B U S I N
E www.amcham.org.eg/bmonthly S S
NOT FOR SALE M O N T H L Y
MARCH 2014
ALSO INSIDE:
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EGYPT GOES DIGITAL
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CAIRO’S INDIE FILM SCENE ▲ ▲ AMCHAM, EGYPT-U.S. BUSINESS COUNCIL JOINT MISSION TO WASHINGTON T H E
C H I N A
S Y N D R O M E M A R C H
2 0 1 4 Egypt's import economy
M A RC H 2 0 1 4 VO LU M E 3 1 | I S S U E 3
Cover Story 24 Made in China
Cairo is awash with cheap goods from Asia that are either imported through proper channels or smuggled in. But questions have been raised lately about whether these products are safe and reliable, while Egyptian factories struggle to stay afloat.
Cover Design: Nessim N. Hanna
Inside 12 8 Editor’s Note
10 Viewpoint
The Newsroom
12 In Brief The news in a nutshell
16 Region Notes News from around the region
© Copyright Business Monthly 2013. 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.
6 I Business Monthly – March 2014 M A RC H 2 0 1 4 VO LU M E 3 1 | I S S U E 3
18 40
42 Market Watch Executive Life 32 Stock Analysis 40 Dining Out Heat rises Spanish confusion 33 Capital Markets A glance at stocks & bonds 42 Food What's cooking? 35 Money & Banking Forex and deposits
36 Key Indicators The economy at a glance
37 Egypt-U.S. Trade In Depth Imports and exports The Chamber
18 Signals fuzzy as Egypt Corporate Clinic 37 AmCham, Egypt-U.S. counts down to digital Business Council 38 Technology The end of analog broadcasting joint mission Connected
21 Egypt’s independent movie 52 Events industry hits its stride A growing audience for art house 56 Member News films
58 Announcements
60 Media Lite An irreverent glance at the press
8 I Business Monthly – March 2014 Editor’s Note
Director of Publications & Research HEAL Khaled F. Sewelam Editor-in-Chief Rachel Scheier
Contributing Editor THYSELF Tamer Hafez
resident in obstetrics and gynecology at Kasr el Aini, Egypt’s oldest and largest Staff Writer hospital, told me he became a doctor in order to serve his country. Now he just Mat Wolf wants to leave. Australia, Dubai—he’ll go anywhere he can earn a living wage. In recent weeks, doctors like him employed by Egypt’s public hospitals and Art Director clinics, which serve the vast majority of the population, have stepped up strikes demanding Nessim N. Hanna better pay and increased health care spending. Egyptian doctors are infamously underpaid, with fresh medical graduates earning as little as LE 200 a month. Many are forced to moon- Contributing Writers A Isabel Esterman light to the point of exhaustion or take bribes from patients in order to make ends meet. Brendan Meighan After seven years of medical school and eight as a resident, my doctor friend now earns LE 2,000 a month. He says: “Garbage collectors make more.” Photographers Last month, Egypt made international headlines when Army officials claimed to have Soha El Gabi invented several machines that can cure, among other things, AIDS and hepatitis C. One Said Abdelmessih of the devices, which a reporter said resembled “an antenna affixed to the handle of a blender,” claimed to detect the viruses that cause both diseases, while another reportedly Production Supervisor acted like a dialysis unit to “purify” the blood, curing 100 percent of AIDS cases and 95 Hany Elias percent of hepatitis C cases. The news that the Egyptian military had hit upon “miraculous” Advertising Director cures to not just one but two deadly illnesses the global scientific community has been Amany Kassem working to cure for decades was met with a mix of outrage and humor. Essam Heggy, a scientific advisor to interim President Adly Mansour, called the claims a “scandal” that Advertising & Circulation Assistant could damage Egypt’s reputation. For comedian Bassem Youssef—who is also a cardiac Raghda Salama surgeon—the news provided plenty of satirical fodder. Still, these diseases are no laughing matter. Egypt has the world’s highest prevalence of Market Watch Analyst hepatitis C, which can lead to cirrhosis and liver cancer, with an estimated 20 percent of Amr Hussein Elalfy Egyptian blood donors testing positive, according to the World Health Organization. While HIV prevalence rate remains low—under 1 percent—those who are infected often face so Chamber News Contacts Nada Abdalla, Nihal Alaa, much discrimination from health workers that they opt to forego care. A staggering 31 per- Shorouk Genena, Salma Shaaban cent of children under five suffer from stunted growth from malnutrition. Concerns have been raised about the Egyptian health sector’s ability to tackle these afflictions and other challenges likely to grow along with the population, from drug addiction to swine flu. Health care spending in Egypt represents about 5 percent of GDP—on par with other emerging markets but much lower than the Western world. Many have pointed out that redistributing resources from the top-heavy Ministry of Health, where the bloated salaries of senior administrators eat up valuable pounds, would mean more money for patient care. Even private donations to hospitals often come in the form of new equipment or build- ings; little goes to providing better training and pay for physicians and nurses, points out
the Kasr al Aini obstetrician. In the meantime, Egyptian doctors continue to decamp for U.S. address: 1615 H Street, NW • Washington, D.C. 20062 greener pastures. “You can’t serve your country when you’re hungry,” he says. Please forward your comments or suggestions to the Egypt editorial office: Business Monthly American Chamber of Commerce in Egypt RACHEL SCHEIER 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
8 I Business Monthly – February 2014
Viewpoint WHO HATES EGYPT?
