B U S I N

E www.amcham.org.eg/bmonthly

S NOT FOR SALE S

M O N T H L Y

MARCH 2015

ALSO INSIDE ▲ ▲

BLACK MARKET BLUES

▲ ▲

GREEN ENERGY HEATS UP

▲ ▲

CLICK AND RIDE

▲ ▲ TRADE WINDS H E R E

C O M E S

T H E

S U N

M A R C H

2 0 1 5

MARCH 2015 VOLUME 32 | ISSUE 3

34 Comeback

With analysts cautiously opti - mistic that Egypt’s economy is recovering, the government is unveiling $20 billion worth of pro - jects this month to investors from around the world. Officials are looking to the high-profile eco - nomic summit in Sharm el-Sheikh to bring back foreign investment that fled the country after 2011.

Cover Design: Nessim N. Hanna

Inside 28 24 Editor’s Note

26 Viewpoint

The Newsroom

28 In Brief The news in a nutshell

32 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.

20 I Business Monthly – March 2015

MARCH 2015 VOLUME 32 | ISSUE 3

44 60

48 Market Watch Executive Life 52 Stock Analysis 60 Dining Out Weak pound gives the market a Finally, good Mexican food boost comes to Cairo 53 Capital Markets A glance at stocks & bonds 62 Downtime What to do in Sharm? 55 Money & Banking Forex and deposits 56 Key Indicators The economy at a glance In Depth 57 Egypt-U.S. Trade The Chamber Imports and exports 36 Courting investors, Egypt takes aim 66 Events at black market Corporate Clinic Central Bank allows the pound to drop 58 New blood 72 AmCham MENA Council 40 Damietta grain project offers big Three American businesses hit on promises innovative ways to attract talent 78 Member News Analysts remain wary of another Toshka 80 Announcements

44 World’s richest start-up takes Cairo for a spin 81 Classifieds Click-and-ride apps arrive in Egypt 84 Media Lite 48 Can green power help recharge An irreverent glance Egypt’s economy at the press Investors eye renewable energy projects

22 I Business Monthly – March 2015

Editor’s Note

Director of Publications & Research Khaled F. Sewelam

Editor-in-Chief IT’S ONLY MONEY Rachel Scheier ast month, eight months after the new president promised to fix Egypt’s Contributing Editor troubled economy, the International Monetary Fund said it was starting to Tamer Hafez see signs of a “turnaround.” Striking a tone of cautious optimism, the IMF Staff Writer upped its growth forecast for the year to 3.8 percent, up from 2.2 percent Eric Knecht last year. The report came as welcome news to Cairo as Egypt aims to attract billions in foreign investment at this month’s economic summit in Sharm el-Sheikh. Hany Art Director LKadry Dimian, the finance minister, called the report “the message of confidence we Nessim N. Hanna have been waiting for.” The economy was much in need of good news. Several years of turmoil and unrest fol - Contributing Writers lowing the 2011 revolution frightened off tourism and foreign investment and left Kate Durham growth stagnant. Unemployment and poverty rates soared as the state struggled with a Brendan Meighan ballooning deficit. Meanwhile, a worsening shortage of natural gas—which Egypt relies upon to run its factories and electricity plants—forced blackouts on a regular basis, shut - Photographers Soha El Gabi tering industry and leaving millions sweltering in the dark. Said Abdelmessih Now there are signs that things are looking up. Business delegations from Japan, Britain and the United States have recently visited Cairo, looking for investment oppor - Cartoonist tunities in the Arab world’s largest market. Global corporate giants including Coke, Joseph Hakim Nestlé and BP have pledged to funnel billions into the country over the next few years. Last month, the stock market hit a six-year high. Like the IMF, investors have been Production Supervisor cheered by a handful of reforms recently undertaken by the new government. Long over - Hany Elias due cuts to fuel subsidies last summer will help rein in the deficit, and in recent weeks, the Central Bank allowed the pound to depreciate, a move that should bolster exports and Advertising Director Amany Kassem tourism while throwing water on Egypt’s thriving forex black market. A new compre - hensive, business-friendly investment law has been promised. Advertising & Circulation Assistants Foreign investment alone won’t improve the lives of Egypt’s 90 million citizens, how - Tasneem Abo El Ezz ever. A new report released by the Egyptian Center for Economic and Social Rights points out that foreign investment peaked during the last years of the Mubarak regime, Market Watch Analyst reaching 8.1 percent of GDP in fiscal 2007/8, while at the same time, the percentage of Amr Hussein Elalfy the population living in poverty rose steadily from 16.1 percent in 2000 to almost 21 per - cent by 2008 and 25.2 percent in 2011. That’s partly because Egypt’s investment frame - Chamber News Contacts work favored “the interests of multinational corporations above the interests of the pub - Nada Abdalla, Farida El Gueretly, lic,” argues the report. Foreign corporations are allowed to transfer all their profits off - Azza Sherif shore, often untaxed. Egypt needs policies that ensure companies reinvest some of their profits back into the country and hold them accountable for corruption and violations of environmental and human rights. Otherwise, the billions in investment pledged at this month’s conference won’t mean much more than a row of zeros to the Egyptian people. ACHEL CHEIER R S U.S. address: 1615 H Street, NW • Washington, D.C. 20062 Please forward your comments or suggestions to the Egypt editorial office: 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

CTP and printing: Sahara Printing Company, SAE – Nasr City Free Zone

24 I Business Monthly – March 2015

Viewpoint

CHEER UP

henever you read about business val - and wise forecasts that are not the fruits of exact science. We uations it is always encouraging to live in the 50/50 zone. Thus we are “newsed” out. We inces - look at start-up statistics. Growing santly see a new world where uncharted territories have 100 percent is always easy when become fertile ground for extremists and criminals, making your starting point is very low; on the our future look bleak and unpredictable. other hand, when you reach maturity, Obviously all of the above is debatable and not conducive 2 percent growth seems acceptable, and investors begin to to the desired changes. No matter how true the news, the pre - look for new funds to stimulate profits and may head for an dictions and the statistics, we are still human beings who are exit of some sort. fuelled and incentivized by hope, laughter and love. Thus we There are lies, white lies and statistics, and if one does not need to give ourselves a chance for success by doing the best read the fine print, then figures and rates can be totally mis - we can in our respective areas of expertise without attempting Wleading … that is why laymen ask the simple questions that to constantly rule the country and the world in the struggle to often reflect the honest truth “Are we doing better?”, “Are we claim the mantle of the winner before asking others for that headed in the right direction?”, “If we keep taking the same chance. actions, will we be alive in two years?” … In times of drastic I am trying to shut off the conspiracy theories and defeat the change, anxiety kicks in faster; we all want to know what the bad odds by making “a job well done” my ultimate goal, future holds starting with our immediate social circles, our regardless of who planned bad actions or failed to see the countries, and sometimes the world. The media bombards us scary signs on the wall. The combined efforts of all, in a pos - with figures and projections lined with scary “what ifs” that itive direction, will gradually win the battle. makes everything sound like a firm “maybe”. That approach In a nutshell, in politics as well as in business, we need to confuses the general public because 50 percent is not a satis - carefully choose our partners and base our decisions on facts. factory answer, and without a context, that number does not Not being all inclusive does not mean being exclusive and cer - mean anything. tainly not abusive. On the contrary, regardless of academic The truth is that good news does not make the news; partic - predictions, excluding bad elements from a society may lead ularly as it can be seen as boring, even more so if it does not away from abusive destruction and towards creating a more directly affect the recipient. Market and media research inclusive community. reflects that people need suspense or money in their pockets We are all going through a reality check, learning about before they react. “friends” and selecting “partners”, trying our utmost to remain Like everything else, news is a commodity affected by independent and rely on diversified sources, in doing so we offers and demand. For the past four years, we have been sub - should stay away from fear and avoid demoralizing statistics in merged by avalanche of political news, economic predictions, order to build a brighter future for our country and businesses. ANIS A. A CLIMANDOS President, AmCham Egypt

Business Monthly – 26 I March 2015

In Brief

IMF predicts economic “turnaround” After four years of stagnation, Egypt’s economy is showing signs of a rebound, the International Monetary Fund concluded after its first compre - hensive review of the country since 2010. “The authorities have embarked on an economic reform program to raise growth, create jobs, and contain fiscal and external deficits and the loss of foreign exchange reserves,” said Egypt’s IMF mission chief, Christopher Jarvis. In particular, the report praised recent subsidy and tax reforms, noting that “the authorities’ S E V objectives are ambitious but are broad - I H C R A ly within reach with steady policy Y L H implementation.” It also predicted that T N O M Egypt’s budget deficit would dip below S S E N

8 percent of GDP by 2018/19, down I S U from 13.8 percent in the 2013/14 finan - B cial year, and that GDP growth would A VISIT BY RUSSIAN PRESIDENT VLADIMIR PUTIN LED TO SEVERAL TRADE DEALS. reach 3.8 percent in fiscal 2014/15, ris - ing to 5 percent in the medium term. The government is pinning its hopes on the Union. The two leaders also announced IMF estimates are less optimistic than upcoming Egypt Economic a preliminary deal for a Russian invest - government projections of growth Development Conference to boost for - ment zone along the Suez Canal and exceeding 4 percent in the current fiscal eign direct investment. plans for Russia to help establish a year. Although broadly supportive of nuclear power station in Egypt. The government policies, the IMF highlight - two countries also plan to allow some ed several areas of concern, including Egypt, Russia bilateral transactions to be carried out low foreign reserves and Egypt’s vulner - strengthen ties in local currencies, cutting out the U.S. ability to regional insecurity. The gov - A state visit by Russian President dollar—Russian tourists paying for ernment and the IMF also disagreed Vladimir Putin culminated in the sign - holiday packages in rubles, for exam - about the likely size of Egypt’s current ing of several trade deals, with further ple, while Egypt could use those rubles account deficit; the IMF predicts the agreements between Cairo and to buy Russian wheat. Other deals shortfall will remain at 3.5 to 4.5 percent Moscow still to be finalized. During reportedly on the table include the pur - of GDP, while the government says it Putin’s visit from Feb. 10 to 11, Putin chase of Russian-made weapons, a gas will not exceed 3 percent. In remarks and Egyptian President Abdel Fattah import deal with Russia’s Gazprom and accompanying the report, Hazem el-Sisi announced the establishment of customs officials have agreed to share Beblawi, who represents Egypt on the a free trade zone between Egypt and data about the goods traded between IMF executive board, indicated that the the Russian-led Eurasian Economic the two nations.

28 I Business Monthly – March 2015 In Brief

Egypt inks LNG import deals With a floating terminal set to arrive this month that will allow Egypt to import liq - uefied natural gas, Egypt’s government has signed a series of import agreements with regional allies and international trad - ing houses. Deals signed last month include a contract with Dutch trading house Trafigura to supply 33 shipments of LNG in 2015-16; a memorandum of S E V

understanding signed by Egypt and I H C R

Cyprus to cooperate in the field of oil and A

Y L natural gas; and a contract for Noble Clean H T N O fuels to supply EGAS, the Egyptian M

S S E

Natural Gas Holding Company, with N I S U seven LNG shipments for two months B beginning in April. EGAS also agreed to UNEMPLOYMENT DROPPED SLIGHTLY IN THE FOURTH QUARTER OF LAST YEAR. import nine shipments of LNG from the workforces for the second month in a row. Swiss company Vitol. Negotiations are Input costs were also said to be on the still ongoing with Britain’s BP for a Unemployment lowest rise, with purchase prices climbing at the prospective deal to buy 21 shipments of since 2012 sharpest rate in four months. Despite ris - LNG, and a deal with Russia’s Gazprom is Egypt's official unemployment rate ing costs, for the third month in a row, also in the works. An agreement with dropped to 12.9 percent in the fourth companies reported lowering their prices. Algeria was signed in December. If natur - quarter of last year, falling from 13.1 per - “The numbers show that Egypt’s recov - al gas imports proceed on schedule, they cent the previous quarter. The last time ery remains weak and vulnerable to could greatly ease Egypt’s power shortage unemployment figures dropped below 13 downside risk. While we continue to as it enters the peak summertime energy percent was in the third quarter of 2012, expect an upward trajectory for the econ - months. when it stood at 12.5 percent. State statis - omy, the gains will come off a low base,” tics agency CAPMAS attributed the said HSBC Senior Economist Razan improvement to a strengthening econo - Nasser in a press statement. Nielsen: consumer my. On the eve of the 2011 revolution, the confidence up rate stood at around 8.9 percent. Official Egypt gained five points on global market joblessness figures do not include work - research firm Nielsen’s fourth-quarter con - ers in the informal sector and are widely Butane prices feed sumer confidence index, closing 2014 with believed to be optimistic. According to a score of 90. Scores below 100 indicate inflation in January CAPMAS, 3.7 million Egyptians were Annual headline CPI eased to 9.66 per - pessimism about local job prospects, per - unemployed in the fourth quarter of 2014 cent in January, down from 10.13 percent sonal finances and immediate spending among a labor force of 27.7 million. in December, supported by favorable base intentions, while scores above 100 indicate effects from the previous year. an optimistic outlook. Egypt’s most recent Meanwhile, the monthly rate rose by 0.99 score puts it 14 points above the same percent in January, after a decline of 0.07 quarter last year, making it one of the Private sector percent the previous month. According to world’s biggest gainers in 2014, although reports contraction the Central Bank, the monthly increase some of the improvement is due to base For the first time since last July, Egypt’s was driven by regulated items, especially effects from the fourth quarter of 2013, a non-oil private sector slid into a contrac - butane cylinders, the price of which has time of particularly tumultuous domestic tion in January, according to HSBC’s shot up by almost 55 percent due to short - unrest. “Egypt’s consumer confidence Purchasing Manager’s Index. The index ages. Seasonal food price increases also score has been climbing for the last two fell to 49.3 in January, down from 51.4 in contributed to monthly inflation. In relat - quarters, and we see a direct correlation to December, indicating that operating con - ed news, the Central Bank’s Monetary the country’s economic growth during that ditions are deteriorating. Readings below Policy Committee elected to keep key same period,” wrote Tamer El Araby, 50 indicate a decline. With output and interest rates unchanged at its monthly Nielsen’s managing director for Egypt, order declining, managers surveyed by meeting, stating that lower global com - Levant and North Africa, in the report. HSBC said they were reducing their modity prices mitigate inflation risks,

Business Monthly – March 2015 I 29 In Brief

STREET SENSE

If you had $100,000 to invest in Egypt, what would you put it in and why?

I like the idea of putting my money in the stock market. In the past though, no matter which broker I worked with or what stocks I picked, it was too risky. But if I had $100,000 and didn't care if I lost it all, I would definitely put my money in the EGX. Salwa Tarek, 28, assistant professor S E V I would buy anything vintage. Stamps, vases, light fix - I H C R

tures—anything I could find that I could hold onto until A

Y L

its price goes up at some point down the line. If you do H T N

your homework, you can easily find things that are guar - O M

S

anteed to get more valuable over time. Plus, whatever S E N I’d buy I could put in my home and enjoy every time I I S U looked at it, unlike a piece of paper saying how many B stocks I bought. TOURISM NUMBERS INCHED UP IN DECEMBER BUT REMAINED FAR BELOW EXPECTATIONS. Fahmy Rashid, 52, food stand owner

I heard that the stock exchange is now offering some - while the country is showing promising thing called exchange-traded funds. They are supposed GDP growth but remains at risk due to Officials move to to be safe, because the investment is spread across the “challenges facing the Euro Area and the entire EGX 30. That means you don’t risk having the liberalize energy sectors softening growth in emerging markets.” Paving the way for the privatization of investment manager choose the wrong stock. Ahmed Salem, 31, public relations executive the country’s electricity sector, Egypt’s cabinet approved a draft law Feb. 18 I would use the money to buy jewelry. I know that jewels Mixed results allowing for free competition in the pro - will never depreciate in value, and on the plus side, I duction, transfer, distribution and sale of would enjoy wearing it. I don’t think I’d go for gold for tourism because it’s getting cheaper. I would probably go for dia - Tourist arrival numbers were up year-on- electricity. The proposed legislation, monds or other precious stones, as long as $100,000 year in December, but still recorded the which still must be approved by the State would be enough. I already have a small collection that lowest figures in six months. According to Council before it can be formally adopt - was passed on to me by my aunt and my grandmother. government statistics agency CAPMAS, ed, would move state entities toward a Gamila Abdel Wahab, 24, waitress 781,602 tourists visited Egypt in regulatory role rather than directly oper - That’s roughly LE 760,000. With that kind of money, I’d December 2014, up 15.3 percent compared ating and managing the sector. At pre - buy a decent-sized apartment and rent it out. The rent to December 2013, when around 677,650 sent, the state-owned Egyptian Electric money would do a lot to help supplement my income. It arrived, but almost 13 percent below Holding Co. is the market’s sole buyer, would also provide some peace of mind knowing that I while its subsidiaries route power to had a nest egg, should I ever need it. I’ve been thinking November 2014, when more than 898,000 about this for some time now. Unfortunately, I don't have tourists visited. December is the peak of large factories and retail consumers. In the money to buy a nice enough apartment to bring in the European winter-holiday season and principle, the proposed changes could decent income. has historically been a prime month for allow private producers to sell directly to Rashid Saleh, 41, IT manager both beach and cultural tourism in Egypt. customers. The draft law also aims to I am not sure I would do anything other than put it in the Experts have attributed much of the facilitate plans to connect Egypt’s elec - bank. Dollars nowadays are as good as gold, and trying decline to the crash of the Russian ruble, tricity grid to those of neighboring coun - to buy something or invest it in something might not pay which has prevented Russians—usually tries. The following week, Egypt’s oil off. Putting it in the bank and earning interest would be the single largest group of visitors, particu - ministry announced it was setting up a the best move given the current economic situation. new state-owned gas company to super - Yassin Taher, 49, business owner larly to Red Sea resorts—from coming. In related news, Minister of Tourism Hisham vise the sale and distribution of natural I would take the money, go back home to Minya, buy a Zaazou told Reuters that tourist revenue gas. According to a press statement, the plot of farmland, cultivate it and live off of the land. rose to $7.5 billion last year, up from $5.9 ministry plans to allow any party in Where I come from, being a farmer is the only way to billion in 2013, with the country receiving Egypt to import gas from anywhere in earn a decent living. Anything else is a disgrace. Unfortunately, I had to sell my land to pay for my broth - 9.9 million tourists in 2014 compared to the world, providing it doesn’t harm ers’ and sisters’ education. If I had that kind of money, 9.5 million in 2013. However, 2014 figures national security. Gas importers will be that’s the only thing I would do. were far below expectations. In October permitted to use the gas for their own Abdel-Tawab Taha, 58, office assistant 2013, Zaazou announced that he expected purposes or to re-sell it to other compa - Egypt to see $11 billion in revenue and nies, paying a tar■iff to transport gas via COMPILED BY TAMER HAFEZ 13.5 million tourists in 2014. the national grid.

