Futtaim Properties - Egypt art space that’s known for discover - For a month, from March 22 to and 10 pairs a month, at around LE 500 Customs and Taxation Industry & Trade ing and promoting local artists. April 22, Townhouse’s first-floor each. Nage’s local fame is also a result Chair: Hassan M. Hegazi, Master Trading, SAE Co-chairs: Mostafa El Halwagy, The Egyptian Company for International Transport & Logistics Co-Chair: Hossam Nasr, Allied Accountants - Ernst & Young Touristic Projects (Americana) Chair: Alfred Assil, Menarail Transport Consultants Wells first met Nage a couple of gallery space has been converted into of his eccentric reputation and quirky Omar El Derini, FAOM Consult/Red Wing Co-Chairs: Amr Kabil, National Stevedoring Group Suresh Narayanan, Nestle Egypt t months ago, when he interviewed a workshop-cum-vitrine for the approach to sales and marketing. Amr Tantawy, DHL Express Education Tarek Fahmy, Mediterranean Shipping Company (MSC) him for a graphic design internship young designer. “This is an “There are many designers, but I’m the Information & Communications Technology Chair: Amr Ezzat Salama, The American University in Cairo Chair: Bassel Mubarak, Oracle Egypt at the gallery. Naturally, Nage started Exhibition About Shoes,”—a title only one that makes shoes out of car - Co-Chairs: Elizabeth Khalifa Travel & Tourism Co-Chairs: Ayman Elgohary, Cisco International Systems Shahinaz Ahmed, Amideast Egypt Chair: Karim El Minabawy, Emeco Travel talking about his shoes, which are Dave Eggers might have come up pets,” he says. Nage regards himself Reem Asaad, Raya Holding J Co-Chairs: Cesare Rouchdy, Four Seasons Hotels & Resorts, Egypt made from all kinds of carpets, from with—features Nage’s signature not as a street peddler but an artist, Roland Bunge, Carlson Wagonlit Travel Energy Insurance those with colorful floral and geo - avant garde oxfords suspended from however—an image that he guards Chair:Khaled Abu Bakr, TAQA Arabia Women in Business Chair: Alaa El-Zoheiry, Arab Misr Insurance Group (AMIG) metric patterns to prayer rugs. “I every wall, while in a small adjacent fiercely. “I’m just trying to work on my Co-Chairs: Ali Bakr, ExxonMobil Egypt Chair: Hala El Barkouky, Allied Business Consultants Arshad Sufi, BG Egypt Co-Chairs: Ghada Hammouda, Qalaa Holdings immediately picked up that there was room, the artist himself measures, brand,” he says, which for the moment Osama ElSaid, Masa Electro Jailan Shindy, Shindy and Associates something interesting about him,” cuts and glues from a small wooden he calls Nage Shoes. Then he is quick - says Wells, who was struck by the work bench. On opening night, Nage ly wh■isked away to measure someone’s way Nage seemed to visualize his looks the part of the struggling 21st feet. American Chamber of Commerce in Egypt – Tel: (20-2) 3338-1050 – Fax: (20-2) 3338-1060 Business Monthly – For more information about AmCham services and news, please visit www.amcham.org.eg or our US mirror site www.amcham-egypt.org 56 I April 2014 Events

INVESTMENT & CAPITAL MARKETS MARKETING Room to invest Inspiration through hospitality