omeone is hitting the brakes and trying to stop Last month, the board of AmCham Egypt and the Egypt- the growth of this country. There are frequent U.S. Business Council together visited Washington, D.C. disruptive criminal acts, new to Egypt and hard Discussions held with representatives of think tanks, Congress to understand. Is it possible to accept the fact and administration officials all confirmed that the current that certain nationals are actively seeking to aggressive, repressive stand, though often understandable, is destroy their own nation? Is it reasonable to leaving a bitter taste and working against the progressive envi- believe that anyone will want to build on rubble? ronment we are trying so hard to build. There are no good answers to these questions. I am not Egypt freed itself from the “listen and obey” rhetoric of inclined to trust conspiracy theories; however, the facts speak the past, and it must go back to trusting others outside the for themselves. Violence is alive and well, and all proponents closed power circle. The last thing we need is give the of these disruptive acts have to be condemned and brought to impression that a new group is simply following in the Sjustice. footsteps of the old one. Giving in to blackmail and arm twisting is a catastrophic While there is a broad pragmatic recognition of Egypt's recipe for failure. We in the business community have learned strategic location in the turbulent Middle East, there is the hard way that it does not pay—if you give in today, there also a realization of our production potential and buying is no reason why you won’t tomorrow, until the situation power. Hence the urgent need to get back to work to avoid becomes a lawless jungle based on brutality and fear. the danger of being sucked in by turbulence and drifting In a country in which the majority of the population is backwards. unable to read and passively bombarded by messages from the Mounir Abdel Nour, now Egypt’s minister of industry, for- media, there is an enormous responsibility borne by television eign trade and investment, gave a hard hitting and well- news anchors and reporters. While it’s normal for news to be received speech at the U.S. Chamber of Commerce. He high- sensational, it would make a huge difference if stories about lighted the success stories of American firms in Egypt and explosions, death and crimes were followed by a touch of real- investment opportunities as well as challenges. We should ity and optimism, in order to create a climate conducive to work to exploit the momentum created by the visit and his hope and success as opposed to fear and desperation. Getting speech; it would be a shame to let serious efforts go down the used to a constant flow of bad news is dangerous. drain. A climate of fear leads to a general state of paranoia. Hasty, Hard work, fairness and strategy can vanquish hate and uncalculated reactions are disproportionate and often cause fear. All of us are given the same number of hours each more harm than good. The recent sentences and arrests are day; unfortunately, some of us use them productively detrimental to the image, credibility and business climate of while others are in danger of wasting them. the country. ANIS A. ACLIMANDOS President, AmCham Egypt
10 I Business Monthly – March 2014
In Brief
Cabinet quits Prime Minister Hazem el Beblawi made a surprise announcement Feb. 24 that the entire Egyptian cabinet was submit- ting its resignation to interim President Adly Mansour. The new prime minister is former housing minister Ibrahim Mehleb, once a member of Hosni Mubarak’s National Democratic Party and CEO of state-owned Arab Contractors. A clear reason for the shake-up was not provided, but in a speech broadcast on state television, Mehleb said the new government would focus on security, fighting terrorism and rebuilding the economy. A new cabinet was sworn in March 1 in which 20 min- isters, two-thirds of the old cabinet, stayed on in their old posts, including defense minister Abdul-Fattah el-Sisi, ARCHIVES BUSINESS MONTHLY IBRAHIM MEHLEB WAS APPOINTED AS EGYPT’S NEW PRIME MINISTER. quashing speculation that el-Sisi was on the verge of announcing a widely- expected bid for the presidency. El-Sisi, the United Arab Emirates during the who also heads the Supreme Council of second half of last year. The bulk of No end in sight the Armed Forces, must vacate his min- the package, LE 21.7 billion, was ear- isterial post in order to run. The reshuf- marked for development projects, for power woes fle also consolidated 12 ministries into With electricity blackouts becoming a including LE 2 billion for redevelop- six. Many of the outgoing cabinet’s most regular occurrence even in the winter ment of the Suez Canal zone. Around prominent names were not included in months when demand is traditionally at LE 12 billion was set aside for social the new lineup, including higher educa- its lightest, Egypt’s energy shortage is spending, including raising the mini- tion minister Hossam Eissa, manpower being felt by households and businesses mum wage, teacher training, social minister Kamal Abu-Eita and finance alike. Early last month, an official from security and pensions. An additional minister Ahmed Galal. the Ministry of Petroleum told Reuters LE 1 billion was dedicated to revital- that in the coming fiscal year, domestic izing ailing state institutions like the gas production is projected to reach 5.4 New stimulus unveiled Federation of Radio and Television. billion cubic feet per day, while daily In a Feb. 10 statement, then-Minister On the same day, the cabinet consumption should rise to 5.57 billion of Finance Ahmed Galal announced announced that it had been able to cubic feet, leaving a critical shortfall of details of a second stimulus package, spend only around 30 percent of the 170 million cubic feet per day. For the projected to inject LE 33.9 billion into LE 29.6 billion set aside for its first current fiscal year, production still the local economy. According to stimulus program, citing “tensions” exceeds demand at 5.31 billion cubic Galal, the program would be funded following the June 30 overthrow of feet per day compared to consumption of by cash and in-kind grants donated by President Mohamed Morsi. 4.95. However, since a percentage of
12 I Business Monthly – March 2014 In Brief
local production is designated for export, Egyptian consumers have already felt the pinch; cement producers report that state holding company EGAS has cut their gas supplies in half, leading to a decline in production. In related news, plans to import liquefied natural gas via a floating regasification terminal were put on hold last month when Norwegian firm Hoegh, which was recently awarded a contract to build the terminal, pulled out of the deal. According to Reuters, the company cited concerns about a lack of financial and commercial guarantees from the govern- ment. Negotiations are reportedly still ongoing, but it is unlikely that a terminal can be put in place in time for Egypt’s peak energy season, which usually begins in April. BUSINESS MONTHLY ARCHIVES BUSINESS MONTHLY Gov’t inks new EGYPT LEADS EMERGING MARKET NATIONS IN SOCIAL MEDIA USE. petroleum deals Three new oil and gas exploration agree- Ministry of Finance approved the alloca- 19 to 29 own a cell phone, with 32 percent ments signed last month should bring tion of LE 15.2 million to meet demands, of that age group owning smart phones $265 million of investment to Egypt’s but workers rejected the offer. able to access the Internet. Overall, 88 petroleum sector and help increase much- Meanwhile, employees at Egypt’s largest percent of respondents