2020 MAY NOT FOR SALE NOT

GCC’S LIFELINE GCC’S VIRTUAL MARKETING VIRTUAL AMERICA’S $6 TRILLION CANON AMERICA’S CHANGING VENTURE CAPITALISM

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The public and private sectors are mobilizing resources to get ahead of crisis. the of stage next the

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MAY 2020 VOLUME 37 | ISSUE 5

Inside 4 Editor
s Note 6 Viewpoint

10 Regional Focus Preserving GCC wealth With oil prices tumbling, the GCC need to diversify their economies.

12 American Impact Game of compromises The U.S. is rebooting its economy, with painful economic side-effects.

20 Cover Story Stepping up to save lives Local private firms are gearing up to help the government combat the spread of COVID-19.

Cover Design: Nessim N. Hanna

28 Changing World Venturing into the unknown Venture capitalists have a sense of trepidation towards financing new clients.

The Chamber

38 Events

44 Media Lite An irreverent glance at the press

© Copyright Business Monthly 2020. 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.

2• Business Monthly - MAY 2020

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Editor’s Note

Director of Publications & Research Khaled F. Sewelam

Acting Managing Editor Tamer Hafez

The race to open Contributing Editor Kate Durham

ith governments raring to reopen their economies, one thing is clear: Consulting Editor recovery will largely depend on how the rest of the world responds. Bertil G. Peterson That could prove problematic for emerging markets, such as Egypt, which depend on international trade and foreign direct investment. Writers According to data from the central bank, Egypt does business with three major regions: Ola Noureldin Adam Skaria theW United States, EU, and the six Gulf Cooperation Council GCC countries. Worryingly, all are going through disruptive changes that could reshape their cross-border investment Senior Art Director and trade policies. Nessim N. Hanna

The U.S. administration looks increasingly likely to get its way on boosting domestic Senior Graphic Designer investment to expand manufacturing. That could mean fewer dollars for overseas invest- Emy Emile ments and expansion. See American Impact, page 12. Not to mention, the ongoing global oil price crisis doesnt bode well for American oil giants, some of whom are the biggest Graphic Designer Verina Maher investors in Egypt. Meanwhile, to escape the trap of crashing oil prices, the GCC may prioritize economic Advertising & Business Development Director diversification, financing that strategy by sucking back liquidity from projects in the Amany Kassem

MENA region. See Regional Focus, page 10. Advertising Specialist Lastly, the EU is still dealing with the worst of COVID-19, with each member state Lamia Seleit fending for itself. There is even talk about breaking up the bloc, similar to the U.K.s
Brexit last year. Advertising & Ad Traffic Coordinator Rowan Maamoun Egypts government might be well-advised to use this crisis to minimize the countrys dependence on foreign investment and international trade. The cover story page 20 looks Photographers at how both startups and established companies are producing ventilators and personal Karim el Sharnouby Said Abdelmessih protective gear for medical workers that have long been imported. While COVID-19 has been the impetus for that response, it is not unreasonable to expect companies to continue Production Supervisor to replace imports with made-in-Egypt goods after the crisis. Hany Elias For its part, the government might consider policies that prioritize economic resilience, instead of a better business environment based on metrics as the World Banks annual Market Watch Analyst Amr Hussein Elalfy Doing Business Report. Such a switch would require more and faster investment in the state-owned medical system that is bearing the brunt of dealing with COVID-19. Chamber News Contacts Elsewhere, investments should be expanded in hygiene for public places and state- Nada Abdalla, Azza Sherif, owned facilities. Testing, both at borders and within the country, also needs significant Susanne Winkler beefing up to help contain the current health crisis and protect against the next one. Down the road, the government should align its infrastructure with the latest testing and tracing technologies and strategies adopted by other countries. That alignment will be vital for tourism, in particular. That all requires the government to listen to what businesses, big and small, need and effectively respond. With increasingly limited foreign investment, exports, and imports, local businessmen and entrepreneurs are all the government has to reboot the economy. And for the foreseeable future, that will have to be enough. U.S. address: 1615 H Street, NW • Washington, D.C. 20062 TAMER HAFEZ Please forward your comments or suggestions to the Egypt editorial office: Acting Managing Editor 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

@BusinessMonthlyEg @BusinessMonthly @BusinessMonthly

4• Business Monthly - MAY 2020 Sponsored Content

PANTONE 7409 C PANTONE 7732 C C 8 C 88 M 34 M 27 Y 99 Y 100 K 0PrioritizingK 15 the community Al Ahram Beverages has contributed EGP 5.6 million, as part of a private sector cooperation initiative with the Egyptian government in combatting COVID-19.

In its continuous efforts to support Egypt, Al-Ahram Beverages Company (ABC) contributes 5.6 million EGP in several CSR projects to support Egypt in combatting COVID-19 as well as help those negatively impacted within the communities. ABC donated 260,000 liters of ethylic alcohol, 96% concentration to support the Egyptian Health authorities in combatting COVID-19 to the “Consolidated Purchase Authority” to be used in producing and distributing sanitizers for medical and hygiene purposes to help arm our Egypt’s white army. During the first days of COVID-19, ABC had also launched an awareness campaign within the communities where it operates. The campaign included the distribution of hygiene kits among 4,000 families containing antiseptic soap and awareness flyers on how to maintain basic hygiene and how to deal with others to avoid COVID-19 infection and transmission. Awareness posters were also communicated in major areas in various communities. With the occasion of the Holy month of Ramadan, and as customary to ABC, the company distributed 4,000 Ramadan bags among 4,000 families in ABC communities. The bags contain the basic staples needed by any Egyptian family during Ramadan (rice, pasta, oil, pulses, tea, sugar, and dates). This campaign was executed in partnership with Orman Association. On his part, Hans Essaadi, ABC’s Managing Director, shared a word “Social responsibility has always been a cornerstone of ABC and its operations in the Egyptian market and society, and in times of crisis, this responsibility is multiplied. For this reason, we will always continue our support, as a significant private sector player, to continuously provide support to the people of Egypt to fight COVID-19.

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Viewpoint

When a great challenge creates an opportunity to autocorrect

he title of this month�s viewpoint could be de´ja` vu, and it is probably easier said than done. However, usually at a time of crisis, the more challenges individuals and societies face, the more opportunities present themselves to formulate creative solutions. For the past several months, the coronavirus pandemic has caused disruptions around the world, and it is difficult to think of any greater challenge that humanityT has faced in recent times. However, disruption brings advancement in the same manner that challenges bring opportunities. This could be an opportunity to autocorrect and harness an incredibly positive energy to create innovative venues for development and growth for Egypt. There is no doubt that a huge dilemma is in place. For Egypt, the primary issue is how to get the economy going while safeguarding the health of Egyptians, which is the utmost priority. This is a delicate balance, because both elements complement each other. Egypt�s plan to control the impact of COVID-19 will be critical for navigating these difficult times, mitigating the risks, protecting the economy and successfully helping it rebound. It is difficult to predict how the world will look post COVID-19, but it will surely be different. Our journey to the new normal must be cautiously gradual until a vaccine is developed and accessible worldwide. In the meantime, what should be our thought process? How can we prepare for the future? How can we do things better? For starters, we as a nation need to change our mindset and think in a competitive, agile and growth-oriented way that has Egypt�s young human capital at its core. Egypt thus far seems to be supressing the curve and, fingers crossed, might escape the worst of the pandemic. In the coming period, while some countries remain focused on flattening their curves to eliminate the virus, Egypt has a chance to return to business hopefully faster than others. This is not to say that there will not be some economic suffering. That said, capital from around the world will be looking for countries that were less affected by the pandemic, which creates opportunities for countries that can act efficiently and expeditiously to attract them including Egypt. As a repercussion of the current crisis, an economic backlash against China is much anticipated. Corporates will probably pivot away from China as part of their supply chain and will be looking for alternatives, presenting a glorious opportunity for Egypt�s industries and manufacturers. With our diversified economy and skilled, low-cost labor, Egypt has the potential to become one of the primary global manufacturing destinations by providing the right incentives and an enticing legal and regulatory environment. As with any other crisis, there will be winners and there will be losers. If Egypt orients its readiness to take advantage of the current opening, it will be among the winners. The government has an invaluable role to play. While it has already signalled that it will be investing heavily in infrastructure to stimulate the economy�including the information and communication technology needed to accommodate the proliferation in digital transformation�it is equally important that it continues to strongly support the private sector. The disruption caused by the pandemic should push us as a nation to think more creatively. If we can embrace the opportunity that is presenting itself, we have a chance to be a much stronger economy. From a health perspective, it is still too early to go back to normal and we need to be careful; but from an economic perspective, we should remain not just hopeful but optimistic. For now, please #StayHome_StaySafe_StayHealthy_StayConnected. Next month, another viewpoint… SHERIF KAMEL President, AmCham Egypt

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THE NEWSROOM IN BRIEF

Draft budget allocates $108 billion for spending

Egypts draft budget sets public expenditures for fiscal year programs, and EGP 170 billion for the National Organization 2020/2021 at EGP 1.7 trillion $107.8 billion. That is a 63.4 per- for Social Insurance. cent increase in investments to EGP 280.7 billion, according The government is targeting EGP 1.3 trillion in revenue. to Finance Minister Mohamed Maait. Maait said the goal is to reduce the budget deficit to 6.3 The new budget will allocate EGP 34 billion $2.16 billion percent and increase the budget surplus by 2 percent. for salaries, an 11.3 percent increase from the current fiscal The draft set oil prices at $61 a barrel with the exchange rate year. The health sectors budget is EGP 95.7 billion, up 32.4 average from January through March. The government priced percent. oil higher in the budget than current levels to account for a The draft budget contains EGP 100.2 billion to buy goods potential recovery, said the minister. He stressed that current and services and EGP 326.3 billion for subsidies. That includes prices are temporary due to the coronavirus pandemic and EGP 19 billion for social security and the Takaful and Karama that they will go up again when the situation normalizes.

The new Egypt’s drat budget will allocate

•EGP 34 bn for salaries •EGP 95.7 bn for the health sector •EGP 100.2 bn to buy goods and services •EGP 326.3 bn for subsidies •EGP 19 bn for social security and the Takaful and Karama programs •EGP 170 bn for the National Organization for Social Insurance.

IMF predicts a slower-growing economy

The International Monetary Fund IMF expects Egypts GDP The report expects unemployment in Egypt to hit 10.3 growth to be 2 percent this year compared to 5.6 percent in percent this year and 11.6 percent in 2021, after falling to 8.6 2019. All other MENA nations will likely see negative economic percent in 2019. growth. The report further expects the global economy to shrink by Egypts GDP should increase by 2.8 percent in 2021, according 3 percent in 2020, a level worse than the 2008 global financial to the organizations World Economic Outlook report. The in- crisis, due to the coronavirus pandemic. However, it should flation rate outlook is 5.9 percent in 2020 and 8.2 percent in rebound to 5.8 percent in 2021, if backed by policy support. 2021, the report said. Last year, the countrys inflation rate was The IMF emphasized the need for fiscal, monetary, and 13.9 percent. financial market policies aimed at alleviating the impact on Year-on-year inflation would likely reach 6.2 percent in June, businesses and households. On a global scale, the organization the end of the current fiscal year, and 9 percent in June 2021, called for multilateral cooperation to support funding and the report said. In June 2019, the inflation rate was 9.4 percent. healthcare needs, especially for the hardest-hit countries.

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In Brief

Home internet usage nearly doubles

Telecommunication services and internet usage increased significantly from the second week in March through the second week in April, according to the National Tele- com Regulatory Authority NTRA. Home internet usage jumped 87 percent and mobile internet usage 18 percent, according to the report, while web browsing went up 131 percent. The number of peak hours for internet services and applications more than doubled to 15 per day, from noon to 3 a.m., during the second week of April, up from seven during the second week of March. The NTRA report also showed more use of video ap- plications such as TikTok up 151 percent, Netflix 59 per- cent, and YouTube 41 percent. Facebook usage increased 151 percent, Instagram 59 percent, and WhatsApp 34 per- • Home internet usage jumped 87 % • The number of peak hours for internet cent. Online gaming applications shot up 96 percent. • Mobile internet usage 18% services and applications more The NTRA also said international and local voice calls than doubled to 15 per day increased by 15 and 3 percent, respectively.