The hospitality industry is diverse, and in today’s world, just about anyone can make a career in this vast and complex sector. That was the message of hospitality management expert Christian Muhr, vice president of operations in Egypt and the Levant for Hilton Worldwide, at a March 12 session of the AmCham Marketing Committee’s Inspiring Young Talents roundtable series. Muhr began with an overview of Hilton, starting with Conrad Hilton purchasing his first hotel in 1919 in Cisco, Texas, to its evolution into one of the world’s fastest-growing organization to eventually become hotel general managers. global hospitality companies, with hotels in 94 countries. They include general manager excellence programs, VP excel - Obviously passionate about his work, Muhr explained that lence programs, women’s leadership programs and enrollment inspiring talent requires a leadership development model that in Hilton Worldwide University and its colleges. begins with oneself and moves on to leading others, such as As a parting thought, Muhr noted that it is critical to map out “We are keeping our best resources unutilized. This is our poten - more people to manage the new supply chain and opened bank managers and enterprises. He added that Hilton Worldwide has a personal career path at the beginning, as it helps you stay tial,” said Khaled Hanafy, minister of supply and internal trade, accounts. “Private companies have started dealing with them,” developed global programs that are built around a stepped pro - focused on your goals and enables any necessary adjustments in at a Feb. 26 AmCham luncheon event titled “Why Invest in said Hanafy, adding that this has resulted in an increase in prod - gression designed to move up deserving talent through the order to fulfil your dreams. Egypt?” at the Conrad Cairo Hotel. Egypt currently uses only a uct circulation of almost LE 500 million a month. “We never little more than 10 percent of its land, and the majority of its expected this level of success. And if we can formalize tiny bak - unemployed citizens are between 25 and 35, most of whom are ers, we can formalize more and more businesses in any sector.”

educated youths. “This means that we have a lot of room for Much of this depends on educating both businesses and con - MARKETING development,” said Hanafy. sumers about the benefit of being part of the formal sector. “We “It is a major stop along Egypt’s aim for development,” said need to talk to people to make them more aware of their rights,” The TV industry: three angles Hanafy. “What we are targeting now is not just economic said Hanafy. growth. We are targeting structural changes in Egypt’s business To that end, The Coca-Cola Co. has several programs in Egypt In the first event of its kind, the AmCham Marketing environment.” This will require new laws reflecting the govern - and the region, including one that aims to empower 5 million Committee gathered three different stakeholders from the ment’s economic policy, which is a “market-oriented” one, female entrepreneurs by 2020. “A lot of them are coming from television industry—a TV producer, a channel representative according to Hanafy. He said that regulatory frameworks and MENA,” said Curt Ferguson, Coke’s regional president. The and an advertiser—to discuss the challenges and opportuni - guidelines for this legistlation also need to be updated to encour - global beverage giant also has a similar program called Global ties they face at its Feb. 24 meeting entitled “The TV age proper enforcement and provide real benefit to individuals Shapers that targets start-up businesses. “We help them bring Industry: Challenges and Opportunities.” and corporations. “If we only develop better laws, those who are their ideas to life. Sometimes it’s with money, other times it’s by Ahmed Lasheen, brands and communication director at implementing them will still run into problems because the exec - connections or just giving them a spark,” said Ferguson. Etisalat Misr, discussed the challenges of creating a media utive document still has the process and procedure problems of If programs like these are scaled up with the help of domestic industry regulatory body for advertising. He also noted that the older version.” partners, they should help dent unemployment rates in Egypt, he with an increasingly fragmented viewership, offering longer The government’s other major goal is to include all business - said. Accordingly, Coke has budgeted $500 million to invest in advertising breaks on TV channels makes no sense. According to Al Ganainy, there is no audience meter to mea - es in Egypt’s economic environment and development plan. the community in the coming three years to expand its domestic Rawia El Shater, strategies and news initiatives group sure how many viewers watch television during the rest of Hanafy noted that there is a large informal sector. “Formal busi - operations. Another $100 million has been allocated to build a director at Future Media Group, added that it is also impor - the year. nesses face problems such as unfair competition because infor - new juice factory that will contract with local growers to supply tant to monitor intellectual property rights. She noted that the The panelists pointed out that the increase in content from mal businesses are not included in the system,” the minister said, it with fruit. “We are proud to play the role of the big investor,” local TV industry is quite young, most channels are private - the Gulf and Turkey has led to more competition and fewer pointing out that informal businesses don’t pay taxes. said Muhtar Kent, chairman of the board and CEO of Coca- ly owned, and viewership tools and analysis have yet to local series being distributed regionally. There are also cash Hanafy used reforms in the bread subsidy system to encour - Cola, adding that the Egyptian arm of the company exports to 40 develop. flow issues in the TV industry that come as a result of chan - age bakeries to formalize, he said. Previously, delays in the sup - other markets. “There is no question in my mind that Egypt will Tarek Al Ganainy, producer and owner of the TVision nels mediating risks between advertisers and producers. On plies of wheat and other production needs meant slow work for be among the next five booming economies. These economies Production Co., noted that fewer producers are entering the the upside, channels are more open to less well-known series small, government-supplied bakeries. Reforms have reduced will be champions in growth, create a new middle class and market and fewer series are being produced, while the and new talents, while the Internet offers many opportunities those delays, and now some 50,000 small bakeries have hired show the world what a dynamic environment is,” he said. majority of content is slated to be aired during Ramadan. for the television industry to expand.