30 I Business Monthly – March 2015

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 ■ Iraq withholds officials’ ■ Libya’s oil revenue ■ Lebanon, World Bank wages running dry sign tech hubIn ddiaen aOl cean Facing the twin blows of falling oil According to an article penned by In an attempt to ease rampant youth revenue and rising costs in its war U.S. Ambassador to Libya Deborah unemployment, estimated at around against Islamic extremists, Iraq has Jones, the North African country 34 percent, Lebanon’s telecom minis - started withholding the salaries of could go broke in 18 months or less ter signed a $6.4 million loan agree - senior government officials. due to disruptions to oil production as ment with the World Bank aimed at According to the Financial Times , Libya’s security situation deteriorates. launching an NGO to train young peo - the move aims both to free up cash The country has historically depended ple who want to establish technology and send a message to the country’s almost entirely on petroleum revenues startups. The Lebanese government elite about the severity of the eco - to finance its budget. Sarir, the coun - will provide an additional $6.4 mil - nomic crisis facing the country. The try’s largest oil field, had to be shut lion toward financing the effort, government is grappling with a $21 down twice last month, the first time which is called the Mobile Internet billion shortfall, which it is trying to due to the bombing of a pipeline by Ecosystem Project. “It aims at turning close with loans, special drawing militants and the second due to power Lebanon into a technology producer rights from the International failure caused by heavy rains. Other and not only a consumer, by develop - Monetary Fund and development fields have halted operations com - ing an ecosystem for the creation of grants from the World Bank. Wages pletely due to unrest in the country, mobile applications,” said telecom - are being withheld from government although last month Libya did resume munications minister Boutros Harb in employees with monthly expense exports from its Zueitina port after a press statement. Officials argue the accounts exceeding $400 as well as almost a year of suspension. The project will strengthen the country’s from workers at unprofitable state- country’s internationally recognized economy in addition to slowing “brain owned factories. Iraq’s finance min - government has also been unable to drain” by encouraging Lebanese ister told the Financial Times that the prevent militias from engaging in the youth to remain in the country. “Its government eventually intends to illicit trade of oil, and officials have objective is to turn Beirut into a tech - pay the wages but is delaying dis - requested help from an international nological hub in a bid to establish new bursement as a temporary move to maritime force, a request Egypt is companies and create job opportuni - ease the country’s cash flow. backing. ties,” said Harb.

32 I Business Monthly – March 2015

In Depth

INVESTMENT SPECIAL

COMEBACK With a handful of reforms in place and a slew of ambitious megaprojects, economists are cautiously optimistic that Egypt’s economy is beginning to turn around. At this month’s Economic Development Conference in Sharm el-Sheikh,

M Egypt will offer up $20 billion worth of projects to global I K A H

H

P investors from some 20 countries. The government is confi - E S O J dent it can lure back the billions in foreign investment that fled following the 2011 revolution. Will the money create jobs and help better the lives of Egypt’s 90 million citizens?

Business Monthly – Business Monthly – 34 I March 2015 March 2015 I 35 In Depth

CURRENCY COURTING INVESTORS, EGYPT TAKES AIM AT BLACK MARKET BY TAMER HAFEZ

n a windy February an about-face. Beginning in late real value of the pound,” says Hany afternoon, a wiry January, the bank allowed the pound to Genena, head of research at Pharos man in a leather drop by more than 6 percent, stabiliz - Securities brokerage. jacket ducks out of ing at around LE 7.6 to the dollar at the Indeed, while watching their cur - the Cairene sand - end of February. The bank also sought rency cheapen causes angst among storm and into one of to increase dollar liquidity by limiting ordinary Egyptians, investors and the many forex joints along Zamalek’s deposits of hard 26 July Street looking to buy $5,000. currency. As “Sorry,” says the guy at the counter. Egypt prepares “Check the place down the street.” The for a make-or- man persists, offering to pay LE 8.05 break conference Oper dollar, more than 50 piastres above in Sharm el the official exchange rate. One of the Sheikh that aims owners, Mohamed Abdallah, politely to lure back for - declines. “We don’t know who he eign investment works for,” explains Abdallah after the to the country, man leaves. “We have a certain clien - Central Bank tele of businesses and individuals to Governor whom we give priority.” Sure enough, Hisham Ramez less than an hour later, a well-dressed, sought to eradi - middle-aged woman in high-heeled cate Egypt’s boots walks into the exchange. She “parallel” cur - asks for $1,000; the teller offers her a rency market, rate of LE 7.90. The transaction is com - promising that pleted in minutes, with no fuss—and of the black market course, no paperwork. would “end Such is the arbitrary nature of soon.” Over the Egypt’s underground forex trade. past year, however, while the official econo mists—who have long believed Businessmen, expats and anyone else value of the pound held steady at the pound was overvalued—have who buys dollars on a regular basis are around LE 7.14 to the dollar, the reacted positively. “It is a long overdue familiar with the currency black mar - black market thrived, with the move,” says Amr El Alfy, head of ket—which is often the only source of exchange rate creeping up to around research at Mubasher.info, echoing the hard currency in a nation that relies LE 8 as businesses were increasingly sentiment of many investors. “We heavily upon foreign imports to run its forced to rely on the underground should have seen this drop right after economy. Since late January, howev - market for hard currency. This was the 2011 revolution.” Egypt’s stock er—after several years of burning mostly due to the fact that the official market, which registered the fourth- through foreign reserves to prop up a exchange rate was simply unrealistic, best performance in the world last year, declining pound—the Central Bank did agree analysts. “Investors know the hit a six-year-high in the week following

36 I Business Monthly – March 2015 In Depth

the pound’s devaluation. The scarce hard currency to buy supplies. For months, businesses that failed to International Monetary Fund called the The black market dissipated after 2003, obtain dollars through official channels decision to let the pound weaken “a when the Central Bank free-floated the could instead deposit large amounts of step in the right direction” that would pound, and Egypt’s economy picked up dollars briefly in the bank in order to bolster Egypt’s efforts to right its lag - steam. But the illicit currency market obtain letters of credit for imports. With ging economy by supporting tourism began thriving again in the tumultuous that avenue now closed and their and exports and helping to attract aftermath of the 2011 revolution, as biggest customers gone, the CBE investment. Currency traders, mean - tourism and foreign direct invest - hopes, black market dealers will be while, report that while the black mar - ment—Egypt’s prime sources of hard forced to sell their dollar holdings to ket certainly hasn’t been stamped out, currency—dried up. In late 2012, bod - the banks. With a cheaper pound, black the gap between the official and unoffi - ies like the World Bank and the IMF market dealers can also unload their cial rates has narrowed. began urging Egypt to implement a hard currency without incurring serious The black market has been a feature gradual “managed currency devalua - losses. The idea is to encourage the of Egypt’s currency market since the tion” to protect the country’s rapidly return of hard currency back into the 1980s. It is controlled by illicit curren - dwindling foreign reserves, which are banking system, enabling companies to cy traders who oversee a handful of needed to import key commodities. But access dollars without resorting to the underground forex spots in their President Mohamed Morsi flatly reject - black market. By mid-February, banks respective districts; buying, selling and ed the idea. “This is completely out of were indeed reporting a spike in dollar sitting on foreign currency to maximize the question,” the former president told inflows, reported state-owned Ahram profits. “They ensure that the supply of Reuters in August 2012. Politically, Online. “We have been selling some of foreign currency is sufficient for it to dramatic dips in the currency can be our excess dollars to commercial banks hover within a particular range,” treacherous, since people tend to view at the formal price,” confirms explains Abdallah, the forex proprietor its value as a key indicator of fiscal Abdallah, the forex owner, adding that health. Moreover, since Egypt he has indeed seen a dip in demand for imports much of its food and hard currency in recent weeks. energy, a weak pound would However, some analysts say this likely have driven up prices could be a risky economic move for a for consumers at a moment country whose private sector is so when they were already strug - heavily dependent on imports. Over the gling to make ends meet. last year, large, publicly traded compa - That may help explain why nies were meeting 50 to 70 percent of even as President Abdel their foreign currency needs via the Fattah el-Sisi’s government black market. “Smaller traders and M

I took power, the CBE contin - businesses are at the end of the list,” K A H

ued to hold the pound steady, explains Ahmed Shafik, who imports H P E

S even as foreign reserves fell to medical products for pharmacies and O J just above the current hospitals. Small business owners like critical level of $15 Shafik and Hashem Fahmy, who now billion from owns a downtown stationery store, around $36 bil - have been forced to buy 100 percent of lion before the their dollars on the black market. If dol - 2011 revolu - lar liquidity improves and banks begin tion. But on selling dollars to SMEs, the Central Jan. 29, the Bank’s strategy will have worked. in Zamalek. “They constantly mon - Central Bank, Otherwise, says Alia El Mahdi, an eco - itor the market and manipulate it which controls the nomics professor at Cairo University, accordingly. If we are running out of pound’s value via small businesses will find themselves currency, we request more, and they regular dollar auctions to unable to access hard currency, which either provide it, or tell us to sell at a banks, allowed a 10-piastre increase in could carry clear negative economic higher rate.” Businessman Hashem the price at which banks could sell dol - repercussions. She adds: “It could open Fahmy, who back in the ‘80’s worked lars. The bank also limited dollar bank the door for even more currency trans - at the finance department of a multina - deposits to $10,000 per day, up to actions to happen outside the banking tional firm that made batteries, remem - $50,000 per month, preventing compa - sector.” bers strategizing with other companies, nies from putting large sums of black Along with subsidy reform last July sharing ways to get their hands on market foreign currency in the bank. and a raft of business-friendly new

Business Monthly – March 2015 I 37 In Depth S E V I H C R A

Y L H T N O M

S S E N I S U B laws, the currency devaluation is clear - country’s economy, where it might ben - modities like wheat and oil and contin - ly meant to send a positive message to efit the smaller businesses that make up ue propping up the pound. In the long potential investors that Egypt is getting the vast majority of Egypt’s economy. term, unless more foreign currency its fiscal house in order. “It’s part of the “Demand for foreign currency will starts flowing into the country again in message of confidence the government continue to increase, because imports the form of tourist dollars and foreign is sending out,” says Genena. are critical to Egypt’s economy and investments, the Central Bank’s recent Economists predict that the pound businesses,” says Abdallah, the moves to eradicate the black market could weaken to LE 7.8 to the dollar exchange office co-owner. “The black currency trade won’t ultimately be suc - before the March conference, where market will always be ready to fill any cessful, says Fakhry El Fiky, director of the government will showcase some gap the government leaves.” Management and Economics Studies $20 billion worth of projects to interna - Last month, unconfirmed media Center. As long as demand for hard cur - tional investors. Moreover, the recent reports circulated that Egypt could rency exceeds the supply, the black drop in global commodity prices— expect another $10 billion in aid from market will continue to flourish. especially oil—could help keep prices its friends in the Gulf in advance of the “Whatever the exchange rate, if there from spiking. “This is the best time for March conference—cash that would aren’t enough dollars to buy, someone the government to do this,” adds certainly add a much needed infusion is going to meet that demand at a pre - Genena. Foreign investors, on the other of hard currency—but officials in mium,” says Alfy. The long-term suc - hand, will likely keep their wallets Egypt and Kuwait told reporters they cess of the devaluation depends on closed until the currency hits a floor. were not aware of any such commit - whether Egypt can attrat more foreign Analysts also point out that even if ment. In any case, the largesse of Gulf currency. the government’s strategy of pushing countries—which aided Egypt to the “It’s a short-term solution,” says Alfy megaprojects like the Suez Canal tune of $20 billion last year—while it of the Central Bank’s recent currency expansion is successful at luring invest - did keep the country afloat, was not gambit. For his part, Abdallah is still ment back to Egypt, the bulk of this enough to prevent its foreign currency being choosy about who he sells his dol - capital will, at least in the near term, reserves from nearing critical levels in lars to. Fiky agrees: “As long as there is remain concentrated in these projects recent months. Egypt simply doesn’t a shortage of hard currency, t■he black rather than circulating through the have enough cash to import key com - market will continue to thrive.

38 I Business Monthly – March 2015

In Depth

GLOBAL TRADE DAMIETTA GRAIN PROJECT

OBY TAFMER FHAFEEZ RS BIG PROMISES

jobs and vastly improve Egypt’s food security. “We saw it would be better to introduce it at the March conference in order to expose the project to the biggest number of investors possible,” said Hanafy at a press event last month. “It’s a strong project. It deserves to have a huge audience.” Some analysts, however, are skepti - Last October, Prime Minister cal as to how building an ambitious Ibrahim Mahlab and trade minister logistics center will enable Egypt to Khaled Hanafy stood on an empty capture a major share of the global plot of dirt in Damietta and announced wheat trade, especially since most of that the site would transform Egypt the world’s grain trade routes do not into a major player in the grain market. currently bypass Egypt. And while the Not just as a buyer—Egypt is already project could potentially benefit Egypt the world’s biggest wheat importer— strategically and economically, the but as a global storage, trade and pro - sheer scope of it makes them nervous. cessing hub for wheat as well as soy, “I am very sensitive whenever I hear sugar, maize and other basic food com - ‘mega’ or ‘national project’ because I modities. The LE 15-billion megapro - always see Toshka,” says Amr El ject is among some $20 billion worth Heny, a board member of the indepen - of projects being offered to investors at dent Chamber of Cereals Industry, this month’s economic summit in referring to the infamous 1990s engi - Sharm el-Sheikh. The proposal neering boondoggle in the Western includes a facility that can store up to Desert. A 240-kilometer canal that was 65 million tons of grain and seeds, to feed off the waters of Lake Nasser, with five specialized industrial zones the architects of Toshka promised that for various grain and food products it would ease crowding, create jobs like flour, pasta and cooking oil. and improve food security by relocat - Officials say the project will triple ing millions of Egyptians. Instead it Damietta’s grain storage capacity to became a cautionary tale about bad 7.5 million tonnes, create thousands of planning and worse political decisions.