Fiscal gap reaches EGP 988 billion The Finance Ministry says EGP 988 billion will be needed accounting for nearly 33 percent of this fiscal years expen- next fiscal year to close the fiscal gap, which is 20 percent ditures and 36 percent of last years. more than the EGP 820 billion required in the current fiscal The draft budget expects 9%that as the Central Bank of year. Egypt resumes its monetary easing cycle. Every 100 bps rate That rate of increase is on a par with previous years, and cut will lead to as much as EGP 12 billion in interest savings. the bulk of the gap, nearly EGP 892 billion, will be filled Tax collections are forecast to grow by 12.6 percent through treasury sales. The remaining EGP 96 billion will year-on-year to EGP 964.8 billion, accounting for almost 78 come from Eurobonds and loans from foreign institutions. percent of overall revenues EGP 1.28 trillion. The government strategy calls for continuing a gradual Revenue from customs could fall by 13.9 percent to EGP shift to long-term debt and targets an average tenor of 4.4 44 billion. Government investments are forecast to rise to years by the end of fiscal year 2020/2021. EGP 281 billion, up 33 percent from EGP 211 billion. Egypts debt-servicing bill will be EGP 566 billion, com- Forecasts show that if the government cant contain the pared to EGP 569 billion in this fiscal years projections. COVID-19 outbreak by July, the budget deficit could grow Only EGP 49 billion of the total will go servicing loans from to 7.7 percent of GDP, instead of narrowing to the targeted abroad. 6.3 percent, as revenue tied to business activity could fall by Interest spending is the largest single item in the budget, as much as 25 percent.

EGP 988 bn will be needed next Nearly EGP 892 bn will be filled The remaining EGP 96 bn will come from Eu- fiscal year to close the fiscal gap through treasury sales. robonds and loans from foreign institutions.

Tax collections are forecast to grow by Revenue from customs could fall by 12.6 % year-on-year to EGP 964.8 bn, Government investments are forecast 13.9 % EGP 44 bn accounting for almost 78 % of overall to rise to EGP 281 bn revenues (EGP 1.28 trillion).

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Regional Focus

he discovery of shale gas in 2014 was a wakeup call for the Gulf Cooperation Council GCC : The six nations realized they couldn#t dominate the energy market forever. TGCC governments increased their oil output, which sent prices from an average of $93.60 per barrel in 2014 to $48.70 the following year. While the move served to eliminate new competitors, it also laid bare the fragility of GCC markets. *Between 2007 and 2014, revenue growth stopped, but spend- ing grew at a much faster pace. That led to a severe decrease in savings in the region,+ Tokhir Mirzoev, a senior economist at the IMF in the Middle East and Central Asia department, told the Peterson Institute for International Economics in February. *During the 2014/2015 crisis, oil revenue halved, barely covering spending.+ As a result of that decline, GCC nations published plans to diversify their economies. In 2015, Saudi Arabia announced Saudi Vision 2030, spearheaded by Neom, a 26,000-square-kilometer cross-border industrial city. Kuwait has its New Kuwait Vision 2035, which *emphasizes human capital,+ Minister of Finance Nayef Falah Al-Hajraf told MarketWatch last April. *It#s only through well-equipped people in Kuwait that we will achieve our goal.+ Bahrain and Qatar also have Vision 2030 plans to diversify their economies away from oil, and the UAE is wrapping up Vision 2021, which it announced in 2010 to make the country a regional business hub. However, the emergence of a novel coronavirus in December has thrown a proverbial wrench in those plans, as governments locked-down their economies to control the outbreak. That caused global oil prices to tumble by 71 percent so far this year. *Unlike in 2014/2015, this is a demand shock, not a supply shock that oil exporters could control by agreeing to adjust out- put,+ said Samantha Gross, a fellow at the Cross-Bookings Initiative on Energy and Climate, in February. By mid-April, the IMF forecast GDP across the GCC would contract by 3 percent this year. Jihad Azour, director of the IMF#s Middle East and Central Asia Department, stressed the importance of committing to continue with ongoing reforms. *Short-term ups and downs shouldn#t distract us from the bigger picture,+ he wrote in a February report titled The Future of Oil and Fiscal Sustainability in the GCC Region. *Countries need to adjust to the long term implications now and not wait until they start to happen.+

The world in 2020 If IMF Managing Director Kristalina Georgieva is to be Preserving believed, the coronavirus-induced global economic slow- down will be unlike anything the world has ever seen. *The outlook for global growth for 2020 is negative  a recession at least as bad as the global finan- GCC wealth cial crisis or worse,+ she said in March. That recession is the result of lockdowns The global economic slowdown should push and curfews across the world to curb the GCC countries to rethink their approach to maintaining an affluent lifestyle.

By Tamer Hafez

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Regional Focus

spread of COVID-19. By the time this issue of Business rather than diversification, as a way to preserve the GCC#s Monthly is distributed, the virus will likely have infected nearly wealth. *One example is Khalid al Falih a former energy minis- 4 million people. Closures, whether mandatory or optional, ter in Saudi Arabia and current minister of investment, who affect businesses from family restaurants to VW and Nissan. wanted Saudi firms to process 10 million barrels of oil a day Those still open are crippled by supplier and sales channel dis- into more high-end products,+ he said. *That would make the ruptions. Moreover, air and sea freight have been grounded as Kingdom much more money and develop an ecosystem around governments fear foreign crews would spread the virus. it to increase employment.+ Nearly two-thirds of the world#s population is not driving, flying, Eventually, GCC governments could tax those companies and or burning fuel noted Bloomberg reporter Sheela Tobben in April. products for added income noted Seznec. That has caused an oil oversupply in excess of 20 million barrels a day, said Kirill Tachennikov, director and senior oil analyst at BCS Rooting out obstacles Global Markets, as reported by Reuters in April. That is nearly That change in direction shouldn#t divert attention from long- one-fifth of global production just before the crisis, according to standing issues that require structural reform. *Saudi Vision 2030 Statistica. The last time oil demand was so low was 30 years ago, is a grand plan with a lot in it,+ said Gross. *However, it is mostly according to an article by Bloomberg published in mid-April. moonshot projects that look good on paper. What those plans The situation will likely worsen as Goldman Sachs predicted don#t include are the things that need to happen on the ground. an additional drop of 8 to 9 million barrels a day by the end of There is also a lack of clarity, which puts off many investors.+ April, as reported by Reuters late March. The Economist said in A case in point is that, except for the UAE, GCC countries are April that during the first half of the year, global demand for oil not supporting the growth of private sector businesses outside might decrease more than 20 percent. Meanwhile, a report by the oil sector. *Youths in the GCC that don#t work in oil are used Oil Price, a specialized portal, said oil consumption could be to cushy, well-paying, prestigious government jobs,+ said Gross. down by 30 million barrels a day. Oil output last year averaged 83 *Where will those youths go if the government stops hiring?+ million barrels a day, according to YCharts, an analytics portal. She said GCC governments hoard the best oil and non-oil Weakening demand resulted in oil prices falling from $70 per business opportunities for themselves. *If they want those barrel at the start of the year to less than $20 by mid-April. That reforms to work, they have to pass on some of the best oppor- comes despite the Organization of Oil Exporting Countries tunities to private companies that they don#t have a stake in,+ she OPEC along with Russia and Mexico agreeing in April to cut stressed. output by 9.7 million barrels a day. By press time, OPEC According to Seznec, GCC central banks also must make members are discussing further cuts. lending easier for private firms outside the oil sector. *That For GCC countries, that will mean a significant drop in would attract more FDI, be it more value-added in the oil income, as oil accounts for nearly 83 percent of those industry or outside it,+ he noted. governments# revenue, according to data from Oil Price. Social dimension Preserving the wealth Growing the economy beyond the rising living standards is the The rapid decline in global demand means GCC countries need only way forward as GCC governments can#t easily ask citizens to increase storage capacity immediately to keep costs below for fiscal discipline, according to Seznec. *Since 2007, GCC cit- international prices. *Refineries in many places are now losing izens have started spending more. That spending continued money for every barrel they process, or they have no place to despite the 2014/2015 crash,+ he told PIIE in February. *The store their output,+ said Bjarne Schieldrop, chief commodities majority of the population is under 25 years old and brought up analyst at SEB, to CNBC in April. According to Market Watch, to spend with little consideration of what comes next.+ as of January, storage capacity around the world was 6.7 billion On the social front, GCC governments need to reform taxes, barrels, 63 percent of which was full. That compares to the cur- remove energy and non-energy subsidies as well as umbrella rent excess supply of 20 million barrels a day, which could double handouts. *That will be very difficult to change because it by mid-2020, according to a CNBC article in April. requires a complete rethinking of the possible social impact of Tony Quinn, chief executive of Tankbank International, told making citizens pay more for government services while Reuters the UAE#s Fujairah bunkering and oil hub had reached removing support,+ said Gross. capacity. *If you go back to the beginning of the year, everyone IMF economist Mirzoev believes the GCC faces one of three had built up their stores of low-sulfur fuels for 2020, but then the scenarios. The first is to preserve its wealth through immediate market slowed right down with a lot of stocks still in tanks,+ he disruptive social and economic changes. Another is a gradual said in April. *Most of the terminals in Singapore and the UAE shift, allowing wealth to be cut in half before reforms kick in. had… filled up after Christmas... and they haven#t emptied since.+ The third is to let wealth run out before the transformation Jean-Francois Seznec, an adjunct professor at the School of plans have an impact on society. *The faster they start, the faster Advanced International Studies SAIS at Johns Hopkins they will avoid complicated reforms that become more University, sees processing crude oil into high-end products, complicated as time moves on,+ he said. n

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American Impact

Game of COMPROMISES The largest rescue bill in history may move the United States toward President Trump’s goal of reducing the trade deficit. The side effects, however, could prove painful.

