NOT FOR SALE NOT 2019 FEBRUARY
www.amcham.org.eg/bmonthly
EGYPT’S GREEN BONDS GREEN EGYPT’S SECURING INVESTMENTS IN AFRICA MINISTER OF CIT SPEAKS
▲ ▲ ▲
ALSO INSIDE ▲ ▲
▲ COUNTING COUNTING
The rise The and regulation of consumer lending ON CREDIT
BUSINESS MONTHLY COUNTING ON CREDIT FEBRUARY 2019 Cover Feb 2019.qxp_Cover.qxd 2/4/19 2:14 PM Page 1 Page PM 2:14 2/4/19 2019.qxp_Cover.qxd Feb Cover
THE ‘WORLD IS YOUR OYSTER’ THIS VALENTINE’S ... SO TRANSPORT A TABLE FOR TWO ... YOUR SWEETHEART TO DIVINELY ROMANTIC SETTINGS FOR A NIGHT A MEMORY FOREVER OF INTERNATIONAL TEMPTATIONS. Saraya Gallery, is stylishly French with the cuisine to match ... ‘Ooh la la!’. Whisper ‘il mio amore’ to your love amid the Italian ambience of Ristorante Tuscany ... take a front row seat for the exotic Japanese teppanyaki show at Torii. Promenade Café awaits in an outdoor setting - just perfect, while The Bakery welcomes you with delectable delights.
For the young at heart ... what’s not to love.
16 SARAY EL GEZIRA ST., PO BOX 33 ZAMALEK, CAIRO 11211, EGYPT. T: 00. 202.27.28.3000 CAIROMARRIOTTHOTEL.COM ARABIC.MARRIOTT.COM/CAIEG
Final Valentine Ad 2019 Cairo Fitness.indd 1 1/22/19 2:21 PM
䈀䄀刀伀一 䠀伀吀䔀䰀匀 ☀ 刀䔀匀伀刀吀匀 䔀䜀夀倀吀
䈀愀爀漀渀 刀攀猀漀爀琀 匀栀愀爀洀 䔀氀 匀栀攀椀欀栀
䤀渀搀甀氀最攀 椀渀 琀栀攀 挀栀愀爀洀椀渀最 䈀愀爀漀渀 刀攀猀漀爀琀 匀栀愀爀洀 䔀氀 匀栀攀椀欀栀Ⰰ 愀 㔀 猀琀愀爀 搀攀氀甀砀攀Ⰰ 漀爀 攀渀樀漀礀 䈀愀爀漀渀 倀愀氀洀猀 匀栀愀爀洀 䔀氀 匀栀攀椀欀栀 琀栀攀 㔀 猀琀愀爀 戀漀甀琀椀焀甀攀 猀琀礀氀攀 栀漀琀攀氀 ᰠ愀搀甀氀琀猀 漀渀氀礀ᴠⰀ 漀爀 琀栀攀 氀甀砀甀爀椀漀甀猀 㘀 猀琀愀爀 栀漀琀攀氀 䈀愀爀漀渀 倀愀氀愀挀攀 匀愀栀氀 䠀愀猀栀攀攀猀栀 愀渀搀 攀渀樀漀礀 愀氀氀 礀攀愀爀 猀甀渀猀栀椀渀攀Ⰰ 猀椀氀欀礀 猀愀渀搀礀 戀攀愀挀栀攀猀Ⰰ 攀砀ⴀ 焀甀椀猀椀琀攀 搀椀渀椀渀最 挀栀漀椀挀攀猀Ⰰ 愀渀搀 甀渀椀焀甀攀 昀愀挀椀氀椀琀椀攀猀 愀渀搀 猀攀爀瘀椀挀攀猀⸀ TOC 19.qxp_TOC.qxd 2/4/19 2:28 PM Page 1
FEBRUARY 2019 VOLUME 36 | ISSUE 2
Cover Story 22 Spending on Lending An eye into the growing reliance on non-banks
Cover Design: Nessim N. Hanna
In Person 28 Toward a Digital Reality An interview with the Minister of CIT
Emerging Trends 12 The Rise of Bus-Hailing Competing in a limited pool or adding to a market growth?
Regional Focus 32 Egypt�s First Green Bonds Thinking outside the box
Investor Focus 16 New Insurance Fund Boosting appetite for investment in africa
The Chamber
42 Events
49 Exclusive Offers
52 Media Lite An irreverent glance at the press
© Copyright Business Monthly 2019. 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.
4• Business Monthly - FEBRUARY 2019
Editorial.qxp_Editorial.qxd 2/4/19 2:30 PM Page 1
Editor’s Note
Director of Publications & Research Khaled F. Sewelam
Editor-in-Chief Nadine Abou el Atta
Contributing Editor Tamer Hafez Kate Durham Pause Consulting Editors ne of my favorite things about closing an issue is scanning through pho- Bertil G. Peterson tos with our designer to choose what best compliments our message. This month some of the photos were of a new family buying furniture Writers for their first home, a decision that impacts them for many years, and Ola Nour El Din Adam Sakaria somewhere in the archives of Business Monthly we have paused this moment forever. OOne of the many moments we captured in this issue are of people sidestepping ris- Contributing Writers ing prices and buying their needs on installments. This has been a well-rising trend Menna Farouk that has fueled the birth and perpetual growth of non-bank lending companies. Mahinaz el Baz These companies are not only competing with regular banks but they are not mon- itored by the government. In this issue, we look into their potential impact on Senior Art Director Nessim N. Hanna banks, consumerism, and Egypt�s economic-welfare as a whole. Another rising trend worth investigating is the bus-hailing service. With the first Senior Graphic Designer player launching just over a year ago and global players following suit last December, Emy Emile the sector is still in its infancy. On the government front, the Ministry of Communications and Information Graphic Designer Verina Maher Technology has launched several initiatives focused on the digital transformation of government services. To better understand how these projects translate to the aver- Advertising & Business Development age Egyptian�s quality of life, Business Monthly sat for a one-on-one interview with Director Minister Amr Talaat. Amany Kassem Moreover, the state is working on launching an insurance fund to protect Egyptian Advertising Coordinator investments in Africa. This month we delve into its potential influence and unad- Lamia Seleit dressed challenges. Addressing budget issues, Egypt is examining the possibility of issuing its first Circulation Coordinator green bond. While still in its early phases, experts are theorizing the different means Veronica Gendy of issuance and their perspective results. Photographers Finally, we end the issue with one of the most controversial industries in Egypt, Karim el Sharnouby petrochemicals. Despite ambitious expansion plans, the industry is still suffering Said Abdelmessih from a significant shortage in feedstock, rendering most plant production levels well below capacity. Production Supervisor On behalf of everyone at Business Monthly, we hope you enjoy this issue. Hany Elias
Market Watch Analyst ADINE BOU EL TTA N A A Amr Hussein Elalfy EDITOR-IN-CHIEF [email protected] Chamber News Contacts Nada Abdalla, Azza Sherif, Susanne Winkler
U.S. address: 1615 H Street, NW • Washington, D.C. 20062 Please forward your comments or suggestions to the Egypt editorial office: Business Monthly American Chamber of Commerce in Egypt 33 Soliman Abaza Street, Dokki 12311 • Cairo • Egypt Tel: (20-2) 3338-1050 • Fax: (20-2) 3338-0850 E-mail: [email protected] www.amcham.org.eg/bmonthly
CTP and printing: Sahara Printing Company, SAE – Nasr City Free Zone
@BusinessMonthlyEg @BusinessMonthly @BusinessMonthly
6• Business Monthly - FEBRUARY 2019 LASTING MEMORIES THIS AT GRAND NILE TOWER
Live entertainment, sparkling stars, and breathtaking views ...
The ultimate ingredients to a romance filled dining experience at the Revolving Restaurant on the 41st floor or aboard Marquise, Grand Nile Tower’s private yacht.
Compliment the magical night with a one night stay in a luxurious room overlooking the spectacular Nile.
WE GUARANTEE YOU A VALENTINE’S TO REMEMBER!
Corniche El Nile, Garden City, Cairo, Egypt Telephone: +202 2365 1234 Fax +202 2362 1927 www.grandniletower.com [email protected] Viewpoint.qxp_Viewpoint.qxd 2/4/19 2:36 PM Page 1
Viewpoint
Never a Boring Moment he visit of U.S. Secretary of State Pompeo was the highlight of January�s events. The Secretary�s speech was broadcasted from the AUC campus in the attendance of a select group representing Egyptian nationals, amongst which were the board of AmCham Egypt. As much as the speech was self-serving to the Trump administration there were still several subtle messages directed to Egypt and the TMiddle East. Commitment to the region and ruling regimes was emphasized, with no mention of politically sensitive issues regarding the Khashoggi case, or human rights. In addition, Pompeo praised Egypt as an example of religious freedom and religious tolerance, unlike most countries in the Middle East. In summary, it gave more comfort regarding the U.S. policy toward Egypt, something to build on in the near future. Another important meeting that I had the privilege to attend was between President Sisi and the 16 foreign fund managers attending the CI Capital conference. Additionally present were the Prime Minister, ministers of investment, planning, health, and industry and trade. The message sent was clear, Egypt will continue the reform program after the end of the IMF agreement. It is a homemade program that will move on, further privatization is a must not a luxury, and involvement of the private sector in running publicly held companies is a necessity. It is time for full financial and operational accountability as the current model is not working. The interest rate is a function of inflation and it is the job of the Central Bank of Egypt. Some recent highlights noted include Egypt�s sovereign wealth fund of EGP 200 billion is set to be inaugurated, with a governance structure designed by BCG, McKenzie, as well as PwC. Furthermore and apart from an ongoing focus on oil and gas, renewables, and infrastructure, the coming period will witness a heightened focus on industry and logistics. The government will also be inaugurating by June turnkey modular industrial clusters for private investors, along with logistical hubs, that will also be commissioned this year. As for infrastructure, more than 7,700 kilometers of new roads and over 660 new bridges are being completed. To date, total investments in infrastructure exceeded EGP 2 trillion, EGP 500 billion of which went to electrical power generation. Moreover, the government availed 250,000 furnished three-bedroom apartments for the neediest strata of the society. In short, the meeting was another reassuring statement whereby the President clearly stated that the economy is to be led by the private sector. 2019 is a challenging yet interesting year that will witness multiple events, from heading the African Union, to hosting the African Cup in Egypt, to successfully ending the IMF program and the pursuit of even more sustainable reforms. There is much more yet to come, never a boring moment here in Egypt. TAREK TAWFIK President, AmCham Egypt
8• Business Monthly - FEBRUARY 2019
InBrief new.qxp_InBrief.qxd 2/4/19 2:37 PM Page 2
THE NEWSROOM IN BRIEF
Chemical Exports Overview
Chemicals and fertilizer exports during Egypt’s Chemicals and Fertilizer Exports – 2018 the first 11 months of 2018 increased by 23 percent compared to the same timeframe in 2017, topping $4.9 billion. While yet to be officially announced, Khaled Aboul Makarem, head of the Chemicals and Fertilizer Industries Export Council, expects the 12-month growth rate to top 25 percent in comparison to 2017, making it the fastest growing exporting sector. Plastics and rubber exports topped the list, accounting for $1.5 billion. Fertilizers came in second place with exports reaching $1.22 billion, while paper and carton exports stood at $541 million. In terms of countries, Turkey 25% Y.o.Y Growth $5.3 B $1.5 B $541 M $1.22 B Paper & Total Exports Plastics & Fertilizers Rubber Carton
Source: Chemicals and Fertilizer Industries Export Council Egypt’s Chemicals and Fertilizer Exports by Country - 2018
is the largest importer of Egyptian chemicals and fertilizers, accounting for 4% U.K 18 percent of the sector�s exports. Italy follows in second place at 6.01 percent and France comes in third with 5.93 France 5.9% Italy percent. Spain�s imports represent 5 6% percent, while India, Britain and Saudi 5% 18% Turkey Arabia each receive around 4 percent of Egypt�s chemicals and fertilizers. In Spain 2019, local players announced they plan to open new markets including Russia and several sub-Saharan countries such as Source: Chemicals and Fertilizer Industries Export Council Kenya.
10• Business Monthly - FEBRUARY 2019 InBrief new.qxp_InBrief.qxd 2/4/19 2:37 PM Page 3
In Brief
SME Funding Roundup Total SME Loans 2015 - 2018
Loans to local SMEs between December 2015 and the end of 2018 reached EGP 115 million, directed towards 491 businesses, according to CBE Deputy Governor, Mohamed Abou Moussa. This funding is part of the EGP 200 billion financing initiative with an interest rate of 5 percent. This is less than a third of the current interbank interest rate, which stands at 16.25 percent. The initiative aims to support 350,000 SMEs, creating 4 million new jobs by early 2020. Furthermore, by the set deadline, local banks� lending portfolio must com - prise 20 percent SMEs. In July, Prime Minister Mostafa Madbouly announced several initiatives to support local EGP SMEs including the allocation of 10 percent of the 350,000 200 B available plots to these companies, as well as giving SMEs Financing banks EGP 10 billion to give out as loans to SMEs until 491 EGP Initiative mid-2022, among others. The main driver behind the SMEs targeted strategy to support SMEs is to bring unemployment 115 M benefited down from 12.8 percent in 2015 to 10 percent by the end Total of 2020. This would be possible as SMEs comprise 90 value percent of Egypt�s private sector, rendering them the country�s biggest employer. Source: CBE
Protecting Egypt’s Livestock Major Transportation Achievements
The government has submitted amendments to the current The Information and Decision Support Center published a agriculture law to protect Egypt�s livestock. The most report in January highlighting the Ministry of Transportation notable amendments focus on setting a two-year minimum reform efforts in 2018. Topping the list was the completion of slaughter age for calves as well as the existing minimum-set- the northeast and northwest arcs of Greater Cairo�s Regional weight of 400 kilograms. This alone, the government fore- Ring Road with an investment cost of EGP 8.25 billion. casts will increase local livestock wealth six folds. However, Another notable project is the recently-completed Shoubra to Tarek Soliman, the head of the Livestock Development Banha international highway, at a cost of EGP 3.46 billion. Division in the Ministry of Agriculture, stressed at a press Overall, the Ministry of Transportation has executed and conference in January, that this law will not be the last upgraded 2,619 kilometers of the road during 2018. Meanwhile, reform. He highlighted that his division is working on rail transportation upgrades have seen the ministry receive six improving the domestic livestock genetic pool to achieve all-new locomotives and 1,300 train cars, costing around EGP better production and birth rates. Such modifications will 24 billion. This is in addition to the recently-acquired 72 fully- work in tandem with ongoing reforms including prohibit- automatic rail crossing equipment. Other transportation pro- ing the slaughter of female cows and giving small-scale live- jects noted include the near completion of the EGP 492 million, stock breeders low-cost bank loans to encourage further 4.5 kilometer Dekhila Port Axis, which connects the port to breeding. These modifications are fueled by the rapidly Alexandria�s international highway, thereby alleviating conges- dropping local livestock wealth, which according to official tion at the Alexandria Port exits. Still under construction, how- figures has been dropping by 40 percent annually. ever, is Cairo�s third metro line, whose first phase was complet- Currently, the state imports 50 percent of the country�s ed in 2018, at a cost of EGP 1.8 billion plus EUR 257 million paid need from livestock needs. in foreign currency.