40 I Business Monthly – March 2015 In Depth

A grain hub project proposed in 2005 Federation of Egyptian Industries. says modern storage units could cut was eventually shelved after officials “We don’t even know the deadlines those losses significantly to less than 5 realized that its scale was simply unre - and scope of investments for the dif - percent. Minister Hanafy has argued alistic. At first, “[then Prime Minister ferent phases of the project.” that the Damietta grain storage and Ahmed] Nazif and [trade minister Nonetheless, foreign investors from trade hub will thus increase food secu - Rachid Mohamed] Rachid were Sudan, China, Canada, Italy, Spain, rity for Egypt and other countries by extremely impressed and excited with Slovenia and the United Arab Emirates enabling them to store enormous the project,” remembers Nader Nour- are among those who’ve expressed amounts of staple crops more efficient - El-Din, who was one of Rachid’s aides interest in the project, according to ly, in modern facilities. Moreover, the at the time. But after several months of statements from Hanafy to the media. new equipment would enable Egypt research, they realized that the pro - According to an official press release, make fewer import trips to meet the ject’s costs were simply too high to a group of Sudanese investors and country’s grain needs throughout the generate reasonable returns. “We both businessmen signed a contract on the year, thus reducing transportation realized it was not going to work,” sidelines of the Arab Businessmen and costs. The government would also save says Nour-El-Din, adding that on the Investors Conference in November money on its annual food subsidy bill, surface, the current project looks simi - that involves storing and processing which was nearly LE 34 billion last lar to the 2005 proposal. more than a million tonnes of grain year. Greenlighted by President Abdel and sugar every year through the new Hassan Ebeid, an economics profes - Fattah el-Sisi last October, it was ini - Damietta hub. According to Egypt’s sor at Cairo University, argues that the tially slated to take five years, but the General Authority for Investment, the Damietta hub could enable Egypt to timeframe was later shortened to two United Arab Emirate’s Al Ghurair function as the hub of a “regional com - years at the behest of the president, Group has also agreed to finance the modity-exchange market for the according to the local news reports. A building of 25 state-of-the-art grain Middle East and Africa,” making pric - joint project between the ministries of silos for the storage of Emirati grain. ing more competitive by enabling the supply and housing, the hub is to be Even before the Damietta project was country to better plug into global trade. built on 3.35 square kilometers of announced, UAE officials committed Ahmed El Wakil, president of the scenic open space owned by the New to building 25 new silos in Egypt with Federation of Egyptian Chambers of Urban Communities Authority that’s a storage capacity of 1.5 million Commerce, adds that the grain hub fits sandwiched between the Nile and the tonnes. into the current government’s strategy Mediterranean. The plan includes a And Mikhail Orlov, president of the of bolstering trade relations with the total of three ports—two seaside and Russian-Egyptian Business Council, rest of Africa. “It will further highlight one overlooking the Nile—with the says Russian grain exporters have and strengthen Egypt’s standing place remainder of the plot divided into silo signed a memorandum of understand - as a business hub in the region,” says and storage clusters with a total capac - ing to invest in the hub’s infrastruc - Wakil. ity of 7.5 million tonnes. According to ture, saying the Damietta hub has the Minster Hanafy told a television Mahmoud Diab, a spokesman for the potential to boost grain export from interviewer last month that he esti - supply ministry, the hub will also fea - Russia, the only potential investor mates an internal rate of return of 16 ture four industrial zones, each dedi - mentioned so far that currently exports percent for investors in the new cated to processing a particular com - wheat and corn to Egypt. Officials at Damietta grain hub, a rate that some modity, such as flour, soy, cooking oil the Ministry of Supply expect more experts say is overly optimistic. and sugar. A fifth zone will be dedicat - investors to sign on after the March Hanafy’s logic rests on what officials ed to processed, packaged foods like conference. have long touted as Egypt’s strategic pasta, pastries and frozen burgers. As The high-capacity, top-of-line grain trade location at the intersection of of yet, there is no start date for con - storage facilities slated to be built as three continents. Damietta “is connect - struction on the project, says part of the Damietta grain hub could ed on one side by road, railway and Mahmoud. “What will be the invest - also cut Egypt’s import costs. The river to 15 grain-producing gover - ment model? From where will all the country is badly in need of better grain norates, and on the other side, it pro - money come to finance it? These are storage. Egypt imports some 10,000 vides easy access to ports in the all questions they have not yet tonnes of wheat a year but experts Mediterranean, Black Sea and North answered,” says Yousry El Hawary, a believe around 20 to 30 percent is lost America,” explains a press release member of the cereals division of the to rot and pests during storage. Diab from the Egyptian embassy in

Business Monthly – March 2015 I 41 In Depth S E V I H C R A

Y L H T N O M

S S E N I S U B

Washington, D.C. However, as Nour like macaroni,” he says. “But that whether Damietta’s aging infrastruc - El-Din and others point out, globally would make it a macaroni exporter, ture— roads, electricity and sewage traded grains mainly reach their desti - not a global grain logistics hub.” as well as roads and railway net - nation markets via ocean routes—not Rashad Abdo, a Cairo University works that are in need of improve - via the Suez Canal. Trade maps show finance professor and head of the ment—can support a mammoth glob - that when Gulf countries import wheat Egyptian Forum for Economic and al grain hub. “Damietta is already from Australia, Argentina or Russia, Strategic Studies, adds that becoming operating at maximum capacity,” he for example, it’s shorter and cheaper to a global trade player could also have says. FEI’s Salamouny adds that the send the grain across the Indian and unintended consequences as a result of timeframe of two years for a project Pacific oceans or, in Russia’s case, via opening up Egypt’s subsidized food of this scope is “almost impossible. overland routes, rather than expend the system to the global marketplace. You need at least five years for such extra time and money to traverse the “When Egypt becomes part of the a large-scale project to be up and Suez Canal. Transportation costs are a global market, pricing will be deter - running.” crucial factor in sealing commodity mined without government interven - Eighteen years after Egypt broke shipping deals. “It doesn’t make sense tion,” says Abdo. That could force the ground on the Toshka project, it still for a country to pay higher transport government to pay more to provide the isn’t finished, despite having the dis - costs for the grain or go out of their poor with subsidized wheat. tinction of being one of the Arab way to make an extra transit stop if Ahmed Sultan, an advisor to the world’s largest and most expensive they don’t have to,” Nour El-Din says. Ministry for Maritime Transport, engineering projects. In the mean - Moreover, why should countries also raises the issue of security. time, some LE 10 billion has been pay for the extra cost and time of “Everything will be funneled into squandered, according to official involving an unnecessary middleman Egypt via a single entry point,” says estimates. By way of comparison, in their import purchases, asks Abdel Sultan. “If it is sabotaged, who will the Damietta grain project is estimat - Ghaffar El Salamouny, vice chairman pay for the lost crop? How much ed to cost LE 15 billion. “That’s a lot of the cereals division of the FEI. “It would this affect Egypt and countries of money,” says Nour-El-Din. “I am would work only if Egypt is process - who entrusted Egypt with its sure no one wan■ts to end up with ing this grain into consumer products reserves?” Sultan al questions another Toshka.”

42 I Business Monthly – March 2015

In Depth

MULTINATIONALS WORLD’S RICHEST START-UP TAKES

BCY ERAIC KNIECHRT O FOR A SPIN S E V I H C R A

Y L H T N O M

S S E N I S U B

n December, Uber, the five- Uber’s taxi hailing app depends on Egypt as a key market for Uber, year-old taxi app that connects two things in order to work smooth - which is now operating in 277 cities passengers with private cars, ly: predictable traffic patterns—to worldwide, with plans to expand into was declared the world’s most give passengers an accurate assess - many more. Six months ago, when valuable start-up, with investments ment of how long it will take drivers Khoury first arrived in Egypt to worth an estimated $41.2 billion. But to arrive—and customers with credit scout out Cairo’s suitability, he Ibeginning last month, the company cards (fares, including tips, are auto - immediately sensed that Egypt was may be facing its biggest test to date. matically charged to a pre-assigned on the verge of a “huge entrepreneur - If the cashless car service can make card). Cairo has neither. ial wave.” Cairenes in particular it in Cairo, where it officially But Anthony Khoury, Uber’s 28- struck him as a young, tech-savvy launched in February, it can probably year-old head of Middle East and lot, the sort of crowd that would make it anywhere. That’s because Africa expansions, nonetheless sees appreciate being able to hail a cab

44 I Business Monthly – March 2015 In Depth

all, people have been calling for taxi and limousine ser - vices for years. But like everything else in the smart - phone age, the appeal of the product has less to do with innovation and more to do with ease, and the reason Uber—whose sleek app calls itself “everyone’s private dri - ver”—is now one of world’s fastest growing start-ups is that it’s condensed the whole taxi-hailing process into a few effortless taps. I’ve used UberX to get around several American cities, and it has always worked seamlessly. Unfortunately, like many parts of everyday life, Cairo has managed to make a sim - ple task into an arduous process. One chilly recent morning, I decided to take UberX Cairo for a test drive, so to speak. A swipe and a tap later, I was promised a driver without looking up. at my door in 10 minutes. Indeed, while less than 10 Sure enough, 10 minutes percent of Egyptians have later, a driver called to say he bank accounts and even was outside. When I went fewer have credit or debit downstairs, though, the car cards, nearly everyone has was nowhere in sight. a mobile phone. Cell phone Finally, after the wayward penetration rates are driver and I had exchanged among the highest in the several phone calls and world in Egypt, at more another 15 minutes had than 116 percent, or more than 100 beta, testing the service in select dis - passed, I was on my way, now slight - million cell phone lines. Internet use tricts. In February, it officially went ly late. Arriving safely and comfort - is also growing by leaps and bounds live across the city. There is clearly a ably at my destination a short time here. In August, the communications market for the service. A handful of after, I chalked up the initial delay to ministry reported that 46.2 million smaller operations have sprouted early kinks in the system. Several Egyptians are now online, just over over the last couple of years, includ - hours later, when I ordered a car half the population. In a country ing Careem, a Qatar-based ride app; from a hotel in downtown Cairo, where the primary avenues of mass PieRide, an app that enables resi - however, I found myself waiting communication have become dents to carpool with neighbors; and once again—some 15 minutes after Facebook and Whatsapp, it’s not dif - Easy Taxi, an e-hailing service that’s Uber said it would be seven. When I ficult for global tech firms like Uber become increasingly popular since it finally called the driver, he gave me to see Egypt’s potential. Khoury launched just over a year ago. It con - an ETA of 45 minutes. I gave up. A said: “This is exactly where we need tracts with metered taxis and uses the friend of mine uses the service regu - to be.” traditional cash-and-meter system, larly and says my experience is par So in November, UberX—a ser - bypassing the need for a credit card. for the course. “I live in Nasr City, so vice that offers everyday compact When it comes right down to it, I always allow 20 to 30 minutes,” she cars such as Toyota Corollas and there’s nothing new or novel about says. “Once it told me 10 minutes, Mitsubishi Lancers—launched in hailing a ride from your phone. After and it took an hour.”

Business Monthly – March 2015 I 45 In Depth

Those experiences notwithstand - cupcakes, the Uber logo written on ing, Khoury promises that the app top in sugary frosting. should get a car to you anywhere in Also, UberX’s rate is on average Cairo within 15 to 20 minutes. “We 10 percent cheaper than that of stan - are working day and night to get dard, metered taxis. If Uber ever more drivers, and to get this range takes off widely in Cairo, this fact down to eight to 10,” he says. could create friction with the thou - However, I’ve also noticed that if sands of taxi drivers roaming the you open the app early in the morn - capital. In France, unsurprisingly, ing (before 7:30 a.m.) or late at night taxi drivers succeeded in getting the (after midnight), there are no drivers service banned in some areas after even on the map. Despite the delays, protesting that Uber was unfairly my friend keeps using it anyway, undercutting their livelihoods. But though, because it’s convenient, Uber’s greatest challenge in Cairo comfortable and—best of all— may be figuring out a way to reach there’s minimal risk of being intimi - the masses of Egyptians who have dated, insulted or groped by a sleazy smartphones—but no credit cards. taxi driver. To guard against things Khoury says the company is explor - like theft and sexual harassment, ing options like offering an e-wallet, Uber has a policy of doing back - essentially a pay-as-you-go account ground checks on all its registered that’s rechargeable through offline drivers. That may be a major selling means, which Uber has used to get point in a city like Cairo, and it prob - around the same problem in coun - ably explains why a large percent of tries like India. A number of banks Uber’s local customers are women. one-on-one; we make sure they have and mobile telecom companies in However, as Uber has aggressively city knowledge,” says Khoury, Egypt have teamed up in the last expanded, a handful of countries adding that the service has been a couple of years to launch mobile have banned the service after drivers boon to tourist companies, whose financial services, which have suc - were accused of sexually assaulting revenues are down. “They are very cessfully enabled millions elsewhere female customers. Uber has been for - happy with us. It’s a new revenue in the developing world to perform bidden from operating in countries stream for them.” cashless transactions with credit including India, France, Spain and Now may be the time to give the cards. The services have been slow South Korea, while lawsuits have service a try. To ramp up local pub - to take off here, largely because of been filed against the company in licity, the company has trotted out a Egypt’s stringent financial regula - several U.S. cities claiming that the slew of clever marketing schemes. tions, say analysts. But as the coun - firm failed to properly vet its drivers. New users get promotion code to try regains stability and the govern - Controversy has also flared as a pass on to friends, who get a free gift ment aims to modify laws that ham - result of Uber’s surge pricing system of LE 90 toward their first ride. If the string business, that may begin to (which isn’t active in Cairo), which recipient uses the code, the original change. “Once there is a modicum of charges higher fares when demand customer also gets a free ride, creat - stability, people will start to think peaks. This caused outrage in ing a sort of pay-it-forward incentive about what makes their lives more Sydney in December when prices scheme with kickbacks. On convenient,” says Khaled Hegazy, soared as users tried to flee a section Valentine’s Day, Uber partnered with Vodafone’s head of government of the city where a gunman had taken the popular food discovery website relations. hostages. elmenus to sponsor a contest in The appeal of UberX is clear—a Following these controversies, which couples posted videos of safe ride from a registered driver, Uber seems to be exercising extra themselves singing cheesy love free from many of the stresses that special caution as it enters Cairo, songs on the elmenus Facebook accompany taxi rides in Cairo, working exclusively with drivers for page. The three couples with the including whether you’ll be harassed licensed tourism and limousine com - most “likes” won a Valentine’s Day or cheated, whether you have exact panies who have been with the firms dinner. Some days, Uber leaves change or whether your driver knows for at least two years. “We hand pick coupons for popular local restaurant or doesn’t know (or pretends to know every driver that works on the Uber chain Mori Sushi in their cars’ back or not know) the way. Uber might yet system. We do a background check seats, and once even surprised cus - take off in Cairo— if the ca■rs man - and drug test; we interview them tomers with complimentary Nola age to make it to your door.

46 I Business Monthly – March 2015

In Depth

RENEWABLE ENERGY CAN GREEN POWER HELP RECHARGE

BEY EGRIC KNYECHT PAND TBREN’DASN ME IGEHAN CONOMY? M I K A H

H P E S O J

n a rainy February after - an NGO that pushes for solar power Karim Donato, the CEO of Rodosol, noon, in a second-floor development. Eventually, the rain a local solar firm that launched last classroom on the peters out and a burst of sunlight year. Until recently, courses like this American University in parts the clouds. The students— didn’t exist, explains Donato. That’s Cairo’s high-tech GrEEK campus, 12 mostly young, male 20-some - all changed in the last six months or would-be solar technicians are doing things—look relieved as they put so, as there is a growing sense that Osomething people rarely do in away their notepads filled with Egypt’s solar energy market is on the Egypt—waiting for the sun to come trigonometric equations and make brink of exploding. out. They are part of a three-day their way up to the roof, where they The government has been nominal - training on the installation of photo - connect two solar panels to a small ly committed to developing renew - voltaic energy systems being spon - black inverter. “A lot of technicians able energy resources since at least sored by the Solar Energy want to work in the solar field,” but 2008, when the electricity ministry Development Association, or SEDA, they lack training, says instructor set the ambitious target of increasing