reported owning a needed domestic supplies should the textile firm went on strike for 12 days, mobile phone, and 68 percent of exploration yield fruit. Three companies, agreeing to suspend it on Feb. 22 after the Egyptians said they did not have a work- UAE-based Dana Gas, Italian firm Edison Ministry of Investment said it would look ing landline. However, Egypt lags behind and Irish Petroceltic will drill test wells in into their demands, which also included its neighbors in other mobile technology the Mediterranean Sea, the Nile Delta and getting paid the new public minimum metrics. Only 6 percent of cell phone the Gulf of Suez. At the end of 2013, the wage. Among professional syndicates, owners reported using their phones to government announced plans to auction doctors continued a partial strike demand- make or receive payments, compared to rights to 22 gas and oil concessions by ing better pay and higher government 68 percent in Kenya and 50 percent in May of this year. spending on health care. Even police got Uganda. in on the action, with low-ranking officers Strikes grip Egypt in seven governorates walking off the job February witnessed a wave of labor to protest hazardous working conditions Monthly inflation actions nationwide, as more than 20,000 and low wages. Interim President Adly inches up workers in various sectors took to the Mansour announced Feb. 19 that police Headline consumer inflation ramped up streets seeking wage increases and better would be entitled to a 30 percent salary by 1.42 percent month-on-month in working conditions. All 28 public trans- increase beginning this month. January, compared to a 1.02 percent port garages in greater Cairo went on drop the previous month. The annual strike starting Feb. 22, demanding to be rate slowed to 11.36 percent compared included in the new LE 1,200 minimum Egypt leads in to 11.66 in December, due to favorable Ahram wage scheme. According to base effects from the previous year. Online social media use , workers in the sector earn Among Egyptians with Internet access, The Central Bank of Egypt attributed between LE 600 and LE 1,400 per month; 88 percent report using social networks the bulk of the monthly increase to a although the Public Transit Authority is like Facebook and Twitter, putting them at 9.15 percent rise in fresh vegetable state-owned, it is classed as a business the top of a list of emerging markets sur- prices, which contributed 0.71 percent- unit rather than an administrative entity veyed by the Pew Research Center’s age points to headline inflation. Other and is therefore not covered by the new Global Attitudes Survey. The poll also food prices registered increases as well, minimum wage law. On Feb. 24, the found that 92 percent of Egyptians aged including a 6.65 percent rise in milk, a
Business Monthly – March 2014 I 13 In Brief
STREET SENSE
Do you buy locally produced goods?
I always buy from street vendors and they sell mostly Chinese stuff. They’re the only ones I can afford. I sometimes think that some of the things they sell are actually made in Egypt but have a “Made in China” sticker to make people buy them! For me, it doesn’t really matter where it’s manufac- tured, as long as I can afford it. Nesma Abdel Mohaimen, 36, sales clerk
I probably buy more Egyptian-made products than I think I do, but almost all will be licensed international brands. I buy them for the brand name. And because the imported alter- natives just are way too expensive. Samia Fahmy, 35, housewife
I take extra care if I’m buying stuff made in Egypt. I prefer my shampoos and creams and soaps to be the imported stuff, but sometimes I can’t find what I need, so I buy inter- national brands made here. Diapers are a case in point. Tahany Fahmy, 29, nursery owner BUSINESS MONTHLY ARCHIVES BUSINESS MONTHLY I’m not rich, so I have to watch where my money goes. I’d say TUK-TUK IMPORTS HAVE BEEN SUSPENDED BY THE GOVERNMENT FOR ONE YEAR. my daily consumption is Egyptian-made products, but the rest is probably all Chinese. I don't look at where it’s made—I just look at the packaging and the brand name. If it doesn't look good or the brand name is strange, I don't buy it. 4.98 percent rise in poultry and a 2.76 live abroad, bringing the worldwide Mohamed Abdel Moneim, 39, carpenter percent rise for fish and seafood. The total to 94 million. The birth rate has I shop at just a few places whose quality I trust. I tend to go increases were partially offset by a 16.4 spiked in recent years, with figures and see what I need, and if I can afford it, I buy it. My expe- percent decrease in the cost of butane between 2010 and 2012 showing the rience with Egyptian-made non-perishable items is not cylinders. largest two-year jump since Egypt’s good—a lot of electronics go bust a couple of months after government began keeping records. I buy them. So I usually go for Chinese ones, because they’re With resources strained and youth cheaper than the Egyptian alternative and their quality is a bit better. CBE establishes unemployment estimated at around 25 Abdel Salam Masoud, 41, chef mortgage fund percent, the population bulge threatens In a move aimed to bolster Egypt’s to exacerbate social unrest. I don't remember the last time I bought a non-perishable Egyptian product. It’s not about their quality or price; my construction and real estate sectors, the problem is I don’t find anything I like. So I go for imports, and Central Bank announced Feb. 18 that it Tuk-Tuk Chinese goods have the biggest variety. If you choose careful- has allocated LE 10 billion to financing imports ly, they’re not half-bad from a quality standpoint. You just mortgages for low- and middle-income have to be careful about what you’re getting and from where. buyers. The funds will be channeled suspended Heba El Tawfiky, 26, accountant Claiming the three-wheeled motorized through local banks over a period of 20 rickshaws are being used as getaway I buy what I can afford—I don't really care where it’s made. years and lent at between 7 and 8 per- vehicles for criminals, Egypt’s govern- I buy a lot of Chinese products because they’re always well- cent interest, well below current inter- ment on Feb. 12 imposed a one-year ban priced and there’s a lot of variety. I’m not necessarily happy tuk-tuks bank rates of around 8.3 percent. The on importing . Imports of fully doing it because of what you hear in the media, but they’re mortgages are available for properties the only ones I can afford. assembled motorbikes and their compo- Hamdia Mohamed, 47, housewife in selling for LE 300,000 or less in new nents were also suspended. Widely used tuk-tuks urban communities. in informal settlements, have I really don't care where they’re made—I care about the recently been appearing in more upscale brand name. If you buy a Mercedes or a BMW that’s assem- bled in Egypt, that’s technically an Egyptian-made product. locales like Maadi, where many consider And if you look at an iPhone assembled in China, that’s tech- Population hits them a blight. However, GB Auto, nically a Chinese-made product. I think times are different 86 million Egypt’s largest car assembler, warned that now—it doesn't really matter where they are made, it’s With 1 million Egyptians born since the import ban would have an “adverse about who’s making them. August 2013, Egypt’s population impact” on their profits, noting that in the Kamel El Saleh, 47, business owner reached 86 million last month, accord- first three quarters of last year, two- and ing to statistics agency CAPMAS. An three-wheelers contributed 13 percent to OMPILED BY TAMER HAFEZ C additional 8 million Egyptian citizens the company’s bottom line.