By Tamer Hafez

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American Impact

ince taking office in 2017, U.S. dropping interest rates twice in 12 days to economist to Yahoo Finance in April. President Donald Trump has zero. It also lowered the interest rate for .Just have a look at how long it took to been fixated on how to create banks by 1.5 percent and decreased the unwind from the financial crisis of 2008 jobs for more Americans primar- reserve ratio, which protects banks from and 2009. Now we are adding at a pace ily by instigating a trade war with China loan defaults, for individuals and busi- that is multiples faster., Sin an attempt to bring back manufactur- nesses to zero. According to Federal Reserve ers like Apple, Levi Strauss & Co., Black To keep credit flowing through the sys- Chairman Jerome Powell, those steps & Decker, and Mattel, maker of iconic tem, the Fed announced it would pur- .focus on the near term,, as reported by Barbie dolls. chase unsecured payment obligations as CNBC in mid-April. Economic lockdowns across the world well as buy from lenders short-term loans to limit the spread of COVID-19 will that businesses, banks, and other finan- Looking inward likely accelerate Trump-s plans, as nations cial institutions take to pay daily expens- Onlookers are debating whether that look to insulate themselves from future es. The Fed also announced support for money will be enough to rescue U.S. com- catastrophes by being as self-sufficient as currency swaps for overseas companies panies, despite Powell adopting a .what- possible, regardless of cost. .There will that need dollars to do business with ever it takes, attitude, telling Reuters in be a rethink of how much any country American firms. March: .We really are going to use our wants to be reliant on any other country,, By April, the Fed had a $2.3 trillion tools to do what we need to do here., said Elizabeth Economy, a senior fellow credit line for banks and public-private The uncertainty, however, is how the at the Council on Foreign Relations, to project loans. From that money, about current economic and health crisis would The New York Times in April. .I don-t $600 billion was earmarked for individu- change government and private-sector think fundamentally this is the end of als and privately owned businesses  aka strategies and policies. .As much as I globalization. But this does accelerate the Main Street companies. It also allocated hope we are able to get ordinary econom- type of thinking that has been going on $500 billion to buy state and municipal ic activity back up, that-s just the begin- in the Trump administration, that there bonds. The Fed additionally assigned an ning of our problem,, Adam Tooze, a his- are critical technologies, critical undisclosed amount to buy corporate torian at Columbia University and author resources, reserve manufacturing capaci- bonds of companies whose credit ratings of Crashed, which looked at the long- ty that we want here in the U.S., fall from investment to non-investment term effects of the 2008 crisis, told the First, though, America-s economy grade because of the lockdown. New York Times in April. needs to survive the pandemic. To that The Fed also launched the Paycheck Globalization is a primary concern. For end, Congress signed a $2 trillion direct Protection Program as an incentive for one thing, a business that depends on assistance package and an additional $4 businesses to retain their employees. imports and exports wouldn-t be able to trillion in Federal Reserve lending. Each company could get a maximum of reopen until lockdowns are lifted in all .Liquidity and cash for small business, $10 million at 1 percent interest to cover markets it deals with. .I think companies individuals and the unemployed to keep two months of payroll and overhead are actively talking about resilience,, said this thing the economy going,, said expenses. Restrictions also were lifted on Susan Lund, a partner at McKinsey, to Director of the U.S. National Economic Wells Fargo, the third-biggest U.S. bank, the New York Times in April. .To what Council Larry Kudlow at a press confer- to allow it to lend. extent would companies be willing to sac- ence in March. To stimulate demand, the Fed rifice quarter-to-quarter efficiency for However, coming out of this crisis, the announced in April that taxpayers would resilience over the long term, whether U.S. economy could look very different. receive a $2,000 per month stimulus pay- that-s natural disasters, the climate crisis, .Americans are traditionally the world-s ment for six to 12 months under the pandemics or other shocks?, consumers of last resort. But that-s about Emergency Money for People Act. Cutting international trade ties was evi- to change,, Financial Times columnist Additionally, eligible families would get dent across the world after the 2008 crisis. Rana Foroohar wrote in April. .Even $500 per child for up to three kids. That After continually increasing since 2002, when what the IMF is calling the Great is an upgrade from a one-time payment when it accounted for less than half of the Lockdown- ends and we emerge from the of $1,200 to taxpayers under the world-s economy, international trade has immediate coronavirus crisis, the eco- Community and Regional Economic leveled off at 60 percent of global GDP, nomic ramifications of this moment will Support program implemented in according to World Bank data. .What produce a new age of U.S. austerity., March. typically happens after you get a crisis like .The amounts... are enormous, and it this is people talk about new eras and how Saving the economy just tells you how much support is need- the post-pandemic world will be differ- The Federal Reserve Fed started its ed when the economy is closed down,, ent,, said Ruchir Sharma, chief global stimulus strategy in early March by said Torsten Slok, Deutsche Bank-s chief strategist at Morgan Stanley Investment

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American Impact

Management, in the New York Times. 2013 and fifth-highest since 1920. Question of time .This time I think the trends that were Meanwhile, realizing that business Economic literature differentiates a already in motion before this pandemic won-t be back to normal under a nation- recession from depression based on will be accelerated., al lockdown, U.S. businesses haven-t duration. The former lasts between six been rushing to take advantage of the months to a year while the latter lasts New reality Fed-s stimulus. Robert Vanden Assem, for several years. Additionally, a depres- With so much government money head of developed markets investment- sion sees much higher unemployment going into the U.S. economy  the $6 grade fixed income at PineBridge and a more severe decline in GDP trillion package is nearly a quarter of Investments, told the Financial Times growth. The United States has seen 33 America-s GDP in 2019  experts have that the lowest-rated investment-grade recessions, but only one depression. a catalog of concerns. firms BBB rated have been shying For the U.S. government, pouring so away because they have too much debt. .The current recession will turn into a much money into the economy will like- According to Bloomberg data, by the depression if business closures and lay- ly lead fiscal deficits to rise uncontrol- end of 2019, more than half of invest- offs spread unchecked, changing a tem- lably. .Debt crises may be coming,, the ment-grade firms in the United States porary dip into a total collapse of Economist Intelligence Unit EIU were BBB-rated. demand that derails the economy,, wrote in late March as reported by Foroohar, the Financial Times wrote Yuwa Hedrick-Wong, a chief eco- CNBC. .For now, governments are Columnist, believes the biggest chal- nomics commentator for Forbes Asia. ramping up fiscal spending to fight the lenge facing the U.S. government will be Powell is cautiously hopeful. .My epidemic maintain basic economic putting people back to work. guess is that behavior will change. It architecture and keep workers in their Unemployment benefit applications won-t change quickly. People will jobs. As a result, fiscal deficits will rise have reached 24.6 million since mid- start to go back to the movies, to the- sharply in the coming years., March, according to the Department of aters. They-ll start to travel and That forecast comes after a decade of Labor. That figure may not markedly they-ll gain confidence that it-s OK to rising fiscal deficits. According to improve in the long term as companies do so,, he said in April. .That Trading Economics, America-s budget try to replace workers with machines, process… will certainly be gradual deficit last year was its highest since according to Foroohar. and tentative., n

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Emerging Egypt

Baramoda startup aims for agricultural As Egypt undertakes wholesale measures across key sustainability economic sectors to align with global sustainability standards, pioneering efforts by the private sector are emerging in agriculture. By Business Monthly

he brainchild of Mostafa el cal practices are becoming all but In the post-revolution years, fertiliz- Nabi  a 29-year-old South essential as Egypt grapples with a myr- er prices were increasing. And coupled Valley University graduate in iad of economic, societal, and environ- with natural gas and electricity short- hisT native Qena  Baramoda is a mental problems such as overpopula- ages and outages, as well as the unique local startup that converts tion, water scarcity, pollution, and removal of subsidies, El Nabi ascer- agricultural waste from sugarcane and waste management. tained that the confluence of the other produce into eco-friendly Ventures like Baramoda solve some issues facing the worst-hit farmers was biofertilizers. It claims to be the first of those endemic problems for a societal issue before being an envi- agro-tech startup that develops tai- Egyptian agriculture. However, they ronmental or economic one. lored fertilizers in the MENA region. still face a cumbersome bureaucracy El Nabi and his cohorts came up El Nabi#s vision for the company and legal rigidity that is hampering with the idea of establishing was born of his belief in technology their ability to grow. Baramoda to recycle sugarcane waste and innovation as a way to tackle envi- to produce essential biofertilizers. ronmental and industrial issues. That Thereby dispose of waste bi-products, includes reducing the often-prohibi- Societal problem produce a cheaper and eco-friendly tive costs of farming and enhancing El Nabi recounts during the nascent fertilizer, provide local jobs, and ulti- farmer expertise. It also reduces the stages of setting up Baramoda that a pan- mately improve the quality of life in impact of things like hazardous waste elist in a competition remarked to him to these rural farming regions. and soil erosion. )focus on the real problems in society, Shortly afterward, Nabi and his team Such innovation is necessary given and think about how to save lives.( He managed to secure a top-ten finish in the Egypt#s booming population that has says that that advice remained with him IMKAN incubator and accelerator pro- already surpassed 100 million. to this day, pushing him to solve the prob- gram conducted on behalf of the U.N. Meanwhile, sustainability and ecologi- lems in his hometown of Qena. Industrial Development Organization

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Emerging Egypt

UNIDO, the Japanese Embassy in That is because, with Qena producing El Nabi used it to fund an in-house Cairo and the Ministry of Trade and some 140,000 tons a year, )the waste microbiology research lab to develop Industry. They received commercial and produced after processing this ton- bacteria strains to help improve the technical training in Cairo before being nage is exclusively bought by large quality of their fertilizers. selected as one of three finalists and traders to make bricks,( he explains. being awarded $2,000 in 2015. Wings to fly

Launchpad After their latest success, El Nabi Sugarcane and able By 2016, Baramoda reached another received a call from Khalid Ismail, a Baramoda  which takes its name milestone after El Nabi entered the leading angel investor eager to invest from a Pharaonic term still used to Royal Dutch Shell, called Intelaka, in the startup. That funding allowed denote the month of harvest April meaning )launch( in Arabic. Baramoda to build a factory and scale- when farmers are paid for delivering Intelaka saw El Nabi secure EGP up operational capacity. crops  opened in December 2016 by 5,000 in funding and, more importantly, )We now have an R&D facility with renting land on which waste from sug- an award for )Best Idea in Egypt.( That seven fresh Ph.D. graduates working arcane factories would be collected, brought Baramoda to the attention of on developing new ideas. We are tai- sorted and processed. Mahi el Gazzar, founder of the Gesr loring our fertilizer to the land compo- They developed a prototype fertiliz- Foundation, an incubator program. )She sition, water, and the specific crops it er within months, but after sending it was very interested, and they took us in, is used for,( El Nabi explains. Past to a lab for analysis, the technician helping us to register the business, pro- experiences also helped them develop told them that )regular dirt would viding training, workspace, and financial a modular fertilizer that, according to have been more beneficial as fertilizer support,( says El Nabi. El Nabi, )reduces farming costs and than their product.( Frustrated and While there, they started searching with no viable product or prospect, for other agro waste as sugarcane facto- water consumption.( the five partners ceased operations. ries operate only five months of the year. Later, Shell contacted El Nabi to Soon enough, one of IMKAN orga- )We hired someone in R&D and eventu- participate in a global contest where nizers directed them to a specialist ally found that we could use a variety of they were selected as one of the 50 that tested their sample at the govern- agro-waste such as bananas and toma- best startups in Africa. That success ment#s Institute for Arab Research toes, among others,( El Nabi says. )That increased Baramoda#s exposure, fund- and Studies in Cairo. )The result came helped us grow our clientele.( ing, and production, allowing it to in that we had the highest concentra- In its third competition, Baramoda contract the Nag Hammadi factory in tion of organic components of any fer- reached the finals and took first place Qena to supply the company with tilizer used in Egypt, which was in Hona el Shabab, a TV show where 60,000 tons of waste to recycle per around 55 to 65 percent,( says El Nabi. startups compete for funding. The year. The company also contracted a El Nabi believes that the first lab company#s experience here proved local radish producer to supply 80,000 was either reluctant or deceitful in vital as they secured a total of EGP tons of waste this year, 180,000 tons providing accurate sample results. 600,000 for their success on the show. in 2021, and 250,000 tons in 2022.

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Emerging Egypt

Trash is treasure Baramoda#s factory now employs 39 because the way they calculate credit workers full-time, and it offers two There is a lot of opportunities for scoring is not suited to our business brands of fertilizers. )Our generic fer- Baramoda to expand its supply. )Egypt model. For example, the bank tilizer is priced below average com- has 10 million acres of in-use arable demands either an environmental or land, resulting in 39 million tons of pared to market alternatives at EGP industrial license. To get it, we must agri-waste,( says El Nabi. )Only 10 to 295 per ton, and our customizable fer- be inside an industrial zone.( 15 percent is recycled; the rest is tilizer sells for EGP 400 per ton,( However, there is no law governing burned or left on the land.( Nabi says. companies that recycle waste. Baramoda#s production process Of the 15 companies in Egypt that )Therefore, we are not seen as an eli- takes three months. )We are now recycle waste for standard bio-fertiliz- gible industry,( says El Nabi. As per ers, Baramoda is the only one that has focused on waste in sugar, bananas, the law, if they buy arable land, they its own microbiology laboratory and dates, and tomatoes, among other can#t register it to Baramoda. produces a customizable variant. )We viable fruit or vegetable waste,( says Additionally, they must cultivate it, are constantly working on what is new,( El Nabi. The startup produced 800 not conduct R&D. )We want to oper- says El Nabi. Baramoda has its lab and tons of fertilizer in 2017, its first year of ate legally. But the law completely full-scale operation, 5,000 in 2018, and headquarters in Cairo functioning in tandem with the factory in Qena. prevents us from formalizing our 9,188 in 2019. The forecast for 2020 is business,( says El Nabi 50,000 tons. Baramoda also recycled Wasting success? Looking to the near future, El Nabi 15,000 tons of waste in January alone, cites the possibility of Baramoda as much as in all of 2019. Despite the success, Baramoda faces securing further funding from abroad, In 2019, Baramoda had 87 clients in crippling challenges, El Nabi says. )We where similar business models are Upper Egypt, while this year, it has don#t get support from the govern- more prevalent and prioritized. Also, supplied 120 clients in the region to ment despite the importance of our Baramoda#s model )can easily be date. It now also has contracts to pro- work to the future of agriculture in vide fertilizers to NGOs, including Egypt,( he says. applied outside of Egypt.( Misr el Kheir. That is crippling the company#s Nonetheless, El Nabi remains cau- To achieve those production figures, growth potential, given that its cus- tiously optimistic and is not dissuaded by Baramoda processed 2,000 tons of fer- tomizable fertilizers would be a boon the lack of official oversight and support. tilizer in 2017, 9,000 in 2018, and 15,000 for Egyptian farmers. One such prob- )The idea of investing in agro-waste is in 2019, with a projected 140,000 tons lem is that Baramoda can#t legally buy still largely unexplored, but we have a in 2020. )We have reduced costs by 20 land for research, and must, therefore, strong opportunity to expand,( he says. percent and increased our productivity rent it. )Although the business model is very by 15 percent and water-saving by 30 Another is securing bank funding. robust, Baramoda can#t expand to meet percent,( he says. )We can#t access banks for loans opportunities.( n