48 I Business Monthly – March 2015 In Depth

green power to account for 20 percent ElSewedy. Following the passage of of Egypt’s energy mix by 2020. the feed-in tariff last September, the Currently, however, Egyptians still get National Renewable Energy Agency 94 percent of their power from fossil began collecting applications to pro - fuels, especially natural gas, which duce a total of 4,300 megawatts of powers the country’s aging electricity green electricity over the next couple of plants and most factories. As the coun - years—roughly equal to Egypt’s ener - try grapples with a chronic gas short - gy shortfall during peak demand season age, Egypt is heading into its fourth last summer. In part, the sudden interest summer in a row of widespread rolling among big firms is thanks to the way blackouts, bringing factory production officials structured the tariff, which to a standstill and leaving residents offers a much more generous rate to sweltering in the dark. It wasn’t until solar projects than wind projects, and last fall that the government put in big projects are heavily favored over place a long-awaited feed-in tariff, small ones. In fact, the rate for large which encourages the development of solar projects is one of the highest in green energy by guaranteeing that pro - the world—more than twice the feed-in ducers can sell it to the government at a tariff for similar energy projects in guaranteed price. In countries like Dubai, for example. As a result of this Germany, such tariffs have given a skewed tariff scale, in January, the huge boost to renewables. “There was NREA announced that it had failed to no market before this tariff. It’s all attract enough wind power proposals to completely new,” says SEDA founder reach the 2,000 megawatts it had hoped Khaled Gasser. Suddenly, he says, for. On the solar side, meanwhile, it everyone seems to want a piece of the received applications totaling 14,000 alternative energy market. “You don’t megawatts—many more projects than even have a market yet, but you have Egypt can accommodate. According to companies registering as solar ElSewedy, many of the companies now installers every day,” says Aya Salah, waiting to move forward in the tender - executive manager at The Solar Energy ing process are multinationals. Co., which sells parts for solar power Last summer, when record energy systems. shortfalls led to almost daily rolling Almost overnight, Egypt’s green blackouts, Egypt needed around 27,000 energy sector has become a major megawatts of electricity to keep its focus of the government’s efforts to lights and air conditioners on and fac - lure back foreign direct investment to tories humming—about 4,000 Egypt. While few details have been megawatts fewer than it produced. “It released, officials have promised to was the worst year we have ever seen,” unveil several renewable energy pro - says Osama El Said, managing director jects at this month’s economic summit of electrical consulting and contracting in Sharm el-Sheikh. Before the feed-in firm Masa Electro and a former senior tariff, “We never saw large-scale advisor to the Ministry of Electricity. renewable energy developers world - For producers of renewable energy, the wide investing in Egypt,” says Wael silver lining of the power crisis is that, Hamdy, general manager of Cairo- “the market has very high potential,” based ElSewedy Electric, which makes says Silvia Macri, a Middle East and energy equipment for export world - North Africa energy analyst with IHS, wide. ElSewedy, which operates manu - an international research firm. That’s facturing plants all over the Middle why “Despite the political uncertainty, East and Africa, is among a handful of companies are interested,” she says. major companies setting up large-scale With a ballooning population, Egypt’s solar and wind projects in Egypt. A energy needs are growing every year. slew of foreign companies are also Said, who advises firms looking to “moving seriously” toward investing in enter the local energy market, says Egypt’s green energy market, says companies from India, Korea, China

Business Monthly – March 2015 I 49 In Depth

and Spain are among the prospective players. Small-scale, local solar producers, on the other hand, are not nearly so eager to get into the game. They com - plain that unlike big companies, small outfits get such a low rate that there is no incentive for them to buy in. This setup is the opposite of that in most other countries, says Donato, where higher tariffs are offered to small-scale power producers in order to empower homegrown SMEs. “From our experi - ence in all other countries, the govern - ment should give higher rates to the small and medium projects,” says Gasser of SEDA. “If you use the feed- in tariff to empower small and medium S E V

projects, then these will be implement - I H C R

ed by small and medium companies A

Y L that are coming from Egypt. That H T N O

means you are injecting money into M

S S your country.” E N I S U

Moreover, while large-scale projects B have the potential to give a single large jolt of power to the national grid, they courages small-scale local outfits from power stations just for Egyptians to also require land allocations, lengthy signing on, says Gasser. If just one per - take a shower.” Other countries have resource assessments, tender processes cent of Egyptian households—some created huge savings by creating and reams of other types of red tape; 200,000 homes—installed solar panels simple financial incentives for home - and after all that, they often fall on their roofs, it could produce, using owners to switch to solar water through in the end anyway. (It’s worth the most conservative estimates, 1,000 heaters that pay for themselves in noting that none of the proposed megawatts of power. Moreover, he five years. renewable projects currently on the adds that opening up the sector in this Despite these criticisms, Gasser table are a sure thing.) In Hurghada and way would create “new SMEs, and acknowledges that the solar market is Kom Ombo, the government has been young people would start working— rife with opportunity. Flashy adver - trying to launch large-scale wind and you’d open a new market for a lot of tisements for lé Park, a self-described solar plants since 2011. “But what has people. It’s not a dream.” According to “smart eco-housing” compound in the government actually accomplished Gasser, simply raising the low end of Sharouk City that advertises itself as in four years? Just resource assess - the tariff scale by some 20 to 30 per - Egypt’s first solar-powered com - ments,” says Salah. She describes the cent could create enough new small pound, began blitzing Egyptian air - current proposals as little more than projects to keep local solar producers waves in mid-February. Meanwhile, “an expression of interest” by compa - “in business for the coming 20 years .” Donato, the solar energy systems nies. Analysts like Macri point out that Gasser argues that the green ener - trainer, says there is increasing inter - many of the projects are very long- gy sector has great potential to help est in his installation courses, as stu - term—20 to 25 years—and there is still solve Egypt’s power crisis and dents look to acquire skills that will a sense among the global business simultaneously boost the economy, land them jobs in the future. Salah, the community that Egypt is a powder keg; but this will require a more holistic solar equipment supplier, agrees that things are now relatively stable, but approach. His group has lobbied the there is growing interest, though will they remain that way? “Once you government to do things like require whether Egypt’s prospective green sign the contract, you are committed to industries to use more renewable energy projects actually come to the project for the next 20 years,” she energy and provide incentives for fruition remains to be seen. “This must says. hotels to switch to solar water mean they are all seeing something. On the other hand, the government is heaters. Currently, “We have more But none of us can confirm whether it’s missing an enormous opportunity by than 6 million water heaters in our a real planet or just a ■shooting star. We structuring the tariff in a way that dis - homes,” says Gasser. “It takes two have to wait to see.”

50 I Business Monthly – March 2015

Stock Analysis

Weak pound gives the market a boost

ontinuing last year’s winning streak, the bench - of CIB, Egypt’s largest private bank,, climbed by 6.1 per - mark EGX 30 was up some 9.6 percent year-to- cent; while Credit Agricole saw its shares jump some 17 date, representing a 2.4 percent increase in the percent to LE 22.23—the highest increase in several years. period from Jan. 15 to Feb. 15. The market gave a strong Interestingly, milling stocks are back in favor, and ear - Cperformance across the board, with other major indices lier than usual. Milling firms close their financial years closing up as well. The EGX 70 gained another 3.9 per - on June 30, with dividend season usually falling in cent to register a 6.1-percent year-to-date hike, while the September or October. But this period, Central Egypt EGX 100 was up 2.1 percent for an 8.1-percent year-to- Mills, North Cairo Mills, Alexandria Mills and Middle & date increase. Investors were clearly buoyed by the West Delta Mills saw their shares up 28 percent, 20 per - Central Bank’s decision to allow the pound to drop, cent, 14 percent and 13 percent, respectively. Meanwhile, resulting in a gradual devaluation over two weeks from Arabian Cement ended the period up 16 percent at LE around LE 7.15 to the dollar to around LE 7.60. At press 18.54 per share, more than double its IPO price last May. time, the pound had settled at around LE 7.5 to the dollar. The cement maker is the first company to switch to coal It is also annual earnings season in Egypt. Two major for production. Meanwhile, as Orascom Construction banks reported positive results that beat analyst expecta - Industries N.V. prepares to demerge its construction unit, tions. CIB’s fourth quarter 2014 earnings spiked 36 per - Orascom Construction (OC), OCI shares jumped 17 per - cent year-on-year to LE 1.03 billion, beating expectations cent to LE 317.49 in anticipation of the former’s plan to by 9.5 percent. CIB's board recommended a 1-to-4 stock delist the stock from Egypt. Meanwhile, shares of the car dividend. Credit Agricole Egypt also posted 6 percent manufacturer GB Auto lost 12 percent to LE 36.73. higher earnings of LE 682 million in 2014, beating the Investors’ eyes were on this month’s economic confer - analyst consensus by 12 percent. Its board has recom - ence in Sharm el-Sheikh. Indeed, high expectations for mended a cash dividend of LE 1.42 a share, a 6.4 percent the event may have dampened the stock market as yield and a 1-to-12 stock dividend. In the period, shares investors adopt a wait-and-see approach.

IN THE SPOTLIGHT Qalaa Holdings

Qalaa Holdings, Egypt’s largest private equity firm, decided recently to change its business model. The switch to an operating company entails raising stakes in its subsidiaries, which has been done recently through a share swap. The firm is now undertaking its third capital increase since its list - ing. It will be exchanged for higher stakes in certain subsidiaries. The firm has also been exiting non- core operations such as Pharos Holding. During the period, Qalaa Holdings stock went up 9.5 percent from LE 2.85 to LE 3.12, with more than 242 mil - lion shares worth around LE 754 million changing hands.

52 I Business Monthly – March 2015 Market Watch Capital Markets

Egyptian price indices - EGX 30

EGX 30 9785

Egyptian price indices - EGX 70

EGX 70 600

Selected sector performance

Business Monthly – March 2015 I 53 Market Watch Capital Markets

Corporate News

OCI N.V. separates construction business mostly in the energy and cement sectors, and would bring the OCI N.V. will demerge its construction unit, Orascom company's capital to LE 9.7 billion from LE 8 billion. Qalaa Construction (OC), which will trade on the Nasdaq Dubai with Holdings will issue 340 million shares, 255 million of which a dual listing on the Egyptian Exchange. As part of the demerg - would be common shares and 85 million preferred shares. er, OC will increase its capital by up to 15 percent through an Meanwhile, Qalaa has hired investment bank EFG Hermes to IPO in Egypt at a range of $13.33 to $15.23 a share. advise on the possible sale of its food businesses, a deal the Meanwhile, OCI N.V. presented a mandatory offer to buy conglomerate said would help put the company back in the 329,601 shares of its subsidiary Orascom Construction black by the end of the year. Qalaa is considering selling con - Industries (OCI), or 0.157 percent of OCI’s capital, to either fectioner Rashidi El-Mizan and dairy producer Dina Farms. buy stock at LE 255 a share or be exchanged for one share in OCI N.V. Regulators were still reviewing the offer. Bidding war continues for Arab Dairy Orange to buy out OTMT’s stake in Mobinil Pioneers Holding said it is still interested in buying Arab Dairy Products Co. through a sealed-bid process under the supervi - French telecom Orange and Orascom Telecom Media & sion of the Egyptian Financial Supervisory Authority. Technology agreed that the former company will purchase all Regulators have already approved a request by Al Noor for OTMT’s shares and voting rights in Mobinil for a total consid - Dairy Industries Co., a subsidiary of French dairy Lactalis, to eration of €209.6 million. That includes OTMT’s 5-percent raise its offer price for Arab Dairy to LE 65.75 a share for a direct stake in Mobinil at LE 280.7 a share and 28.75 percent minimum 51-percent stake. This price is 2.25 percent higher of the voting rights of MT Telecom, Mobinil’s holding compa - than Pioneers’ rival bid of LE 64.30 a share. ny that is fully owned by Orange, for a consideration of €45.8 million. The transaction is expected to be finalized by end of Pioneers Holding approves Roiaa acquisition the first quarter as part of Orange's call option under a share - holder agreement signed with OTMT back in 2012. As a result, Pioneers Holding’s board of directors has approved a plan to Orange will increase its stake in ECMS. Meanwhile, Mobinil acquire a 60-percent stake worth LE 1.2 billion in Roiaa will consider boosting its free float on the Egyptian Exchange Holding, having endorsed the fair value study prepared by two to comply with Egyptian capital market regulations. The firm, independent financial advisors estimating the company’s value which currently has 1.08-percent free float, may also consider - at LE 3.4 to LE 3.5 billion. Pioneers Holding is considering an ing seeking a strategic investor to acquire a major stake. initial public offering for Roiaa following the acquisition. Qalaa Holdings to raise its capital again Naeem Holding ventures into fructose Qalaa Holdings has approved a share swap with subsidiary Naeem Holding reached a preliminary agreement with two companies equal to a LE 1.7 billion ($223 million) capital local banks for a syndicated loan to finance 50 to 60 percent increase. This move is the firm's third capital increase since it of a $155 million investment to establish a fructose plant. was listed on the Egyptian Exchange in 2010. It comes as the Naeem would own 95 percent of the plant, with 40 percent of company considers a series of money-raising divestments to its investment financed internally. The proposed facility is restore profits. The capital increase will involve swapping expected to be completed in 30 months, with a total grinding shares in the holding company for larger stakes in subsidiaries, capacity of 1,500 tons of corn per day.

International stock price indices

Feb. 15 Jan. 15 Nov. 14 Sept. 14 value % change value % change value % change

DOW 18,019.35 17,320.70 4.03% 17,634.74 2.18% 17,031.14 5.80%

NASDAQ 4,893.60 4,570.82 7.06% 4,688.54 4.37% 4,518.90 8.29%

S&P 500 2,096.99 1,992.67 5.24% 2,039.82 2.80% 1,984.13 5.69%

FTSE 100 6,873.52 6,498.78 5.77% 6,854.37 0.28% 6,804.21 1.02%

NIKKEI 225 17,913.36 17,108.70 4.70% 17,490.83 2.42% 15,911.53 12.58%

54 I Business Monthly – March 2015 Market Watch Money & Banking

INTEREST RATES

BANKING & RESERVES (in millions of L E)

2014 End of April May June July August Sept. October November Reserve Money 3,461,611 347,865 364,473 364,473 370,901 374,619 368,636 363,202 Int'l Reserves (net, US$ mln) 17,512 17,306 16,687 16,737 16,836 16,895 15,905 15,356

Domestic Liquidity 1,459,568 1,484,420 1,516,591 1,545,032 1,557,379 1,543,756 1,560,327 1,572,950

Foreign Assets (net) 122,614 126,059 128,425 117,934 1,131,557 1,115,556 1,128,931 1,138,833

Domestic Assets 1,336,954 1,358,361 1,388,166 1,427,098 1,437,647 1,425,945 1,448,684 1,470,645

Dollarization Rate (%) 19.06 19.42 18.95 19.01 18.66 18.83 18.50 18.17

Discounted Bills (except CBE) 3,600 3,649 3,786 3,519 3,608 3,848 3,755 3,896

Bank Loans (except CBE) 565,871 575,850 584,066 584,484 584,378 597,394 611,952 614,397

Securities (except CBE) 797,267 812,226 825,524 830,089 845,896 863,626 866,843 884,375

Currency in Circulation 275,432 283,716 289,875 305,067 299,073 299,333 295,508 292,653

EGYPTIAN POUND EXCHANGE RATES

Jan. 15, 2015 Nov. 15, 2014 Sep. 15, 2014 Feb. 15, 2014 Currency Feb. 15 Amount change Amount change Amount change Amount change Australian Dollar 5.904 5.799 1.82% 6.206 -4.86% 6.345 -6.94% 6.256 -5.62% Bahraini Dinar 20.044 18.775 6.76% 18.792 6.66% 18.196 10.16% 18.318 9.42% British Pound 11.712 10.824 8.21% 11.172 4.84% 11.421 2.55% 11.587 1.08% Canadian Dollar 6.109 5.954 2.60% 6.277 -2.68% 6.328 -3.46% 6.331 -3.50% Chinese Yuan 1.238 1.163 6.42% 1.160 6.74% 1.142 8.40% 1.138 8.84% Euro 8.665 8.396 3.22% 8.886 -2.48% 9.102 -4.79% 9.504 -8.82% Indian Rupee 0.122 0.114 6.97% 0.116 5.56% 0.115 6.47% 0.112 9.29% Japanese Yen (100) 6.403 6.082 5.28% 6.134 4.39% 6.541 -2.11% 6.812 -6.00% Jordanian Dinar 10.688 10.014 6.73% 10.050 6.35% 9.878 8.20% 9.771 9.38% Kuwaiti Dinar 25.746 24.203 6.38% 24.422 5.42% 24.476 5.19% 24.582 4.74% Lebanese Pound (100) 0.503 0.465 8.17% 0.464 8.41% 0.456 10.31% 0.456 10.31% Russian Rouble 0.120 0.111 8.65% 0.151 -20.45% 0.186 -35.26% 0.198 -39.19% Saudi Riyal 2.028 1.898 6.82% 1.899 6.77% 1.872 8.33% 1.851 9.54% Turkish Lira 3.094 3.121 -0.87% 3.181 -2.74% 3.156 -1.96% 3.175 -2.56% UAE Dirham 2.071 1.940 6.76% 1.940 6.76% 1.911 8.36% 1.890 9.59% US Dollar 7.612 7.127 6.80% 7.128 6.79% 7.022 8.40% 6.943 9.63%

Business Monthly – March 2015 I 55 Market Watch Key Indicators

DEMOGRAPHICS

2006 2007 2008 2009 2010 2011 2012 2013 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 Overall Balance -2,327.2 -237.0 -3,746.7 1,747.4 -218.2 -738.9 -1,478.6 410.0 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 Russian Federation & CIS 305.2 631.8 -326.6 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

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

56 I Business Monthly – March 2015 Market Watch Egypt- U.S. Trade

EGYPTIAN EXPORTS TO THE U.S. EGYPTIAN IMPORTS FROM THE U.S. (in millions of U.S. $) (in millions of U.S. $)