14 I Business Monthly – March 2014
Region Notes
Caspian Black Sea Sea
TURKEY
CYPRUS SYRIA IRAN TUNISIA Mediterranean Sea LEBANON IRAQ MOROCCO ISRAEL JORDAN KUWAIT SYRIA PALESTINIAN Persian Gulf ALGERIA LEBANON TERRITORIES BAHRAIN QATAR LIBYA ISRAEL EGYPT UAE OMAN JORDAN SAUDI ARABIA
Red Sea
YEMEN SUDAN Arabian Sea
SOUTH SUDAN Map intended for illustrative purposes only and may not accurately SUDAN depict national boundaries or disputed territories.
Atlantic Ocean
■ Kurdistan agrees to sell ■ South Sudan conflict his government running. Disruption of oil via Baghdad hits oil industry South Sudan’s oIinl diinand uOscetrayn also threatens to After weeks of negotiations between South Sudan has long been plagued by dis - cause problems for Sudan, which relies on Baghdad and the autonomous region of agreements with its northern neighbor revenue from pipeline transit fees. Iraqi Kurdistan, an agreement was reached Sudan, but now its oil industry is facing ■ Jordan firms to import Feb. 19 that will see Kurdistan export oil strife within its own borders. The crisis in Israeli gas via Iraq’s central marketing body. The South Sudan began in mid-December, Texas-based Noble Energy has signed a autonomous region had previously when President Salva Kiir and sacked for - deal with two Jordanian firms to export planned to bypass Baghdad and sell oil mer Vice President Riek Macher, with each natural gas from its offshore Israeli directly via a newly constructed pipeline accusing each other of plotting a govern - holdings. Under the deal, which is esti - to Turkey that could eventually move 2 ment takeover. In a conflict that has killed mated to be worth $500 million over 15 million barrels a day. The Iraqi govern - thousands, displaced more than 800,000 years, Jordan-based bromine and fertil - ment views independent oil sales as people and been marked by atrocities on izer company Arab Potash will be sup - unconstitutional and tantamount to smug - both sides, rebel forces loyal to Macher plied with gas from the Tamar field, gling and threatened to cut Kurdistan’s have been battling with government troops which has estimated reserves of 10 tril - share of the national budget and take legal for control of key oil hubs in Unity and lion cubic feet of gas. Petroleum-poor action against Ankara if the plan went Upper Nile states, prompting energy firms Jordan relies on imports for around 95 through. Exports via the Mediterranean to evacuate non-essential staff. The percent of its energy needs. Previously, port of Ceyhan, Turkey were put on hold Financial Times reported that oil execu - it depended on Egyptian gas for around to give negotiations a chance to proceed. tives believe a direct attack on the fields is 80 percent of that, supplied via the Arab Despite the February agreement, disputes unlikely but fear that rebels may encircle Gas Pipeline, which runs through have persisted about how oil revenue is to the fields to gain leverage. Since the con - Egypt’s Sinai Peninsula. But supplies be shared. Officially, Kurdistan is entitled flict began, output has fallen by 40 percent have been repeatedly disrupted in recent to 17 percent of Iraq’s vast oil wealth, but to 150,000 barrels a day. Oil makes up years, with militants in the restive Sinai the region claims it has been getting less around 98 percent of South Sudan’s blowing up parts of the pipeline 20 than its fair share, leaving government income, so a major drop in revenue would times since the 2011 revolution that workers unpaid. make it nearly impossible for Kiir to keep overthrew President Hosni Mubarak.
16 I Business Monthly – March 2014
In Depth
BROADCASTING SIGNALS FUZZY AS EGYPT COUNTS DOWN TO DIGITAL BY TAMER HAFEZ
ohamed Abdel Wahid sits with- his family on a two-seat sofa in his living room in Kit Kat one recent winter afternoon and shows off a late ’90s model Toshiba TV set he pur- chased two weeks ago. At LE 250, it’s an investment from which he appears to be getting plenty of mileage. Most Mmornings, his wife, Farha, turns on the television around 9, when her husband leaves for his job as a security guard at a local computer mall, and doesn’t switch it off until it’s time to go to sleep around 1 a.m. To entertain herself while she does the housework and takes care of their two small children, she watches Turkish soap operas, cook- ing shows and reality talent competi- tions. Once, she was even inspired by an informercial to purchase a set of kitchen utensils. Unfortunately, the latest addition to the Abdel Wahid household is among the millions of television sets that may soon broadcast nothing but static when the country switches to a digital broad- casting signal some time in the next 10 to 14 months. Egypt has agreed to comply with the global cutoff date of June 2015 to transition from analog to digital terrestrial television (or DTT) set by the International Telecommunications Union, the United Nations agency that allocates radio spectrum and satellite orbits. Recently, officials told reporters that the country is on track to make the digital switchover, though by most accounts, very little has been done to prepare for
the change technologically or educate SOHA EL GABI
18 I Business Monthly – March 2014 In Depth
the public about its implications. Nor in the 1940s and ’50s—to digital has the government addressed the con- broadcasting has been described as sumer cost challenges the shift will “the most significant advancement of inevitably raise in a country in which television technology since color TV TV is the number one information was introduced,” as stated in 2008 by medium. Some 95 percent of Egyptian David Rehr, president and CEO of the households own a television, amount- U.S. National Association of ing to an estimated 15 million TV sets. Broadcasters. It has numerous benefits Once the switch takes place, those with for consumers, broadcasters and adver- older, analog TVs will have to pur- tisers. In addition to much sharper chase a set top box to convert the digi- image and sound quality, digital trans- tal signal back to analog. Ashraf mission uses bandwidth much more Hamdy, chairman of LG Electronics efficiently, allowing for many more Egypt, believes that some one-third of channels in addition to the integration televisions fall into that category. of other digital services such as mobile A report on digital media in Egypt telephones or high-speed Internet published last August by the New access. It allows broadcasters to trans- York-based Open Society Foundations mit more stations at the same band- concluded that the process of convert- width and cost, offering greater value ing Egypt to digital TV had thus far to advertisers. Digital compression been “extremely chaotic,” as Hassan technology can transmit eight to 10 TV Mekkawi of the Egyptian Radio and channels using the same amount of Television