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Cover Story

Stepping up To save lives Businesses show their hearts and empathy in the war against COVID-19 as they donate cash, supplies and equipment, and work to develop protective gear, diagnostics, and ultimately, vaccines. By Ola Noureldin

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WARNING SIGNS: COVID-19 INFECTIONS WILL LIKELY INCREASE AS PEOPLE CONTINUE TO VISIT BRICKS AND MORTAR SHOPS.

ptimism might be in short supply as the coron- Made in Egypt avirus pandemic grows deadlier by the day, taking The number of reported coronavirus cases in Egypt passed thousands of lives around the world and upending daily life. 4,000 on April 24. According to Cabinet spokesman Nader But one bright spot is the speed with which the business Saad, there are 3,000 to 4,000 ventilators in quarantine hospi- communityO has begun tackling the problem. As the Egyptian tals and 11,000 ICU beds nationwide. Though no more than 10 government tries to contain the spread of COVID-19 at every percent of cases need ventilators, according to Health Minister turn, the public and private sectors rolled out promising initia- Hala Zayed, initiatives to produce them locally have emerged to tives and adopted new technologies that could help mitigate the help cope with any larger outbreak. Tanafoss Breathing is the pandemic and save lives. most ambitious project, with a first-phase goal of producing The statistics are grim. In less than three months, the virus 5,000 units. has surged from Wuhan, China, to infect more than 750,000 *The idea was triggered following the announcement by people across 203 countries, according to official counts. Many more people may have the virus and do not know it. More than medical device-maker Medtronic that it would publicly share 280,697 people have died as of the morning of May 10. design specifications for one of its ventilators,+ Tanafoss The rapid spread of the virus has led to a scarcity of medical spokesperson Robert Boutros told state-run Al-Ahram. In late supplies, especially ventilators needed for the critically ill as well March, Medtronic posted specs for its basic PB 560 ventilator as personal protective equipment PPE supply gaps. Seven *to enable participants across industries to evaluate options for countries account for 70 percent of total ventilator exports, rapid ventilator manufacturing to help doctors and patients according to the World Bank. dealing with COVID-19.+ Thus, many nations including exporters of those devices After studying Medtronics device and the feasibility of face a daunting shortage. Italy!s government asked the country!s producing it in Egypt, Boutrous said, *our work is divided into only domestic manufacturer of ventilators, Siare Engineering, to three specializations: electronics, mechanical and software. A more than triple its monthly production from 160 machines to 500 and ordered to reserve them for domestic use, according to large percentage of components are available locally and Reuters. Previously, the company exported 90 percent of its factories have already begun producing them, especially the ventilators. hardware, such as boards, screens, valves and hoses.+ Fiat Chrysler Automobiles joined forces with Siare to provide Some components cannot be found in the Egyptian market or additional resources and know-how to help scale up production. have been discontinued, he noted, but there are options. *A large

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HIGH STAKES: RISKING INFECTION, MANY STILL PREFER FACE-TO-FACE INTERACTIONS OVER USING A WEBSITE AT HOME.

number of electronic engineers are working on alternatives, as Tanafoss is developing a fourth-generation ventilator are software engineers because the installation of an alternative Medtronic!s device , while other initiatives aim for second and to any of the components would require a modification of the third-generation ventilators that need to be manually adjusted device!s software,+ said Boutros. and monitored. *To simplify, they are more suitable for patients Another challenge, he added, is some components depend on with mild coronavirus symptoms, while the one we!re working sophisticated technology not available in Egypt. *We don!t have on is for intensive care units.+ time to experiment. However, we may resort to importing a Medhat Nafei, chairman of the state-run Holding Company piece or two of these components, such as the embedded con- for Metallurgical Industries, proposed that his company handle troller, to speed up our production,+ said Boutrous. *We are the first stages of production, including a prototype ventilator. open to all kinds of cooperation with all concerned bodies, uni- *The plan is to shift toward a process based on assembly rather versities, research institutions and professors. We frequently than full manufacturing, because full manufacturing may require publish the required specializations in which we need volunteers a transition that could take more than 10 years,+ Nafei says, and we have been amazed by the number of applications.+ adding he approaches the project from a risk management Hani Dahi, head of the Egyptian Engineers Syndicate, called perspective as Egypt!s patient count is still comparatively low. on the organization!s electrical and mechanical divisions to sup- port the initiative with all their human resources, according to Glass half-full Boutros. As the limits of crisis-management tools become clear, it is When it comes to mass production of a prototype ventilator increasingly apparent the private sector must contribute. There!s in Egypt, there are three possibilities: military factories, the a reason the White House asked Walmart to help with Arab Organization for Industrialization, and the Al-Arabi drive-through testing and Downing Street wants manufacturers Factory, he said. to shift production lines to building ventilators. The Holding Company for Metallurgical Industries, Zewail *The role of the private sector is vital, and we constantly City of Science and Technology, and Cairo University also have call for private sector collaboration to offer even the smallest COVID-19 initiatives. level of support to assist government efforts in fighting the *Cooperation is underway among all the initiatives, but our pandemic,+ says Heba El Sewedy, founder and chair of Ahl Masr working concept is different,+ said Boutros, explaining that Foundation.

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Although the Ahl Masr Foundation specializes in treatment of burn victims, El Sewedy says they are now focused on fighting the coronavirus with the help of many private entities. The foundation is cooperating with companies in diverse sectors including finance, food and beverage, real estate, oil and gas, and telecommunications. *We !ve provided a sizable number of ventilators of various types and modalities, complete ICU solutions and thousands of pieces of PPE for medical personnel,+ El Sewedy says. Upon launching its initiative Ahl Masr Ad Al Masoulia Up to the Challenge, the foundation signed a memorandum of under- standing with the Supreme Council of Universities to provide quarantine hospitals with imported ventilators, monitors, gloves, face shields and gowns. Under the supervision of the Health Ministry, the foundation equipped three of its buildings with a total of 500 beds to serve as quarantine hospitals. *We also have partnered with Egyptian Fashion designers Sara Onsi and Vivian Moawad to reopen their workshops to produce blankets and bedsheets,+ El Sewedy adds. In late April, Giza Systems Education Foundation GSEF launched a face-mask production line in a10th of Ramadan fac- tory as part of Ahl Masr!s initiative. Production capacity can reach 10,000 masks per day. More than 27,000 face masks have been distributed to 140 hospitals, including El Qasr El Ainy, El Demerdash, Abu El Rish, Ain Shams University Hospital, Air Forces Specialized Hospital and others in Beni Suef and Minya governorates, as of May 3. Shehab El Nawawi, founder and chairman at GSEF, said that since the outbreak began the foundation team has brainstormed with the international community to generate solutions through digital manufacturing technologies such as 3D printing and laser cutting. However, Al-Nawawi says that due to local needs and high demand, GSEF has maxi- mized production of masks that have received positive responses from doctors and hospitals.

Answering the calls The business community is working to protect healthcare GE Healthcare also has rolled out a software application workers as well as maintain continuity of operations while using artificial intelligence to manage patient load and max- aiming to help patients. imize resources such as ICUs, lab orders, test results and General Electric GE Healthcare has boosted both ventilators. Working in the background, algorithms devel- capacity and output of equipment including CT scan oped by GE Healthcare gather and analyze millions of data machines, ultrasound devices, mobile X-ray systems, patient points generated by hospitals and turn them into real-time monitors and ventilators. All of which are essential in the operational insights, she explains. The software is being diagnosis and treatment of COVID-19 patients says GE used at a regional level to help metropolitan areas pool bed Executive Director Mai Abdel Halim. capacity across health systems. A few weeks after the WHO declared a global pandemic, GE *We also are working with our partners in the government... Healthcare and Ford Motor Co. announced they would partner and the Unified Procurement Authority on the timely provision to scale up production of ventilators. Ford provides technical of ventilators,+ Abdel Halim says. *There is a massive demand and production expertise with the goal of manufacturing a for these critical systems around the world, so we!re working simplified design of GE Healthcare!s existing ventilator and hard to leverage our global supply chain to serve the market producing 50,000 units within 100 days, says Abdel Halim. from different origins.+

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RAISING DEFENSES: MANY NGOS IMPORT AND DISTRIBUTE PROTECTIVE GEAR TO HOSPITALS AND THOSE WHO NEED IT.

Meanwhile, the company!s field engineers work with clinics continuously working on an uninterrupted delivery supply and hospitals across the country to identify, repair and maintain chain of CT scanners, ultrasound devices, X-ray equipment ventilators that are out of service. *Every machine matters and and blood gas analyzers. can save lives,+ says Abdel Halim. +Across 26 public hospitals, we However, he believes proactive virus testing drives by the provide free training for staff so they!re able to complete level government, especially in hotspots, would go a long way one troubleshooting with medical devices to quickly address toward curtailing the spread of the virus. *Diagnostic test- issues with equipment on the spot and focus on what matters ing is strongly recommended by the WHO as an important most: patients.+ tool in the fight to slow down and reduce the spread of the Meanwhile, Michael Schmermer, managing director at virus,+ Schmermer says. *Tests allow us to identify infected Siemens Healthineers Egypt, says the company is taking individuals, qualify their isolation, and assist in tracing and all necessary precautions to ensure full on-site service quarantining their contacts. It!s a basic first step, which also capacity of technicians and specialists. *We are working helps allocate medical resources and staff more efficiently.+ relentlessly on accelerating and facilitating COVID-19 He adds the company is working with healthcare providers diagnostics, for example, by providing CT scanners in con- and pursuing innovative ways to deliver effective testing for tainers for mobile usage,+ he says, adding the company is COVID-19 clinicians and patients as quickly as possible.

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STANDING IN LINE: BUSINESSES DO THEIR BEST TO PROTECT EGYPT FROM THE WIDESPREAD OF COVID-19. HOWEVER, COMMON BEHAVIOURS COULD ANNUL THEIR EFFORTS.