U.S.-EGYPT TRADE DEFICIT (in millions of U.S. $)

EGYPTIAN EXPORTS TO THE U.S. DURING NOV. 2014

EGYPTIAN IMPORTS FROM THE U.S. DURING NOV. 2014

SOURCE : US I NTERNATIONAL TRADE COMMISSION (USITC)

Business Monthly – March 2015 I 57 Hiring

NEW BLOOD Three American businesses hit on innovative ways to attract talent

Published by the Economist Intelligence Unit Analysis by Eric Knecht

he lack of jobs for young Egyptians—even edu - apply “innovative strategies to hire and upskill young workers ” cated ones—was a key factor driving the 2011 while reducing “the unemployment hardships that dispropor - revolution, and the situation today has only got - tionately impact disadvantaged young people.” ten worse. At the end of 2010, the unemploy - ment rate was 8.9 percent; by last year, the num - ber had climbed above 13 percent, and since Points for performance Unemployment rates in the small town of St. Mary, Kansas, mir - official statistics only count active job seekers, experts say the ror Egypt’s: Regionally, 20 percent of residents under 19 don’t actual number was certainly much higher. In February, state sta - have a job. Of course, when the economy tanks, there are a hand - tistics agency CAPMAS reported that the unemployment rate ful of businesses that flourish. LiveWatch security, a local firm had declined slightly to 12.9 percent. Still, as a report from the that makes wireless alarm systems, was one of them. When rev - International Monetary Fund pointed out in 2012, the proportion enue jumped 56 percent, from $6.1 million in 2009 to $9.5 mil - Tof unemployed youth is higher in the Middle East than any other lion in 2012, the company found itself desperate for a “pipeline region in the world. In Egypt, nearly two-thirds of the jobless are of trainable, tech-savvy employees,” to service its growing cus - under 30. Counterintuitively, unemployment here tends to be tomer base. With a population of just 2,600, St. Mary is a tiny, highest among those who have university and even graduate rural community; many of its youths who go to college move degrees, suggesting that there is a clear mismatch between the away to find jobs elsewhere. So in December 2012, LiveWatch demands of the job market and the skills young people are being launched what it calls its “gamification” training program. The taught. two-week, game-based program combines lessons in technology Of course, youth unemployment is a problem that is by no development, business development, marketing, accounting, means unique to Egypt; finding and hiring talented, qualified billing and customer service. Trainees work with actual cus - workers is a challenge with which companies worldwide strug - tomers, and they earn points based on how well they perform gle. The Economist Intelligence Unit recently set out to profile a and “their willingness to try new tasks.” LiveWire CEO Brad handful of firms that sought to apply an innovative approach to Morehead, who teaches entrepreneurship at Northwestern the problem. The idea was that firms trying to find good talent University in Evanston, Illinois, explains that the idea is to might seek to emulate the companies’ “creative youth hiring engage and motivate the new workers by using a training models.” “Innovations in Youth Hiring,” profiles three small method that speaks to them. “It’s almost like a video game,” he businesses in different parts of the United States that sought to explains.

58 I Business Monthly – March 2015 Hiring

Even after training is over, LiveWatch employees can contin - The new hires begin working right away as helpers to ue to rack up extra points for accomplishing tasks like renewing senior mechanics, and later, mid-level technicians, which customer accounts. The points are recorded on an online “dash - offsets some of the training costs. An approach that’s simi - board,” which keeps track of employee stats and even ranks lar to European-style apprenticeships, it’s easy to scale up or them, translating the points into dollars, which can really add up. down. Any business grappling with a shortage of skilled “You can have two people in the same position and one making technicians can adopt such a model, Reichan says; the key double,” says LiveWire President Chris Johnson, who adds that is to attach incentives to training so workers stick around. this leads “the person who is making half as much to look at this He works with a local community college to identify poten - other person and say ‘What are they doing?’” By rewarding tial recruits; he also hires former prison inmates. His work - employees who go the extra mile, the system motivates the ers are “buying homes. They’re buying washers and dryers. workers to give their best. They’re putting their kids through college,” he says. “If I The game approach has been so successful that LiveWatch can give them a skill set, no one can ever take that away.” has gotten rid of performance reviews. The “gamification” sys - tem hasn’t just helped with recruitment—the company’s work - force has grown more than fivefold since 2010—it has helped to Giving back retain talent as well. Around 90 percent of new hires are still The average age of American soldiers returning from working for LiveWatch after a year. Morehead adds that the sys - Afghanistan and Iraq is 22. Like their Egyptian counterparts tem is so simple that even companies without technology exper - returning from compulsory army service, these Americans tise can apply it with a simple whiteboard on an office wall. “We often struggle to find jobs. With less time to rack up intern - used a pen and paper to figure out how we wanted it to work,” ships and work experience after college, they often have less he says. “You can score this the old-fashioned way and turn it experience than their non-serving peers. Despite such short - into a game.” comings, Karen Ross saw veterans as a deep potential talent In Cairo, a growing sector is call centers, which have become pool. The CEO of Sharp Decisions, a New York City-based a popular first job for recent university graduates. But executives technology consultancy that is one of the city’s biggest complain about committing money and time to train new women-owned firms, Ross says: “They committed to us. Why employees, only to see them leave after a few months for more not commit to them?” lucrative opportunities. A solution could be rewarding young In 2013, Ross launched the Vocations, Education and workers for doing their jobs well in way that makes work more Training for Service Members, or VETS., which offers mili - fun. tary veterans six weeks of “boot camp” training in quality assurance and software testing. Then they’re placed on a sam - ple project to evaluate their skills. So far, Sharp Decisions has A reason to stay trained 50 veterans, with a retention rate of 94 percent, and Jobs that demand highly specialized skills often require firms to Ross hopes to have 200 veterans on her staff by the end of the invest heavily in training. The problem is that workers often year. They go on to serve high-profile clients like Freddie don’t stick around long enough to make the large upfront invest - Mac, EmblemHealth and Experian. The program gives the ment in them pay off. Ron Reichan, CEO of Precision Body & vets a chance to acquire specialized skills and a potential Paint, an auto body shop in Beaverton, Oregon, faced a shortage of skilled mechanics. “There are soft metals and hard metals in future career in a field that often excludes those without tech every car, and differences in the ways the energy is absorbed at connections. What’s more, this ready-made pool of eager, different crash zones,” explains Reichan, who employs 98 work - trainable talent also means Ross doesn’t have to wait months ers in two locations and grosses $10 million in annual sales. He to secure visas for tech-savvy immigrants, as many U.S. tech explains that his company would invest years in training firms often do. unskilled workers, only to see them depart just as they had Ross aims for the program to mimic the group dynamics of become profitable. the military—“No man left behind.” The vets are deployed So he set up a novel, “contract-based system” to attract and train to client companies as a unit, in teams of three or more, and mechanics. To pay for five years of training, he loans new hires the group ensures that everyone understands what’s going on $4,000 per year, for a total loan of $20,000. For every year an by motivating and teaching one another. Freddie Mac, the employee stays with the company, Precision forgives the loan, but U.S. mortgage giant, has so far hired 10 veterans from the if a worker leaves before training is completed, he must repay the program, and found them “very focused.” Sharp uses popu - cost of his training. Since Reichan set up the system nine years lar online job posting sites like Monster.com to recruit young ago, he has never had to enforce the terms of the contract, because veterans and screens them in a series of interviews. “I don’t no one has ever left early. Moreover, workers that graduate from care if they have a college degree,” says Ross. “Can they Precision’s training program get certificates to work on specific present? Can they articulate what their skil■ls are? Can they car models, which can benefit them throughout their careers. look you in the eye and shake your hand?”

Business Monthly – March 2015 I 59 Dining Out I B A G L E

A H O S FINALLY, GOOD MEXICAN FOOD COMES TO CAIRO BY RACHEL SCHEIER

or the last few years, we’re that the proprietors rarely seem to give the big, cowhide chairs in the lobby as var - told, Cairo has been under - much thought to what the market actually ious expat families from the nearby going a restaurant renais - needs—you can find all manner of American school greeted each other casual - sance, as the chattering “European” cuisine, interpretations of ly. The chairs are in keeping with the ranch classes have discovered which vary widely, but Mexican food— theme announced by the giant steer head the joys of going out to eat. popular, relatively cheap and easy to pre - over the front door. The upstairs dining Indeed, in tony enclaves like Zamalek and pare—is practically nonexistent. room is festively decorated with Mexican Maadi—and recently in farther flung satel - Which is why Barbacoa Mexican Grill, a flags and colorful papel picado banners lite city locales—trendy new eateries have new spot just off Maadi’s popular Road 9 suspended from the ceiling. We were seat - opened at a steady clip. Unfortunately, I expat mecca, is a welcome addition to ed one of the comfy, red vinyl booths, can still count on one hand the number of Cairo’s restaurant scene. Open since last which, together with the low lighting, mar - FCairo restaurants that actually serve first- summer, the place has already garnered a ble floors and strange, textured-steel pillars rate food. And nothing seems to prevent loyal following among the local expatriate in the center of the room, manage to create mediocre establishments from charging population. On a recent Friday evening, I a wonderfully tacky ambience that’s half shockingly high prices. Another problem is waited for my dining companions in one of Old West bordello, half hotel cafeteria.

60 I Business Monthly – March 2015 Dining Out

Next door to us was a birthday party of about a dozen young Egyptians who were having a grand time, the girls gamely don - ning sombreros over their hijabs when the waiters sang “Happy Birthday.” Unlike certain other Cairo establish - ments advertising “margaritas” that turn out to be teetotaling Slurpee-like concoc - tions laden with sugar water, Barbacoa serves the real thing. Their cocktail menu features Latin favorites such as the mojito I B

(LE 70), the piña colada (LE 80) and san - A G L E

gria (LE 70), and a few other popular A H O drinks like the cosmopolitan. But the fea - S tured item is, of course, the house mar - garita (LE 70), made with blended gallo (a mild salsa crudo mixture of making your own tacos, along with fla - Tequila, Triple Sec and lime juice in a fes - tomatoes, onions and cilantro) on the side. vorful lamb consommé . I confess that I’m tive, long-stemmed glass with salt on the I was pleasantly surprised to find Sopa de not much of a lamb lover, but the meat rim. Full disclosure: My party, being Tortilla, or tortilla soup, (LE 37) on the was so deliciously cooked that I polished booze snobs, brought our own tequila and menu, as it’s not an item you generally this off after my girlfriend couldn’t finish gave the barman special instructions as to find in run-of-the-mill Western-style it—and that was after eating an entire how to prepare the drinks, which were— Mexican restaurants. The standout among plate of fish tacos. needless to say—excellent. Before that, the soups, however, was the Sopa Azteca Interestingly, the proprietors of however, I tried a plain old house mar - (LE 40), a spicy tomato soup with shred - Barbacoa turn out to be an unlikely pair— garita, which wasn’t bad. It reminded me ded chicken and panela cheese with a Sudanese from Khartoum and an Italian of the sort of margarita you’d drink with chopped onions, avocado and coriander from Milan who happened to marry sis - your workmates at Friday night happy served on the side. ters from Mexico. The latter fact, and an hour in a suburban mid-range Mexican Pace yourself with the appetizers, honest assessment of what the Cairo restaurant in the United States. though, because there’s lots of good stuff restaurant scene was lacking, led them to Anyone who has ever imbibed happy ahead. Barbacoa offers the usual assort - open this friendly but elegant Mexican hour margaritas knows that you’d better ment of quesadillas, burritos and tacos, joint. Barbacoa is offering a number of eat, and nothing goes with a cold margari - including Ensenada Fried Fish Tacos with promotions to help bring in new cus - ta like chips and salsa. I will admit I was Tamarind Sauce (LE 75), which I have yet tomers, such as Taco Tuesdays (30 per - pleasantly surprised to find that to try, and Grilled Fish Tacos with cent off tacos), Señorita Sundays (half off Barbacoa’s chips were properly home - Cilantro-Lime Mayonnaise (LE 75), house drinks for ladies after 5 p.m.) and made, lightly fried and coated with salt, which were very tasty—mild grilled Margarita Mondays (30 percent off mar - while the salsa featured a nice balance of white fish with avocado and pickled garitas.) It also offers a set two-course fresh chilies, tomatoes and coriander. onions, along with the dressing for kick. “business lunch” for LE 120 per person. Even better was the Guacamole de la My only complaint was they would have Osman Abdelmoniem, the Sudanese half Casa (LE 45), and having grown up in been better with the small, soft corn tor - of the team, admits that despite that need, California, I consider myself a connois - tillas you find at Mexican groceries in introducing Egyptians to real Mexican seur of the beloved avocado dip. There are California, which, to my knowledge, are food has not been without challenges. many ways to make guacamole, but the not sold anywhere in Cairo. My son’s “They can be tough,” he says. Part of the best ones use good, ripe avocados, plenty Beef Enchiladas (LE 85) consisted of tor - problem, he acknowledges, is the absence of lemon and garlic and don’t attempt to tillas stuffed with tender, flavorful Brisket of a “food culture” that emphasizes fresh, add unnecessary fillers like mayonnaise beef and dipped in red sauce with melted seasonal foods and diverse flavors. or sour cream. Barbacoa’s guacamole met cheese and sour cream on top. While they Thanks to places like Barbacoa, ■perhaps all these criteria and disappeared so fast I might have been saucier and cheesier, the that is now beginning to change. thought the kids were going to lick the beef was excellent. But the most interest - bowl. Equally popular were the Nachos ing dish of all, fittingly, was the restau - Barbacoa Mexican Grill (LE 45), which featured the aforemen - rant’s namesake, the Barbacoa de Cordero Road 10, next to Metro market tioned chips, not piled into a basket as I’d (LE 140), a traditional Mexican dish of Maadi expected but served in the more authentic shredded lamb slow-cooked, seasoned Open Daily, 2-midnight style, layered with beans, melted cheese and wrapped in a banana leaf. It came 2751-5333 and chilies with sour cream and pico de with spicy rice and warm flour tortillas for

Business Monthly – March 2015 I 61 Downtime Downtime

another notable site at the tip of the Ras Mohammed The stars quietly retreat from a blue-black sky as the pre-dawn Natural Protectorate . A boat excursion to the Strait of light rises like a tide and, the sun crests over the ridges and WHAT TO DO IN SHARM Tiran can accommodate all levels of reef lovers from floods the valleys below. The show is often accompanied by snorkelers to advanced divers. Gordon Reef’s southern exuberant singing from pilgrims visiting the site where Moses flank has a sandy plateau with coral gardens suitable for is said to have received the Ten Commandments. Y ATE URHAM AND AMER AFEZ B K D T H open-water divers, while the steep walls and stronger cur - From Sharm, tour organizers arrange transportation that rents around the three other reefs to the north offer more departs around 10:30 p.m. for the three-hour drive to the intense drift diving and the occasional shark sighting. Monastery of St. Catherine , where the trail begins. Local If you’re an uncertified beginner and want to try diving, Bedouins will be happy to give you a lift up (or down) on a ask about an intro dive, in which a divemaster takes you camel, but the last stretch to the peak has to be done on foot. he economic summit promises three days of pre - Let loose out on the local reef to experience the feeling of cruising Limited parts of the monastery are also open to tourists from sentations, panels and networking, all aimed at Sharm’s mainstay nightspot is Pacha (Malek El Bahrein, weightless underwater. The guide takes care of all the 9 a.m. to noon, including a small museum with ancient man - encouraging the crème de la crème of the busi - Na’ama Bay, 012-7786-6663, www.pachasharm.com) , equipment, so all you have to do with breathe, kick your uscripts and icons, as well as an ossuary housing the bones of ness world to invest in Egypt. As an added the multi-story disco in Na’ama Bay featuring themes fins a little and admire the fish. A house reef intro dive can monks. bonus, it’s being held in one of the region’s most popular nights for house, techno, jam, Oriental fusion and more. be completed in a morning or an afternoon, and many cen - resort cities, Sharm el-Sheikh. This is one business trip The club has space for private parties and a rooftop terrace ters can arrange one on a boat excursion. They start at Twhere you might want to consider arriving early with stunning views of Na’ama Bay. For a night out of around LE 300, and many hotels have a dive center onsite Virtual tourism and staying late. Here are some suggestions to town, Dolce Vita (Sharm El-Sheikh Desert Road, 012- or can recommend one. Don’t have time to see the rest of Egypt? Head to fill that extra day or two. 2133-4466, www.tajmahalsharm.com) , is an open-air Culturama (www.cultnat.org/General/Culturama.aspx, discotheque that hosts concerts and DJs at desert parties [email protected]) in Soho Square, where you every Wednesday and Friday. Where the rubber meets the road can virtually visit the pyramids of Giza, the tombs On the rocks Ghibli Raceway (Peace Road, near Hyatt Regency in front and temples of Luxor and Cairo’s Islamic archi - Some of the most produc - of Hollywood Sharm, 069-360-3939|3737, www.ghiblirace - tecture. Projected as a 180-degree panorama on tive meetings happen Dive in way.com) lets you fulfill your dreams of being an F1 racer, nine screens, this guided multimedia presen - after hours, over Sharm El-Sheikh is consistently rated among the 10 best albeit on a very small scale. The facility has four different go- tation is interactive, letting you pick an drinks. dive sites in the world, so now is your chance to explore kart circuits geared to children, amateur drivers, corporate era and surround yourself with signifi - Soho offshore in snorkel or scuba gear. For history buffs, the events and has hosted a number of national and international cant monuments from that time. The Thistlegorm , a wrecked WWII British supply ship that kart racing championships over the years. The Arrive & Drive program is presented by the Square sank in 1941, is a veritable underwater museum. Ranked session lets you race the kart against the clock, with a race Center for Documentation of (White one of the top five dive sites worldwide, the site controller giving you your lap stats for the 15-minute session. Cultural and Natural Knight Beach, involves a full-day boat excursion for advanced History, affiliated with Sharks Bay, 010- open-water divers, with two dives outside Bibliotheca 0010-9109, soho- and inside the wreck and a third By moonlight Alexandrina. sharm.com) is home to the after lunch at the Shark and Mount Sinai, or Jebel Musa (Mount Moses), as it’s known Ice Bar , Africa’s only water - Yolanda Reef , locally, boasts one of the most spectacular sunrises in Egypt, ing hole made entirely of ice. well worth a 2 a.m. trek up a camel trail that winds Chairs, tables, bars, even the glasses around the 2,285-meter peak. are frozen, which is great for those who like their ice outside their drink. The first drink is free with admission, and the bar boasts vodka shoot - ers “as they were meant to be served.” More importantly, it offers ankle-length winter robes for those who forgot to pack their ski pants and parka. Soho also houses the Oxygen Bar (Sharks Bay, 010-0010-9109) , where you can get shots of pure, scented oxygen to clear your lungs— think a shisha pipe without the tobacco.