Business Monthly - FEBRUARY 2019 •11 Emerging Trends.qxp_eLife.qxd 2/4/19 3:46 PM Page 1
Emerging Trends
Competition Roars Between Bus-Hailing Providers A trio of emerging bus-hailing platforms vie for a share of Egypt�s hotly contested transportation market. By Ola Noureldin
I shifted to bus-hailing services to spare myself almost 80 hours of driving and about EGP 2,200 spent on gas per month,� says 23- year-old Gaser el Zahaby. �I now hop onto� a bus and chill, without having to worry about Cairo�s daunting traffic every single day.� The fresh graduate opted for Swvl for his daily commute from New Cairo to his work at the Industrial Zone in 6th of October city. He pays a flat rate of EGP 40 per ride, compared to at least EGP 200 for a car-hailing app. El Zahaby�s experience with the home- grown mass-transit system is not without hurdles. Running late to work, he was notified on the spot that his pre-booked bus would not arrive on time because the driver missed his scheduled ride. Consequently, his trip was delayed by 20 minutes until the next scheduled bus arrived. He says it happened three times in less than two months. Nonetheless, he still thinks Swvl is his best option. �It is a smooth ride that is much cheaper than using cars from regu- day with a fleet of about 1,500 buses. The application, which finds other passengers lar ride-hailing apps, and obviously more relatively new service competes with traveling in the same direction. The ini- convenient than using multiple public Careem and Uber, which launched their tial rollout covers Nasr City, Heliopolis, transportation services,� el Zahaby says. own versions in early December. Downtown, and Mohandeseen, with Aiming to provide Egyptian com- plans to expand across the city, the com- muters with a middle-ground alternative pany said in a December 4th statement. to expensive ride-hailing services and Heated Competition Uber�s announcement came a day after hectic public transportation, Swvl Uber chose Cairo for its first bus service Careem unveiled its bus service, which launched in April 2017 with eight lines. globally, an upscale, tech-enabled version initially operates 20 lines in Downtown Today, it has more than 600 lines con- of the microbus system. Residents hail a Cairo, Maadi, 6th of October, and Fifth ducting tens of thousands of rides per bus ride through the standard Uber Settlement. Careem plans to establish
12• Business Monthly - FEBRUARY 2019 Emerging Trends.qxp_eLife.qxd 2/4/19 3:46 PM Page 2
Emerging Trends
bus service in at least four cities before car-hailing clients, says Swvl Marketing Mwasalat Misr recently launched an expanding elsewhere in North Africa Manager Hazem Taher, while refusing to app for viewing routes. Furthermore, it and the Middle East, according to give specific numbers. signed an agreement with Google Maps Hadeer Shalaby, regional director of Swvl uses travel agency buses that for real-time display of its bus lines and Careem Bus. had been underused due to the slow- their estimated arrival times. �It made sense to pilot our product in down in tourism. Both Uber and However, Careem and Swvl do not Egypt, as customers were crying for Careem use a similar strategy. view Mwasalat Misr as a competitor. more affordable transportation due to However, Swvl�s earlier tap into the �They are still new, they still have to work inflation and the surge in fuel prices,� market combined with its larger fleet on culturally embedding their model in says Shalaby. �We needed a cheap option size are the key factors the homegrown order to allow users to get accustomed to that could ease Cairo congestion.� company is relying on to maintain its it,� says Taher. �They have a segment lead. �It is a supply game at the end, if they cater to, but I don�t know if they will you don�t have enough buses, it�s a dis- be in direct competition.� aster,� Taher says, adding that main- taining Swvl�s lead will require focus, money, continued growth, and Dynamic vs. Fixed enhanced overall customer experience. Routing Shalaby, on the other hand, is basing While Swvl enables riders heading in the Careem�s edge on a different factor. Since same direction to share fixed-route bus the bus-hailing market is still in its infan- trips several times per day, Uber follows a cy, Careem views its ability to use data as dynamic routing system where there are crucial for growth, Shalaby notes. �We no fixed routes or stations. When riders have a huge database of people, which request an Uber Bus, it connects them allows us to thoroughly study the market with a nearby stop where other passen- and user behavior,� she adds. Besides gers are traveling in the same direction, being able to accurately assess scale, fre- before eventually dropping riders off at quency, and trip times, Careem offers locations closest to their destinations. walk-in booking for users who may not Waked explains that this is going to be tech-savvy or own smartphones. take a lot of experimentation and part- Shalaby adds that Careem is the only nership with the city and government as market player that uses real-time telem- well. �We are certainly up for it, and we atics to track captains� driving, including believe this is going to be a multiyear speed and braking. investment for us in partnership with the Uber MENA general manager, government.� Abdellatif Waked, believes competition Nadia Safwat, 32, an accountant, has is important as it makes the company reservations about Uber�s dynamic rout- �smarter and more sustainable. It makes ing system. Commuting from us continue to be at the cutting edge of Mohandeseen to Heliopolis, Safwat wait- innovation.� ed for 20 minutes for her bus to arrive at Despite differences among the three a station that was 10 minutes away from bus-hailing apps, they are often where she lives. Walking to the bus or lumped together as competition for waiting is not her only concern, as her The service�s prices are benchmarked. Mwasalat Misr, a subsidiary of Abu trip ended up taking more than two Both Uber and Careem�s buses are priced Dhabi-based Emirates National hours. at around 70 percent less than their car- Group. Instead of an app, Mwasalat Looking for a middle ground, Careem hailing service. Misr offers a prepaid smart card sys- launched its bus service following a fixed- With the launch of bus services, the tem targeting university students and dynamic routing system, where fixed ride-hailing rivals are looking for a piece junior employees. Early last year, the routes have no set schedules. of industry leader Swvl�s market share. company introduced 56 new buses �I only promise a certain frequency of For its part, Swvl plans to expand to with WiFi and air conditioning, with buses, but not a fixed schedule every day Southeast Asia by the end of March. plans to add 500 more buses to its fleet because we built this model based on Over the past year, Swvl has attracted a by the end of this year, at a cost of reality,� says Shalaby. �In Egypt, how do significant number of Careem and Uber EGP 1 billion, to cover Greater Cairo. you guarantee the bus or the customer
Business Monthly - FEBRUARY 2019 •13 Emerging Trends.qxp_eLife.qxd 2/4/19 3:46 PM Page 3
Emerging Trends
will be at pickup locations at a set time,� nized and comforting lifestyle,� says a research consultant explained to World Shalaby notes that an accident could hap- Nouh, adding that Swvl�s experience Resources Institute �WRI� during a pen, roads could get blocked, or a driver in the market allows it to better deter- December interview. could show-up late, all of which are mine where hotspots are and cater to Challenges revolve around the need unforeseen factors that could cause them. Fixed schedules give com- for additional routes and greater frequen- delays. In Careem�s fixed-dynamic rout- muters a sense that no unexpected cy of trips to meet demand, especially at ing system, buses are usually 10-20 min- events will happen as they get ready to night, says el Zahaby. He cites a dire need utes away at any time. leave their houses, Taher adds. for comfortable buses, more leg space, Teaching assistant Hend el Behairy, 27, and punctual drivers. disagrees. �I like to have a fixed plan. I The Road Ahead Taher, Swvl�s marketing manager, says want to sleep at night knowing for sure Experts are concerned that the rise of his company�s main challenge is to which bus will be taking me, from which technology in mass transportation may enhance brand visibility and build user station, and at what time,� she says. �I do more harm than good by leaving vul- loyalty. The company plans to introduce prefer advance bookings so I don�t have nerable people without service. Bus-hail- fixed bus stops with signage in Cairo to to worry about getting a seat while I rush ing companies tend to concentrate on boost brand recognition, following a to my class.� high-density, high-income areas, Junfeng model used on the Corniche in By opting for Swvl, el Behairy cut Jiao, assistant professor of community Alexandria. In addition, Swvl has part- her commuting expenses by more planning at the University of Texas told nered with Ford to obtain premium than half. Used to paying more than Wired magazine last February. buses. EGP 100 per trip on ride-hailing apps, While cheaper than many forms of Careem and Uber, on the other hand, she appreciates the less expensive ser- transportation, buses are still consid- must ensure their service models are vices on the long run, adding that Swvl ered unaffordable for the majority of aligned with the needs of the Egyptian buses are clean and safe. low-income Egyptians struggling to market. Both ride-hailing companies are Swvl founder Mahmoud Nouh make ends meet. Moreover, despite expected to up their game by introducing believes fixed routes are the best the fact that competition helps main- additional routes and expanding their option in big cities like Cairo. �This is tain reasonably priced fares, it may fleets. Still, bus-hailing apps have a long where the world is going, everyone is way to go to revolutionize transportation not ensure the long-term economic n pre-planning, trying to have an orga- viability of bus-hailing, Varun Shridhar, in Egypt.
14• Business Monthly - FEBRUARY 2019 arab african international bank
A FINANCIAL GROUP WITH A STRONG REGIONAL PRESENCE
EGYPT • DUBAI • ABU DHABI • BEIRUT
Call 19555
Confidence.. Distinction Investor Focus.qxp_InDepth.qxd 2/5/19 2:04 PM Page 1
Investor Focus
New Insurance Fund Boosting Appetite for Investment in Africa
Egypt’s plan to launch an insurance fund for Africa-bound investments has raised praise, however, some stakeholders are concerned about implementation. By Menna A. Farouk
t was outstanding news for At a December 5th meeting Tarek Hassan, who exports with Prime Minister paper to sub-Saharan countries, Mostafa Madbouly, when he heard of the launch of Minister of Investment an insurance fund to encourage invest- and International Iment in Africa. “Investing in Africa Cooperation Sahar comes with a load of logistic and finan- Nasr said the ministry cial challenges,” he says, “and I believe had reviewed invest- that this fund will find solutions to ment insurance fund these problems.” models in a number of Hassan explains that Egyptian countries, including the investors in Africa typically face difficul- U.K. and France, as well as the ty shipping goods for long distances due Multilateral Investment Guarantee to a lack of transportation infrastruc- Agency (MIGA), a member of the ture, “not to mention the risk of not World Bank Group. Nasr noted the Boosting being paid and the absence of a strong ministry would compare the models Investments banking system,” Hassan says. before deciding whether it will be a In recent years, Egypt has ramped Announced in December during government or private fund. up efforts to increase investments in Africa Summit 2018 at Sharm el The draft was reviewed by related Africa. President Abdel Fattah el Sisi Sheik, the investment insurance fund ministries, Nasr added, and the announced during the Africa Summit is expected to focus on safeguarding Ministry of Investment is now working that Egypt's investments in Africa Egyptian exports to Africa, as well as on a final draft to present to during the current year reached $1.2 addressing banking and red-tape Parliament. billion, bringing total investments to challenges. Sherif el Khoraiby, head of the $10.2 billion. Despite his optimism, Hassan is con- COMESA Company for Investment, a On the other hand, African invest- cerned about the implementation company specialized in exporting ments in Egypt currently stand at about methodology, smoothness of operation, Egyptian commodities to countries $2.8 billion, according to a December eligibility regulations, and the associated part of the COMESA agreement, announcement by Nasr. This comes as red-tape. expects the new fund to focus on secur- Egypt is due to assume the presidency ing Egyptian exports to Africa. “In of the African Union this year. fact,” he adds, “this should be the main Fund Outline During the 2018 Africa summit, el objective.” The Ministry of Investment and Sisi stressed the need to achieve Moreover, el Khoraiby notes that the International Cooperation has pro- greater regional integration and facili- establishment of the new fund meets duced an initial document that address- tation of intraregional trade, especially the demands of many Egyptian export- es the fund's structure, participants, since the African Union launched the ing companies that for years have called capital requirements, management, and African Continental Free Trade Area at for an export insurance mechanism. risk assessment.