Siemens Healthineers has released its support as responsible individuals and By partnering with Ahl Masr Fast Track Diagnostics FTD SARS- corporates,+ says Ahmed Shalaby, CEO of Foundation, Tatweer Misr also provides CoV-2 assay test kit used to aid in the Tatweer Misr. More importantly, Shalaby government and educational hospitals diagnosis of infections of the SARS-CoV- says, is acknowledging the impact on the with ventilators, monitors, syringe 2 virus that causes COVID-19, according informal sector, as many families lost their pumps and PPE for doctors and nurses. to Schmermer. The assay is designed to daily income due to restrictions imposed Meanwhile, Palm Hills Developments identify the virus in less than three hours, on movements and gatherings. converted a 200-room tourist establish- he says, and is expected to be released for To support the community, Tatweer ment to a quarantine facility, says WHO and FDA by mid-May. Misr launched the campaign Benbny Chairman Yasseen Mansour. It will house Siemens Healthineers is working on a Hayah-Building Life, to supply houses in those working on the frontline of the SARS-CoV-2 serology assay to detect cer- the village of Kafr Abdel Khalek in COVID-19 crisis, including doctors and tain antibodies in the blood that potential- Minya with water systems and electricity service staff, in addition to patients and ly might reveal if people had COVID-19 which enables residents to stay home, quarantined individuals. As of late April, even if they were asymptomatic or never maintain social distancing and wash there had been 71 cases identified. In diagnosed with the disease, he explains. hands regularly. *We realized that the addition, Mansour Group donated EGP The test is supposed to be released in the lower socioeconomic class in Egypt 5 million to the Ministry of Health!s U.S. under Emergency Authorization would be incapable of abiding by WHO laboratory facilities for research and Approval EUA by end of May. guidelines as they lacked basic sanitary operating expenses. facilities,+ Shalaby says. *Egypt, like all countries across the Go-getters Furthermore, the company works globe, is currently facing a crisis, one that The coronavirus pandemic is leaving no closely with families in Wadi El Natrun requires everyone to unite in order to sector untouched, as even real estate to ensure that those who lost their overcome,+ says Mansour. *We must all developers are joining the fight. income can sustain their families. So far, do our part to help our country and *Our white army! cannot fight this bat- Tatweer Misr has spent EGP 5 million to countrymen through adhering to local tle on its own and definitely needs our support more than 100 families. regulations, compassion and tolerance.+

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SAVING LIVES: GOVERNMENTS NEED THE PRIVATE SECTOR TO BUILD VENTILATORS TO COPE WITH THE RISING NUMBER OF NEW COVID-19 CASES.

Hyde Park Developments has provid- successfully delivered the first batch of According to the U.S. Centers for ed three university hospitals with 2,000 equipment to El Negela Central Hospital Disease Control and Prevention, cloth COVID-19 antibodies IgM/IgG rapid in Marsa Matrouh, El Agamy General masks can substantially decrease the tests. In collaboration with the ministries Hospital in Alexandria and others. spread of the disease, especially droplet of higher education and scientific *While we all should apply social dis- and airborne modes of transmission. The research, and social solidarity, as well as tancing, we should remain more connect- masks produced are reusable to minimize Misr El Kheir Foundation, HPD provid- ed than ever before,+ says Amr Soliman, the environmental impact. ed the National Cancer Institute with CEO at Mountain View. *No one can face *I believe we are working really hard to 1,000 tests, Abul Reesh Mounira a pandemic single-handedly and no one make the most of this pause in our usual Children!s Hospital with 520 tests, and El will remain far from the ripple effects.+ everyday lives and taking things step by Demerdash hospital with 480 tests, step and day by day,+ says El Nawawy. according to a company statement. Every thought counts *We never expected to target the Mountain View, on the other hand, While much of the response has been Egyptian market this soon as we were leveraged its unique capabilities by offer- from large corporations, smaller busi- focused on the U.K. and Europe.+ ing an out-of-the-box experience to resi- nesses have pitched in as well, though El Nawawy also signed an agreement dents. Since the start of the quarantine, they often have less experience and fewer with *The Lunch Box Egypt,+ which will the company has been sending families resources. include the protective face masks in *stay weekly kits that include board games and Scarabaeus Sacer, an ethical streetwear safe+ boxes for mothers and children. do-it-yourself meals. This is in addition to brand, dedicated its entire supply chain *We also support an initiative called an initiative launched in cooperation to making organic cotton masks and sell- Ben7ayikom We Salute You by donating with Misr El Kheir Foundation March ing them at affordable prices, says Aly El a percentage of our masks to medical called *Protect Those Who Protect Us+ Nawawy, the company!s co-founder. *The professionals and their families as a ges- where the company dedicated EGP 4 goal is to leave medical-grade masks for ture of appreciation and deep respect for million to supply PPE to medical those who desperately need them at hos- their hard work and selflessness,+ he professionals. The initiative has already pitals and on the frontlines,+ he says. concludes. n

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The Changing World

Venturing into the unknown

For investors who finance risky fast-growing firms, the global outbreak of COVID-19 will force them to rethink their strategies and priorities. By Tamer Hafez

ith economies collapsing tal is also drying up. That)s creating win- The list includes Facebook, Twitter and worldwide, Airbnb raised dows for private equity funds to invest Linkedin. 1If these venture capitalists $1 billion from Silver Lake under more favorable conditions.2 got lucky, they would have one, two, or Wand Sixth Street Partners in April. Accordingly, venture capitalists need to three of these moonshot successes in However, the online lodging portal had change how they approach deals. For their fund portfolio. This would then to sweeten the deal with a 10 percent one, the crisis is due to governments give them the return on investment they interest rate and guarantee investors telling businesses to shut down, not bad needed to fall in line with their could sell their stakes at a fixed price. investment decisions that venture capi- investors) expectations. That)s it,2 said And those investors valued Airbnb at talists can fix. 1In downturns, revenue Tristan Pollock, entrepreneur in resi- half what it had been in 2017 when the and cash levels always fall faster than dence at 500 Startups, a global incuba- company first raised cash. 1Such gener- expenses. In some ways, business mir- tor and venture capitalist firm, in ous terms by Airbnb would be unimag- rors biology,2 according to a Sequoia Entrepreneur magazine in March. inable under normal conditions,2 Capital release in March. 1As Darwin For a company, working with a venture Bloomberg Opinion columnist Alex surmised, those who survive are not the capitalist means it would get more value Webb wrote in the Economic Times in strongest or the most intelligent, but than it would from an angel and other April. the most adaptable to change.)2 early-stage investors. 1If changing the Webb noted such a trend would world and likely generating enormous dominate the global venture capital Financing risk wealth is the stuff entrepreneurial scene in 2020 and beyond. 1As equity Venture capital, which funds promising dreams are made of, venture capital usu- markets tumble, private market valua- yet risky projects and exits them in ally provides the financial fuel for realiz- tions are also falling,2 he said. 1And as three years, has paved the way for some ing those dreams,2 Paul Jones, director companies need cash to see themselves of the world)s best-known businesses to and investment advisor for Angels on through the crisis, ready access to capi- become multibillion-dollar enterprises. the Water, wrote to Lexology in March.

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The Changing World

Nevertheless, the relationship between a �negative� or �somewhat negative� out- �Funds may need to borrow more investors and businesses that receive look on early-stage investment activity. through subscription lines and other funds can be quite sensitive as venture That will likely last �one to two years,� forms of debt during these times,� he capitalists seek the best value for their respondents said, as reported by NAS- told Ostler in March. money. �They think in terms of making DAQ in April. That could give rise to a liquidity tenfold on each investment,� said Despite that dim outlook, more than crunch as banks, and other international Jones. �That�s because �they� are lucky half of respondents were not sure what financing institutions may not be open if two in 10 investments actually deliver would be a prudent strategy. Meanwhile, to lending at regular rates during the the goods.� 26 percent said they would continue downturn. In April, the IMF said this Business owners, on the other hand, their pre-coronavirus plans for this year. crisis would be more severe than the want to retain control of their compa- The survey also identified investment 2008 crash while offering no specific nies and might be satisfied with lower priorities as healthcare �46 percent�, predictions of its length or severity. returns. �It�s probably the only business remote work solutions �42 percent�, where offering an investor a surefire logistics �32 percent�, and productivity Deals for thought quadrupling return is a good way to get software �28 percent�. The deals venture capitalists are likely turned down,� said Jones. Regardless of their views and confu- to consider this year are those whose sion over what to do next, survey respon- funds were raised before the global lock- Slowing down dents stressed that portfolio companies down. �We would expect investors will The coronavirus-induced recession, should cut costs. They also will need to continue to deploy capital... but perhaps however, may push venture capitalists to adjust their business models to survive if they will be a bit more reserved and cau- take their time to close deals. �Instead income stagnates, NASDAQ reported. tious,� Sean Day, a researcher at Rock of giving people three to four months, On the ground, a significant change Health, told Fierce Healthcare. �At the moment, we are not expecting a sharp you may need to give more time, five to going forward is that venture capitalists contraction in the funding environ- six months, depending on how long this may find it harder to exit their portfolio ment. We expect the moderation that�s lasts,� Chua Kee Lock, CEO of Vertex companies as per their pre-coronavirus plans. �There�s a diminished outlook been going on the past 12 to 18 months Holdings, a subsidiary of Singapore to simply continue.� state investor Temasek, told Arab News for... initial public offerings in 2020,� according to Heather Landi, senior edi- Deals that go through could heavily in March. tor for Health IT, in Fierce Healthcare in favor venture capitalists as the market is Venture capitalists might even sus- April. high-risk for them. At the same time, pend additional investments in the next companies seeking such funding might Selling to private investors and invest- few months. �Despite their vast years of need cash urgently to survive. Like ment firms also is not likely to happen as experience, neither these investors nor Airbnb, company owners might find investors liquidate assets to stock up on themselves offering extra incentives, anyone within the startup ecosystem for cash. �On the eve of President Trump such as exit guarantees with no obliga- that matter �has� ever dealt with some- declaring COVID-19 a national emer- tion to reinvest in future rounds. They thing of these dimensions,� wrote gency, the New York Times reported might even guarantee a fixed minimum Mariana Lo´pez, a researcher for something weird happened on Wall Contxto, a venture capital news portal valuation for the company and dividend Street as traders ran for cash,� said payments, David Felman, corporate and in South America. �Naturally, that Henryk A. Kowalczyk, founder and tax group co-chair at the National Law means they�ll be proceeding with greater manager at Virtual Agora. �They were Review, said in an April blog. Another caution in the coming months. In sum, selling everything they could �...� a week concession could be beefed-up over- expect funding to slow down because later, in its headline, the Wall Street sight over business decisions. markets are far too unstable to offer a Journal proclaimed: Wild rush for cash Regardless of the peculiarities of reliable picture for investing.� rattles markets.� those deals, venture capital investment Chima Ubani, a corporate partner at will likely slow down considerably in New strategies Osler, Hoskin & Harcourt LLP law firm, 2020. �Any disaster or shock to public 500 Startups, an early-stage venture believes venture capitalists likely will confidence distracts and worries people, fund and accelerator based in San have to renegotiate deals with their port- including those with checkbooks, and Francisco, surveyed 139 venture capital- folio companies to extend their commit- this is no exception,� Matthew Ocko, ists about their vision in the wake of the ment periods in anticipation of a slowing co-founder of the Venture capital firm coronavirus pandemic, which the IMF pace of new contracts. DCVC, said in an email to Arab News says could shrink global GDP as much Portfolio companies, on the other in March. �Good startups will continue as 6 percent. hand, probably will need more money to be funded, but there may be delays Nearly seven of 10 surveyed had either than anticipated to survive, said Ubani. and friction.� n

Business Monthly - MAY 2020 •29 At A Glance.qxp_Layout 1 5/12/20 3:18 PM Page 2

At a Glance

In Partnership with

DECODING THE ECONOMICS OF LOWER OIL PRICES

Brent global spot price (dollars per barrel, FoB)

Iraq Asian Global Arab COVID-19: 140 invades Financial Financial Spring Lower 120 Kuwait Crisis Crisis Demand, 100 OPEC+ Price War 80 & overwhelmed storage capacity 60

40 U.S. Shale 20 Boom 0 2020

Source: Energy Information Administration (EIA) based on daily prices & The Economist May 20, 1987 20, May 1988 20, May 1989 20, May 1990 20, May 1991 20, May 1992 20, May 1993 20, May 1994 20, May 1995 20, May 1996 20, May 1997 20, May 1998 20, May 1999 20, May 2000 20, May 2001 20, May 2002 20, May 2003 20, May 2004 20, May 2005 20, May 2006 20, May 2007 20, May 2008 20, May 2009 20, May 2010 20, May 2011 20, May 2012 20, May 2013 20, May 2014 20, May 2015 20, May 2016 20, May 2017 20, May 2018 20, May 2019 20, May

Crude oil production: changing dynamics Largest 10 Producers in 2019 (in Million barrels per day)

1. United States 6. Iraq 10. Kuwait 9. Iran 19.51 4.74 2.94 3.19 3. Russia 11.49 Booming U.S. shale oil produc�on helped the United States surpass Saudi Arabia & Russia to become the world's 4. Canada 5. China top oil producer in 2018 5.50 4.89 and 2019. 7. UAE 4.01

8. Brazil 2. KSA 3.67 11.81 Source: Energy Information Administration (EIA)

Global price war: what is going on?