Business Monthly – Business Monthly – 58 I April 2015 April 2015 I 59 Events

INSURANCE Opening the market

“Private pension funds registered with EFSA have reached 610 with over EGP 40 billion in assets,” said Sherif Samy, chairman of the Egyptian Financial Supervisory Authority, at a March 9 AmCham Insurance Committee meeting called “Overview of the Overdue Insurance Legislative Changes in Egypt.” The chairman said the authority is developing new executive regulations for the Private Pension Funds Law, which dates back to 1975, in order to enhance governance, allow private pension funds to be more active players in the capital market within conserva - The EFSA has three main objectives for 2015, said Samy. tive investments guidelines and enable asset managers to The first is amending the executive regulation, which will, manage their investments. among other things, find new distribution channels, simpli - Samy explained that the EFSA has issued several direc - fy the process for insurance brokers, amend investment tives on the rules regarding insurance intermediary activity limits, amend fluctuation provisions and open a narrow and the conditions that insurance companies should abide door for takaful and reinsurance. The latter involves the by while operating open-ended, money market and debt new insurance law, which will cater to new technology- instrument funds. The EFSA is also addressing regulations based distribution channels, allow for microinsurance, for marketing insurance products through banks and the allow for the establishment and regulation of specialized postal authority and on registering reinsurance companies medical insurance companies and bolster flexibility. Samy and concentration limits for Egyptian insurance companies said that the financial authorities’ final goal is to address in dealing with reinsurers. the Policyholders Protection Fund.

MARKETING Selling the Egypt of tomorrow

How do you capture Egypt’s mood? AmCham’s Marketing Committee, in cooperation with Nielsen Egypt, explored this question at a March 1 meeting at the Four Seasons Hotel Cairo at Nile Plaza. The event featured marketing experts from var - ious sectors anchoring a series of youth-focused, brand- focused and product-focused megatrends panel discussions that offered insights into the latest trends in the Egyptian mar - ket and how companies can remain one step ahead of their consumers. The event kicked off with a video covering Nielsen Egypt’s sustainability, and Heba Afifi, head of insights and commu - report, “Mood of the Egyptian Nation,” followed by a panel nications at Nestlé Egypt, presented a video celebrating discussion moderated by Christin Ghobrial, deputy managing Nestlé’s century of production in Egypt. Shereen Shaheen, director at AMA Leo Burnett. Ahmed Nazmy, franchise mar - head of corporate affairs at PepsiCo Northeast Africa, keting manager at Coca-Cola Egypt Atlantic Industries, high - offered different perspectives on corporate social responsi - lighted the company’s strategy for engaging Egypt’s youth in bility and how addressing CSR may contribute to building controversial topics. Cairo Runners co-founder Mahmoud and establishing a brand. Tarif said he relies on social media to reach out to the compa - The conference concluded with a session on digitizing ny’s young followers; while Fadi Abi Nader, Egypt market one’s product and product safety featuring panelists Omar director for Mars, engaged with the audience on his compa - Elsahy, general manager at Souq.com Egypt; Marian ny’s brand strategy for targeting youth. Makary, head of communications at Mobinil; and Sally The next session focused on branding and corporate Khairat, Knorr marketing manager at Unilever Mashreq.