16• Business Monthly - FEBRUARY 2019 Investor Focus.qxp_InDepth.qxd 2/5/19 2:04 PM Page 2
Investor Focus
its summit in Rwanda last March to countries and help protect investors Investors and economists believe the promote investment. Furthermore, the against corruption and manipulation of establishment of the fund should reduce Egyptian president called for joint pro- laws. “Each member state will con- investment risks in volatile African jects with African countries to develop tribute to the capital of the fund, countries that struggle with political and infrastructure, new and renewable depending on its financial capabilities,” economic problems. Mohamed Genidi, energy, and communications and infor- he explains. head of the Industrial Investors mation technology. Moreover, Koura notes the fund will Association, says investors in Africa A previous similar attempt was encourage Egyptian banks to get have long faced serious challenges, such launched in 1922 by the Export Credit involved in Africa, opening branches as payment of fees and bank transfer dif- Guarantee Company of Egypt, throughout the continent. ficulties. which is “The fund will be an insurance policy partially Benchmarking so investors can pump money into the owned According to Koura, the major concerns African continent without fear,” he by the for potential investors in Africa are non- adds. "With the launch of this fund, commercial risks, which relates to polit- African governments’ financial and ical volatility and security issues. He trade institutions will be involved in points out there are many international, order to solve these obstacles." regional, and local institutions that Egypt’s new fund can bench- Challenges mark with. A few Although the fund is widely praised, examples include economists are worried it can’t address MIGA of the World every challenge ahead. Bank Group, Arab “There have been earlier attempts to Investment and launch companies in Africa that can Export Credit receive exports from Egypt in a bid to Guarantee Corporation, and avoid any problems or obstacles,” says the Islamic Corporation for the el Shami. “However, these attempts Insurance of Investment and Export have failed because the requirements Credit of the Islamic Development to work with these companies were Bank. costly and involved a lot of paperwork. Germany, for example, has a special- The government needs to seek techni- ized investment insurance entity to sup- cal assistance from international insti- port companies doing business in tutions in order to bring the new fund emerging countries, according to up to international standards.” Ahmed el Shami, an economist and pro- The investment insurance fund is fessor of feasibility studies at Ain Shams part of broader plans by Egypt to unite University. In the first half of last year, it African countries and lead develop- Egyptian insured German companies to the tune ment on the continent, says Hassan, Ministry of about EUR 900 million ($1 billion) the paper exporter. of Trade for projects in Asia, Africa, and Eastern He expects the value of Egyptian and Industry. Europe, he says. investments in Africa to triple over the El Khoraiby says MIGA, which includes 50 interna- next 10 years with the launch of this the company was tional, regional and national institutions, fund and with national initiatives mainly concerned with had investment guarantees issued by its aimed at bolstering African economies non-payment and political risks, members in 2017 worth $64 billion and and carrying out large developmental has failed to attract investors on account compensation of about $232 million. projects. of the high cost of participation. Koura says the value of the coverage “Egypt’s approach toward Africa is Ahmed Koura, former president of Al provided by the new Egyptian invest- developing rapidly and will bring real Watany Bank of Egypt, agrees, saying ment insurance fund will depend on its change for both Egypt and the conti- the new initiative will include all African financial solvency and capital. nent,” Hassan says. n
Business Monthly - FEBRUARY 2019 •17 At a Glance new.qxp_Market watch-09.qxd 2/4/19 2:52 PM Page 2
At a Glance
EGX’s Performance in 2018
Last year witnessed numerous fluctuations in 2018 Performance the international stock exchange, with some Egypt vs Developing Countries emerging markets losing half the value of their main indicator �a country�s chosen benchmark Russiaa -5.6%- stock value to compare its performance global- Indiaa –8.8% ly�. One example is Argentina with a recorded Malaysiaa -8.9% 51.7 percent decline in its main indicator; another is Turkey which saw a decline of 43.6 UAEE -11.9% percent. Egyptt -16.3% Nigeriaa -18.2% 2018 Performance Chinaa -20.4% Egypt vs Developed Countries S. Koreaa –22.6% Mauritiuss –24.2% S. Africaa –26.5% U.S. -6.3% Greecee –37.8% Botswanaa -43.4% Japann -14.5% Turkeyy -43.6% Francee -14.6% Argentinee -51.7% Australiaa -15.8% Source: EGX 2018 Swedenn -16.1% Egyptt -16.3% -17.7% U.K. Egypt�s main indicator, EGX50 EWI Spainn -18.3% �based on the performance of the top 50 Canadaa -19.1% listed companies�, however, was able to -20% weather the storm with minimal losses. It Italyy recorded an overall loss in value of 16.3 per- Germanyy -23.9% cent, closely following U.A.E�s 11.9 percent Irelandd -26.4% decline in value on a regional level and -28.6% Sweden�s 16.1 percent on an international Belgiumm level. Austriaa -29.3% This report is an infographic summary of
Source: EGX 2018 the overall performance of Egypt�s stock exchange �EGX� in 2018, as per the official data released.
2018 749.7 B Indicators Performance The overall value of shares, market capitalization of EGX, lost EGP 75.2 billion during 2018, closing the year at EGP 749.7 billion, compared to EGP 824.91 billion at its beginning. EGX30 declined 13.21 percent, or 1,983.37 points, to end the year at 13,035.77 points. Similarly declining, EGX 70 index closed the year at 693.83 points, show- ing a drop of 16.17 percent. The all-embracing EGX 100 index declined by 12.4 824.9 B 2017 percent to reach 1,727.21 points. Source: EGX 2018
18• Business Monthly - FEBRUARY 2019 At a Glance new.qxp_Market watch-09.qxd 2/4/19 2:52 PM Page 3
At a Glance
Overall Trading Volume
Total traded volume in EGX in 2018 closed at a value of Bond market capitalization recorded EGP 685.98 billion EGP 358.5 billion. It was represented in 60.8 billion traded at year�s end, of which 98 percent were treasury bonds and securities and 6.3 million transactions. only 2 percent corporate bonds.
EGX Trading Volume - 2018 EGX Traded Bonds – 2018
Transactions Corporate 6.3 M Bonds 2% Traded Treasury Securities Bonds 60.8 B 98%
Traded Volume Market EGP358.5 B Capitalization EGP685.98 B
Source: EGX 2018 Source: EGX 2018
Breakdown of EGX Transactions Monthly Performance by Country – 2018
In Egypt, March saw the highest overall value and the highest number of securities traded, while the lowest figures were recorded in August, with a difference of over EGP 28 billion between both figures. 14.15% 13.47% 12.84% 7.93% 7.79% 4.87%
KSA US UK UAE Cayman Kuwait Islands 31 % of transactions are not broken down, attributed to several minor investors. Source: EGX 2018 EGX No. of Securities Traded - 2018
5 B 5 B 9 B 8 B 5 B 3 B 4 B 4 B 4 B 4 B 5 B 4 B
January February March April May June July August September October November December
32 B 33 B 48 B 41 B 30 B 21 B 23 B 20 B 33 B 27 B 28 B 24 B
EGX Value of Trade - 2018 Source: EGX 2018
Business Monthly - FEBRUARY 2019 •19 At a Glance new.qxp_Market watch-09.qxd 2/4/19 2:52 PM Page 4
At a Glance
Investors
EGX has an overall total of 24,200 traders: 22,515 individual investment funds and 40.6 percent of institutional traders. investors, 815 institutional investors, and 870 investment Individuals represent 56 percent of total transactions, funds. while institutions contribute 44 percent. Non-Egyptian The official breakdown divides non-Egyptians as foreigners investors were net buyers during 2018, recording EGP 5.78 and Arabs, with other data identifying the Arabs classification billion and representing 36 percent of total transactions in as either foreigners or Gulf. For accuracy purposes, data 2018. presented in this report combines all non-Egyptians under Leading the trend, Saudi Arabian investors represent one calculated category. 14.15 percent of total transactions. The U.S. follows by a Non-Egyptian individuals and entities represent 14 percent close margin, standing at 13.47 percent, and the U.K. comes of total traders; however, they contribute 98.3 percent of third with 12.84 percent of all transactions.
EGX Investors Breakdown – 2018
Individual Institutional Investment Investors Investors Funds 22,515 815 870
Non- Egyptians Local Local Egyptians International International 20,298 484 331 14 856 2,217
Source: EGX 2018
Performance by Sector In terms of value, the banking sector contributes the lion�s The Tourism and Entertainment sector, on the other share standing at 23.4 percent of total market capitaliza- hand, grew by 26 percent, representing the highest tion, however, in terms of growth, the sector declined in growth rate. The sector�s market capitalization stands at trading by 5.1 percent. 4.4 percent.
EGX Growth Breakdown by Sector – 2018 26% 15.3%
3.6% Communications Construction Personal Products Real Estate Medical Care and Drugs Primary Resources Chemicals Food and Beverages Banking
-5.1% -8.9 % -14.8% -13.6% -13.5 % Financial Services Products and Cars Services, Industrial
-21.4% ( Excluding Banking) -25.5% Tourism and Entertainment
-35.7% -38.8% Source: EGX 2018
20• Business Monthly - FEBRUARY 2019 At a Glance new.qxp_Market watch-09.qxd 2/4/19 2:52 PM Page 5
At a Glance
23.4% EGX Market Capitalization by Sector – 2018
10.2% 10% 8.4% 5.4% 11% 5.4% 5.9% 5.6% 3.2% 3.8% 4.4% 0.2% 1.1% 0.7% 1% 0.2% Food & Primary Retails Banking Media Resources Chemicals and Drugs Beverages Real estate Technology Oil and Gas Tourism and Facilities [2] Medical Care Constructions Entertainment Communications Financial Service Personal Products Products and Cars Services, Industrial Source: EGX 2018 (Excluding Banking) Initial Public Offerings The EGX witnessed four initial public offerings �IPOs� Non-Egyptian investors acquired 60 percent of IPOs in during 2018, at a total amount of EGP 5.21 billion. Private 2018. Moreover, their trading in private offerings and public offerings hit EGP 4.68 billion, while public offerings offerings reached EGP 3.07 billion and EGP 0.04 billion, recorded EGP 0.53 billion. respectively, at year�s end.
IPOs by Company
Company IPO Type IPO date IPO Value �Million EGP� B Investments Holding Public 27/03/2018 53.73 Private 1,564 CI Capital Holding 26/04/2018 Public 173.74 Cairo Investment & Real Estate Private 1,156.5 27/09/2018 Development �CIRA� Public 87 Private 1,955 Sarwa Capital Holding 11/10/2018 Public 217 Total 5,206.97 Source: EGX 2018 Trading Reforms Announced in 2018
January: Approving margin trading for Exchange-Traded trading ratio for disqualified stocks from the list of Funds �ETFs� to enhance market activity and diversity specialized activities. investment products for investors. October: February: Expanding the number of stocks allowed to be • Expanding price limits on companies subject to tender offers traded with margin and intra-day trading. with a price outside price limit to accommodate for swift price June: Doubling the intra-day trading limit per security while movements and ensure trading continuity. allowing multiple trades after reaching the limit per security. • Setting the requirements for the inclusion of IPO shares to July: Allowing stock splits more than once per stock per the list of specialized activities. year via amending the executive regulations of the listing • Further reducing trading halt time from 15 to 10 minutes to rules issued by EGX board to further enhance trading align with international best practices and further enhance efficiency. trading activity and turnover ratios. September: • Extending intra-day trading to accommodate trading of 160 • Allowing the adjustment of ETFs opening price to reflect stocks up from 104 stocks. the fund�s net asset value �NAV� per certificate to rectify Transparency and Disclosure Achievements any misalignment between opening prices and NAV to EGX launched in 2015 an Online Disclosure System �ODS�, improve efficiency in the market. which allows listed companies to publish their disclosure • Amending trading system tick size. Allowing three deci- reports directly to the trading screens. This reduces time and mal points quotation for securities priced below EGP 2 or errors in processing announcements and corporate updates. $2 to further enhance trading activity and turnover of these 2018 saw the addition of 53 companies, growing the total securities number of companies using ODS to 220 companies, around 90 • Extending the time granted to confirm with the margin percent of listed companies.
Business Monthly - FEBRUARY 2019 •21 Cover Story new.qxp_InDepth.qxd 2/4/19 2:57 PM Page 2
Cover Story
The Perpetual Rise of Non-Banks
As prices skyrocket, so has the number of companies offering credit installment plans. The state wants to protect buyers and sellers, and, ultimately, the overall economy. By Tamer Hafez
22•Business Monthly - FEBRUARY 2019 Cover Story new.qxp_InDepth.qxd 2/4/19 2:57 PM Page 3
Cover Story
alking into Aman for Resilient Business Financial Services in Hyper Realizing that consumers may want financ- One mall, which specializes ing options, non-bank lending was legally rec- in loans for white goods and ognized in 1995, according to Sherif Samy, for- electronics, Ahmed Salah, a 32-year-old doctor mer head of the FRA. That year saw the intro- Wwas amazed he could get instant credit duction of a law that allowed leasing, where approval to buy a variety of brand-name air real estate developers offer installment plans conditioners. The most expensive installment with no bank involved. In 2001, it was option was about EGP 350 a month with no replaced by the mortgage financing law. payments for 30 days, at an interest rate of �Other laws regulating non-bank financing 17.56 percent and a longer repayment period pertain to lending for investment purposes than traditional bank loans. �I found this only,� says Samy. �As of mid-2017, there was setup very good,� he says. �They required two talk that we needed to regulate consumer standard documents and another two from credit through the FRA.� several optional ones; and four of them were Until now, supervised consumer lending was in my wallet: a credit card, sports club mem- offered only by banks, regulated by the bership, driver�s license, and syndicate card.� Central Bank of Egypt that set the terms and There are more and more lenders like Aman conditions. By 2016, the CBE announced it as consumers move toward installment plans would reduce the maximum installment pay- to escape the rising prices of goods, from ment from 60 percent of net income to 35 per- kitchen appliances to cars. cent. Meanwhile, bank loans for homes or In early January, the Financial Regulatory apartments could go up to 40 percent of total Authority �FRA� announced it had sent net income. At the time, the CBE�s stance was Parliament a draft law to regulate and license that since consumer credit didn�t directly ben- non-bank companies that offer installment efit the economy, these measures were meant loans. �A main feature of the law is that credit to limit banks� appetite for consumer credit seekers will be audited by the lending compa- and to �control credit risk and delinquency ny and FRA using the national credit rating rates,� Al Ahram reported at the time. agency, iScore, as a reference,� says Khaled el Despite this limitation, bank lending to Nashar, FRA vice-chairman. individuals has been increasing by double dig- Many non-bank lenders see the law as limit- its for the past couple of years, reaching EGP ing their exposure to default risk, while raising 257.2 billion in fiscal year �FY� 2017/2018, com- their profile. �This law will be great for busi- pared to EGP 200.86 billion in FY 2015/2016; ness,� says Hazem Moghazi, CEO of Aman just before the installment limitation was Financial Services, a subsidiary of Raya placed. Between June 2018 and October 2018, Holding. consumer lending increased by 8.73 percent, Economists, on the other hand, view the reaching EGP 286.76 billion in October, rise of consumer credit as risky for everyone according to CBE. involved. �Consumer credit works in devel- Outside the banking sector, 40 companies oped economies, not emerging markets,� says offer a wide range of financing options, Ahmed Ramadan, an economics professor at according to el Nashar, of the FRA. Alexandria University. �In emerging Meanwhile, FRA Chairman Mohamed economies there is a high likelihood of default Omran, during a press event last October, due to the increasing living costs and high estimated consumer lending by non-banks at interest rates. This can hurt retailers and, on a EGP 70 billion, or 24.3 percent of all bank large-enough scale, the economy at large.� lending.