Union put it, with “virtually spectrum used to transmit just one ana- no planning in effect.” A few very lim- log channel, a benefit known as “the ited digital conversion measures have digital dividend.” At a press conference been undertaken by the government; in January to announce government such as outfitting a handful of exclu- investment in the ICT sector, Egyptian sive neighborhoods including Zamalek communications minister Atef Helmy and Garden City to receive digital predicted that the sector—which is broadcasts of some Gulf-based chan- expected to grow by 10 percent this fis- nels such as MBC and Rotana. Some cal year—will be expanding by 20 per- state-owned stations have also convert- cent annually by 2017, creating thou- ed a few studios to digital broadcasting sands of new jobs. on a trial basis. Complicating things A number of countries around the further, however, the ERTU, which has world have already made the digital traditionally controlled broadcasting in switchover, including most of Europe, Egypt, is reportedly reluctant to hand North America and some parts of Asia. over control of the airwaves to the In the Middle East, a handful of National Telecom Regulatory nations, including Israel, Morocco and Authority (which will take over when Saudi Arabia, have largely completed Egypt switches to the digital transmis- the transition to digital broadcasting, sion, when frequencies will also be while a number of Sub-Saharan shared by other players such as mobile African countries have also made the telecom firms and Internet providers). shift in recent months. According to the According to press reports, Maspero, ITU agreement signed in Geneva in as the ERTU is commonly known, has 2006, all 193 member nations are sup- so far stubbornly refused to vacate its posed to make the change by June 17, analog frequencies. Some industry 2015, though it seems clear that a size- insiders speculate that the deeply- able number will probably need more indebted state broadcaster is ultimately time. holding out for a deal in which it will Non-compliance is risky. After 2015, receive compensation for relinquishing nations may use frequencies that are the airwaves. currently assigned for analog curren- The global shift from analog for- cies for digital services without being mats—which were standardized back required to protect the transmissions of
Business Monthly – March 2014 I 19 In Depth
have been organized in other countries, including South Africa and Thailand, and some industry experts say that in order to foster a smooth transition to digital broadcasting, the Egyptian gov- ernment will have to offer consumers some help. “The government needs to push forward with some sort of finan- cial support for individuals or to coop- erate with the private sector to offer low-priced hardware for those who can't afford it,” says Mahmoud Shahin, a professor in the ICT department at Cairo University. However, the govern- ment is already burdened with an LE 112.5 billion bill for laying down the necessary digital infrastructure, according to official estimates. Private sector broadcasters—who have only set up shop in the last decade or so in Egypt, when the state opened up the
BUSINESS MONTHLY ARCHIVES BUSINESS MONTHLY airwaves to private satellite stations— have much newer infrastructure, which neighboring countries against interfer- China and Taiwan that could sell for should make the transition smoother ence. In other words, Egyptian stations even lower prices than today’s sets. and less costly. that are still transmitting via analog Hamdy, the LG executive, predicts that The price of the new technology after the deadline will not be able to sue more than half a million such low-end will inevitably drop. “Cost will not be digital broadcasters who infringe on televisions might be sold in Egypt during a major worry in time,” says Badawy their domestic frequencies. “There is the first year of digital broadcasting of the NTRA, who points out that no option but to convert to digital,” alone, though that is likely to level off as smart phones, for example—which says Amr Badawy, former head of the the market adjusts to the change. For the just a few years ago were affordable NTRA. Even if Egypt is granted an vast majority of Egyptians, however, only to the privileged classes—are extension, experts say that sooner or who can't afford to shell out more than now owned by Egyptians from all later, it’s inevitable. As more and more LE 2,000 for a new digital TV, the more walks of life. Even so, digital televi- countries switch off their analog sig- popular option will likely be to purchase sion equipment is likely to remain out nals, manufacturers will stop making a so-called set top box, which converts of the reach of many for the foresee- the old hardware, meaning analog the digital signal back into analog to able future. Apart from subsidies, equipment and spare parts are likely to make the new signal compatible with the there has been no mention of explor- become increasingly obsolete and old equipment. How much set top boxes ing ways to provide incentives for expensive. “For international manufac- will cost locally remains unclear at the local firms to manufacture low cost turers, it’s a matter of economies of moment, as the private sector has yet to set top boxes. In any case, whenever scale,” says Sayed Azzouz, sector head import or manufacture them. In the Egypt does finally flip the digital of the Radio Spectrum Management United States, which largely completed switch, shutting off its analog signal and Planning division at the NTRA. the digital switchover in 2009, the con- for good, experts say the government A bare bones digital television set verters sold for between $40 and $80. will have to come up with some sort manufactured here in Egypt retails for At the time, the American govern- of plan to enable average families like a little under LE 2,000 for a 32-inch ment partially subsidized the digital the Abdel Wahids to purchase the nec- screen model at a downtown electron- transition by offering owners of analog essary hardware. Nobody, including ics shop, while an imported version TV sets a maximum of two $40 Mohamed Abdel Wahid, yet knows costs about twice as much. Digital coupons each (for two-television how much he might have to spend so receivers, meanwhile, currently sell for households). The subsidy was financed his wife can keep watching “As Time LE 250 to LE 300. Electronics retailers by a fraction of the more than $19 bil- Goes By” and “X Factor,” but he’s expect that the impending transition to lion the government raised in a wire- sure it will be more than he can digital will open the door to an less spectrum auction in advance of the afford. “I’m on a very tight budget,” onslaught of cheap TVs imported from conversion. Similar subsidy schemes he says.