Business Monthly – 60 I April 2015 New Members

Academic/Educational and R&D Consultancy Affiliate Members Future University in Egypt Mortimer Harvey Africa Middle East LTD Academic/Educational/Research & Development (R&D) Industrial Machinery & Equipment Khaled Azazy Thibaud Weick Brian MacDougall Amir Malak Chairman CEO Executive Vice President for Administration and Finance - The General Manager - General Electric International Operation American University in Cairo Address: Road 90, Fifth Settlement Information Technology Tel.: (20-2) 2618-6100 Address: 6 Kamal Al Tawil St. ground floor, Khaled Rabie Fax: (20-2) 2618-6171 flat 3, Zamalek Agriculture Tel.: (20-10) 0933-8592 Ahmed Elsherbiny Chief Business Officer (CBO) - Etisalat Misr Membership Type www.mortimerharvey.com Membership Type Plant Superintendent - Cargill Trading Egypt Ahmed Nassar Multinational General Amr Salah Senior Director, Business Development - Raya Holding Agriculture Industrial Machinery and Equipment Trading Manager - Cargill Trading Egypt Nermin Louis Petroleum Canal for Agriculture Development AB Care Medical Technology Regional Trade Execution Manager - Cargill Trading Egypt James Sughru Islam Salem Mohamed Zoheir Commercial Manager - Apache Egypt Companies CEO Vice President Emile Boustany Chief Operating Officer - Wadi Holding, SAE Pharmaceuticals/Medical/Health Address: Cairo Festival City Business Address: 224 Almoltaka Al Arabi St. Almaza, Mohamed Mahgoub Nevine Raafat Park, building B1, floor 2, Fifth Governmental Affairs and Policy Director Middle East West Settlement Heliopolis Strategic Business Development Manager - Wadi Holding, SAE Tel.: (20-2) 2616-8200 Tel.: (20-2) 2266-6609 Asia & Africa - Janssen Fax: (20-2) 2616-8204 Fax: (20-2) 2268-5745 Membership Type Automotive Membership Type Real Estate Multinational Safinaz Soliman Multinational Mostafa Reda Business Development Manager - National Automotive Co. Vice President - Arabian American Real Estate Co./ Global Consultancy Real Estate "NATCO" Relocation Consultants Al-Mashoura Consulting Firm L.T.D Madinet Nasr for Housing and Development (MNHD) Construction/Engineering Pacinthe Fahmy Ahmed Aly Walid El Hindi Magdy Girgis President and Managing Director Chairman and CEO Chief Development Officer - Emaar Misr for Development General Manager - Finance and Administration - Samcrete Ahmed El Hitamy Address: 4 Youssef Abbas St. Nasr City Egypt Engineers & Constructors, SAE Address: 12 Al Nasr Ave. Rabaa Adawiya General Manager - Madinet Nasr for Housing & Development Tel.: (20-2) 2261-9570 Investment Project Building Consultancy (MNHD) Tel.: (20-2) 2291-6937 Fax: (20-2) 2405-2659 Mouhamed Moussa Mohamed Abdel Salam Fax: (20-2) 2291-6935 Membership Type www.mnhd.com Membership Type Partner and Senior Architectural Designer - Mancon Chief Financial Officer (CFO) - Madinet Nasr for Housing & www.almashouraltd.com Associate Resident Associate Resident Consultancy & Project Management Development (MNHD) New replacements in member companies Mohammed Naguib Ahmad Touni Development Director - Al Futtaim Real Estate Development, SAE Osama Soliman Onur Dostel Category: Managing Director - FREMIR Reinsurance Services Commercial Manager, Cargill Trading Egypt Category: Affiliate General Manager, Beko Egypt Trading LLC. Multinational Service Providers Sector: Agriculture Sector: Industrial Zeinab Moussa Hanan El Sheikha Fatma Sarhank Magdi Ibrahim Partner and Senior HR Coordinator - Mancon Consultancy & Head of Performance and Talent Manager – Learning Category: Affiliate Category: Associate Senior Manager- President's Technical Office - International Sector: Financial Sector Director Risk Management, HR, Project Management & Dev. – Organizational Dev., National Bank of Egypt Resident Business Associates Group (IBAG) Admin & I.T. Egypt and Lebanon, Sector: Ismail Sarhank Travel Choice Hospitality/Tourism Food & Beverages Shady William /Travel Technical Officer- President's Technical Office - International Category: Affiliate Ihab Eissa Business Development Director, Samcrete Egypt Business Associates Group (IBAG) Sector: Operations Manager - Coca-Cola Egypt – Atlantic Industries Engineers & Constructors, SAE Construction/Engineering Soha Soliman Category: Public & Diplomatic Managing Director, Social Fund for Sector: Diplomatic Missions Textiles Amr Seif Bahgat Category: Affiliate Development and NGOs Amr Mahgoub Ahmed Tolba Head of Treasury and Capital Markets, Piraeus Bank Sector: Financial Quality Assurance Manager - Coca-Cola Egypt – Atlantic Sector CEO - Cairo Cotton Center Bishoy Anis Abdalla Heba Elmahdy Industries Category: General Transportation Partner and Managing Director, El Raed Group Category: Associate Resident Country Manager, Johnson & Johnson Sector: Chemicals Sector: Real Estate Khaled Mokhtar Assem Shoheib for Real Estate Investment Group of Consumer Companies Distribution Center Manager - Golden State Foods (GSF Egypt) General Manager - Aramex International Egypt