Business Monthly - FEBRUARY 2019 •23 Cover Story new.qxp_InDepth.qxd 2/4/19 2:57 PM Page 4
Cover Story
Filling the Gaps income. Additionally, we require a National Bank of Egypt �NBE�, for backup person in case a payment is Local non-banks that provide con- example partnered with retailers to delayed.� sumer credit are diverse. Some special- offer interest-free or low-interest install- ValU allows its customers to apply ize in a specific product, such as ment plans. for financing online or in one of the Contact Cars and Rawaj, which only Similarly, other banks offered loans company�s physical locations. finance new car purchases. Companies for sport club memberships. Banque �Between 80 and 85 percent of our such as valU and Aman for Financial Misr offered up to EGP 120,000 to be applications are submitted online, Services provide loans for white goods repaid over a maximum of five years to mostly via mobiles,� says Walid and electronic equipment. In addition, join any sporting club in Egypt. Arab Hassouna, managing director of valU. retailers and manufacturers have Investment Bank offered to cover up to Meanwhile, Aman for Financial branched out into installment loans to 70 percent of membership fees with a Services offers installment loans of up promote the brands they sell, including maximum of EGP 150,000 for any to 36 months compared to the more Kia and Renault dealerships; sporting club in Cairo and Alexandria. common 24 months, thereby reducing MobileShop; Drive, a subsidiary of United Bank had offers for Al Ahly the monthly payment amount. GB-Auto; and appliances retail chain Club, Acacia Country Club in
B.Tech. Alexandria and Hewar Sporting Club in A main advantage of this type of Getting on the Mansoura with eight-year loans cover- financing is its ability to cater to the ing up to 90 percent of membership Bandwagon fees. One of the main advantages over wide segment of unbanked Egyptians. Capitalizing on the boom in demand for �This is a major driver of our install- conventional loans is there is very little installment loans, banks have ventured paperwork and payments are automati- ment payment business,� says in a diversity of directions, with many Mahmoud Khattab, chairman of cally deducted each month. offering, for a limited time, special loans The Industrial Development Bank B.Tech. �All you need with us is proof for their clientbase. QNB Alahli, of employment or that you have a fixed �IDB� went one step further, establish- Commercial International Bank, and ing a fully fledged department under the
24•Business Monthly - FEBRUARY 2019 Cover Story new.qxp_InDepth.qxd 2/4/19 2:57 PM Page 5
Cover Story
Najlaa Aly, a 23-year-old secretary who Alaa Farouk, head of retail banking at plans to get married in May, was amazed the NBE, agrees, adding that such com- at how many options she and her future panies may eventually need to take bank husband had in terms of shops, install- loans themselves. �If they decide to take ment plans, and products. �We chose that route, it is still the banks� money what would work best for us,� she says. and would have to undergo our credit- �It was truly remarkable.� worthiness assessment procedures,� he Non-bank lenders quickly established says, adding that in either case, interest a foothold in Egypt, growing at a rapid rates must be higher than prevailing pace. ValU, founded in December 2017, bank rates to take into account lending provides installment plans for more to riskier clients. �Consumer lending than 1,000 stores in 20 product cate- targets clients who would likely be gories representing 160-plus brand rejected by banks,� says Farouk. names. �Our rapid growth has been While some doubt that consumer down to installment plans becoming a lending by non-banks will be a threat to fact of life in almost all product cate- banks in the short term, their continued gories,� says Hassouna. growth could ultimately have a negative Aman for Financial Services started as impact. �This is a growing business, a department of Raya Holding to help given high prices and nearly stagnant consumers buy the company�s goods. salaries. It is logical to worry about the �Our operations have grown so much impact of such lending on banks, espe- that we needed to become a stand-alone cially if large international consumer subsidiary,� says Moghazi, of Aman. The credit non-banks open in Egypt,� says company now offers installment plans Sherif Aly, head of credit at Audi Bank. for products not sold in the parent com- �Banks will still have the upper hand. pany�s shops. But they will lose some business to such In the long term, Khattab, of B.Tech, companies.� believes installment loan growth is sus- tainable despite higher monthly pay- Regulating the Market ments due to continuing price hikes Those interviewed agree that having a mortgage finance law, which finances and lagging wages. �Our society is built law regulating non-bank consumer lend- homes according to the 2001 law. on consumption,� he says. �This is why ing will help develop this business in Additionally, the department can pro- we continue to grow as a business. All Egypt by driving out blackmarket vide credit to pay utility bills and stu- we need is to adjust our offerings to the lenders as well as standardizing how dent loans. �This operation is part of the status quo of the market.� non-bank lenders operate. They say this bank. Yet, it is not overseen by the will help protect lenders and borrowers CBE,� says Hamdy Azzam, deputy Threat to Banks? against defaults and abusive market chairman at IDB. For some, the growth of non-bank lend- practices. �Having such a law is vital to
ing is already eating into banks� con- our business given how fast it is grow- High Growth Market sumer lending portfolios, according to a ing,� says Hassouna, of valU. Moghazi, Buying goods via installment plans is banker who wished to remain anony- of Aman for Financial Services, voices a the only way for some people to afford mous. In addition to the speed with similar sentiment. �There has to be a what they want. Morkos Wesa, an elec- which financing is approved or rejected, quantitative and qualitative definition tronics shop owner on Haram Street, non-bank consumer lenders can approve of consumer credit providers to ensure a noticed an increasing number of single monthly payment amounts equal to 70 favorable business and investment envi- women buying household items such percent of income, compared to 35 per- ronment,� he explains. as washing machines with installment cent for banks under the CBE. According to el Nashar, of the FRA, loans. �They are buying today because Other bankers dismiss consumer the crux of the submitted draft is that they are afraid that when the time lending as insignificant. �We have �consumer finance� businesses would comes, it will be too expensive,� he both financing options and consumer legally provide only consumer credit, says. �Usually, the installment paper- credit outside the banking division is such as valU. �There are currently only work and checks are in the name of the very small,� say Azzam, of IDB. �Much three companies that comply with the father, who has enough money to pay fewer people apply for it compared to definition in the draft,� says el Nashar. for these installments.� traditional loans.� Omran, the FRA head, said in a
Business Monthly - FEBRUARY 2019 •25 Cover Story new.qxp_InDepth.qxd 2/4/19 2:57 PM Page 6
Cover Story
January press event, the law will regulate ficient experience in the domestic financial have seen in developed economies that any non-bank entities providing loans or sector. Lastly, the draft stipulates that non- the rise of this type of lending is down to credit in any format to individuals. �The bank consumer lenders must generate min- social changes. This is organic growth only businesses excluded will be those imum sales of EGP 25 million a year, that benefits businesses,� says Ramadan, that don�t perform this activity systemat- according to Omran. of Alexandria University. �Those taking ically,� he said, adding that companies Contracts must include the nature of loans have enough income and good job operating under existing non-bank the product or service to be financed, or salary prospects that drive them to financing laws would need to apply for a how much of its cost will be borrowed, spend more.� separate license to offer consumer credit. the loan term, and other details, notes However, he notes that Egypt�s con- Omran explained the law will set a Omran. This will make it easier for the sumer-lending growth is mainly down to minimum time for installment pay- FRA to audit and assess the level of risk products becoming increasingly unaf- ments and minimum paid-in capital, to which non-bank lenders are exposed. fordable, coupled with people who still though it will not be less than six According to el Nashar, the draft law want to purchase them whether or not months and EGP 10 million. Actual allows licensed lenders to establish a they can afford it. �Such consumers will amounts will be set by either the union or federation to lobby for their go to any lengths to purchase this prod- approved law or its executive regulation, interests. �Such a body will not only help uct, even if it means taking on debt that according to Omran. the market grow, but also create a more they can barely pay back,� says The other limitation placed on non-bank mature market,� he says. Ramadan. consumer lenders is that at least 50 percent This will likely cause defaults, espe- of their ownership structure is institutions Rising Risks cially with annually rising prices for fuel with financial institutions owning 25 per- The rise of consumer credit, even under and electricity caused by higher infla- cent of the company. The draft also gives tight regulation of the new law, is still tion. �We have been seeing these the FRA the right to ask for a change of a perceived as a risk to the economy. �We defaults for years,� says Islam Shawky, a firm�s CEO and CFO on grounds of insuf- sociology professor at Ain Shams
26•Business Monthly - FEBRUARY 2019 Cover Story new.qxp_InDepth.qxd 2/4/19 2:57 PM Page 7
Cover Story
University. �Just look at the rise in the the presence of a law with quantitative a 29-year-old accountant who is getting number of NGOs asking for donations limitations of what defines a non-bank married to Ali, the secretary. �It is too to release poor people who were impris- consumer lending business may give rise early to say for sure what will we cut out. oned because they defaulted on a loan to an underground variant. �The biggest But we will definitely cut out a lot.� they knew they most likely couldn�t risk I see is that installment plans are on Meanwhile, medium-sized and family repay.� He hopes the new law will help the rise, gaining a lot of momentum,� he businesses can�t continue to rely on eliminate loan sharks and contain penal- says. �There are now technologies and installment-plan sales for too long. �I ties other than prison for those who know-how that can allow informal would love to say that my business is default. �The law will hopefully be more lenders to operate outside the law, cater- sustained thanks to installment plans, humane,� says Shawky. ing to an even more needy, and risky, sec- but it isn�t,� says Wesa, the Haram Street Companies providing consumer cred- tion of society. Regulators must put this appliance shop owner. �Right now, I it say they are doing their best to ensure into consideration from day one.� barely have enough money to replenish that whomever they are lending can a quarter of my stock. A significant por- repay the loan. �At B.Tech, we look Paycheck to Paycheck tion of my money will be paid over the beyond income and the paperwork the On the ground, safer consumer lending next two years, and the trader from client presents to us. Our field research which I buy these products won�t take doesn�t detract from the reality that n helps protect applicants as much as us,� more Egyptians will be installments.� says Khattab, of B.Tech. �This is vital living paycheck to pay- because we are going through 50,000 check with heavier debt applications every month.� At valU, the limiting day-to-day business model relies on getting the spending. �It is quite client�s credit score from iScore or field sobering to realize that investigations, says Hassouna, of valU. half our income has �Once approved, we buy the product for already disappeared the client and keep it in our name until because we want to get all payments are made. That way we can married and live in a cover our losses if there is a default.� nice place,� says For Samy, the former head of FRA, Mohamed Abdel Hady,
Business Monthly - FEBRUARY 2019 •27 InPerson.qxp_InDepth.qxd 2/4/19 3:08 PM Page 2
InPerson
28• Business Monthly - FEBRUARY 2019 InPerson.qxp_InDepth.qxd 2/4/19 3:08 PM Page 3
InPerson
Toward a Digital Reality An Interview with the the Minister of Communications &Information Technology
By Nadine Abou el Atta
s Egypt undertakes its 2030 Vision, the need to move toward a digital economy From a qualitative point of view, how does became paramount. The Ministry of the ongoing upgrade of Egypt�s digital infra- ACommunications and Information structure translate to the daily life of Technology �MCIT� has introduced several reform Egyptians? projects to help digitally transform the govern- ment and enhance the connectivity of citizens This is something we are very keen on achieving, throughout the country. translating the new initiatives and ongoing pro- The communications and information technolo- jects into tangible improvements in the life of the gy �ICT� industry is projected to grow by 15 per- average citizen. cent during the current fiscal year �FY�. Egyptians should witness a wide improvement Furthermore, the sector�s contribution to the in obtaining government services in the very near country�s gross domestic product is expected to future. A few examples include renewing your car reach 4 percent in FY 2018/2019, increasing to 5 license, obtaining municipality services, issuing a percent by FY 2021/2022. copy of your birth certificate, or paying your utili- The ministry is basing its reform plan and ty bills. All of these services will soon be done growth objectives on two strategic pillars: human either in post offices or online. Additionally, call development and digital transformation. With a centers offering the same set of services will be strong focus on educational transformation, the launched, primarily targeting elderly people who ministry is working on launching Egypt�s first arti- are not comfortable with the previously men- ficial intelligence technology faculty before the tioned options. end of the current year. The main idea is to have government outlets Additionally, it is working on launching several where government services will be offered with a technology hubs in universities, in order to substantial amount of ease. improve the ICT skills of Egyptian youth before they graduate to enhance the country�s skill-base. Upper Egypt, specifically, deals with a dif- Examples include South Valley University in Qena; ferent set of cultural and economic prob- Menoufia University; Sohag University, and lems than other areas of the country. How is Zagazig University. This is in addition to entrepre- the ministry addressing these differences neurship-focused technology parks in the New when implementing its projects? Capital and the cities of Sadat, Assiut, Beni Suef and Borg el Arab. I have visited Upper Egypt numerous times, and I To better understand how these ambitious steps have a lot of respect for the people there, especial- will affect the quality of life of the average citizen, ly the women and how they embrace social and Business Monthly sat for a one-on-one with Amr economic challenges with perseverance, hard Talaat, minister of ICT. work, and determination.