20 I Business Monthly – March 2014 In Depth
ENTERTAINMENT EGYPT’S INDEPENDENT MOVIE INDUSTRY HITS ITS STRIDE BY MAT WOLF SOHA EL GABI WORKERS INSTALL SOUND INSULATION IN THE FLOORS OF CIMATHEQUE, A MOVIE THEATER AND “ALTERNATIVE FILM CENTER” IN DOWNTOWN CAIRO.
n several floors of an old art world. Abdallah, along with inde- a little more like a hub for this grow- beaux arts building next to pendent filmmaker Tamer El Said and ing, nascent community of alternative the Sha'ar Hashamayim British-Egyptian actor Khalid Abdalla, filmmakers.” Synagogue in downtown spearheaded the project, which will Independent films in Egypt have Cairo, construction workers are busy rely heavily on grants from cultural long suffered from a chronic lack of putting the final touches on what will organizations. It may never be prof- financing, distribution and exposure. Obe Egypt’s first dedicated independent itable, acknowledges Abdallah, who But broader tastes and more relaxed movie house. Cimatheque, an “alterna- nonetheless believes that there is an censorship rules in recent years cou- tive film center” that aims to “celebrate appetite among Cairo’s young, urban pled with the advent of the Internet and film and support the needs of indepen- population for films other than the new digital technology have led to a dent filmmakers in Egypt,” will also usual commercial mix of Egyptian takeoff of the genre. Meanwhile, the feature a darkroom and a film archive melodramas and slapstick comedies historic events of the last three years in specializing in local and regional works and the latest blockbuster fare from the wake of the January 25 revolution as well as a café for moviegoers. On a Hollywood. The partners, who had have provided plenty of dramatic fod- recent afternoon, amid sawdust and the been running a production company in der for an international audience. “The pounding of hammers, workers were the building and offering occasional Square,” which tells the story of the busy laying soundproofing under the screenings for film buffs, thought: uprising and depicts many of the strug- supervision of Mohammed Abdallah, “Maybe we can start something that’s a gles and unrest that followed, earned an whose background is in the non-profit little more public,” he says, “something Oscar nomination this year, Egypt’s
Business Monthly – March 2014 I 21 In Depth
first, for Best Documentary Feature. Directed by Jehane Noujaim, an Egyptian-American whose past films include “Startup.com” and “Control Room,” “The Square” premiered at last year’s Sundance Film Festival in the United States and is currently being shown online via the American streaming channel Netflix. To date, though, it has not been screened com- mercially in Egypt. The director says the government has blocked the movie from being shown here, but the head of the censorship board denies that, saying the filmmakers never filed the proper paperwork. Cairo has long been known as the Hollywood of the Middle East, with the oldest and most prolific movie industry in the region. However, the golden age of Egyptian cinema has long since passed, and local commercial films are typically formulaic dramas, action COURTESY PHOTOS OF FILM CLINIC AHMED DASH (FAR LEFT) AND MOAZ NABIL AS HANY AND MOMEN IN “EXCUSE MY FRENCH.” flicks or slapstick comedies that draw an audience in Egypt and the rest of the Arabic-speaking world but are mostly momentum as a result of the great Egyptian Competition Authority dismissed by critics. In addition to demand for raw footage of the Tahrir accused two companies—which con- “The Square,” a handful of Egyptian- Square protests and other events in trolled 95 percent of the Egyptian made productions have in the last few 2011. Zero Production, which is film market, according to the ECA— years become notable exceptions to housed in the same building as of engaging in anticompetitive behav- that trend. “Excuse My French,” which Cimatheque, is slated to release El ior by only showing their own films depicts the struggles of a Coptic boy Said’s first fiction feature, “In the Last in their movie houses. These same who poses as a Muslim in order to fit in Days of the City,” about a group of firms also run the bulk of cinema pro- at his public school, was the top gross- friends from Egypt, Iraq and Lebanon duction in Egypt. “They totally con- ing local film in Egypt for three weeks who have been shaped by their cities trol everything, says Ahmad Abdalla, after it was finally released in late and the instability of their region. One a well-known local independent January, after the script was initially of the film’s stars is the third partner of director. “If those four or five people blocked by censors for fear that it the trio, British-Egyptian actor Khalid don’t like your film, or don’t like the would stir religious strife. Its director, Abdalla, who appeared in “The way you’re producing your film, or Amr Salama, is no stranger to sensitive Square” as well as Hollywood movies sometimes if they don’t like you per- social topics—his 2011 film “Asmaa,” such as “The Kite Runner” and sonally, your films will never be about discrimination faced by an HIV- “United 93.” screened in theaters.” positive Egyptian woman, won critical What defines independent film in Abdalla has become an example of accolades for its frank exploration of Egypt is somewhat subjective, as the how new technology and cheaper pro- the prejudices and fear around AIDS in term has evolved to refer mainly to a duction costs are allowing independent Egypt. genre that aims to transcend the pre- filmmakers to make movies and get Two of the partners behind dictable formula of mainstream cine- them seen without relying on main- Cimatheque, Khalid Abdalla and El ma. “It’s about independence from the stream channels. Having begun his Said, are also the founders of Zero major producers, who in fact also hap- career as an editor of commercial films Production, a Cairo-based independent pen to have a monopoly on distribution and ads, Abdalla decided a few years film production house that was shaped to an extent as well,” says Mohammed back to shift course. “I wanted to make by their involvement in Mosireen, a Abdallah. my own movies,” he says. His 2009 media collective that was borne of Indeed, a handful of firms have his- debut film, “Heliopolis,” which chron- activist efforts to document the revolu- torically controlled the vast majority of icles the lives and unfulfilled dreams of tion online. These efforts gained film distribution in Egypt. In 2010, the six young Cairenes as they contend