Business Monthly – Business Monthly – 62 I April 2015 April 2015 I 63 Member News Advertorial

INTERCONTINENTAL HOTELS GROUP MERCEDES -B ENZ ABRAJ MISR

As part of its continuing efforts to contribute to the community, the InterContinental Cairo Citystars, the Holiday Inn Cairo Citystars and Staybridge Suites Cairo Citystars sponsored a blood drive in collaboration with the Association of Friends of the National Cancer institute. IGH set up a clinic at the InterContinental Cairo Citystars where people could give blood. It was donated to cancer patients at the Children’s Cancer Hospital Egypt 57357.

After record sales in 2014, Mercedes-Benz presented its full passenger car AbrajMisr has announced that The Gate, the first and largest eco- PHILIPS line up at the 22nd Automech-Formula motor show. Models included the friendly, multi-use development in Egypt and the Middle East will Mercedes-Benz A-Class, CLA, GLA and GLK models as well as the com - cover an area of 35,000 square meters and cost LE 4.5 billion. “The pany’s core models; the C-Class, the E-Class and the flagship S400 Philips Healthcare, the global healthcare technology firm, has signed a memo - Egyptian real estate market is highly competitive and has huge HYBRID. “In 2014 we sold approximately 4,300 cars representing about untapped potential, which offers attractive long-term prospects,” said randum of understanding with Children’s Cancer Hospital Egypt 57357 that a 40 percent growth bump over 2013,” said Zakaria Mackary, the com - aims to boost awareness about the disease in Egypt. Philips is lending its sup - Ali Rabei, AbrajMisr’s CEO. The Gate is situated along Al Nozha pany’s director of sales and marketing. “In 2015, we plan to introduce Street in the heart of Heliopolis. It’s a 10-minute drive from Cairo port to the hospital’s Awareness against Cancer initiative, which promotes early new cars… and further invest in network expansions to continue to offer International Airport and is close to Al Nasr, Salah Salem and Al detection of the disease and aims to improve the quality of medical care and the best levels of customer satisfaction.” services for children suffering from cancer. Studies show that more than 70 per - Orouba Streets. The compound is expected to be finished by 2018. cent of Egyptian children who are diagnosed with cancer annually die.