Business Monthly - FEBRUARY 2019 •29 InPerson.qxp_InDepth.qxd 2/4/19 3:08 PM Page 4
InPerson
It is our responsibility and commit- ment to respond to this excellent “We are working on helping the youth of this spirit by ensuring they have access to country compete more effectively in the all the facilities that can help them local and international labor market.” progress in their careers and lives. We are doing several projects in order to Moreover, the card will help the achieve this. We are working on Of course, it is very important to government categorize its employees launching a number of innovation include these people in social and and identify those who are really in hubs at several universities. The main capacity-building programs. We are need of support. The concept is mul- purpose is to foster an ecosystem of currently in collaboration with the tifold and I find this one of the innovative thinking and pioneering Ministry of Youth, setting up inter- important projects we are currently new ideas. net centers at youth clubs throughout concerned with. Furthermore, we are working on the country. This, hopefully, will help education training in Upper Egypt connect people in less-privileged for students and freelancers. Our aim Realistically speaking, how soon areas. We want young Egyptians in is to help them enhance their skills to can the government become 100 these areas to see the world and what compete in the job market both percent paperless? is going on in it. locally and online. It is our responsibility to ensure Moreover, we are focused on We plan to have a pilot in 2020. I that our youth have internet accessi- ideation and acceleration of startups. don�t want to say paperless, but less bility. dependent on papers. Given that many don�t have the means or skill to “Our main purpose is to foster an deal with the government electroni- ecosystem of innovative thinking and cally, we would be excluding citizens pioneering new ideas.” if we shift entirely paperless. However, we are moving toward what we call a collaborative government, We are connecting them with where all entities connect and com- To boost financial inclusion, the investors and creating a platform for municate well through digital means, ministry is about to launch a uni- them to exhibit their ideas in hopes thus providing the citizen with easy fied card. How will the new card of securing investments from�or in access to all services. service address the lack of banks partnership with�the private sector. in some towns? On the health front, we are work- India has always been able to
ing with the Ministry of Health on attract most global communica- I will tell you something; some coun- making services available through tions players on account of its tries with infrastructure inferior to telemedicine. This should help con- ours have leaped forward in terms of cheap, skilled labor. In your nect Egyptians in rural villages to financial inclusion and in digital opinion, is the float of the pound medical help. banking. We have no excuse not to be and relatively cheaper labor Finally, to be able to identify under- there, and I believe we are ready. enough to attract some of these privileged areas with the strongest The idea of the unified card is to companies? demand for support, we have part- help citizens receive their govern- nered with the Ministry of Social ment entitlements, whether cash or I think we are ready. Our market Solidarity. in-kind. This helps bring a vast offers huge opportunities for In short, there are a myriad of initia- amount of unbanked people receiving investors to come. We are now one of tives that are all going in parallel to help these entitlements into the banking the least expensive, if not the least and support our people in Upper Egypt. system and the digital economy. expensive country in terms of skilled
In addition, the service relies on labor. Moreover, we have a huge pool Many towns lack access to the unique penetration of the postal of skilled ICT professionals, and we banks, and some off-the-grid vil- offices throughout Egypt, where citi- are working diligently on expanding lages don�t even register their zens of areas that don�t have banks our skill base further. births with the government. can access the system through the There is an ecosystem sufficient to Does the ministry have a plan to closest postal office. foster investment in various sectors digitally include them? of the ICT industry.
30• Business Monthly - FEBRUARY 2019 InPerson.qxp_InDepth.qxd 2/4/19 3:08 PM Page 5
InPerson
Some major players, such as Google, closed their offices in Egypt, while others, such as British Telecom, reversed their plans to open in Egypt. What are their main concerns and how can we attract them?
What we are planning to offer is a portfolio of advantages that make us unique. We have the right infra- structure that connects us well to Europe and Asia, we have the right pool of skills at competitive rates, and now we are completing the pic- ture with the legislative reforms, which include several attractive investment incentives such as tax reductions and free zones within IT technology parks. These steps are helping us attract such companies back to Egypt.
With the ministry giving signifi- cant attention to promoting entrepreneurship in AI, how can these efforts aid local robotics innovation, which isn�t receiving any investments?
Robotics is a very important disci- pline in ICT and without it we won�t be able to build a competitive manufacturing industry in Egypt. To enhance this sector, we need to partner with both academia and industry in order to strengthen our robotics capabilities, not only in the manufacturing field but in the scientific one as well. Through our new technology parks, we are working on incubat- The private sector is at the forefront of Any final words to our readers? ing some of the startups working on the ICT business. I come from the pri- robotics. I have seen some impressive vate sector, where I spent more than 35 We are working diligently to help facil- projects in Borg el Arab�s technology years. Therefore, I am a firm believer itate their lives by making government park and we are helping them spur that the private sector is the one lead- services more easily available. We are enough investment to continue their ing. The role of the government is to also working on helping the youth of research and development work. facilitate, manage, and regulate. We are this country compete more effectively
not here to do business ourselves nor in the local and international labor mar- How can the private sector aid to set up companies and trade. We are ket. Finally, we are directing all our ICT the ministry in achieving its here to encourage the private sector to capabilities toward identifying those in goals? invest and create progress. need of government support. ■
Business Monthly - FEBRUARY 2019 •31 Regional Focus.qxp_InDepth.qxd 2/4/19 3:13 PM Page 2
Regional Focus
Egypt’s Green Bonds a Safe Bet? Following U.A.E.’s inaugural green bond issuance, Egypt is considering following suit as part of a plan to diversify its base of funding. By Ola Noureldin
ith the launch of several Green bonds are voluntary issuances Mostafa Madbouly completed last July green and renewable by financial institutions, companies, or amendments to executive regulations energy projects in governments to raise funds for a set for the new Capital Markets Act, which WEgypt, the government period of time, with proceeds invested include provisions regulating green acknowledges the importance of private in renewable energy projects, improving bonds. An issuance is set to take place as sector capital in the transition to an energy efficiency, and reducing carbon part of a partnership with the environmentally friendly economy. New emissions. International Finance Corporation debt instruments, such as green bonds, The move to green bonds comes as �IFC�, Mohamed Omran, head of the are being studied under the country�s Egypt�s FY 2018/2019 budget of EGP Financial Regulatory Authority �FRA�, goal to reduce public debt to about 80 714 billion, as per official figures, calls for said in a press statement on July 18, percent of gross domestic product by EGP 511 billion from domestic debt without providing an announcement the end of Fiscal Year �FY� 2021/2022, instruments and the rest from bond date. Omran added that the regulations according to a draft state budget. issuances on top of the International will include measures to assess and Following the region�s inaugural green Monetary Fund loan, according to choose eco-friendly projects, the com- bond issuance by the National Bank of Reuters. The country�s new diversifica- pliance of such projects with clean envi- Abu Dhabi �NBAD� in March 2017, tion strategy was put in place in ronment requirements, and disclosures reaping $587 million over five years, the response to a foreign borrowing cap of to investors and periodical statements. move seems like a safe bet for Egypt $16.733 billion for FY 2018/2019, accord- Additional specifics were not available especially given its abundant sunshine ing to a government document obtained as of press time. and countless renewable energy projects by Reuters on October 25th. The lack of updates during the past in the pipeline. On this regard, the government of six months have raised concern among
32• Business Monthly - FEBRUARY 2019 Regional Focus.qxp_InDepth.qxd 2/4/19 3:13 PM Page 3
Regional Focus
stakeholders. �Egypt is not ready for Similarly, Samy believes foreign currency both oversight and information, local listing of green bonds, due to min- issuance is the right choice for corpora- according to Investopedia. imal logistics in place,� notes Allen tions, adding that if a project funded by Alternatively, listing on a stock Sandeep, head of research at Naeem the bonds fails to generate enough rev- exchange helps protect investor interests Holding. enue in foreign currency, it could be less and guarantees wide acceptance, explains Sherif Samy former FRA chairman risky to issue bonds in local currency on a fixed-income banker, who requested echoes a similar note. �I am not sure if the Egyptian Stock Exchange. anonymity. �I expect great demand from there is a firm decision to issue green Samy believes several projects and ven- foreign investors for a sovereign bond bonds in 2019,� he says. �Now that we tures in Egypt could qualify to issue green issuance offshore only if Egypt is keen to have the Capital Market Act�s executive bonds. To facilitate workflow, he notes, standardize regulations in place, it should be feasible.� they should be included in a register at what the FRA based on criteria designed in Marketing Green Bonds cooperation with the Ministry of Environment. The projects should After consultations with the FRA in have a sustainable impact and be June, the IFC announced the author- financially viable, he says. ity would provide comparative studies of international markets during OTC vs. Exchange, another round of meetings. Even though the results of those talks have Corporate vs. not been released, experts inter- Sovereign viewed cite four parameters that Green bonds do not necessarily could shape an issuance: whether the have to be listed on the stock bonds will be in foreign or local cur- exchange to be issued in Egypt. rency; sold over the counter �OTC� or Green OTCs, a financial instru- listed on the stock exchange; listed ment traded via a dealer network as locally or abroad, and whether they opposed to a formal exchange, despite will be corporate or sovereign debt. the ability of exchanges to regulate Despite government measures to sup- trades. port foreign investment, businesses Sandeep advocates issuing OTC off- abroad continue to see repatriation as a shore green bonds in cooperation with risk. Issuing green bonds in U.S. dollars institutions such as the World Bank, might mitigate a possible lack of inter- IFC, and European Investment est within Egypt, says Sandeep. Bank. Yet, OTC transactions can lack
Business Monthly - FEBRUARY 2019 •33 Regional Focus.qxp_InDepth.qxd 2/4/19 3:13 PM Page 4
Regional Focus
projects will be qualified as sustainable,� was commissioned to provide a second- obligations in check going forward,� says the banker. Sandeep agrees, �These party opinion to the NBAD Green explains the fixed-income banker. are government-proposed initiatives; Bond Framework during the first half of The Finance Ministry in September sovereign issuance is the way to go.� 2016. Proceeds are reviewed quarterly said it would continue to cancel auctions Samy, however, believes Egypt by the bank�s green bond committee. of domestic bonds as long as yields remain should opt for an offshore corporate The bank developed a management and high. Yields had soared to highs of 18.5 issuance to avoid exacerbating the tracking process for the use of proceeds percent and 19 percent in the last canceled country�s debt crisis. Corporate that is reviewed annually internally, as bond auction on September 25th. issuances, he says, �are all about a well as by an independent auditor for Sandeep shares a positive outlook on specific project, management credi- compliance with the NBAD Green green bond issuance, adding that tax bility, business model, and viability. Bond Framework. According to regula- concessions attached to the securities There will be no issues or concerns tions, unused proceeds can be placed in will lure investors. �The impact on regarding government deployment temporary investments and targeted for Egypt in the long term would be very and effectiveness.� full deployment within 12 months. positive,� he says. �As for the appetite Since bonds are not actively traded for green bonds in international mar- on the Egyptian Stock Exchange and A Bumpy Way Forward kets, the growth is phenomenal given given Egypt�s need to target interna- The biggest challenge for the NBAD the nascent stage of the market.� tional institutions, Samy explains, it Green Bond Framework came one Even if Egypt capitalizes on green is more suitable for the first issue to month after the 2016 investor roadshow, bonds in the future, current challenges be listed on an international when the bank postponed issuance due remain. For example, in dealing with exchange, such as Dublin or to lack of investor interest. Failure to corporate debt, an issuer may fear the Luxembourg. �Launching green launch green bonds in 2016 was report- additional cost required by a green bonds internationally would give edly influenced by the ongoing merger bond, while providing returns compara- Egypt a wider, diversified investor of NBAD with First Gulf Bank, which ble to those of a normal bond, according base that theoretically means cheap- made it difficult to price the bond, an to a 2016 Ernst & Young corporate sus- er funding,� says the banker, agreeing unidentified banker told Reuters, pro- tainability report. These costs may with Samy. viding no further details. NBAD include the expense of meeting green declined to comment on the matter. criteria, monitoring and maintaining the Lessons from the UAE When plans were revived in March, a proceeds as green, and transparently The region�s first green bond issuance by banker involved in the process communicating to investors. the NBAD took place almost seven explained the bank reevaluated the pric- In sovereign debt offerings, the months after it organized an investor ing and decided to launch in a �soft mar- Egyptian government must convince roadshow in August 2016 to market the ket,� where there are typically more investors it will not engage in �green- benchmark-sized, five-year dated bond. potential sellers than buyers and lower washing� projects to appear environ- In March, the London Stock Exchange prices, a step that aims to complete the mentally friendly when they are not. welcomed the bank�s listing to fund pro- trade ahead of the merger with FGB, Egypt instead should develop, follow, jects that would fight climate change which took place in April, according to and enforce strict definitions and crite- and protect natural resources. Global Capital. ria for sustainable projects, according to The issuance �demonstrates NBAD�s �Shaky investor sentiment for its first Green Biz, an environment-focused commitment to pursue innovative foray will inform the way NBAD issues news website. financing solutions and to broaden our green debt instruments in the future, Despite such hurdles, it is important global investor base,� NBAD Group with issues likely to launch on a more to remember the value of green bond Treasurer Stephen Jordan said in a state- modest scale with stronger price incen- issuance in promoting the transition to ment in March. tives,� reported Global Capital. a low-carbon economy. The government NBAD will use proceeds from the Back home, those interviewed believe should take policy actions like develop- bonds to pay 3 percent semiannual Egypt is unlikely to face low investor ing a priority list of green projects, coupons, and finance the 100 megawatt appetite at the time of the issuance, ensuring financial viability and pipeline Shams concentrated solar power plant even after bond cancellations last year. transparency for the investors, and in Abu Dhabi and the Etihad Rail net- �I wouldn�t link previous bond cancel- establishing a collaborative platform for work, according to The National. lations to �green bonds�, because �they� the government, banks, and investors. If Furthermore, it will fund an undisclosed were local auctions. They were canceled Egypt plans to meet its announced tar- project in the U.S. because the Finance Ministry is manag- get of achieving a capacity of 175 To ensure full credibility and trans- ing its portfolio with prices it is willing gigawatts by 2022, fast-tracking such parency, the Vigeo Eiris rating agency to accept in a bid to keep its debt service policies is a necessity. ■
4234• Business Monthly - FEBRUARY 2019
Market watch new.qxp_Market watch-09.qxd 2/4/19 3:24 PM Page 1
MARKET WATCH Stock Analysis 2018: A Bumpy Year
ast year was not as kind to investors as the prior two Cement - Qena �MCQE� fell 58 percent to EGP13.61 as years were. Back then, the EGP devaluation worked oversupply in the market put a lid on cement producers� Lits magic and lifted almost all boats, while in 2018, profits and margins. the EGX 30 fell 13.2 percent to end the year at 13,035.77. As for the period from December 15 to January 15, some SImilarly, EGX 70 fell 16.2 percent, ending at 693.83. old-timers came back to the forefront, such as Egyptian However, 2019 brought with it some waves of optimism Media Production City �MPRC�, ending the period up 49.6 that helped lift stock prices of large caps. Year-to-date percent at EGP6.85. Also, ASEC for Mining �ASCM� fol- �through January 15�, EGX 30 inched 3.2 percent higher, lowed suit, up 42.6 percent to EGP10.31. Elsewhere, the whereas EGX 70 slipped 2.7 percent. The period from poultry industry saw its four listed stocks jump 20 percent on December 15 to January 15 saw the EGX 30 advance 3.5 per- average on news of extending the ban on transporting live- cent to 13,447.12, while the EGX 70 was flattish at 675.44. stock across Egyptian governorates. Egypt for Poultry Advances outnumbered declines by a ratio of 5 to 2. �EPCO� led the pack, up 23.2 percent to EGP2.24, while In 2018, we had four IPO that ended the year with mixed Cairo Poultry �POUL� tailed the list, up only 14.0 percent to performance. B Investments �BINV� fell 28.9 percent to EGP6.53. On the negative side, Dice Sport & Casual Wear EGP 7.64, CI Capital Holding �CICH� advanced 2.7 per- �DSCW� seems to have succumbed to pressure of some cent to EGP7.91, Cairo Investment & Real Estate shareholders wanting out of the stock, pushing the stock Development �CIRA� jumped 50 percent to EGP 9, and down 27.9 percent to EGP2.21, post its 5-for-1 stock split. Sarwa Capital �SRWA� fell 13.6 percent to EGP6.36. Stepping into February, investors will likely set their eyes Meanwhile, Qalaa Holdings �CCAP� was by far the stock of again on the CBE, hoping to see a repeat of last year�s rate the year. It skyrocketed 180 percent to EGP3.56, buoyed by cut by mid-February. Last year, a 1-percent cut helped push the approaching launch of its 17 percent-owned Egyptian the market higher, but the question is, will this be enough Refining Company �ERC�. On the other hand, Misr for the market this time around?