March 5, 2020 March 6, 2020 March 7, 2020 April 12, 2020 OPEC voted in favor of Russia ini�ally rejected Saudi Arabia slashed its OPEC and allies finally agreed decreasing produc�on by OPEC’s proposal, oil prices by USD 4- USD 8 to reduce output by 9.7 mn an addi�onal 1.5 million arguing that it was per barrel as it reportedly barrels per day (bpd) for May barrels per day (b/d) un�l “too early” to assess looked to ramp up its and June following pressure June 30th 2020 to temper the impact. produc�on in an a�empt from the U.S. However, the adverse impact of the to put Russia under pressure the cut was not enough COVID-19 on the global oil and recapture market share. to ramp up prices. demand & to support prices.

30• Business Monthly - MAY 2020 At A Glance.qxp_Layout 1 5/12/20 3:18 PM Page 3

At a Glance

Oil & Gas in the Egyptian economy

48.3 mn tons 34.6 mn tons Egypt’s produc�on of Egypt’s produc�on of Natural Gas in 2018/19 Crude Oil, Condensates (Consump�on: 46.2 mn tons) & Butane in 2018/19 (Consump�on: 31 mn tons)

41% Increase in Natural Gas produc�on over the past two fiscal years EGP 53 bn thanks to new Gas discoveries Egypt’s oil subsidy bill in 2019/20 budget compared to • 2.5% growth in O&G EGP 85 bn in 2018/19 sector in Q1 2019/20 compared to 11.6% in Q1 2018/19 (Base effect) • 10.2% Share in GDP in FY 2018/19

0.2% Percentage of employed persons in Egypt’s mining USD 11.6 bn sector in Q2 2019 Egypt’s oil & gas exports in 2018/19 (Imports: USD 11.5 bn) USD 3.6 bn Egypt’s net oil sector FDIs* in 2018/19 (61% of total) *Foreign Direct Investments Source: Central Bank of Egypt & CAPMAS What do lower oil prices mean for egypt? According to the U.S. Energy Informa�on Administra�on (EIA)*, Brent crude oil prices are projected to average USD 23 per barrel in Q2 2020 and USD 30 per barrel during H2 before rising to USD 46 per barrel in 2021 as declining global oil inventories put upward pressure on prices. In the short term, this means the following:

Possibly Decline in oil Easing Marginal oil lower subsidy bill pressure trade deficit remi�ances (lower Gov’t on infla�on of USD 0.4 bn from GCC spending) in 2020** in 2019/20*** & oil FDIs

*April 2020 Forecast. **Given lower global oil prices and relatively lower aggregate demand, absent major shocks in supply chains. ***According to Dcode EFC’s projections; compared to a marginal surplus of USD 8 mn in FY 2018/19.

Business Monthly - MAY 2020 •31 Market Watch.qxp_Layout 1 5/12/20 3:50 PM Page 2

MARKET WATCH Stock Analysis

A volatile month ending on a positive note he period from March 15 to April 15 was as volatile Elsewhere, El-Arabia Engineering Industries EEII, which is as every other stock market around the world. EGX majority-owned by Arab Moltaqa Investments AMIA, saw 30 only added 1.9 percent to 10,342.13, but the jour- its stock jump 48.5 percent to EGP7.75. Late April, AMIA said Tney was rocky. Within the first four trading days of the it reduced its stake in EEII from 55.87 percent to 50.77 percent. period, the market bellwether tumbled 20 percent to 8,113.82 EEII was trading at 20 times TTM earnings. Meanwhile, before recovering in the following days to a high of AMIA added 28.4 percent to EGP12.49. 10,498.24, 29 percent higher off its one-month low. That is Losers, meanwhile, included large-cap names, including a reflection of the mixed sentiment investors have. Advances Sinai Cement SCEM down 28 percent to EGP 4.35, Egyp- outnumbered declines during the period by a ratio of less tian Satellite EGSA down 28 percent to USD 3.62, than 2 to 1. Meanwhile, EGX 70 added 7.5 percent to Arabian Food Industries DOMT down 27.5 percent to 1,091.90. Ironically, the wider EGX 100 index was almost EGP 5.37, and MM Group MTIE down 26 percent to flat for the period, as market indices continue to diverge. EGP 6.65. Generally speaking, large-cap stocks have borne Top performers were mostly small-cap stocks. Stock prices the brunt of foreign investors selling off the market at the of Egyptian for Developing Building Materials EDBM, outset of the COVID-19 crisis. known as Lift Slab, doubled from EGP 1.08 to EGP 2.15 after With first-quarter results season upon us, investors will not the company s shareholders agreed to increase its capital by likely pay attention because they will not reflect the full impact 150 percent or EGP 84.2 million through a rights issue at a of the COVID-19 outbreak. Second-quarter, and possibly par value of EGP 1.24. EDBM is trading at 27 times, trailing third-quarter, earnings should give investors more insights as twelve months TTM earnings. Also, Medical Packaging to how damaging the crisis has been. Until then, the market Co. MEPA saw its stock jump 53.6 percent to EGP 1.05 will likely trend sideways with a few stocks here and there, mak- after the company said it would increase its capital by 7.8 ing the headlines on company-specific catalysts. But when the percent or EGP 5 million through a rights issue at a par value dust settles, foreign investors will probably be the ones bidding of EGP 1. MEPA is trading at 22 times TTM earnings. the market higher again. It s just a matter of when not if.

Speed Medical (SPMD)

2.59 Speed Medical s SPMD story began over a year ago. 2.55 2.56 2.52 2.46 The lab operator went public mid-April 2019 at a val- 2.45 2.46 2.5 2.44 2.42 uation of EGP 185.6 million and was listed on NileX, the 2.36

small-cap exchange. Fast forward one year, the company 2.25 is valued at EGP 892 million. Since then, the stock is up 2.15 a staggering 380 percent on an adjusted basis over one 2.05 year. The company, which is looking to operate a hospi- 1.95 1.91 tal in East Cairo, is looking to move to the EGX main 1.89 1.87 exchange. During the reporting period, the stock was 1.83 1.81 1.82 1.8 1.82 up 30.9 percent at EGP 2.50, with 67 million shares

4/1/20 4/3/20 4/5/20 4/7/20 changing hands worth some EGP 143 million. 3/16/20 3/18/20 3/20/20 3/22/20 3/24/20 3/26/20 3/28/20 3/30/20 4/9/20 4/11/20 4/13/20 4/15/20

32• Business Monthly - MAY 2020 Market Watch.qxp_Layout 1 5/12/20 3:50 PM Page 3

Capital Markets

Egyptian price indices - EGX 30

10458.16 10321.97 10342.13 10353.72 10047.44 10237.47 10095.57 9865.67 9912.98

9750.66 9840.62 9760.18 9770.48 9593.94 9428.94 9455.38 9521.43 9446.99 9424.89 9201.65 9205.58 9272.88

8756.7

4/1/20 4/3/20 4/5/20 4/7/20 3/16/20 3/18/20 3/20/20 3/22/20 3/24/20 3/26/20 3/28/20 3/30/20 4/9/20 4/11/20 3/13/20 3/15/20

Egyptian price indices - EGX 70

1091.9 1086.91 1067.15 1047.82 1048.1 1034.78 1041.22 994.95 995.86 1002.25 978.09 9428.94 959.42 986.21 981.16 986.27 930.11 905.15 894.05 904.75 869.91 840.47 843.35

4/1/20 4/3/20 4/5/20 4/7/20 3/16/20 3/18/20 3/20/20 3/22/20 3/24/20 3/26/20 3/28/20 3/30/20 4/9/20 4/11/20 3/13/20 3/15/20

Egyptian price indices - NileX

728.37 723.85 721.11 715.99 713.24 704.27 706.72 702.42 713.82 701.38 686.07 696.31 665.97

646.33

626.48

598.72 587.92 592.42 583.65

585.91 582.06 585.31

4/1/20 4/3/20 4/5/20 4/7/20 3/16/20 3/18/20 3/20/20 3/22/20 3/24/20 3/26/20 3/28/20 3/30/20 4/9/20 4/11/20 3/13/20 3/15/20

Business Monthly - MAY 2020 •33 The high life.qxp_eLife.qxd 5/12/20 4:19 PM Page 1

The High Life

Trends, tips and tech in Digital marketing For businesses around the world scrambling to cope with the COVID-19 pandemic, digital marketing has emerged as one of their best defenses.superfoods.

By Adam Skaria

ith public safety the priority in these trying slides into a global recession is mainly contingent on how times, commerce has taken a back seat as com- businesses react. One of their biggest challenges is how to panies grapple with myriad issues, from work-at- reach consumers. homeW policies and layoffs to suspension of operations and In the past, billboards, sponsoring events, and other out- outright shuttering. door advertising opportunities were great opportunities to A key concern for businesses is how to respond to a new increase exposure to potential consumers. However, with reality that threatens to change the face of customer rela- large gatherings such as sports events, concerts, and business tions long after the pandemic dissipates with the prospect of conventions canceled, using the internet to advertise prod- people spending more time at home. ucts has become a logical pivot for many businesses. Such a shift in behavior should be a significant determi- While digital marketing has been around a while, the nant of how companies might conduct business. As a result, coronavirus pandemic could push businesses to shift more digital marketing has emerged as potentially one of the most marketing dollars to digital strategies and online ads. It powerful tools. would make companies ,think long and hard about digital transformation,+ said John Lincoln, CEO of Ignite Digital transformation Visibility and digital marketing professor at the University According to many observers, whether or not the economy of California San Diego.

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The High Life

E-commerce boon? Trends and tips The fact that consumers are staying home should expand the There is a greater urgency than ever to explore creative ways reach of brands that already conduct the majority of their to enhance the bottom line. Digital marketing involves an marketing digitally. ,What happens if, all of a sudden, your array of fast-changing and consistently advancing tools and commercial audience is going to be at home more?+ said outlets. Biegel. ,It doesn%t mean they don%t want to buy those things The popularity of buying online and picking up at the store … they%re going to turn to online.+ BOPIS has exploded in several countries during the pan- ,Whether out of boredom, necessity or both, we%ll likely demic and seems poised for ongoing growth. However, ,cart start to see an uptick in people shopping from phones and values for mobile BOPIS orders are 39 percent lower than for laptops,+ said Lincoln. ,Long term, new shopping habits desktop, shipped orders,+ according to a study by Quantum could take hold as people become more comfortable brows- Metric, a customer experience analytics platform. The study ing and buying online and frequenting physical stores less.+ recommends focusing on cross-selling as effectively and cohe- ,If we come to a point where we must avoid stores or other sively in-store as online to boost revenues and resilience. public places, it would boost e-commerce, especially for Crowd-sourced workforce initiatives are gaining traction as packaged consumer goods and those purchases we can%t post- ,68 percent of companies are looking to turn customers to pone a few weeks,+ said Frederick Vallaeys of Optmyzr, an ad- loyal followers to build content and engagement,+ noted the tech company. ,That would, of course, have a big impact on Quantum Metric report. Premium homeware brand digital marketers, who could compete for the purchases of Williams-Sonoma, for example, acquired 3D and augmented consumers who have not been frequent online shoppers.+ reality platform outward to offer 3-D product imagery to Another boon for the e-commerce sector is it can be con- online shoppers. ducted remotely. ,I am very happy that as a digital marketer I The ability to use ,big data+ is becoming ever more appar- can do my job from home,+ said Dana Tan, senior manager for ent. With a large amount of information available on con- global SEO at Under Armour sportswear. ,Grocery store sumer purchasing habits and mounting concerns over privacy, clerks, food service workers and many other people don%t ,eTailers+ and businesses ,need to increasingly focus on tools have this luxury.+ that offer a single, accurate version from the customer%s When the pandemic subsides, ,new habits may breed sub- point-of-view of their digital journey with the brand,+ accord- stantial long-term gains for online retailers, as well as digital ing to Tamara Gaffney, Quantum Metric%s vice president of advertisers and affiliate marketers that bring in new traffic,+ decision insights. She said businesses should ensure that new said Tan. ,The real opportunity is to focus on developing data tools strengthen in-depth analytics that results in ,deci- transparent messaging across the board.+ sions that support and enhance a deeper relationship between the consumer and the brand.+ Communication key Marketing is all about communication, and businesses that The back office? will cope with the implications of COVID-19 will understand Focusing on employees% experience is an important way to that honesty and transparency must supersede aggressive, improve productivity and customer engagement. ,Seventy exaggerative, and disingenuous ad messaging. Companies also percent of workers report having to enter the same data in are being advised by marketing professionals that this crisis is multiple systems to get their jobs done. Ultimately, the best an excellent opportunity to run digital awareness campaigns customer experience comes from the entire organization, aimed at reaching casual internet users. from shipping to returns to fitting rooms, acting in unison to Communication strategies will take center stage as busi- pivot quickly to satisfy the customer%s informational needs,+ nesses try to keep pace with developments. Ahead of any spe- said the Quantum Metric study. cific digital marketing tool, the primary focus should be on a Employee experience is critical because it revolves around plan that is ,best prepared to mitigate losses that may arise communication. As a result, businesses should devote at least as from cancellations, nonrefundable ad spots, and supply much time and resources to improving employee-facing tech- chain issues and so on,+ Lincoln said. Marketers will need to have honest conversations about hit- nology as they do to customer-facing technology. That might ting goals and cost-effectiveness. ,It might be a time to dial involve using integrated help desk and software offerings to things back and do some spring cleaning,+ said Natalie encourage and develop seamless communication among diverse Barreda, a senior manager at T-Mobile. Brands also should parts of the business when serving customers. That is a prime start thinking about how they can leverage marketing to solution for enhancing both employee and customer experience. address issues caused by COVID-19, such as store closures. Finally, a leading digital trend involves downsizing teams ,Having great customer service and a strong e-commerce rather than people. With the rapid growth of the direct-to-con- experience is imperative during times like this,+ she said. sumer business, building cross-functional teams are crucial.