Business Monthly – Business Monthly – 62 I March 2015 March 2015 I 63

Chamber news

BOARD OF GOVERNORS PRESIDENT MEMBERS OF THE BOARD Anis A. Aclimandos, Transcentury Associates Ahmed El Daly, Dale Carnegie Training Egypt (Westwood Group) EXECUTIVE VICE PRESIDENTS Amr Allam, Misr Sons Development - Hassan Allam Sons Curt Ferguson, Middle East & North Africa Business Nevine Loutfy, Abu Dhabi Islamic Bank Unit, The Coca-Cola Company Sherif Kamel, School of Business, The American Omar Mohanna, Suez Cement Group of Companies University in Cairo Thomas Maher, Apache Egypt Companies

VICE PRESIDENT, MEMBERSHIP PAST PRESIDENT Dalia Wahba, CID Consulting M. Gamal Moharam, MGM Financial & Banking Consultants COMMITTEE VICE PRESIDENT, PROGRAMS (July 2014 to June 2015) Amr Talaat, IBM CHIEF EXECUTIVE OFFICER LEADERS VICE PRESIDENT, LEGAL AFFAIRS Hisham A. Fahmy Said Hanafi, Orascom Hotels & Development International Cooperation TREASURER Chair: Hanaa El Hilaly, Social Fund for Development Sherif El Kilany, Allied Accountants-Ernst & Young ˚ Co-Chair: Rafeh Saleh, CID Consulting

Investment & Capital Market Chair: Alaa El-Afifi, Qalaa Holdings Entrepreneurship and Innovation Co-Chair:s Hussein El Sherbiny, Pharos Holding for Financial Investments Agriculture and Food Security Chair: Alaa Hashim, ECES Sharif El Akhdar, Beltone Private Equity Chair: Tarek Tawfik, International Company for Agricultural Production Ç ÇÇCo-Chair: Hashem El Dandarawy, Team 4 Security and Processing Legal Affairs 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 Chair: M. Maged El Menshawy, Manapharma Girgis Abd El Shahid, Sarwat A. Shahid Law Firm Co-Chairs: Ahmed Ezz El Din, Johnson & Johnson Medical Egypt Banking and Finance Mohamed Roushdy, Amoun Pharmaceutical Company Marketing Chair: Zeinab Hashim, Abu Dhabi Islamic Bank Chair: Hisham Ezz El Arab, Danone Egypt Co-Chair: Nadir Shaikh, Citibank, NA Egypt Co-Chairs: Mai Aly, 4PR Communications Tamer El-Araby, Nielsen Egypt Human Resources Chair: Somaya El Sherbini, Microsoft Egypt Corporate Social Responsibility (CSR ) Real Estate Co-Chair: Maisa Galal, General Motors Egypt Chair: Mohamed El Kalla, Cairo for Investment and Development Chair: Mohamed Abdalla, Coldwell Banker Affiliates of Middle East Co-Chair: Shereen Shaheen, Pepsi-Cola Egypt & Greater Africa Co-Chairs: Abdalla El-Nockrashy, Majid Al Futtaim Properties - Egypt Hala Bassiouni, Egyptian Housing Finance Company Customs and Taxation Industry & Trade Co-chairs: Mostafa El Halwagy, The Egyptian Company for International Chair: Hassan M. Hegazi, Master Trading, SAE Transport & Logistics Touristic Projects (Americana) Co-Chair: Hossam Nasr, Allied Accountants - Ernst & Young Chair: Alfred Assil, Menarail Transport Consultants Omar El Derini, FAOM Consult/Red Wing Co-Chairs: Amr Kabil, National Stevedoring Group Suresh Narayanan, Nestle Egypt t Amr Tantawy, DHL Express Tarek Fahmy, Mediterranean Shipping Company (MSC) Education Information & Communications Technology Chair: Amr Ezzat Salama, The American University in Cairo Chair: Bassel Mubarak, Oracle Egypt Travel & Tourism Co-Chairs: Elizabeth Khalifa Co-Chairs: Ayman Elgohary, Cisco International Systems Chair: Karim El Minabawy, Emeco Travel Shahinaz Ahmed, Amideast Egypt Reem Asaad, Raya Holding J Co-Chairs: Cesare Rouchdy, Four Seasons Hotels & Resorts, Egypt Roland Bunge, Carlson Wagonlit Travel Energy Insurance Chair:Khaled Abu Bakr, TAQA Arabia Women in Business Chair: Alaa El-Zoheiry, Arab Misr Insurance Group (AMIG) Co-Chairs: Ali Bakr, ExxonMobil Egypt Chair: Hala El Barkouky, Allied Business Consultants Co-Chair: Mike Newton, Commercial International Life Insurance Arshad Sufi, BG Egypt Co-Chairs: Ghada Hammouda, Qalaa Holdings Company (CIL) Osama ElSaid, Masa Electro Jailan Shindy, Shindy and Associates

American Chamber of Commerce in Egypt – Tel: (20-2) 3338-1050 – Fax: (20-2) 3338-1060 For more information about AmCham services and news, please visit www.amcham.org.eg or our US mirror site www.amcham-egypt.org Events

EDUCATION A class half-full

“We currently have students from primary to secondary years who don’t know how to read and write,” said Minister of Education Mahmoud Abul Nasr at a Feb. 23 AmCham breakfast meeting entitled “Education in Egypt: Issues, Challenges and Opportunities” held at the Cairo Marriott Hotel & Omar Khayyam Casino. “We have a strategic plan that will be com - pleted by 2030. The first phase will end in 2017, where we will be laying the strategy’s foundations,” he said. There are 20 million Egyptian youth in school, 18.5 million of whom are enrolled in public schools. “This is the biggest age of interest from factories to build such classrooms on group in Egypt’s demographic,” said Abul Nasr. The education their premises,” said Nasr. ministry has more than 47,000 schools nationwide, with an aver - On the academic side, two STEM secondary schools—spe - age classroom density of 90 students per classroom. “This is a cialized in science, technology, engineering and math—were very high figure,” said Nasr. established in 2011 in 6 October City and Maadi, each backed by The strategic plan President Abdel Fattah el-Sisi approved last considerable government support. To enroll, prospective stu - year aims at increasing children’s access to formal education, dents must demonstrate academic excellence in their prep years given that there are 1,163 rural villages in Egypt with no access as well as pass several entrance exams. “Students were entered to education. The Ministry of Education is working to set up sin - into global competitions and achieved third place overall in two gle-classroom mini-schools for students under the age of 15 in consecutive years,” said Nasr. Students in these schools have more than 760 of these villages. These facilities are very small also registered 15 patents, mainly related to water treatment. and highly localized, but they teach the same curriculum as the “Some of them have gotten scholarships at universities outside formal education system and are supervised in a similar fashion. Egypt,” said Nasr. These schools allow students to join the formal education system The government is currently planning to expand these special any time, said Nasr. schools nationwide as well as international baccalaureate With a goal of bringing classroom densities down to 40 stu - schools that teach in Arabic, which currently exist only in Sheikh dents, the ministry will also to extend its school expansion plans Zayed City and Maadi. to cities and villages that already have schools. “We need almost The ministry has also launched a pilot program to teach stu - 200,000 classrooms, or the equivalent of 10,000 schools to dents in primary one through primary three how to read and achieve that,” said Nasr, noting that that would cost the ministry write Arabic. “The program achieved 85 percent success,” said LE 65 billion. “Our budget from the government only allows us Nasr. However, in the last academic year, when it was expanded to build 8,000 classrooms every year,” he said. to all grades, its success was only 65 percent. “We have made a Pushing forward, Nasr has signed deals with other Arab gov - lot of modifications to the program for this year and are await - ernments and domestic businessmen who have helped the min - ing the results,” said Nasr. istry build 26,000 classrooms so far this academic year. “We are He added that the ministry is in talks with the Ministry of hoping that by the coming academic year we would have 35,000 Social Solidarity to link the aid given to poor families with their classrooms,” said Nasr. “All this will improve the quality of children’s school attendance. Officials are also looking into hav - learning, and hence the students’ employment and career ing one school in each of the ministry’s 278 educational districts prospects.” obtain global certifications in every aspect of education. “These The Ministry of Education is also trying to make edu - schools would then be responsible to help other schools become cation more relevant to the skills and knowledge busi - certified,” said Nasr. nesses need. To achieve that, the ministry has decreed The minister said there is still a long way to go toward grant - that each vocational school is to have a mini-factory ing all Egyptian children a decent education. “When we started, where experienced workers teach students how operate the glass was empty. Now it’s 30 percent full, and every year we machinery and other necessary skills. Each factory will will fill it a little bit more,” said Nasr. “We know we will never have at least three vocational classrooms, each capable of reach 100 percent success or effectiveness. It’s not humanly pos - accommodating at least 25 students. “We have seen a lot sible. But we want to reach just short of what is impossible.”

Business Monthly – 66 I March 2015 MARKETING Employees as players

“How does one align incentives in a very complex organization so that everybody knows the company’s score?” asked Ashraf Bakry, managing director of Unilever Mashreq, at a Feb. 4 ses - sion of the AmCham Marketing Committee’s Inspiring Young Talents roundtable series. Through anecdotal examples, Bakry invited the audience to question how managers can interact with their teams to produce successful outcomes. “On a sports field, the football player knows the game, its pur - pose, its rules, his position on the field and the overall team strat - egy. The player also knows how to score and can always see the does not stand back and say, ‘This is not my job,’ and lets them goal,” Bakry said. The player also has coaches, trainers, man - score,” he said, switching metaphors to explain the importance agers, captains and supporters who recognize achievement. of aligning the incentives of the team. Bakry compared this kind of team dynamic to a chessboard, He concluded by emphasizing that it is the role of managers to where the pieces do not know the rules or the strategy and are develop their employees into good players by making sure they moved by a single player. “If the goalkeeper is lying flat on his understand how to score as a team, deploying the team in the face in the mud, and the center forward is the best person to pre - right skill/job match and following the rules of the game and vent the opposition from scoring a goal, [the center forward] ensuring that the incentives of their employees are aligned.

INDUSTRY & TRADE Keeping standards up

Egypt was the first Arab state to join the International Standardization Organization, said Hassan Abdel Magied, chair - man of the Egyptian Organization for Standardization and Quality at a Jan. 13 meeting of AmCham Egypt’s Industry & Trade Committee. As the sole organization in the country responsible for enforcing standards and quality control, the EOS issues quality marks and conformity standards for Egyptian products as well as the halal mark for food. Most recently, the EOS began standardization in the cosmetics sector. It serves as the technical branch of the Consumer Protection Authority, said oped energy efficiency unit offers technical advice to con - Abdel Magied, adding that his group offers advice and technical sumers about the differences among energy efficient appli - support to help organizations properly apply standards, mea - ances. The organization also helps SMEs by offering techni - surements, calibrations and quality control. Keeping pace with cal support on the application of standards, calibrations and technological updates, the EOS has also developed a user-friend - product testing. ly, downloadable mobile application known as EOSQ. With over 1,700 professionals responsible for developing The EOS, which also fields consumer complaints, has standards, the agency has issued close to 10,000 standards via issued consumer protection standards such as those protect - more than 150 technical committees, and Abdel Magied noted ing hospital patients. The EOS, a member of the United that 95 percent of all EOS standards are based on international Nations Economic Commission for Europe, also has a spe - standards. He added that the EOS is just one of several organi - cial unit for cars to develop and leverage Egypt’s competi - zations that play a key role in standardization and quality, includ - tiveness in the automotive sector by helping carmakers meet ing the World Trade Organization, the European Committee for international safety and quality standards. Its newly devel - Standardization and the European Organization for Quality.

Business Monthly – March 2015 I 67 Events

BANKING & FINANCE Funding the future

“What I have learned from experience is that you should never let a crisis go to waste. And this is what is happening in Egypt,” said Philip ter Woort, Egypt director for the European Bank for Reconstruction and Development, at the AmCham Banking & Finance Committee’s Feb. 11 interac - tive panel discussion “Project Financing and Syndicated Lending—Case Studies” at the Four Seasons Cairo at Nile Plaza. This sentiment will be the stepping stone for domestic businesses and investors to gain access to international that was unheard of in the past three or four years,” said financing institutions like EBRD, the International Financial Dubin. Since 2008, rates have fallen sharply, which has ben - Corporation and Citigroup. Understanding the trends domi - efited borrowers immensely, he said. “Some borrowers nating project financing worldwide will prove important for could borrow at 3 to 5 percent interest for 20-year loans.” domestic lenders and borrowers alike. One such trend, The IFC has played a major role in project financing in according to David Dubin, Citigroup London managing Egypt with a portfolio of $1 billion, the largest in the region director and head of the Europe, Middle East and Africa along with Pakistan, said Nada Shousha, IFC manager for Project and Infrastructure Finance Division, is that long- Egypt, Libya and Yemen. The IFC generally finances long- term debt financing is no longer dominated by banks and term projects, but when many foreign investors exited Egypt insurance firms. Equity and capital markets are showing after 2011, it stepped in with short-tenure investments. The interest in this type of financing. “Debt investors wanting focus of the IFC in the coming four years will be to finance long-tenure investment in a variety of markets is something real estate and micro-lending projects.

CUSTOMS & TAXATION The benefits of VAT

Egypt’s sales tax has been in place for more than 23 years. “It brought in LE 90 billion in tax revenue in the last fiscal year,” said Mamdouh Omar, advisor to the Minister of Finance and Taxation and former chairman of the Egyptian Tax Authority at a Feb. 18 committee meeting at the Conrad Cairo Hotel. “Now however, its shortcomings are becoming more appar - ent, and it is becoming an obstacle to investments,” said Omar, explaining why the government is retiring the sales tax . One of these shortcomings is that the minimum capital requirements for a corporation to be liable to pay sales tax has every product or service. Also, the definition of processed not changed since 1991, when the tax law was passed. goods is vague. “Despite my best efforts, there were problems Companies with a minimum of LE 54,000 in capital are that never got solved and were always disputed,” said Omar. required to register with tax authorities. The LE 54,000 reg - The VAT law will address all these problems by unifying istration limit set in the 1991 is now equivalent to LE the registration limits for all businesses and the rates and 500,000,” said Omar. Also, this limit is different for industri - processes to calculate the tax. It will also allow companies to al firms and traders. “There is no technical reason for this to deduct taxes paid on raw materials from the taxes due on the be the case.” final product. “We have only a short list of exemptions for Another shortcoming is that not all products and services products that the poor frequently use and goods bought for are taxed equally. “This creates massive discrepancies in national security or the army,” said Omar. “We are also inte - accounting,” says Omar. grating the VAT with foreign country VAT laws to facilitate Meanwhile, the sales tax law registration doesn’t apply to imports and exports.”