GHABBOUR AUTO AL MANSOUR AUTOMOTIVE ABB

GB Auto signed an agreement with Cairo University whereby the car manufac - turer said it would support students who participate in the Baja SAE competition organized by SAE international, a group of around 138,000 engineers and tech - nical experts in the aerospace and automotive industries. GB Auto is offering LE 375,000 as well as technical support to the contestants in their quest to build two cars from scratch.

PEPSICO Al-Mansour Automotive, a leading auto company for more than 40 ABB, the global leader in power and automation technologies, has years, showcased its passenger car lineup at Automech-Formula announced that it will be supplying Shalateen, Egypt’s most southerly 2015. The new offerings include the new Meriva, Corsa, Adam, Celebrating the 12-year success of its Pepsi Schools League, PepsiCo Egypt is town, with a state-of-the-art grid application for a solar-powered under - Cascada and Mokka models. "Opel is gearing up to grow tremen - ground water extraction station. The grid was ordered by Spark teaming up with La Liga, the top professional association of the Spanish football dously as a popular brand in Egypt,” said Ankush Arora, Al Renewables, a multi-disciplinary company operating in the field of wind league. The partnership aims at enhancing the skills of talented young players Mansour’s chief operating officer. He said that for the first time, the energy and other renewable power sources. by providing them with training from international football experts in the hopes Egyptian Opel factory is producing five new models in the same year, of giving them a shot at professional careers. and it’s also inaugurating the latest Al-Mansour Automotive show - room in Sheikh Zayed City.

Business Monthly – Business Monthly – 64 I April 2015 April 2015 I 65 Announcements

Jobs Benefits AMCHAM RECRUITMENT CENTER Code Vacancies Company Name 89437 Sales & Marketing Manager Mamiba Cosmetics 89474 Project Manager Intelligent for Field Marketing 89256 Treasury Manager Ideal Standard 89491 Technical Team Leader Raya Holding Group 89232 Sales Capability Manager Al Bardi Paper Mill Co. (Fine) - Nuqul Group 89224 Administration Manager Ahram Security Group

For more information about these jobs and others, visit: www.amcham.org.eg/recruitment – e-mail: [email protected], Tel: (20-2) 333 88 220 Ext. 1513 - 1514 Fax: (20-2) 333 73 779

Top Tenders TOP TENDERS FROM TAS Bid bond Description Client Deadline Specs fees Sectors Economy Revamping of the company's Al Hamrawin port on the Red Sea. This is a repeat - El Nasr Mining Co., Commercial Division, the cashier, April 29, 2015 LE 3,000,000 ed tender with extended deadline. Pre bid meeting is set for 3/24/2015. LE 22,000 Mining

Completion of the implementation of the medium and low voltage electricity network New Urban Societies Authority, Al Shorouk City April 15, 2015 LE 500,000 Electromechanical Works and the street lighting network to serve the city's third district. Pre-bid meeting is set Development Agency, the cashier LE 1,000 Energy for 3/30/2015.

SEMIRAMIS INTER C ONTINENTAL HOTEL Beneficiary Sectors Generating Sectors Would like to extend its exclusive offer of a 15% discount in all restaurants during weekdays. www.amcham.org.eg/TAS In addition to: For further information, contact the Business Information Center at AmCham Egypt Tel: (20-2) 3338-1050 – Direct: (20-2) 3761-9641 • Fax: (20-2) 3338-9896 • E-mail: [email protected] - City view rooms upgraded to Nile view with Egyptian direct rate during weekdays and Website: www.amcham.org.eg • US Website: www.amcham-egypt.org weekends; late check out to 4p.m. subject to hotel availability. - Special packages on spa, health club (available anytime till end of September 2015) - 20% discount on laundry during the stay. * The offer is not applicable during public holidays and special events. U.S. Exhibitions ***Discounts will be granted for AmCham members upon presenting Listings are now available on our website: www.amcham.org.eg their AmCham 2015 membership card*** Exhibitions related to the following sectors are scheduled for the upcoming months For more information, please contact: Sector Show Name Website Embassy Contact Rooms Information and reservations: April Mahmoud Abou Hussein: Office: (20-2) 2798-8000• Fax: (20-2) 2798-8015 Broadcast The 2015 NAB Show nabshow.com [email protected] E-mail: [email protected] Dinning Information and reservations: May F&B reservation desk: • Office: 2798-8000 - Extension: 1151 Energy-Oil 2015 Offshore Technology Conference otcnet.org [email protected] Please visit AmCham’s Cyberlink on http://www.amcham.org.eg/cyberlink The National Restaurant Association Restaurant, Hotel- for more information on all AmCham benefits Hospitality show.restaurant.org [email protected] Motel Show (NRA Show) 2015 Offer is valid until September 2015