22 I Business Monthly – March 2014 In Depth HESHAM ISSAWI MARYHAN AND MOHAMED RAMADAN AS AMAL AND TAREK, THE STAR-CROSSED YOUNG CHRISTIAN-MUSLIM COUPLE AT THE CENTER OF “CAIRO EXIT.” with the chaos of the capital, was shot pendent cinema closer to the audi- feature-length film he made locally, with digital cameras for a mere $7000 ences,” he says. Hefzy also produced “Cairo Exit,” about an interfaith and went on to screen at the Toronto “Excuse my French,” which has been a romance between a Coptic Christian International Film Festival. The crew surprise runaway success, bringing in girl and a Muslim boy, addressed sensi- and cast, including well-known local more than LE 3 million in its first three tive subjects like premarital sex and movie actor Khaled Abol Naga, weeks. Still, the script initially ran afoul accidental pregnancy. It was rejected worked for free. of government censors when it was first by Egyptian censors. Issawi decided to For his second film, “Microphone,” reviewed in 2010, only receiving a go ahead and produce the movie any- about the underground music scene in green light two years later under a new way, without a permit. Completed in Alexandria, Abdalla made the movie administration. “Family Secrets,” from 2010 for $500,000, largely with funds via Film Clinic, a Maadi-based produc- director Hany Fawzy, about a young from the organization that runs the tion house that makes a mix of main- middle class Egyptian man coming to Dubai Film Festival and private equity stream and art house films. Mohamed terms with his homosexuality, was firms in the Gulf, the film opened to Hefzy, Film Clinic’s founder and gen- screened in January at the Luxor Film positive reviews. It has since been eral manager, explains that crowd- Festival but has yet to air in Egyptian screened around the globe, including at pleasing comedies like “Sameer and movie houses as Fawzy remains locked the prestigious Tribeca Film Festival in Shaheer and Baheer,” which depicts in a battle with the censorship board, New York in 2011, but only received the hijinx of college students who trav- which has demanded that a number of permission in January 2014 to be el back in time, reliably draw enough scenes be cut from the film. shown in Egypt. Issawi, who now co- box office revenue to enable the studio Some independent Egyptian film- runs his own production house in Cairo to produce more serious films like makers whose movies have met with and is working on a new movie, Ahmad Abdalla’s latest, “Rags and acclaim abroad have encountered a less believes that as the independent film Tatters,” which chronicles the chaos enthusiastic reception at home—if they scene in Egypt continues to gain and rage that followed the 2011 upris- are lucky enough to get their work momentum, it will become easier for ing through the eyes of a released pris- screened in Egypt. Hesham Issawi is an filmmakers to win financing from a oner who wanders Cairo. Egyptian director who was working in broad array of sources. As long as these Hefzy says his established relation- Los Angeles when he saw “Heliopolis” production can be made cheaply, he ship with the mainstream movie indus- in 2008 and decided to move back points out, they are a low risk invest- try in Egypt has also enabled him to air home after two decades. “That movie ment. “I think these movies are the films that might not otherwise receive made me say ‘Oh my God, there is hope of Egyptian cinema,” he says. local distribution. “It has allowed me to independent cinema in Egypt! I can “They’re really going to bring bring what many people consider inde- make a movie here,’” he says. The first Egyptian cinema back!”
Business Monthly – March 2014 I 23 In Depth
COVER STORY
24 I Business Monthly – March 2014 From cell phones to cigarettes, imported Asian- made products are plentiful and cheap. But with smuggling becoming rampant amid the chaos of the last three years, questions have been raised about the safety of some of these products. Meanwhile, Egyptian factories are finding it ever harder to compete.
BY TAMER HAFEZ
Business Monthly – March 2014 I 25 In Depth SOHA SOHA EL GABI CHINATOWN: THE OLD JEWISH QUARTER IS KNOWN AS CAIRO’S INFORMAL SHOPPING CENTER FOR INEXPENSIVE ASIAN-MADE IMPORTS.
plaque in Hebrew, where they get their stuff to sell it so 2011 revolution. In a statement issued in Arabic and English cheap,” says Badawy. While he insists he December, then Minister of Trade and marks the start of imports his budget jewelry and ladies’ Industry Mounir Abdel Nour promised Haret El Yehud, the scarves through proper channels, every- that officials would “look into” regula- old Jewish Quarter, one knows that many of the goods sold in tions governing the inspection of goods once a residential area Haret El Yehud are smuggled. imported from China. His remarks came of jewelers, tailors and grocers in Old Black market goods that enter the partly in response to several highly publi- Cairo that now resembles an urban country from China with forged docu- cized incidents concerning sub-standard Chinatown. The neighborhood is a ments or no papers at all make up a grow- or counterfeit Chinese imports, including labyrinth of 360 narrow alleys and some ing share of Egypt’s import economy. The a story in late 2011 about fake LE 1 coins 10,000 shops, the vast majority of them influx of cheap, plentiful goods has found imported from China that had made it into Alittle more than makeshift closets with a ready market among an enormous pop- circulation. Late last year, there were sto- street tables piled high with retail goods. ulation that’s getting poorer every year. ries about black market Chinese cigarettes In a city awash with cheap, imported More than a quarter of Egyptians now found to contain higher-than-normal lev- goods from China, Haret El Yehud is live below the poverty line, according to els of toxic chemicals, while electromag- known as an informal shopping mecca for government statistics. Recent United netic waves emitted from improperly con- everything from half-pound earrings to Nations figures indicate that between structed Chinese-made battery-powered giant plastic toys and electronics and 2009 and 2011, around 15 percent of toys had reportedly caused people to suf- appliances of every stripe. A food proces- Egyptians slipped into poverty, about fer headaches and blurred vision. sor supposedly made by “Generaal twice as many as climbed out. Mounting Officials say they are reviewing the so- Ilectric” sells for around a 10th of the cost complaints from local traders and manu- called CIQ (China Inspection and of the real thing. Abdel Rahman Badawy, facturers about the flourishing black mar- Quarantine) standards agreed to in 2010 a 73-year-old trader who has been selling ket in cheap, Chinese goods have shone a by Egypt and China, which sought to bol- goods here since his teens, says even he is spotlight on what many say is lax enforce- ster quality and efficiency by providing surprised lately at how low some traders ment of import regulations, particularly in guarantees from the Chinese government price their wares. “You have no idea from the wake of worsening security since the before goods were shipped that they had