Business Monthly – 68 I March 2015 ICT A Digital Vision for Egypt

his year, senior executives from Oracle, IBM, MasterCard, cloud computing. Jones pointed to the example of Oracle DHL, EMC2 and Microsoft met with Minister of helping the National Australia Bank switch from a system TCommunication and Information Technology Tarek Helmy to using paper checks to one with using mobile applications discuss their plans for growth in Egypt. “These visits send out a that enable customers to transfer cash between accounts and loud and clear message to the whole world that Egypt is at the generate statistical reports. “It’s richer than writing on a right place and on the right track,” said Helmy at a Feb. 16 piece of paper,” he said. AmCham breakfast meeting entitled “The Role of IT in Driving The Egyptian government is also planning to adopt disrup - Egypt’s Economic Growth” at the Four Seasons Hotel Cairo at tive technologies. “Our vision for converting Egypt into a dig - Nile Plaza. The meeting was hosted by Google Egypt. ital economy is moving from the planning phase to the execu - The rise of information technology has forced companies to tion phase,” said Helmy. The minister explained that the plan adopt so-called disruptive technologies by digitizing their busi - was first introduced in mid-2014 with vision to “provide pros - ness operations to offer completely new and innovative prod - perity, freedom and social equality for all citizens,” by allow - ucts and services. “We have seen industries such as the record - ing government services to be accessed anytime and anywhere ing industry, printing and publishing, postal services, photog - via cheap, simple tools. raphy and film, and even traditional currencies transformed by The ministry’s first goal is to develop a unified digital portal technology,” said Juan Jones, Oracle senior vice president for through which all government services will be offered. “All we global customer support services. “Disruption will be a com - had so far were ad-hoc attempts, which pose huge security petitive advantage.” threats,” said Helmy. The second goal is to improve Egypt’s These technologies have changed the definition of innova - global attractiveness as an outsourcing hub, and the third is for tion, said Jones. Instead of businesses focusing on creating new Egypt to become an Internet hub, given that it already has 17 applications while maintaining their existing platforms, “The submarine cables passing through its territory. focus now is mainly around the user experience when execut - The conversion, Helmy said, will cost around LE 120 bil - ing transactions,” he said. “How can we make the experience lion, of which the government will finance up to 20 percent, more effective and personalize it for the customer?” and the private sector will cover the rest. Changes to invest - The second aim of innovation is to make processes and pro - ment and labor laws will further support the ministry’s vision cedures more efficient. The third is to develop new business for Egypt. The aim is that by 2020, investment in the ICT sec - models that will allow a company to expand by doing things in tor will top LE 195 billion, or 8.4 percent of GDP, up from LE a completely new way. According to Jones, 73 percent of sur - 58 billion (3.8 percent of GDP) at the end of 2014. Annual veyed executives have a digital strategy, but only 19 percent growth should increase from 10 percent to 18 percent in five feel they have the right tools to execute their vision. “So there years. is a lot of opportunity to deliver solutions.” The minister said the ICT sector has remained intact and sta - These solutions will be based on a single familiar platform, ble despite the challenges it had faced since 2011. “During but rather will require the integration of brand new platforms. those difficult years we have maintained growth forecasts and The Internet of Things, for example, allows automobiles and in some areas even exceeded them,” said Helmy. “This proves home appliances such as the refrigerator to communicate with that Egypt, despite all the negatives and instabilities, is moving the Internet via familiar platforms such as mobile phones and in the right direction.”

Business Monthly – March 2015 I 69 Events

ENERGY Going green

“If Egypt retains its fossil fuel products, renewable and nuclear products and undergoes energy efficiency reforms, we will still need to meet 37 percent of our energy needs,” said Mohamed Salah Elsobki Jr., executive chairman of the New & Renewable Energy Authority, at a Feb. 2 AmCham Energy Committee meeting entitled “The Future of Renewable Energy in Egypt” at the Conrad Cairo Hotel. The NREA chairman added that with 7,650 square kilometers of Egypt’s land allocated to renewable energy projects in the coming years, this offers a great opportunity for the country The NREA chairman provided an overview of the solar to diversify its energy mix. and wind atlas, explaining that Egypt enjoys excellent wind Elsobki explained that Egypt faces many challenges in the conditions, particularly in the Suez Gulf. The nation also has energy sector, including high demand, limited financing and intense sunshine, with direct solar radiation ranging from commercial regulations. To address these challenges, the 2,000 to 3,200 kWh/m²/year from the North to the South, government is working on providing alternative energy with nine to 11 hours of sunshine per day. resources, attracting investment and gradually transforming Elsobki surveyed the various renewable energy develop - the sector into a commercial one. Egypt aims to increase ment schemes that will be used to promote the sector, rang - energy efficiency on both the supply and demand levels and ing from independent power producer projects to feed-in develop the national grid. tariff schemes.

BREAKFAST BRIEFING AmCham welcomes foreign diplomats

On Feb. 4, AmCham hosted a special orientation meeting Binational Fulbright Commission in Egypt. for Ambassador Georg Stillfried of Austria, Ambassador Those in attendance listened to a presentation by AmCham Markus Leitner of Switzerland, Ambassador Premjith CEO Hisham Fahmy on AmCham activities followed by a Sadasivan of Singapore, Deputy Head of Mission Jean- question-and-answer session focusing on Egypt’s political Pierre Reymond of Switzerland and Deputy Chief of and economic challenges and the positive role the Chamber Mission Mark Seah of Singapore. can play in the country’s economic development. AmCham members included Farid Saber, vice chairman AmCham regularly hosts meetings to familiarize diplo - and managing director of AIG Egypt Insurance Company; mats with its role in promoting trade and investment between Giel-Jan M. Van Der Tol, CEO of Emirates National Bank of Egypt and the United States and advocating for a business Dubai; and Maggie N. Nassif, executive director of the friendly environment.

Business Monthly – 70 I March 2015 SUEZ EXPANSION PROJECT The new canal

uccessfully completing the major Suez Canal expansion the number of containers that pass through Port Said, while currently in the works will be key to demonstrating the port’s basin will be extended by 800 meters, with new con - Egypt’s ability to pull off large-scale investment pro - tainer terminals and a logistics area. The goal, said Zaki, is to jects, said AmCham President Anis Aclimandos in his intro - transform Port Said into one of the top 10 ports in the world. Sductory remarks at a Feb. 22 AmCham breakfast event held at In Ain Sokhna, a 33-kilometer area has been designated for the Conrad Cairo Hotel entitled, “The Suez Canal Area development, 27 kilometers of which will be dedicated to Development Project: Master Plan – Nearly Accomplished.” industrial activity, with the rest for things like housing and Yehia Zaki, managing director at consulting firm Dar al- ICT. Handasah, provided an overview of the Suez Canal master The canal megaproject entails 600 square kilometers of land plan, detailing the “consolidated canal corridor” project, and promises to create a million jobs over 10 years—“This which will develop areas of land east of the canal near such would represent 15 percent of Egypt’s employment and 2 to 3 locales as El Arish and east of Ismailia. He also explained the percent of GDP in Egypt,” said Hany Serei ElDin, chairman “regional integrator plan,” which seeks to develop better inte - of legal firm Sarei El Din and Partners. Given the project’s gration between the canal and Cairo. The major question, said enormous scale, he said, “The setup has to be right from day Zaki, is how to get the population in and around the crowded one.” The sheer number of actors raises a key question: “Do capital to move to new areas—an area of East Port Said and we need new legislation for this type of project or can we use an urban zone east of Ismailia, for example, have both been existing laws and regulations?” In the end, he concluded that designated as potential new population centers. Given how the laws currently in place, particularly the tenders law from expansive the project is, “We had to get the vision of all the 2002, which he called, “the best piece of investment legisla - stakeholders,” said Zaki, noting workshops and focus groups tion since the investment code of 1948,” are enough to carry were held in order to understand the interests of the various the project. However, Serai ElDin added that completing it parties. will require a more “enabling framework.” He discussed the The expansion of the Suez Canal comes at a time when the creation of a new economic board to run the canal zone that vessels passing through it, and their containers, are getting sig - would have “exclusive and inclusive” authority over econom - nificantly bigger. Fortunately the new canal can cater to these ic matters, meaning it would have final say over the approvals wider and deeper vessels. The master plan envisions tripling that are normally needed from outside authorities.

Business Monthly – March 2015 I 71 AmCham MENA Council Women in Business Awards Ceremony

AmCham chairmen & CEOs from Egypt, Bahrain, Jordan, Lebanon, Morocco, Tunisia, Palestine and Abu Dhabi-U.A.E

The winners of the four awards are: embers of the AmCham MENA Regional Council comprising nine AmChams from Best Woman in the Corporate Sector was awarded to Nadia Al across the region gathered in Abu Dhabi Jan. Saeed, CEO of Bank Al Etihad in Jordan, for her exceptional 30 for their annual board meeting and to recog - efforts on behalf of the bank for more than a decade. She was nize the winners of the third annual AmCham MENA Council behind the introduction of mobile banking; the launch of Women in Business Awards. The ceremony was part of Shorouk, a full array of banking solutions; and for having MAmCham Abu Dhabi’s fifth annual Excellence Awards and strong female representation at the senior managerial level. annual charity gala. The event brought together more than 300 She was recognized for her key contributions to Jordan in senior business executives and government officials from both the public and private sectors. across the Middle East North Africa region to recognize the Al Saeed has held various roles throughout her career; most award winners, sponsors and AmCham members. notably, she served as Jordan’s minister of communications The MENA Council Women in Business Awards recognizes and information technology from 2004 to 2006, and before the notable achievements of Middle Eastern women leaders in that as an economic advisor to the ICT minister. the corporate world as well as entrepreneurs and civil society Al Saeed was selected as one of 2014’s most powerful women leaders whose achievements have set a benchmark. This year, in the country by Jordan Business Magazine and was selected a new category was introduced to recognize regional compa - as one of the most powerful women in the corporate sector by nies with effective gender diversity programs. Forbes Middle East.

Business Monthly – 72 I March 2015 Left to right: Hisham Fahmy, CEO AmCham Egypt and regional coordinator, Left to right: Hisham Fahmy, CEO, AmCham Egypt and regional coordinator, AmCham MENA; Matthew E. Byrd, chairman, AmCham Abu Dhabi and AmCham MENA; Matthew E. Byrd, chairman, AmCham Abu Dhabi and AmCham MENA; Nadia Al Saeed, CEO, Bank Al Etihad and winner of the Best AmCham MENA; Paola Chakhtoura, director, AmCham Lebanon, accepting on Woman in the Corporate Sector Award; Hala El Barkouki, chairwoman of the behalf of Sarah Beydoun, founder and creative director of Sarah's Bag, winner Women in Business Committee, AmCham Egypt and AmCham MENA. of the Best Woman Entrepreneur Award; Hala El Barkouki, chairwoman of the Women in Business Committee, AmCham Egypt and AmCham MENA.

Left to right: Hisham Fahmy, CEO, AmCham Egypt and regional coordinator, Left to right: Hisham Fahmy, CEO, AmCham Egypt and regional coordinator, AmCham MENA; Matthew E. Byrd, chairman, AmCham Abu Dhabi and AmCham MENA; Matthew E. Byrd, chairman, AmCham Abu Dhabi and AmCham AmCham MENA; Rania Fahmy, executive director, Banati Foundation and win - MENA; Tarek Atta, managing director and Maisa Galal, human resources director, ner of the Best Woman in the Non-Profit Sector Award; Hala El Barkouki, accepting the Best Company for A Woman to Work For Award on behalf of General Chairwoman of the Women in Business Committee, AmCham Egypt and Motors Egypt & North Africa; Hala El Barkouki, Chairwoman, Women in Business AmCham MENA. Committee, AmCham Egypt and AmCham MENA.

Best Woman Entrepreneur was awarded to Sarah Beydoun, The foundation brings together at-risk kids and children of the founder and creative director of Lebanon’s Sarah’s Bag – A prisoners to keep them off the streets and inspire them to build Social Entrepreneurship Business, a fashion boutique that better lives. The average ratio of caregivers to children at the retrains underprivileged women, prisoners, ex-prisoners and organization is 1:6. Children are provided with a passport to eco - other disadvantaged individuals as designers. They learn bead - nomic empowerment through the workshops offered at Banati. ing, embroidery and crochet in order to become financially inde - Fahmy recently won the 2014 Larissa Award from the African pendent and earn a living. Today, Sarah’s Bag is one of the most Child policy forum. Banati has also been selected as the 2014 successful social entrepreneurship brands in the region, a desti - Stars Impact winner in the category of protection. nation for stylish women from Tokyo to Caracas. Beirut and A new category, Best Company for Women to Work for was Paris are sitting up and taking notice. awarded to General Motors Egypt for their outstanding commit - Best Woman in the Non-Profit Sector was awarded to Rania ment to developing female potential in the company. Fahmy, executive director of the Banati Foundation in Egypt for GM Egypt fosters an inclusive working environment for her work with at-risk youth. women. It has developed unique programs designed to support

Business Monthly – March 2015 I 73 AmCham Egypt Delegation at the Awards Ceremony.

and invest in female talent including short-term developmental Conference scheduled for March 5 and Egypt’s Economic assignments abroad and an eight-month course for developing Development Conference scheduled for March 13-15. top female talent, focusing on personal leadership, peer-sharing Khush Choksy expressed the commitment of the U.S. and mentoring. In 2010, the Women Forum was established, Chamber of Commerce to support the MENA Council and to sponsoring health, education, and leisure activities. GM Egypt is advocate for issues of importance for its members. equally committed to female blue-collar workers and has started training female vocational students. AmCham Abu Dhabi 5th Annual Excellence Awards

MENA Council Board Meeting This year’s winners of the AmCham Abu Dhabi annual AmCham Abu Dhabi, the current chair of the MENA Council, Excellence Awards, which recognizes best-in-class American hosted chairmen, presidents, members of the board and directors and Emirati individuals and businesses for their achievements in of eight AmChams from across the region who met to discuss the the Abu Dhabi business community, are Salem Rashid Al council’s plans for 2015. The meeting was also attended by Noaimi, CEO and managing director of Waha Capital and Khush Choksy, director of the Middle East Department at the Partner; SeedStartUp, winner of the the Young Achiever award; U.S. Chamber of Commerce. Janice Phillips, general manager, Olgoonik Global Security and Members discussed the upcoming Annual Conference sched - winner of the Women in Business award; Kassem Alom, founder uled to take place on April 8 in Abu Dhabi under the theme and vice chairman, Al Noor Hospitals Group and winner of the #ThinkMENAbiz: “Boosting Cross-MENA Business Ventures Falcon Individual award; Etihad Airways, winner of the Falcon and FDI from the U.S.” Speakers at the conference are set to Organization award; and Cleveland Clinic Abu Dhabi, winner of include regional investors, venture capital outfits, angel investor the Bridge of Excellence award. networks, ministers of trade and investment as well as U.S. Sponsors of the event raised proceeds to mark the 15th year of diplomats from across the region. AmCham Abu Dhabi giving back to the community. Those con - Discussions also focused on several potential joint programs tributions went to charities and educational institutions in Abu between AmChams including cooperation with the U.S.-Arab Dhabi including the Emirates Red Crescent, the Make-A-Wish Bilateral Chamber of Commerce to offer a webinar series Foundation U.A.E., the American Community School of Abu focused on “Doing Business in the MENA Region” featuring Dhabi and St. Joseph’s School. successful business leaders from around MENA who would pre - Sponsors of the event included the Al Noor Hospitals Group, sent their perspectives on the business environment and potential Cleveland Clinic Abu Dhabi, Etihad Airways, Gulf Diagnostic opportunities for U.S. investment. Center Hospital, Lockheed Martin Global, AV Concepts, Tax issues were also a key topic of concern among the Occidental Petroleum Corp., Sultan International Holding, AmCham Abu Dhabi expat community. The issue will be Nirvana Travel & Tourism, Tasleeh Entertainment, Abu Dhabi addressed at the AmCham Abu Dhabi/MENA advocacy week in Tourism & Culture Authority, dnata travel, Europcar, Gulf Washington, D.C., scheduled to take place April 20. Alliance Company - A Perot Company, Jumeirah at Etihad Members also shared information on upcoming missions and Towers, Oshkosh Corp., Patchi, Raytheon International, Sayah major events held by various AmChams, including AmCham Engineering MENA, The International New York Times and Tunisia’s upcoming Entrepreneurship and Investment Gray Mackenzie & Partners.