Arab Company for Asset Management & Development (ACAMD)
ACAMD is not a commonly recognized household 2.96 2.96
name, as it did not exist until mid-2018 when it spun 2.93 2.92 off the Arab Cotton Ginning Co. With the spin-off, 2.9 2.89 ACAMD inherited an un-utilized land of less than 2.87 2.82 2.81 600,000 sqm spread across the Delta region and 2.78 2.78 2.79 2.77 Upper Egypt on or close to the Nile. ACAMD also is 2.76 2.76 debt free with some EGP 10 million in cash. Its mar- 2.73 2.72 2.67 2.69 ket cap of some EGP 800 million dwarfs the adjust- 2.68 ed net asset value of its land bank which can easily 2.62 exceed EGP1 billion. The stock advanced during the 12/16/18 12/19/18 12/22/18 12/25/18 12/28/18 12/31/18 1/3/19 1/6/19 1/9/19 1/12/19 1/15/19 period by 12.7 percent to EGP 3.01 with 200 million shares changing hands worth EGP 568 million.
36• Business Monthly - FEBRUARY 2019 Market watch new.qxp_Market watch-09.qxd 2/4/19 3:24 PM Page 2
Capital Markets
Egyptian price indices - EGX 30
13525.83 13447.12 13402.7
13365.58 13367.44 13264.7 13335.75 13215.4 13343.08 13204.37 13121.11 13137.58
13078.2 12984.21 13035.77 12992.06 12947.35 12944.52 12840.16 12784.44
12670.63
12/16/18 12/18/18 12/20/18 12/22/18 12/24/18 12/26/18 12/28/18 12/30/18 1/1/18 1/3/18 1/5/18 1/7/18 1/9/18 1/11/18 1/13/18 1/15/18
Egyptian price indices - EGX 70
697.91
694.3 693.83
688.1 688.24 687.3
687.34 687.11 685.53
677.63 678.21 676.3 675.44 672.87 676.48 676.14 673.83 674.06 672.4 671.47 669.81
12/16/18 12/18/18 12/20/18 12/22/18 12/24/18 12/26/18 12/28/18 12/30/18 1/1/18 1/3/18 1/5/18 1/7/18 1/9/18 1/11/18 1/13/18 1/15/18
Egyptian price indices - NileX
469.79 469.32 469.34 469.07
468 467.45 467.46 466.89 466.1 466.58 465.63 465.87 465.72 465.93 465.44
463.89 463.7 462.78
461.64 461.07
459.9
12/16/18 12/18/18 12/20/18 12/22/18 12/24/18 12/26/18 12/28/18 12/30/18 1/1/18 1/3/18 1/5/18 1/7/18 1/9/18 1/11/18 1/13/18 1/15/18
Business Monthly - FEBRUARY 2019 •37 InDepth 19.qxp_InDepth.qxd 2/4/19 3:25 PM Page 1
In Depth
Petrochemicals A Held-Back Boom The government may be working on expansion projects for Egypt�s petrochemical sector, but experts believe most of the industry�s core issues have yet to be addressed.
By Mahinaz el Baz
ith numerous announcements about mega plant expan- sions, the Egyptian govern- Wment has been boasting about the establishment of a number of petrochemical facilities to limit its imports and close the supply-demand gap. Yet, many experts argue the market is not ready to accommodate such rapid expansion. “To attract more investment in the [petro- chemical] sector, the government needs to allo- cate more natural gas to it,” says Sherif el Gabaly, chairman of the board of the Egyptian Chamber of Chemical Industries, Federation of Egyptian Industries (FEI). To el Gabaly, future expansion of the petrochemical industry is at the mercy of what current plants suffer from: limited fuel supplies. Natural gas is not only used as the main feedstock of the petrochemical industry but as raw material for the production of several products. However, its supply dictates the country’s petrochemical production capacity. While official announcements say Egypt has reached natural gas self-sufficiency, most exist- ing production is directed toward generating electricity, around 63 percent, with only 10 percent earmarked for petrochemical plants.
38• Business Monthly - FEBRUARY 2019 InDepth 19.qxp_InDepth.qxd 2/4/19 3:25 PM Page 2
In Depth
Petrochemical Engineer Amr el by 3 kilos per person, notes Ihab Highlighting the sector’s poten- Shikh believes most Egyptian petro- Yahia, head of marketing research at tial, el Sherbiny says multiple pro- chemical companies have been oper- Sidi Kerir Petrochemicals Company. jects are under development with ating at less than 50 percent of “This is a significant growth when successful milestones. A project to capacity since 2011 due to the speaking in aggregate terms.” produce methanol derivatives and scarcity of natural gas. Last year saw the implementation of another to make petrochemical Abeer el Sherbiny, a business develop- four new industrial petrochemical pro- products in the Alamein area have ment engineer at the Egyptian jects with total investments of about been fast-tracked to cope with Petrochemical Holding Company $1.5 billion. The first project in growing domestic and internation- (ECHEM), believes the feedstock issue is Damietta Port turns out methanol al demand. the primary reason for delays in the derivatives for Suez Petroleum Services In conjunction with this growth, petrochemical 2002-2022 master plan, a Company with investments of $60 mil- ECHEM has updated its master three-phase national upgrade program. lion. It is considered a new player in plan for 2020-2035 to focus on A report published by the the manufacture of fertilizers, ready- specialty products. “There are Organization of Arab Petroleum mix concrete, and adhesives. many new projects coming within Exporting Countries in 2018 notes The second project produces indus- the next three years in this sector,” “the Egyptian petrochemical industry trial rubber (polybutadiene) at the according to el Gabaly. is facing difficulties and delays in the Egyptian Ethylene and Derivatives implementation of the master plan, Company complex in Alexandria with Technical Barriers mainly due to the lack of feedstock investments of $105 million. The pro- Feedstock is not the only issue, the supplies.” ject’s final product will be used in 13 technology used is one of the main With an ambitious goal to attract industries, including tires, conveyor reasons for the heavy reliance on $20 billion in investment and create belts for cars and factories, as well as natural gas, el Sherbiny explains. 100,000 jobs, according to el Sherbiny, building and construction. Mahmoud Farghaly, plant opera- the master plan was updated recently The third project includes two new tions manager agrees, “Right now to address issues in the domestic mar- Sidi Kerir Petrochemicals Company ECHEM is looking for technolo- ket, including the availability of natur- factories to produce propylene and gies to get feedstocks from other al gas. Nevertheless, the question polypropylene with investments reach- resources similar to natural gas, remains whether expansion plans will ing $1.2 billion, as well as a project to one example would be cracking address those problems. produce medium-density fiberboard at heavy petroleum materials.”
Kafr el Sheikh. Outdated infrastructure is anoth- Sector Performance in The fourth involves the construction er byproduct of the industry’s slow 2018 of the new offshore exporting platform technology adoption. Petrochemicals play a dynamic role in of Misr Fertilizer Production Company Although there is an increasing the Egyptian oil and gas sector. The at Damietta Port with investments number of new petrochemical pro- industry represents 3 percent of the reaching $180 million. It will support jects, a gap remains between gross domestic product (GDP) and 12 the export of urea fertilizer and liquid national production and interna- percent of overall industrial produc- ammonia. tional trends. For instance, an tion, according to the General Despite the industry’s issues, output abundance of olefins would widen Authority for Investment and Free has been increasing, notes el Sherbiny. the range of petrochemical prod- Zones. Egypt produces about 4.8 mil- “The Egyptian petrochemical industry ucts produced locally and increase lion tons of petrochemical products per has reported strong growth over the opportunities to manufacture new year, Saad Helal, chairman of the past decade and a half with total pro- derivatives, such as specialty chem- Egyptian Petrochemical Holding duction of more than 4 million tons of icals, that are now imported. Company, said at the Al-Ahram diversified petrochemical products, Another technical issue is the Energy Conference in December. including polymers, fertilizers, and location of the new projects. To be Moreover, Egypt is one of the largest chemicals,” he says. competitive, petrochemical experts markets for lubricants in Africa and “The 2018 increase in produced and say production sites should have the second-largest refining center on exported polymers such as polyethyl- easy access to both feedstock and the continent. ene and polyvinyl chloride shows the markets. In addition, they must be In addition, the annual per capita volume of growth in this sector in capable of producing high quality, consumption of petrochemical deriva- Egypt aligns with global growth for lighter products that international tives between 2014 and 2018 increased similar products,” says el Sherbiny. markets increasingly demand.