Business Monthly - MAY 2020 •35 The high life.qxp_eLife.qxd 5/12/20 4:19 PM Page 3

The High Life

Hyper-personalization revolution,+ said Marr. Exceeding the capacity of human intelligence in numerous ways, AI will continue to engender Bernard Marr of Enterprise Tech wrote in the March issue of ultra-customization and ,micro-moments+ when people Forbes, of a Fourth Industrial Revolution, which ,is responsi- reflexively turn to a device to act on their needs. ble for a tremendous metamorphosis in the way our work- By capitalizing on these moments when decisions are made places and the world work.+ In the new world of ,Industry and preferences shaped, a business is harnessing a marketing 4.0,+ as he terms it, smart tech, interconnectivity, AI, and tool that can offer consumers what they want, as well as when advanced learning are changing entire professional fields, and where they need it. Companies ,that succeed in doing so such as marketing. In his essay, Marr highlights four critical are using the latest tech to take advantage of micro-moments technological developments. in a customer%s life,+ said Marr. ,It is direct digital access to The first of these is big data. ,Ninety percent of all data in consumers that allows for this ultra-customization.+ the world was generated in the past few years and it is invalu- Finally, virtual reality VR, augmented reality AR, and able for business,+ said Marr. Experts say we now have the mixed reality MR have broad applications for digital mar- specialized tools to accentuate and accelerate manipulation of keting, giving companies an entirely new method of engaging these vast reams of data, including machine learning and AI. consumers. MR takes AR to another level that lets users That results in ,more granular consumer insights+ as it manipulate digital objects, providing ,extended reality becomes more intuitive, personalized, and case-specific. That engagement that can allow shoppers to try before they buy no has become the core model for such companies as Netflix, matter where they are located,+ said Marr. AR, VR, and MR Disney, and Facebook, which are at the vanguard of utilizing create an ,extended reality+ to achieve a more adaptive, big data to better understand and cater to consumers. insightful, and relatable customer experience. Another significant trend is the interconnection of smart Digital marketing today means the era of mass profiling has devices, creating the Internet of Things. Such an ecosystem passed. Marketers now have at their disposal a vast number of facilitates a seemingly endless collection of data on almost data points to determine subtle intricacies about individual anything, meaning that marketing materials, once produced user behavior, enabling them to facilitate experiences with exclusively by content creators, can now be outsourced to razor-sharp precision and efficacy. Ultimately, hyper-personal- machines. ization  understanding the nuances of customer personas AI and machine learning are critical factors in the and intent at a deeper, more intimate level by leveraging the trajectory of digital marketing ,as technologies that use the right tools to craft unique user experiences  has become a n prolific data we have to fuel the Industry 4.0% intelligence holy grail for the world of digital marketing.

36• Business Monthly - MAY 2020 Chamber.qxp_Layout 1 5/12/20 3:19 PM Page 1

CHAMBER NEWS

PRESIDENT VICE PRESIDENT, LEGAL AFFAIRS Sherif Kamel,The American University in Cairo Girgis Abd El Shahid, Shahid Law Firm PAST PRESIDENT EXECUTIVE VICE PRESIDENTS TREASURER Tarek Zakaria Tawfik, Cairo Poultry Group Jeff Wedgwood, Apache Egypt Companies Kamel Saleh, Saleh, Barsoum & Abdel Aziz – Deloitte BOARD Dalia Wahba, CID Consulting ADVISOR TO THE BOARD MEMBERS OF THE BOARD Hisham A. Fahmy OF GOVERNORS VICE PRESIDENT, MEMBERSHIP Seif ElDin ElSadek, Agrocorp For Agriculture Investment Amr Allam, H.A. Construction (H.A.C.) Sherif El Kholy, ACTIS CHIEF EXECUTIVE OFFICER Soha Ali, J.P. Morgan Chase Bank Sylvia Menassa VICE PRESIDENT, PROGRAMS Omar A. Mohanna, CHUBB Insurance Egypt Khaled Abu Bakr, TAQA Arabia Zaidun Jawdat, Bechtel Overseas Corporation

Healthcare Non-Banking Financial Institutions COMMITTEE Chair: Ahmed Ezzeldin, Cleopatra Hospital Group Co-Chairs: Hassan Hussein, El Taamir Mortgage Finance - Aloula Co-Chair: Tamer Said, General Electric (GE) Healthcare Mounir Nakhla, Tasaheel LEADERS Tarek Azmy, Corporate Leasing Company Egypt (CORPLEASE) (July 2019 to June 2020) HR (Talent Management) Chair: Emad Nasr, Lecico Egypt, SAE Oil & Gas Co-Chairs: Ahmed Farid, Shell Egypt Chair: Hesham El Amroussy, ExxonMobil Egypt, SAE Nagla Kinawi, Vodafone Egypt Telecommunications, SAE Co-Chairs: Brian Essner, Noble Energy Egypt Colby Fuser, Halliburton Agriculture and Food Security Karim Badawi, Schlumberger Chair: Abdel Hamid Demerdash, Agriculture Export Council Industry & Trade Mark Konecki, Apache Egypt Companies Co-Chairs: Ahmet Ertürk, Soyven Co-Chairs: Alaa Hashim, Giza Seeds and Herbs Hatem El Ezzawy, PICO Group Ashraf Bakry, Unilever Mashreq Pharmaceuticals Mohamed Shelbaya, PepsiCo Chair: Yousri Nawar, Pfizer Egypt Banking Tamer Hamed, Procter & Gamble Egypt Ltd Co-Chairs: Ramy Koussa, MSD Egypt Chair: Ahmed Issa, Commercial International Bank (CIB) Riad Armanious, EVA Pharma Co-Chairs: Akef El Maghraby, Banque Misr Insurance Dina Samaha, Citibank, NA Egypt Chair: Alaa El Zoheiry, gig - Egypt Power Co-Chairs: Axel Bromley, CHUBB (Formerly ACE Life Insurance Chair: Khaled Hashem, Honeywell Egypt Corporate Impact & Sustainability (CIS) Co. Egypt, SAE) Co-Chairs: Ahmed Ramadan, General Electric International Operation Chair: Tamer Younes, Procter & Gamble Egypt, Ltd. Elena Butarova, MetLife, Life Insurance Company Wael Hamdy, Elsewedy Electric Co-Chairs: Ghada Fouad, Mars North Africa and Levant Sherif El Ghatrifi, Medmark Insurance Brokerage Mireille Nessim, Takatof Association for Development Real Estate Sarah El Battouty, ECOnsult International Cooperation Chair: Mohamed Abdalla, Coldwell Banker Affiliates Of Middle Chair: Walid Labadi, IFC International Finance Corporation East & Greater Africa Customs & Taxation  Co-Chairs: Denys Denya, African Export - Import Bank Co-Chairs: Ahmed Shalaby, Tatweer Misr Chair: Hassan Hegazi, Master Trading, SAE Khalid Hamza, The European Bank for Reconstruction and Magued Sherif, Six of October Development and Investment Co. (SODIC) Co-Chair: Hossam Nasr, Allied for Accounting and Auditing - Development (EBRD) Ernst & Young Transport and Logistics Digital Transformation Investment and Capital Market t Chair: Marwan El Sammak, Worms Alexandria Cargo Services Co-Chairs: Hoda Mansour, SAP Co-Chairs: Aladdin El-Afifi, Pharos Holding for Financial Investments Co-Chairs: Ahmad Hammouda, Uber Egypt LLC Reem Asaad, Raya Contact Center Hazem Badran, CI Capital Holding Co. Ahmed El Fangary, DHL Express Wael Abdoush, IBM Karim Awad, EFG Hermes Holdings, SAE Alfred Assil, Menarail Transport Consultants Omar El Labban, BPE Partners Tarek Fahmy, Mediterranean Shipping Company Education for Competitiveness Legal Affairs Travel and Tourism Co-Chairs: Deena Boraie, The American University in Cairo Chair: Ahmed Abou Ali, Hassouna & Abou Ali Law Offices J Co-Chairs: Haitham Nassar, Hilton Worldwide Mohamed El Kalla, Cairo for Investment and Real Estate G Co-Chairs: Mohamed Serry, Serry Law Office Karim El Minabawy, Emeco Travel Development (CIRA) Said Hanafi, MHR & Partners in Association with White & Case Moataz Sedky, Travco International Holding, SAE Shahinaz Ahmed, Amideast Egyptt Nelly El Kateb, ASTRA Travel Marketing Sherifa Issa, Four Seasons Hotels and Resorts, Egypt Entrepreneurship & Innovation (EIC) Chair: Ahmed Rady, Coca-Cola Egypt – Atlantic Industries Co-Chairs: Hashem El Dandarawy, Team 4 Security Co-Chairs: Dina Aly, Matter Women in Business Ç Moataz Kotb, Cultark Nermeen Bedeir, TNS Chair: Manal Hussein Abdel Razek, Orascom Development Mohamed Rahmy, Endeavor Egypt Riham El Sawy, Mindshare Co-Chair: Nahla Kamal, Nestlé Egypt

American Chamber of Commerce in Egypt – Tel: (20-2) 3333-6900 – Fax: (20-2) 3336-1050 For more information about AmCham services and news, please visit www.amcham.org.eg or our US mirror site www.amcham-egypt.org Chamber.qxp_Layout 1 5/12/20 3:19 PM Page 2