Business Monthly – 74 I March 2015 SAVESAVE THE April 8, 2015 DDATEATE Abu Dhabi, UAE

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Hosted by AmCham Abu Dhabi Current Chair of the AmCham MENA Regional Council

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For more information and to register, please contact: [email protected] For available sponsorship opportunities: [email protected] New Members

New replacements in member companies

Amr El-Ashry Category: Associate Resident Haitham Taher Bassiouny Category: Affiliate Sector: Accounting General Manager, Middle East for Consultations Corporate Solutions Director, MetLife Alico Sector: Insurance (Pharaonic American Life Insurance Company) Ali Redouane Director & Country Representative - Egypt, Area Business Category: General Akram Hatem Kheir Sector: Petroleum Category: Affiliate Manager, North Africa & Levant, Chevron Egypt Lubricants Grundfos Sales Manager, Kheir Group Sector: Industrial Machinery & Equipment

Yasser Mohamed Yehia Khaled Shash Category: Affiliate Category: Affiliate Executive Director- Head of GM HSBC Egypt, HSBC Sector: Financial Sector Vice President, Industrial Sector, Raya Holding Sector: Information Bank Egypt, SAE Technology Yasser Abdul Malak Mai Azmy Chairman & CEO, Nestle Egypt Category: Multinational Category: General Sector: Food & Beverages Managing Director, JWT Sector: Service Providers Dante Campioni Category: Affiliate Mohamed Mahmoud El Etereby Category: General AlexBank Managing Director – CEO, AlexBank Sector: Financial Sector Chairman, Banque Misr Sector: Financial Sector Sameh Habib Category: Affiliate Ahmed Mohie El Din Abo Elezz Category: Affiliate Business Development Section Head, Al Ahly Real Sector: Real Estate Vice Chairman, Banque Misr Sector: Financial Sector Estate Development Co.

Maged Ibrahim Boules Category: Affiliate Aziza Mohamed Sadek El Sharkawy Category: Affiliate Finance & Controlling Senior Manager, Egyptian German Sector: Automotive Managing Director- Manager of Design Sector, Saleh Sector: Consultancy Automotive Co. (EGA) & Hegab Integrated Engineering Economical Consultancy

Yasser Zahreddine Category: Affiliate Usama Zaki Category: Affiliate General Manager – Egypt, Aramex International Egypt Sector: Transportation Chief Executive Officer (CEO) – Bariq, Raya Sector: Information Technology Holding Carlos Hernandez Managing Director Operations, Spanish Egyptian Category: Associate Resident Ibrahim Safwat Sector: Petroleum Category: Affiliate Gas Co. (SEGAS), SAE Commercial Manager, BG Egypt, SA Sector: Petroleum

Nihal Zaki Jonathan Kurtz Category: Affiliate Consumer Business Unit Director, Vodafone Egypt Category: Affiliate HR & Administration Manager, Apache Egypt Sector: Petroleum Sector: Service Providers Telecommunications, SAE Companies

Change in company address Correction DHL Express Ahmed Fayek CCC Cargo Village, Cairo Airport Road Chief Operating Officer Heliopolis Tanmeyah Micro Enterprise Services Tel.: (20-10) 6006-3683

L'Oreal Egypt LLC 69, 9th street, Wadi Degla building For any change to contact information, please contact the Membership (2 buildings after HSBC) - New Cairo Services Department at the Chamber’s office Tel.: (20-2) 2614-7429 Tel: (20-2) 3338-1050, ext. 0016 – Fax: (20-2) 3338-1060 E-mail: [email protected]

Business Monthly – 76 I March 2015

Member News

SCHNEIDER ELECTRIC

In line with its commitment to build the skills of Egyptian technicians, Schneider Electric Egypt and Northeast Africa, in cooperation with the National Academy for Science and Skills, launched its Professional Electrician program under the auspices of Minister of Urban Renewal and Informal Settlements Leila Iskandar. Schneider and the NASS Academy awarded graduation certificates to the first batch of professional electricians to complete the program, which included hands-on training in energy efficiency and electrical fixtures.

AUC

The UAE’s Al Habtoor Group and the American University in Cairo announced the establishment of the Khalaf Ahmad Habtoor Scholarship, which will enable 10 outstanding Egyptian students to study at the university. Company founder Khalaf Ahmad Al Habtoor has a history of educational philanthropy, founding the Al Ittihad School in 1975 and the Emirates International School in 1991, which was the first school in the UAE to provide an international curriculum. The signing ceremony was attended by AUC President Lisa Anderson and other dis - tinguished guests.

QNB

In cooperation with Misr El Kheir Foundation, Qatar National Bank has announced the construction of the Al Sheikh Eissa for Primary Education school in the Minya governorate. The project took 10 months to complete. The new school can accommodate 500 students from preschool up to the beginning of high school. Three classrooms are devoted to each grade, except preschool, which has two. The new school is part of QNB’s master plan to finance 100 schools in Upper Egypt by either building them from scratch or sponsoring major renovations.

CITYSTARS

Ibrahim Nashaat was promoted to general manager at the Holiday Inn Cairo Citystars. He brings more than 25 years of experience in the hospitality industry to the position. Prior to the promotion, Nashaat was the manager of the InterContinental Cairo Citystars. He first joined the InterContinental Hotels Group back in 1988 when he took a position at the Semiramis InterContinental down - town. In 2003, he moved to the InterContinental Cairo Citystars, where he joined the hotel pre-opening team as area director of information technology.

Business Monthly – 78 I March 2015

Announcements

Jobs AMCHAM RECRUITMENT CENTER Code Vacancies Company Name 88739 Facility Manager CONTRACK FM S.A.E 88677 Marketing Manager Smart Villages Co. 88766 Shift Supervisor Egyptian Glass Company 88744 Oracle Supply Chain & CRM Consultant Mobiserve 88731 Consultant - IT Audit Professionals Deloitte - Saleh, Barsoum & Abdel Aziz 88680 Tax Advisor Helmy, Hamza & Partners (Baker & McKenzie)

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 Request of international offers to supply 25,000 tons of rails of 54 Km/ meter E.N.R. Egyptian National Railways Authority, the March 15, 2015 300,000 EURO Industry international standard weight per specs. Purchases & Stores Dept 10,000 LE Transport

Supply, erection, testing & guarantee of the MDM equipment required for the remote Southern Cairo Electricity Distribution Co.,, The March 10, 2015 600,000 LE Electromechanical Works reading of electricity meters to adapt to the applied system in 6th October Zone. This Cashier, 25,000 LE Energy is a repeated tender with extended deadline. Ref. 6/ 2015.

Beneficiary Sectors Generating Sectors

www.amcham.org.eg/TAS 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] Website: www.amcham.org.eg • US Website: www.amcham-egypt.org

U.S. Exhibitions Listings are now available on our website: www.amcham.org.eg Exhibitions related to the following sectors are scheduled for the upcoming months Sector Show Name Website Embassy Contact March Healthy/Beauty Natural Products Expo West/ Engredea 2015 expowest.com [email protected] Consumer Goods International Home + Housware Show 2015 houswares.org [email protected] Plastics NPE 2015 - The International Plastic Showcase npe.org [email protected] April Broadcast The 2015 NAB Show nabshow.com [email protected]

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]

*Please refer to the Commercial Service at the US Embassy for any updates on the exhibitions.

Business Monthly – 80 I March 2015 Benefits

THE AMERICAN U NIVERSITY IN CAIRO FAIRMONT NIL E CITY HOTEL

School of Business is co-hosting with Tuck School of Business at Dartmouth, USA and the Global Enjoy a special offer from Fairmont Nile City Hotel on food & beverages and gym: Business Schools Network based in Washington DC a one- day Summit on experiential learning - 20% Discount on Food & Beverage at Saigon Restaurant & Lounge, Napa Grill, Bab El Nil, under the theme “Learning by Doing, The Power of Experiential Learning in Management Onyx Lounge, and Sky Pool (Excluding Alcoholic beverages). Education” to explore opportunities for applying experiential learning approaches to management education in MENA. - Willow Stream Spa Gym Annual Membership L.E. 6,000 instead of L.E. 7,000 (Including a The Summit is targeting business executives, deans, directors, faculty from different parts of the trainer for six private sessions). world. The Summit will take place on March 16, 2015 at AUC New Cairo Campus. For full details, * This offer is not applicable during holidays & peak periods and cannot be combined with please visit www.gbsnonline.org/ELSummit and another promotion. https://globalbusinessschoolnetwork.box.com/s/d35na20bdnvf0hytwkg4

AmCham members are offered a preferential registration rate of US$ 135 vs. normal rate for ***Discounts will be granted for AmCham members upon presenting Egyptian residents of US$ 150. For registration please use the code: summit10 their AmCham 2015 membership card*** For more information, please contact: For more information, please contact: Farida Zaki Sally Morshed Office: (20-2) 2461- 9494 • Mobile : (20-10) 0110-8847 Office: (20-2) 2615-3320 • Email: [email protected] Email: [email protected] Please visit AmCham’s Cyberlink on http://www.amcham.org.eg/cyberlink Please visit AmCham’s Cyberlink on http://www.amcham.org.eg/cyberlink for more information on all AmCham benefits for more information on all AmCham benefits Offer is valid until March 10, 2015 Offer is valid until December 31, 2015

THE INSTITUTE OF MANAGEMENT ACCOUNTANTS ORACLE EGYPT , L TD . (IMA) The Institute of Management Accountants (IMA) is pleased to offer a special 30% discount to AmCham Members on IMA Membership. As a member of the IMA , you can benefit from a wide array of benefits from networking, Oracle Egypt, Ltd. Is pleased to offer a 50% discount on Oracle Workforce Development to access to thought leadership, CPE opportunities and special corporate offers: Program, in addition to, a 25% discount on Oracle certification exams. •Peer Networking. •IMA Middle East Website and Newsletter. •CMA Certification. •Career Resources. •Continuing Education. •Publications. .

* Please browse the benefits file on AmCham Cyberlink to see the offer details ***Discounts will be granted for AmCham members upon presenting their http://www.amcham.org.eg/cyberlink AmCham 2015 membership card*** **Discounts will be granted for AmCham members upon presenting their AmCham 2015 membership card** For more information, please contact: For more information, please contact: Mohamed Hanafy Renad Hamza Telephone: (20-2) 2580-8888 Telephone: (20-2) 2461-8534 Mobile: (2-010) 9309-1350; 010-0656-6623 Email: [email protected] Email: [email protected]

Please visit AmCham’s Cyberlink on http://www.amcham.org.eg/cyberlink for more information on all AmCham benefits Please visit AmCham’s Cyberlink on http://www.amcham.org.eg/cyberlink for more information on all AmCham benefits Offer is valid until December 31, 2015 Offer is valid until May 1, 2015

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]

Business Monthly – March 2015 I 81 Advertorials

ARAB AFRICAN INTERNATIONAL BANK ABRAAJ MISR

AAIB and Visa are launching a marketing campaign for the bank’s Visa cards. Cardholders will be rewarded for using their cards via a Architect Vincent Callebaut has designed a one-of-a-kind futuristic variety of loyalty programs. The campaign, launched in February, complex called The Gate on Al Nozha Street in the heart of will run for 10 months, until October, and applies to both debit and Heliopolis. Sponsored by Abraaj Misr, The Gate will be constructed credit cards. “The bank’s strategic focus is to increase card usage for ahead of its Parisian counterpart, Smart City, which reflects paying on POS for purchases and to make it a primary transaction Callebaut’s vision of Paris as an eco-friendly city in 2050. The Gate tool instead of cash,” said Himanshu Shrimali, AAIB’s head of Retail will feature residential, business and commercial units and will show - Banking. “Payment cards are convenient, safe and reduce the case its green credentials by integrating renewable energy technolo - adverse impacts of cash on the general economy.” gies such as wind turbines and solar energy facilities.

IKEA KEMPINSKI HOTELS

IKEA at Cairo Festival City mall is offering a new loyalty program For 10 days, the Kempinski Hotel Soma Bay hosted the 24 contestants called IKEA Family. Members will hold smart cards, which they can vying for Miss Germany. The beauty pageant hopefuls were in Hurghada use to take advantage of special promotions every time they shop at to receive training and participate in photo shoots prior to the final com - IKEA. For example, members will receive free coffee or tea whenev - petition back in Germany on Feb. 28. “We are proud to be chosen as a er they buy a main course at IKEA’s Swedish restaurant, and they can destination for international events,” said George Ganchev, general man - return items to the store up to 60 days after purchase compared to 30 ager of the Kempinski Hotel Soma Bay. During their stay, the contestants days for non-members. Cardholders will also get exclusive discounts enjoyed a tour of the hotel facilities, including the world-renowned on certain products for a limited time. Thalasso Centre & Spa, the 18-hole Championship Golf Course, the Kite House and the newly developed marina.

Business Monthly – 82 I March 2015 MAJID AL FUTTAIM GROUP THE CAIRO MARRIOTT HOTEL & O MAR KHAYYAM CASINO

Construction on the Mall of Egypt, the Majid Al Futtaim Group’s most recent local project, is underway and projected to in 2016. The develop - The Cairo Marriott Hotel & Omar Khayyam Casino collaborated with ment is estimated at LE 4.9 billion, employing an eco-friendly construc - IRAM Jewelry to treat clients to a one-of-a kind Valentine’s Day cel - tion approach that uses local materials from around the site in 6 October ebration. Guests enjoyed a reception at the hotel’s Salon Royal, fol - City. Project officials said half of the materials used in the project would lowed by a jewelry show featuring the AURA collection, which was be sourced locally. The Mall of Egypt is also partnering with local waste inspired by the pharaonic lotus flower. The collection includes a wide management company Ertekaa to ensure that all the waste generated array of stunning, limited edition pieces with extravagant diamond during construction is tracked and documented. In December, the recy - creations. cling rate for the Mall of Egypt project was more than 90 percent.

MEAC OM S PEPSICO

MEAComS has signed an agreement with public relations giant Edelman To help women achieve a good work-life balance, PEPSICO announced its to be the firm’s exclusive affiliate in Egypt. MEAComS will provide local FlexiCo program to help female employees balance their home and work expertise and on-the-ground market support for the global PR firm. lives by giving them choice over when, where and how they work. For Meanwhile, the local company’s staff and clients will have access to example, female employees can compress a five-day week into four, work Edelman’s regional and global network of experts, best practices and pro - from home one day a week or adjust their schedule around core work fessional development and training programs. “Edelman is renowned for hours. The program was announced at the Women for Success-Global setting industry standards. We are proud to be an affiliate with a global Partnership for Women’s SMEs, which was hosted by the Arab League last firm whose reputation for innovation and approach to strategic communi - month in Cairo. cations precedes them,” said Fatma Ahmed, MEAComS managing director.

Business Monthly – March 2015 I 83 Media Lite

A Glance At The Press

“Stand your ground man...you can do it!”

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.

Egyptians will part with in order to raise IN HOT WATER BLAME THE VICTIM some extra cash. In addition to the tens Egypt’s Antiquities ministry has gotten Police succeeded in breaking up a of thousands of no-longer-wanted used some bad press lately, particularly after major burglary ring after a phone call cars and mobile phones, Dubizzle has a bumbling museum worker broke off from a distraught housewife whose recently featured listings for live birds, a the beard from King Tutahkhamun’s home had been hit led investigators helium-filled balloon and an empty iconic golden mask and tried to stick it straight to them. The thieves had been whiskey bottle. Perhaps one of the back on with super glue. Now officials successfully breaking into luxury homes weirdest items ever advertised, howev - are trying to figure out how three price - in 6 October and Sheikh Zayed cities er, was a used packet of cigarettes. less, ancient sarcophagi were spotted and making off with their valuables. A The second-hand packet of Marlboro floating in an irrigation canal in Upper few days after the woman’s home was reds still contained 12 smokes, with the Egypt. It’s unclear how the wooden hit, however, she got an even bigger packet “in pristine condition without coffins—which date from Egypt’s shock when police arrested her hus - any scratches, with the thin, transparent Greco-Roman period around the fourth band. Apparently the inept burglars plastic cover,” wrote the seller, who century B.C.—ended up floating by the had accidentally targeted their boss’s had furnished potential buyers with a sleepy village of Auda Basha in Minya. home by mistake. close-up photo of the gently used fags. The artifacts might have been dug up Al Shorouk , Feb. 7 by illicit treasure hunters and tossed into He asked LE 18, a little steep given that the canal, speculated an antiquities offi - the market price for a brand new pack cial, who said the ministry would FIRE SALE was LE 21 at the corner kiosk, though launch an investigation. Two of the sar - Dubizzle, Egypt’s online classified mar - he added he’d be “traveling soon,” cophagi, meanwhile, after being fished ketplace where one can buy second- indicating that he’d take the first best out of the water, were found to contain hand items online, has been known to offer. Sure enough, a few days later, mummies, while the third was empty. feature some strange items. Apparently, the ad was gone. Mada Masr , Feb. 2 there is no limit to the kinds of things Dubizzle.com, Feb. 20

Business Monthly – 84 I March 2015