Business Monthly - FEBRUARY 2019 •39 InDepth 19.qxp_InDepth.qxd 2/4/19 3:25 PM Page 3
In Depth
The country is projected to remain a points due to declining long-term eco- Moreover, he believes the industry net importer until 2022 for petrochem- nomic risk, according to Fitch should draw more on local expertise ical derivatives that represent about Solutions’ report on Egypt and Egypt’s young and talented work- half of the Egyptian demand. They Petrochemicals, published last April. force. Furthermore, Yahia cites an include polyethylene terephthalate and Yet, it stays in seventh place in the excessive bureaucracy and the absence esters, styrene (synthetic rubber and Middle East and Africa regional rank- of effective networking and database latex), acrylics, and acrylates, Yahia ing, ahead of South Africa and behind auditing. says. “Egypt later could turn into a net Qatar. On the upside, the petrochemi- Despite the numerous challenges, exporter for polyvinyl chloride and cals market risk score remains those interviewed believe the market polypropylene,” he adds. unchanged, with no plans to delay or presents a lucrative investment oppor- Licensing is another crucial aspect cancel expansion and construction sec- tunity due to the gap between demand facing projects that produce special tor growth to offset the negative effects and local supply. petrochemical products. Special prod- of more subdued end markets, the “Obstacles facing investors in uct license holders try to control their report added. Egypt’s petrochemical sector are more intellectual property to prop up In 2016, Egypt launched a major or less challenges that can be resolved demand and maintain prices for their economic reform program through a with some initiatives by all stakehold- products, el Sherbiny notes. number of fiscal and monetary policy ers,” says el Sherbiny. “These chal- decisions, including energy subsidy lenges require persistent identification Economic and Strategic cuts. Some international industry and study to address them in the opti- experts point out that the cost of pro- mal way. To put it bluntly, challenges Barriers ducing petrochemicals is highly depen- are always there and it is all about Egypt's Petrochemicals RepRisk Index dent on natural gas, which will cost fighting them with a focused score has fallen 0.6 point to 51.3 more due to lower energy subsidies. approach.” ■
40• Business Monthly - FEBRUARY 2019 Chamber .qxp_ChamberSection-07.qxd copy 2/4/19 3:34 PM Page 1
CHAMBER NEWS
COMMITTEE LEADERS (July 2018 to June 2019)
Agriculture and Food Security Insurance Chair: Abdel Hamid Demerdash, Agricultural Export Council Chair: Alaa El-Zoheiry, Arab Misr Insurance Group | gig Co-Chairs: Amr Salah, Cargill Co-Chairs: Axel Bromley, CHUBB (Formerly ACE Life Insurance Co.) Hatem El Ezzawy, PICO Agriculture Elena Butarova, MetLife, Life Insurance Company Tamer Mosalam, PepsiCo Sherif ElGhatrifi, Medmark Insurance Brokerage BOARD OF International Cooperation Banking and Finance Chair: Walid Labadi, IFC International Finance Corporation GOVERNORS Chair: Ahmed Issa, Commercial International Bank (CIB) ˚ Co-Chair: Catarina Hansen, European Bank for Reconstruction Co-Chairs: Akef El Maghraby, Banque Misr and Development (EBRD) PRESIDENT Hassan Hussein, El Taamir Mortgage Finance – Aloula Soha Ali, J.P. Morgan Chase Bank Investment Tarek Tawfik, Cairo Poultry Tarek Azmy, Corporate Leasing Company Egypt (CORPLEASE) Chair: Hazem Badran, CI Capital Holding Co. Co-Chairs: Moustafa El Chiati, EFG Hermes UAE EXECUTIVE VICE PRESIDENTS Capital Market Sherif El Kholy, ACTIS David Chi, Apache Egypt Companies Chair: Karim Awad, EFG Hermes Holdings, SAE Legal Affairs Ahmed Abou Ali, Hassouna and Abou Ali Law Offices Co-Chairs: Hesham Gohar, CI Capital Holding Co. Chair: Hani Sarie-Eldin, Sarie-Eldin & Partners Legal Advisors Omar El Labban, BPE Partners G Co-Chairs: Mohamed Serry, Serry Law Office VICE PRESIDENT, MEMBERSHIP Said Hanafi, MHR & Partners in Association with White & Case Dalia Wahba, CID Consulting Corporate Impact and Sustainability Chair: Tamer Younes, Procter & Gamble Egypt Ltd. Marketing Co-Chairs: Mireille Nessim, Takatof Association for Development VICE PRESIDENT, PROGRAMS Chair: Tamer El Araby, Egypt & Levant, Nielsen Egypt, Ltd. Khaled Abu Bakr, TAQA Arabia Nadine Abou El-Gheit, United Nations Development Programme – Egypt Country Office Co-Chairs: Heba Saleh, Procter & Gamble Egypt, Ltd. Sarah El Battouty, ECOnsult Moataz Kotb, Cultark Omar El Masry, Danone Egypt VICE PRESIDENT, LEGAL AFFAIRS Customs and Taxation Tarek Mohanna, MHR & Partners in association Chair: Hassan Hegazi, Master Trading, SAE Oil & Gas with White & Case Co-Chair: Hossam Nasr, Allied for Accounting and Auditing - Ernst & Young Chair: Hesham El Amroussy, ExxonMobil Egypt, SAE Co-Chairs: Mark Konecki, Apache Egypt Companies Ossama Halim, Halliburton TREASURER Entrepreneurship and Innovation Aladdin El-Afifi, Pharos Holding ÇÇÇ Chair: Alaa Hashim, Giza Seeds and Herbs Co-Chair: Mohamed Rahmy, Endeavor Egypt Power Chair: Khaled Hashem, Honeywell Egypt MEMBERS OF THE BOARD Co-Chairs: Ahmed Ramadan, General Electric International Operation Health & Pharmaceuticals Morten Langsholdt, Scatec Solar Solutions Egypt Hashem El Dandarawy, Team 4 Security Chair: Mohamed Roushdy, Amoun Pharmaceutical Co., SAE Girgis Abdel Shahid, Shahid Law Firm Co-Chairs: Ahmed Ezzeldin, Cleopatra Hospital Group Real Estate Ramy Koussa, MSD Egypt Chair: Mohamed Abdalla, Coldwell Banker Affiliates of Middle East & Greater Africa Seif El Din El Sadek, Agrocorp for Agriculture Investment Tamer Said, GE Healthcare Co-Chairs: Abdalla El Nockrashy, Majid Al Futtaim Properties-Egypt Nadir Shaikh, Citibank, NA Egypt Yousri Nawar, Pfizer Egypt Magued Sherif, Six of October Development and Investment Co. (SODIC) Sherif Kamel, AUC
Human Resources Transport and Logistics Chair: Somaya El Sherbini, RIGHTFOOT Chair: Marwan El Sammak, Worms Alexandria Cargo Services PAST PRESIDENT t Co-Chairs: Ahmed El Fangary, DHL Express Anis A. Aclimandos, Transcentury Associates Co-Chairs: Emad Nasr, Lecico Egypt Maisa Galal, Coca-Cola Bottling Company of Egypt (TCCBCE) Alfred Assil, Menarail Transport Consultants Tarek Fahmy, Mediterranean Shipping Company ADVISOR TO THE BOARD Industry and Trade Hisham A. Fahmy Co-Chairs: Ashraf Bakry, Unilever Mashreq Travel and Tourism Mostafa El Halwagy, Youssef Allam & Co. J Co-Chairs: Haitham Nassar, Hilton Pyramids Golf Resort, Hilton Worldwide CHIEF EXECUTIVE OFFICER Omar El Derini, FAOM Consult Red Wing Karim EL Minabawy, Emeco Travel Sylvia Menassa Moataz Sedky, Travco International Holding, SAE Information and Communications Technology Sherifa Issa, Four Seasons Hotels and Resorts, Egypt Chair: Bassel Mubarak, Oracle Egypt, Ltd. Co-Chairs: Ayman Elgohary, Cisco Systems International Women in Business Reem Asaad, Raya Holding Chair: Manal Hussein Abdel Razek, Orascom Development Yasser Shaker, Orange Egypt for Telecommunications 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_ChamberSection-07.qxd copy 2/4/19 3:34 PM Page 2
Events
MONTHLY LUNCHEON Egypt Goes Digital
The Egyptian government is currently on the cusp of a This training strategy will help build Egypt�s digital econ- complete digital transformation where all goods and ser- omy. �This economy will be built on two important pillars: vices, provided by the private sector and government, are eligibility and services,� said Talaat. �These are decades-old accessible via a digital platform and paid for by e-cards. conundrums that we must overcome to know who deserves �The ministry�s strategy stands on two pillars,� said which services.� Minister of Communication and Information Technology To that end, MCIT has launched several pilot programs �MCIT� Amr Talaat, at AmCham�s monthly luncheon event including offering 25 government services in Port Said at the Four Seasons Cairo at Nile Plaza on January 20th. governorate that will be completely paperless with digital The first of these pillars is human development. �You monitoring, governance, and inter-ministerial collaboration. need to have a large and diverse pool of skill sets to be able Talaat followed by addressing the ministry�s second strategy to export digital services as well as attract investments,� pillar, financial inclusion. The ministry began by utilizing �the said Talaat. �It is of paramount importance if you want to unique penetration� of the postal service to help citizens in the be a competitive player on the world stage.� most remote areas process any government procedure, from To that end, the ministry began by training 3,600 profes- renewing their IDs to paying their traffic tickets. sionals in 2018, at a cost of EGP 100 million. By 2022, the Talaat further addressed the recently introduced Meeza pay- target is to train 45,000. �It is an ambitious plan,� noted ment card, for banked and unbanked individuals. �A citizen Talaat. Many of these courses are partially or fully subsi- would receive and pay for all entitlements they get from the dized. To ensure that as many Egyptians as possible can government,� said Talaat. �We are expecting that 28 million benefit from these courses, a percentage of them will be people will enter the system via banks or post offices.� To offered in Arabic, added the minister. ensure that such transactions are safe, verification would be Talaat noted, however, that the ministry is focusing on a done by requesting ID card details, communication via mobile handful of specializations. �We can�t work on everything at phone and using the individual�s unique e-signature. the same time,� he explained. �We, therefore, surveyed the Moreover, Talaat is focused on attracting electronics market to see which specializations are most needed.� The manufacturers to produce added-value products. Similarly, list includes courses in embedded systems, digital gaming, the ministry is working on attracting investors in data cen- data science, blockchain, and artificial intelligence. Further ters, given that 95 percent of data traffic between Asia and increasing inclusion, the Ministry is offering courses to Europe passes through Egypt. people with disabilities. Lastly, legislative reforms are ongoing with the passing of an Enhancing access to these trainings, MCIT has established updated consumer protection law, intellectual rights protection, technology innovation clusters in eight state-owned universities and cybercrime law. �We sent parliament a draft of the data including South Valley University in Qena; Menoufia protection law and we are working on an e-commerce law.� University; Sohag University, and Zagazig University. These development plans will help the tech and commu- Furthermore, there will be technology parks in the New nication sector account for 4 percent of GDP in 2019, up Capital, Sadat, Assiut, Beni Suef and Borg el Arab cities. from 3.2 percent in 2018, eventually reaching 5 percent by �These cities will provide academics, R&D, and investment 2022. This will increase the workforce in the sector from opportunities.� 175,000 in 2018 to over 260.000 in 2019. n
42• Business Monthly - FEBRUARY 2019 Chamber .qxp_ChamberSection-07.qxd copy 2/4/19 3:34 PM Page 3
Member News
IPSOS NI CAPITAL
Ipsos, the global player in the research industry has appointed Yasser Omar, as Country Manager of its offices in Egypt. NI Capital has won “Fastest Growing Investment Banking Advisory Firm” Based out of the Ipsos new award by International Finance Magazine in its Financial Awards offices in Cairo, Yasser will be leading the business throughout the Category for 2018. Ashraf Ghazaly, CEO and Managing Director at NI country and playing a key role in driving the company's growth goals. Capital Holding commented on the win saying, “Our investment banking Yasser brings with him over 30 years of global research experience and division has made rapid strides in the field; propelling the government- international exposure in areas of FMCG, customer insights, business sponsored IPO Program and contributing to the progress of the greater strategy, brand building and innovation, P&L, and sales. reform program set for the country.”
HOLIDAY INN CAIRO CITYSTARS JW MARRIOTT CAIRO
As part of their CSR efforts, Holiday Inn Cairo Citystars invited 57357 JW Marriott Cairo celebrated the launch of the first advanced solar-powered Children’s choir to celebrate Christmas and chant Christmas carols with photovoltaic modeling software, the Helioscope and PVSyst. The project the hotel’s guests. The celebration started with a short welcoming cere- launch was in cooperation with Mohamed Shaker, Minister of Electricity and mony where children enjoyed warm Christmas drinks, followed by the Renewable Energy, Amr Nassar, Minister of Trade and Industry, Rania Al carols, and ending with Santa Clause distributed cookie bags to the chil- Mashat, Minister of Tourism, Yasmine Fouad, Minister of Environment and dren and the guests. The day ended with memorable pictures with Santa Randa Aboul-Hosn, Country Director of United Nations Development Program. and the colorful festive decoration displayed. The JW Marriott Cairo was the first hotel in Cairo to install a rooftop solar power station.