Events

ENTREPRENEURSHIP & INNOVATION Mentors must adapt to tough times

One of the biggest problems that face startups and entre- preneurs is a &limited pool$ of mentors for a fast-growing number of new businesses that need guidance. &That is something we are trying to overcome,$ said Ayman Ismail, founder of AUC Venture Lab, at AmChams Entrepreneur- ship & Innovation Committee meeting on March 30. she learned was to diversify her revenue stream. That is Rafeh Saleh, the founder of Consulting Pad and director benefiting Fresh Source now as restaurants are a substantial of the Founder Institute, said the idea of mentorship is rel- source of the firms revenue. Emara had to think outside the atively new in Egypt, starting just a few years ago. &I felt I box to keep the business going. &We used Otlobs platform was isolated from the tech scene and startups. I needed to to sell our produce as well as support our partners by putting become a mentor to be part of that world,$ he explained. their products on our page,$ she said. Saleh eventually left his day job to start his consultancy For Sameh el Sadat, a co-founder of TBS, being a mentor while continuing his mentoring for other startups. He be- in troubled times is very different. &We believe that men- came part of Flat6Labs, where others mentored him as he torship is essential for startups and entrepreneurs to suc- grew his business. &I got to see both sides,$ he said. ceed, especially now,$ he said. &The key going forward is that Farah Emara, a co-founder of Fresh Source and mentor, we need to mentor our businesses in a very different way in was mentored when starting her business. &When you men- the face of the economic crisis that the entire world is going tor companies in other sectors, you learn a lot that can help through.$ In some cases, that means postponing expansions your business,$ she said. Among the most significant lessons even if the business is sound. n

HUMAN RESOURCES HR’s role in the COVID-19 crisis Companies must see crises as &rare opportunities$ to discover new things about themselves as well as shape their future, said Bassem Emad, CEO of Aspire Training Solutions, at a March 31 meeting of AmChams Human Resources Committee. &What is different about this crisis is companies can transform themselves into whatever they want to be,$ he said. That is why the role of HR becomes paramount. According actively disengaged,$ said Emad. The last category can be prob- to Emad, HR executives in companies have four main tasks. lematic as those individuals spread negativity and discontent ac- The first is to promote the idea that crises bring opportunities. ross the organization. &Employees can move among all three &They reveal who we really are, refine parameters of success, re- categories, depending on the circumstances surrounding each discover corporate culture, redefine a companys legacy in the one,$ he said. He pointed out that HR personnel must recognize community and make fresh starts,$ he explained. achievements, adjust organizational culture, communicate to The second is to facilitate the creation of safe environments ensure financial security and ensure ongoing development. where employees can express frustration, receive feedback, and The last important role for HR is to &build momentum to make suggestions. Thirdly, HR must be a &comforter$ to support achieve sustainability,$ said Emad. That means fostering a employees and keep them safe and able to perform. culture of agility, grasping opportunities, building for the future, The other responsibility that falls to HR is empowering em- continuously setting and resetting goals, effectively communi- ployees to take risks, fail and rise once again. &There are three cating the companys direction, developing internal task forces, types of employees here. Those engaged, not engaged, and and blue-sky thinking. n

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Events

TRANSPORT AND LOGISTICS The impact of the coronavirus on logistics

The COVID-19 pandemic has swept the world and turned the transport and logistics sector upside down. &Inter- national and domestic supply chain have witnessed a disrup- tion due to the Covid-19,! said Marwan El Sammak, AmCham Chair, Transport and Logistics Committee; and Chairman and CEO, Ship and Crew at an AmCham Trans- Egypt from two to five per week. &With the increased port and Logistics Committee webinar on April 5, titled demand, we are achieving a 95 to 96 percent success rate,$ &COVID-19 Crisis: Impact on the Transport and Logistics said El Fangary, adding that many organizations have turned Sector.$ While the disease-induced emergency touches all to e-business. &Everyone is moving toward digitalization. It sectors, logistics plays a uniquely vital role in society as a is the name of the game, and everyone is learning how to whole. The Speakers also included committee co-chairs manage the crisis.$ Ahmed Elfangary, country manager for DHL Express, and That transformation is forcing the sector to redefine their Tarek Fahmy, chairman and CEO of Mediterranean Ship- businesses. For most, this is a significant challenge. The goal ping Co. is to foster growth, competitiveness, and internal markets During the viral outbreak, the sector has witnessed longer by capitalizing on opportunities offered by digital technol- shipping times, causing delivery delays and higher prices. ogies. With much of the supply chain disrupted and &We are trying to maintain operations in all ports,$ said businesses around the world forced to implement remote Fahmy. &The way companies have been transporting has work routines, the benefits of going digital become more changed. However, Egypt has not witnessed a disaster in this and more apparent. industry yet.$ The transportation and logistics sectors main focus now Rising demand for air freight is forcing companies such is on protecting the health and safety of employees and as DHL Express to increase the number of cargo flights to ensuring operations continue as smoothly as possible. n

In our coverage of the Travel and Tourism Committee ses- sion titled &Transformation of the Giza Plateau: Visitor Ex- perience Reinvented$ in the May 2020 issue of Business Monthly, we made a mistake in Mr. Ashraf Halims name and title as chief operating office officer at Orascom Pyramids Entertainment. He was the keynote speaker at the event. We truly regret this mistake and will take extra measures in the future to prevent such mistakes from happening. We sincerely apologize to Mr. Ashraf Halim for the error. n

Business Monthly - MAY 2020 •39 Chamber.qxp_Layout 1 5/12/20 3:19 PM Page 4

NEW MEMBERS

Agriculture New Replacements in Member Companies Haytham Wagih Category: Associate Resident Cotton Egypt Association Country Investment Executive- Sector: Financial Sector Wael Olama Egypt, GroFin Egypt Chairman

Address: 22 Syria Street, Mohandessin Mark Wyllie Category: General Tel: (20-2) 3749-8038 CEO, International Company for Sector: Food & Beverages Fax: (20-2) 37498038 Agro Industrial Projects "Beyti" Website: Membership Type Not-for-Profit www.cottonegyptassociation.com Ahmed Ibrahim Gamal Category: Affiliate CEO, Raya Holding Sector: Information Technology

Mirna Arif Category: General Affiliate Members General Manager Micro- Sector: Information Technology Agriculture soft Egypt, Microsoft Egypt, LLC Khaled Schuman Executive Director, Cotton Egypt Association Amr Abou Eita Category: General

Chairman and Managing Sector: Petroleum Food & Beverages Director, ExxonMobil Egypt, Salma Khalil SAE Chief Sustainability Officer (CSO), Ottoman for Trading & Manufacturing (Royal Herbs) Youssef Hafez Category: Affiliate

Public & Government Affairs Sector: Petroleum Naniece Fahmy Manager, ExxonMobil Egypt, HR Senior Director, PepsiCo SAE

Information Technology Hatem Werdany Category: Multinational Malak El Baba Sector: Pharmaceuticals/ Egypt Country Director, Medical/Health Country Manager- Egypt, Visa International Association AstraZeneca

Pharmaceuticals/Medical/Health Jean Pascal Giorda Dalia Salah Youssef Category: Multinational Managing Director, Sector: Transportation Market Access and Pricing Lead CMA-CGM-Egypt

For any change to contact information, please contact the Membership Services Department at the Chamber’s office Tel: (20-2) 3333-6900, ext. 0016 Fax: (20-2) 3336-1050 E-mail: [email protected]

40• Business Monthly - MAY 2020

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MEMEBER NEWS

PHILIP MORRIS MISR LANDMARK SABBOUR

Philip Morris Misr has launched a new corporate social responsibility initiative Landmark Sabbour, a developer of premium-quality real estate, has signed titled “Together today for a brighter tomorrow” in partnership with INJAZ an agreement with the Ahl Masr Foundation in order to support its cam- Egypt. The initiative provides essential food products for the most vulnerable paign to protect healthcare personnel working in government hospitals. families who were hurt by the COVID-19 outbreak. The initiative will provide This is in line with the efforts exerted to support the Egyptian healthcare them with financial support as well. Bearing in mind that the COVID-19 pan- system in its response to the novel Coronavirus (Covid-19) and curb its demic has weakened their chances to find daily jobs and make ends meet. spread. The agreement also emphasizes the significant role played by pri- Moreover, it complements the state’s efforts to overcome the spread and the vate-sector companies and local institutions in supporting public entities in drawbacks of COVID-19 which has resulted in losing thousands of irregular their efforts to overcome crises that may stand in the way of the country’s jobs for caretakers. development process.

NESTLE EGYPT PEPSICO EGYPT

Nestlé Egypt, in cooperation with Ahl Masr Foundation, launched the first PepsiCo Egypt Group, the leading in the food and beverage industry, activity of its initiative “Together can we do it” through distributing Nestlé pledges $1 Million to support Egypt’s daily wage workers in cooperation products to the medical teams of isolation hospitals who are on the front with the company’s philanthropic arm – the PepsiCo Foundation – and the line of fighting Covid-19. The first activation was under the name “Nestlé Egyptian Food Bank. This action comes as part of PepsiCo’s new campaign Egypt and Ahl Masr Foundation Together can do it” which aimed to show “Gathering for Good, to Feed Millions” in partnership with the company’s appreciation and gratitude for the medical teams that are risking their iconic brands – Pepsi and Chipsy – during the holy month of Ramadan. health and safety and spending consecutive days and weeks away from According to CAPMAS statistics, Egypt’s daily labor force is comprised of their families to ensure the wellbeing of Covid-19 patients. more than 2 million workers and this initiative extends its support to this segment that is suffering tremendously due to COVID-19 effects.

Business Monthly - MAY 2020 •43 Chamber.qxp_Layout 1 5/12/20 3:19 PM Page 8

Media Lite

A Glance At The Press

Corona fears “What are all those crowds!! I am afraid that if I go down there I would be infected!!” Al Masry Al Youm, April 29

Media Lite collates a selection of some the most entertaining offbeat and lighthearted news items published in the local press. All opinions and allegations belong solely to the original source publications and no attempt has been made to ascertain their veracity.

Excavated underground, revealed online !Furthermore, this latest discovery is an example of how the ministry is beginning to incorporate technology in a more For the first time in its history, the Ministry of Tourism and integrated way as a strategy for the future.! Antiquities revealed a new archeological discovery solely on the ministrys official website and social media. The choice of using Archaeologist “100 percent certain” an online platform is in line with the governments partial of undiscovered tombs lockdown of the country. The discovery included the sacred animal necropolis in Egyptologist Chris Nauton told a U.K. news outlet he is !100 Saqqara. The most important of which is the ornately embel- percent certain! there are undiscovered tombs only a hundred lished tomb of Wahti and a cachette of holy birds and animals. yards from the famous Step Pyramid of Djoser. He added that The site also contains scarce mummified animals. This latest find there is a !strong possibility! its fabled architect, Imhotep, is was uncovered at a depth of 11 meters in five sealed stone sar- buried there. cophagi as well as four carved niches in an underground room Imhotep was chancellor in the Third Dynasty to the pharaoh containing wooden coffins and late-era human burials. Djoser and mastermind of Egypts first pyramid, which still According to a ministry spokesperson, the find included! stands at Saqqara. Although not born a royal, he was a respected several other artifacts around the coffin, including 365 Ushabti member of the pharaohs family, and 2,000 years after his death, figurines, some of which bear hieroglyphic text, a small 40 his status had risen to that of a god of medicine and healing. centimeter painted wooden obelisk, wooden statues of the god Naunton, the author of !Searching for the Lost Tombs of Ptah-Sokar-Osiris and three pottery canopic jars among many Egypt,! says he has a good idea of where Imhoteps tomb might other artifacts.! be. !The most fascinating possibility for an Egyptologist is that The discovery took place at a site where digging had been you could find a royal tomb. Because so much archaeology has underway for more than three months, with experts saying the been done, I guess many people assume there cant possibly be find dated to the late Pharaonic kingdom following the third anything like that still left to find,! he said. transitional era and before the Ptolemaic Era to about 332 BC. Naunton explained how the area in Saqqara is likely replete While Egyptologists are not in total agreement on the exact with many high-status tombs, and many parts of the best-known beginning of the late-era, they unanimously believe that it was burial sites have yet to be thoroughly investigated. sometime around the late 25th Dynasty. Saqqara is notoriously tricky to excavate, and there is !more !The discovery is certainly very important as it coincides with archaeology than archaeologists are able to deal with,! he says. the expected inauguration of the Grand Egyptian Museum, With an area at least three or five kilometers long and one which remains at the top of the states priorities once the kilometer wide, Saqqara is one of Egypts most famous and oldest pandemic subsides,! said archaeologist Abdel Rahman Rihan. burial site for more than 3,000 years.n

44• Business Monthly - MAY 2020