For more information about these exhibitions, please contact: The Commercial Service at the US Embassy Tel: (20-2) 2797-2330/ 40 - E-mail: [email protected] The BUSINESS MONTHLY Classifieds section is open exclusively to AmCham member companies. Text ads are £E 150 for up to 30 words, £E 5 per additional word. Abbreviations, phone numbers and e-mail addresses count as one word. Display ads are £E 100 per cm in height, per column (max. 20cm in combined total height). Discounts are offered for regular advertisers and repeat bookings. Insertion orders, payment and ad content must be received by the 15th of the month preceding publication. All classified ads subject to editorial approval. For more information, or to place a classified ad, contact Amany Kassem at (20-2) 3338-9890, fax (20-2) 3338-0850, e-mail: [email protected] *Please refer to the Commercial Service at the US Embassy for any updates on the exhibitions.

Business Monthly – Business Monthly – 66 I April 2015 April 2015 I 67 Media Lite

A Glance At The Press

“We will fight bureaucracy!”

“Come back tomorrow, mister.”

Feb. 7, Al Masry Al Youm

Media Lite is a satirical review of items published in the local and international press. All opinions and allegations made in them belong solely to the original publications and no attempt has been made to ascertain their veracity.

hood: “We have enough street dogs explained that he had been feeding MONKEY BUSINESS here as it is,” someone tweeted. “Now her scraps daily through a hole in the A group of escaped monkeys led resi - we have street monkeys.” wall for about five years. dents and authorities on an extended Al Watan, March 16 chase after they managed to escape Various media, March 4 from a veterinary hospital in Nasr City. How some 14 to 18 of the primates LABOR PAINS escaped from the government-owned NINE LIVES A kerfuffle erupted on a Saudi facility—or what they were doing there A lucky star must have been following Arabian Airlines flight scheduled to in the first place—wasn’t clear. But pho - a stray cat who was recently rescued take off from Cairo International tos appeared on the Internet of the from inside the walls of the Naguib Airport when the crew refused to fly errant apes perched in windowsills and Metro station, where she’d been with a visibly pregnant woman. The sitting in trees. Several days went by trapped for several years. A rider alert - mother-to-be, however, declined to while the authorities struggled to chase ed authorities after hearing troubled get off the plane, producing a doc - down the monkeys, while in the mean - meowing coming from somewhere tor’s letter certifying that she was in time, locals took to social media. Some within the underground structure. The good health. She insisted that she complained that the monkeys were rav - police, who were also apparent animal must get to Jedda to see her husband. aging their gardens, while others sug - lovers, dispatched a team straightaway The standoff went on for some two gested novel strategies to catch them— to break down the wall. After working hours before the woman finally from bananas laced with sleeping pills for eight hours, they managed to free agreed to leave the aircraft and go to to peanuts in cages. “If anybody cap - the frightened feline, who was nonethe - a nearby hospital for a checkup. tures one of these monkeys, I would like less in relatively good health after her Before arriving at the clinic she went to keep it,” wrote one resident on long ordeal. As it turned out, this was - into labor, however, and a few hours Twitter. “I always wanted a monkey.” n’t the first time fortune had smiled on later gave birth. Others said there goes the neighbor - the charmed kitty. A local shop owner Daily Arabia, March 19

Business Monthly – 68 I April 2015