Business Monthly - FEBRUARY 2019 •43 Chamber .qxp_ChamberSection-07.qxd copy 2/4/19 3:34 PM Page 4
NEW MEMBERS
Construction/Engineering Petroleum
Al Madkour for EPC Project Baker Hughes, a GE Company (Madkour Group) Hussam Abuseif Mostafa Madkour Director & General Manager CEO Address: Km 11, Plot 41, Kattameya Ain Address: Business Park Building No. 8, Sokhna Road, Kattameya, New Cairo Zizinia Compound, Fifth Settlment, Tel: (20-2) 2759-6100 New Cairo Tel: (20-2) 2612-5061 Membership Type Fax: (20-2) 2759-6102 Membership Type Associate Resident General Fax: (20-2) 2612-5066 Website: www.madkour.com.eg
Food & Beverages Service Providers
Eastern Company., SAE BDP International Hany Attia Emad Tawfik Chief Executive Officer (CEO) Managing Director
Address: Industrial Zone No. 6, Address: 203 Salah Salem, 6th of October, Giza Heliopolis, Cairo Tel: (20-2) 3816-9310/ 130 Tel: (20-2) 2269-8879 Fax: (20-2) 3816-4444 Membership Type Fax: (20-2) 2269-8874 Membership Type Website: www.easternegypt.com Associate Resident Website: www.bdpinternational.com General
Hospitality/Tourism/Travel Transportation
Mubasher International Centre Du Fret et du Transport Ahmed EL Hamzawy International- CFTI CEO Roger Torossian
Managing Director & Partner Address: 8 Moharam Shawki
Street,Heliopolis, Cairo Address: 17 El Ahram Street, Roxy, Tel: (20-2) 2291-6108 Heliopolis, Cairo Website: www.mubasherholidays.com Membership Type Membership Type Associate Resident Tel: (+20-2) 2690-5655 Associate Resident
Investment
Arab Moltaqa Investment (AMIC) Khaled Abou Heif For any change to contact information, Managing Director please contact the Membership Services Department at the Chamber’s office Address: Dallah Tower, 7 (A) Corniche Tel: (20-2) 3333-6900, ext. 0016 El Nil, Maadi, Cairo Tel: (20-2) 2525-6050 Fax: (20-2) 3336-1050 Fax: (20-2) 2525-6079 Membership Type E-mail: [email protected] Associate Resident
44•Business Monthly - FEBRUARY 2019 Chamber .qxp_ChamberSection-07.qxd copy 2/4/19 3:34 PM Page 5
NEW MEMBERS
Affiliate Members Financial Sector Legal Services Mahmoud Nabet Mohamed Hazzaa Deputy CEO- Treasury & Investment, Ahli United Bank Partner, Sharkawy & Sarhan Law Firm
(Egypt), SAE Mohamed Abdelgawad Partner, Sharkawy & Sarhan Law Firm Ahmed Hassan Head of Syndication & Structured Finance, Credit Petroleum Agricole Egypt, SAE Abdel Nasser Khafagy Operation General Manager, Qarun Petroleum Co. Mariam Elsamny Head of Consumer Banking - Personal Banking Group, Mirna Arif First Abu Dhabi Bank (FAB) Regional Sales Director, Baker Hughes, a GE Company
Food & Beverages Tameer Nasser Chief Financial Officer Baker Hughes, a GE Company Sherine Moneim Personal Care Marketing Director, Unilever Mashreq Pharmaceuticals/Medical/Health
Marwa El Abassiry Human Resources Chief HR Officer, Cleopatra Hospital Group Karim Emara Business Development Associate, Care Services, SAE Khaled Hassan Group CFO, Cleopatra Hospital Group
Tarek Zaki Hassan Fikry Executive Director, Care Services, SAE Corporate Strategy & Investors Relations Director, Cleopatra Hospital Group Ahmed Zaki Business Development Associate, Care Services, SAE Textile
Harald Westphal Karim Zaki Managing Director, Mediterranean Textile Co. (Medtex), Business Development Associate, Care Services, SAE SAE Private Free Zone
Industrial Machinery & Equipment Transportation Ihab Mansour Emad Boulos CEO, Cooling Technology by Natural Gas – Gas Chill Financial Manager, Centre Du Fret et du Transport International- CFTI
Information Technology Melad Abdelmalek Ahmed Hussein Chief Executive Officer, Centre Du Fret et du Transport VP Business Operations, GPX Egypt Ltd, International- CFTI
Business Monthly - FEBRUARY 2019 •45 Chamber .qxp_ChamberSection-07.qxd copy 2/4/19 3:34 PM Page 6
NEW MEMBERS
New Replacements in Member Companies Changes
Amr Farouk Elaaser Category: Affiliate Head of Corporate Banking & Sector: Financial Sector Change in Member’s Category: Syndicated Loans, Banque Misr Ahmed El Sayed
Vice Chairman, ECG Engineering Consultants Moustafa Gamal Category: Affiliate Group, SA Director of Treasury & Financial Sector: Financial Sector Institution Head, Banque Misr Category: Associate Resident Sector: Construction/Engineering Hossam Abdelwahab Category: Affiliate
Vice Chairman, Banque Misr Sector: Financial Sector Hisham Mohamed Aly Eman Abdel Aziz Financial Controller, NCR Egypt Category: General Senior Vice President - Head Sector: Financial Sector Category: General of Treasury, Arab Bank Sector: Information Technology
Mai Shaker Category: Affiliate HR Director, Xerox Egypt, Sector: Information Ayman Salem Technology SAE CEO, Nile Radio Productions
Category: General Mohamed Category: Associate Resident Sector: Service Providers Abd El Wahab Raslan Sector: Legal Services Partner, Levari Change in Member Company: Mohamed Shaaban Mohamed Category: Affiliate Sherin Hamed Partner, Levari Sector: Legal Services Assistant Managing Director for Credit, Arab Osama Kamel International Bank Category: General Category: Affiliate Chairman & Managing Sector: Petroleum Director, Egyptian Sector: Financial Sector Drilling Co.
Tarek El Sherif Colby Fuser Category: General Vice President for Egypt and Sector: Petroleum Cluster Commercial Director, Hilton Worldwide Libya, Halliburton Category: Affiliate Sector: Hospitality/Tourism/Travel Nagwa Moussa Category: Affiliate HR & Admin Manager, Sector: Petroleum Ziad Gadalla Dana Gas Egypt Partner, MHR & Partners in Association with Khaled El Tahawy Category: Affiliate White & Case Sector: Pharmaceuticals/ Site Leader, Pfizer Egypt Category: Affiliate Medical/Health Sector: Legal Services
Mostafa Elkady Category: General CEO, Emaar Misr for Sector: Real Estate Amr Kais Development Board Member, Egyptian Transport & Commercial Services Co., SAE Ayman Salem Category: General CEO, Nile Radio Sector: Service Providers Category: Affiliate Productions Sector: Transportation
46•Business Monthly - FEBRUARY 2019 Chamber .qxp_ChamberSection-07.qxd copy 2/4/19 3:34 PM Page 7 Chamber .qxp_ChamberSection-07.qxd copy 2/4/19 3:34 PM Page 8
Announcements
Jobs
AMCHAM RECRUITMENT CENTER
Code Vacancies Company Name 114649 Talent Acquisition Manager Industrial Construction and Engineering Company - SIAC 114637 Quality Manager SUMMIT 114621 Director of Marketing Baron Hotels and Resorts Egypt 114663 District Sales Manager Fedex Express - Egypt 114663 Treasury Section Head Kandil Steel 114671 Executive Director, Campus Services The American University in Cairo - AUC
For more information about these jobs and others, visit: www.amcham.org.eg/recruitment – e-mail: [email protected], Tel: (20-2) 333 88 220 Ext. 1513 - 1514 Fax: (20-2) 333 73 779
Top Tenders
TOP TENDERS FROM TAS
Client Bid bond Description Deadline Specs fees Sectors Supply of a central server with all related instruments,, data bases & operating Egyptian Co. for Pharmaceuticals Trading, the February 24, EGP 870,000 Information Technology licenses. Pre bid meeting set for 2/10/2019. Purchases & Contracts Dept. 2019 EGP 50,000 Industry
Rehabilitation/ replacement of several bridges on piles across El Agouzein General Dept. for West Kafr El Sheikh Drainage March 5, EGP 300,000 Construction Projects Canal at Km 1.750 & across other canals under finance from the Africa 2019 EGP 1,000 Water & Waste Water Development Bank.
Beneficiary Sectors Generating Sectors www.amcham.org.eg/TAS For further information, contact the Business Information Center at AmCham Egypt Tel: (20-2) 3338-1050 – Direct: (20-2) 3761-9641 • Fax: (20-2) 3338-9896 • E-mail: [email protected] Website: www.amcham.org.eg • US Website: www.amcham-egypt.org
U.S. Exhibitions
Listings are now available on our website:www.amcham.org.eg Exhibitions related to the following sectors are scheduled for the upcoming months.
Sector Show Name Website Embassy Contact Person TEL. February International Production and Agribusiness ippexpo.com Cherine Maher 2797-2688 Processing Expo March Natural Products Expo West/ Healthcare - Supplements expowest.com Rania Mekhail 2797-3487 Engredea
For more information about these exhibitions, please contact: The Commercial Service at the U.S. Embassy Tel: (20-2) 2797-2330/ 40 - E-mail: [email protected]
*Please refer to the Commercial Service at the U.S. Embassy for any updates on the exhibitions.
48• Business Monthly - FEBRUARY 2019 Chamber .qxp_ChamberSection-07.qxd copy 2/4/19 3:34 PM Page 9
Exclusive offers
Exclusive Offers
BAVARIAN AUTO GROUP (BAG) CAIRO MARRIOTT HOTEL
Exclusive Tailored Discounts on BMW Car Models, Services & Insurance Packages. Is pleased to extend its offer of 15% discount on the best available room rates and a 1- 2% discount on BMW line sticker prices. 15% discount on Food and Beverages at all Cairo Marriott outlets (This offer does not 2- Original car carpet & Key chain as a gift on your car. require having a room at the hotel) 3- BMW insurance with different packages, services and special rates: 25% discount on laundry during your stay 4- Trade with the best market price in all BMW and non-BMW - Rate is for Bed and Buffet Breakfast at Omar’s Cafe, subject to availability and prior cars through the trade in dep. reservation, valid at any day of the week. 5- Several Bank finance program on all of BMW range. - Rate is subject service charge and taxes. - Offer is valid for the members only and has to be reserved through and used by the ***Discounts will be granted for AmCham members member for a maximum of two rooms per stay. upon presenting their AmCham 2019 membership card*** - Members can only accompany their spouse and children during their stay. -This discount is not applicable for more than 5 pax For more information, please contact: AKarenza Jane Hanna ***Discounts will be granted for AmCham members Mobile: (20-10) 6104-0005 upon presenting their AmCham 2019 membership card*** Email: [email protected] After Sales: Ahmed Ezzat: For more information, please contact: Mobile: (20-10) 0481-6939 Mai Moenes Email: [email protected] Phone: (202) 27394647 Ext. 8808 • Mobile: (20-12) 0434-0648 * Please make sure to contact the above names in order to use the offer Email: [email protected]
Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information on AmCham benefits for more information on AmCham benefits
This offer is valid until December 31, 2019 This offer is valid until December 31, 2019
DHL EXPRESS GIG –EGYPT
DHL Express is proud to offer all AmCham members an exclusive 30% discount on Has the pleasure to provide AmCham members Up to 10 % discount on gig –Egypt DHL published rates for outbound international shipping services. Products N.B: An exclusive discount for groups and individuals on Medical insurance , Cancer, - The discount is not available for domestic shipping. Funeral-Expenses, Personal-Accident, Travel-Care, Home Secure, - The discount is not to be used in conjunction with other promotions from DHL. Fire/Burglary/Property, Motor, Inbound Tourism, and Marine (Inland/Hull/Cargo/Aviation), Oil-Gas & Petrochemicals, and Engineering, and Trade - Only at DHL locations, no pick up service. Credit Insurance. For further information about the nearest DHL location visit our website For additional information call Hotline 19792 http://www.dhlegypt.com/en.html or call DHL hotline 16345
***Discounts will be granted for AmCham members upon presenting their AmCham 2019 membership card*** ***Discounts will be granted for AmCham members upon presenting their AmCham 2019 membership card*** For more information, please contact: Hotline 19792 E-mail: [email protected]
Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information on AmCham benefits Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink
for more information on AmCham benefits
This offer is valid until December 31, 2019 This offer is valid until December 31, 2019
The BUSINESS MONTHLY Classifieds section is open exclusively to AmCham member companies. Text ads are £E 150 for up to 30 words, £E 5 per additional word. Abbreviations, phone numbers and e-mail addresses count as one word. Display ads are £E 100 per cm in height, per column (max. 20cm in combined total height). Discounts are offered for regular advertisers and repeat bookings. Insertion orders, payment and ad content must be received by the 15th of the month preceding publication. All classified ads subject to editorial approval. For more information, or to place a classified ad, contact Amany Kassem at (20-2) 3338-9890, fax (20-2) 3338-0850, e-mail: [email protected]
Business Monthly - FEBRUARY 2019•49
Chamber .qxp_ChamberSection-07.qxd copy 2/4/19 3:35 PM Page 12
Media Lite
A Glance At The Press
Egypt launches the open-book exam system
Your son was allowed to enter the exam with the entire book, but he was still caught with cheating notes!
Al Masry Al Youm, January 15th
Media Lite is a satirical review of items published in the local and international press. All opinions and allegations made in them belong solely to the original publications and no attempt has been made to ascertain their veracity.
Sealed Fate facility in Desouk while they resolve More than Meets the Eye their paperwork discrepancies. An official at the Ministry of Alexandria�s supply and internal trade Al Masry Al Youm, January 20th Antiquities branch office in Kafr el police were in for an unexpected sur-
Sheikh accidentally discovered that Best Laid Plans prise when they stormed a warehouse seven pharaonic and roman relics were reported to include 55,000 smuggled The Alexandria Turtle Rescue team never put on display, and had medicine and cosmetic bottles. In real- saved an endangered species of Jackal remained in storage in the gover- ity, most of the bottles found were Wolf tortoise from people who were try- norate�s museum for decades. His dis- empty, while others were filled with ing to sell it just outside of a turtle sanc- covery was made as he was searching playdough to give the sensation of oint- tuary outside Alexandria. The culprits for a spanner to change his car�s flat ments, as well as some liquid products, were first suspected when workers in the tire. These artifacts included tiaras, which were primarily water with a vases, necklaces, and scripture. sanctuary noticed that they weren�t color additive. Surprisingly, a handful Investigations revealed the reason interested in the displayed turtles. Given of the stock were legitimate commodi- behind the mishap was purely bureau- the sanctuary�s remote location, people ties with registered serial numbers as cratic as the original description of driving this far are usually there to watch official imports. Upon investigation, it the items didn�t match the items in these aquatic creatures. After the perpe- turned out that the owner of the ware- real life, which led to its storage until trators were arrested and the tortoise house was a con artist working on con- the matter was resolved. Upon this returned to its natural habitat in Wadi el vincing nearby pharmacies that he has reveal, the Ministry of Antiquities Rayan, investigations revealed that the smuggled medicines at a fraction of reprimanded existing and previous culprits chose to sell it outside of a sanc- their market-price. The legitimate high ranked staff at the Kafr el Sheikh tuary focused on a different species to products were to be used as samples to museum for carelessness. The artifacts protect themselves from authorities. trick the buyers. were then taken to another storage Egyptian Streets, January 10th Al Watan, January 19th
52• Business Monthly - FEBRUARY 2019