26 I Business Monthly – March 2014 In Depth BERTIL G. BERTIL PETERSON G. NATURAL SELECTION: EGYPTIAN-OWNED FIRMS LIKE THE CAIRO COTTON CENTER IN QALYUBIA STRUGGLE TO COMPETE WITH CHEAP CHINESE IMPORTS. met Egyptian quality standards. However, handbags and belts with locally-produced Trade and Industry Rachid Mohamed many have pointed out that adding stricter components and dyes. But in 2007, he Rachid spearheaded the CIQ agreement regulations to what is already a cumber- gave up the struggle to compete with as part of a larger effort to open up the some customs process for imports won’t cheap Chinese purses that were often faux country to international trade and invest- solve what is really a problem of enforce- versions of popular styles by Gucci or ment. In addition to quality assurance, the ment. Even before the revolution, bureau- Michael Kors. Now he rents out his facto- agreement was supposed to fast track cratic import rules were often skirted by ry for storage. Meanwhile, he sells toys imports to meet the rising demand for smugglers, says Mohamed Abdelmohsen, and home accessories out of a shop he Chinese goods in Egypt. It quickly head of the Alexandria Business rents in the old Jewish Quarter. On a became obvious, however, that there were Association’s import committee. But recent afternoon, he deftly juggled negoti- a number of problems and loopholes in since 2011, “their grip has loosened, while ations with three different potential cus- the CIQ arrangement. It “was and still is the decision-making process has slowed tomers while his two sons guard the mer- risky,” says Yehia El Zananiry, vice presi- down considerably,” he says. “This, of chandise from shoplifters. Even as the dent of the ready-made garments division course, is amplified by the security diffi- value of the pound has plummeted recent- at the Federation of Egyptian Chambers culties we are facing now.” Meanwhile, ly, driving up import costs substantially, of Commerce. “For one, there is no con- local factory owners complain that they selling goods from abroad is still more trol over the corruption that could happen simply can’t compete with cheap goods profitable than dealing in locally-pro- on the Chinese side of the equation,” he smuggled from China. A packet of five duced wares, he says: “I would be stupid says. Egyptian officials have no way of girls’ hair bands made in Egypt, for exam- to price anything higher than I absolutely ascertaining whether or not proper inspec- ple, costs LE 5, while a similar product have to.” tions have been carried out on the Chinese imported from China is LE 1 or LE 2. Between 2002 and 2013, Chinese side. Within months after the deal was imports to Egypt jumped from $853 mil- signed between the two nations, fake lion to $8.35 billion, making it Egypt’s Chinese certificates began to emerge. Good intentions number one exporter. In 2010, in response Since there is no computerized system Mahmoud Yassin, 53, used to run a facto- to the onslaught of Chinese goods flood- to enable customs authorities to run on- ry in Qalubya that made all-natural leather ing the local market, then Minister of the-spot checks ensuring the authenticity
Business Monthly – March 2014 I 27 In Depth SOHA SOHA EL GABI FOUL PLAY: REPORTS OF BLACK MARKET TOYS FROM CHINA THAT POSE A SAFETY HAZARD TO CONSUMERS HAVE RAISED ALARM BELLS RECENTLY. of such paperwork, Egyptian authorities on the shoulders of traders. “It’s a huge goods. “They lost their grip even more instead devised a system whereby cost,” says Zananiry. Many of them after January 2011,” says Mohamed importers must sign a document promis- import “closed crates,” in which the Abdelmohsen of the Alexandria Business ing that their CIQ certificates are genuine. importer pays a flat rate for a mix of Association. Imported black market ciga- It takes inspectors around three days to items, the details of which he doesn’t rettes, for example, are everywhere. Atef verify the paperwork; in the meantime, know until the crate is opened upon Yacoub, head of Egypt’s Consumer his goods are held at the port of entry, and arrival. For example, a shipment might Protection Agency, estimates that about the importer has to pay for storage. contain a variety of toys, electronic acces- 18,000 Chinese factories are supplying Moreover, the lack of direct communica- sories like batteries and chargers, hair Egypt with smuggled goods, costing the tion between the two governments means brushes, shoelaces and so on. This is government LE 4 billion annually in lost that it’s left up to Egyptian importers to cheaper than an “open crate” arrange- tax revenue. keep up with officially determined quality ment, in which the importer pays for each standards for specific products. Often, item separately. The exporter is supposed that simply doesn't happen, or traders pro- to provide a CIQ certificate for each kind Survival of the fittest vide Chinese exporters with incomplete of import, and obtaining such certificates Port Said, a coastal city in the country’s or outdated standards. Because of these in China through above board channels northeast corner, where the Suez Canal issues, Egyptian inspectors usually just can take up to 28 days. All this means meets the Mediterranean Sea, is a major examine the goods from scratch anyway. dealing with a lot of expensive and cum- trading center as well as a transit and refu- “It's safer for me to inspect it 100 per- bersome red tape with little guarantee in eling station for cargo ships. The port was cent,” says Alaa AbdElkareem, chairman the end that the items inside actually meet declared a duty free zone as part of Anwar of Egypt’s General Organization for quality standards. Sadat’s Open Door Policy in the mid- Import and Export Control. But as Smuggling, on the other hand, bypass- 1970s, and the city developed into a trade Zananiry points out, this more or less es all these lengthy, expensive require- hub that today buzzes with importers and defeats the whole purpose of CIQ, which ments. Black market imports were street side vendors making deals at all is supposed to streamline the import already common before the January 25 hours of the day and night. Trucks loaded process. uprising, but in the last three years, border with merchandise continuously rumble Moreover, the price of obtaining CIQ controls have broken down, particularly between the port and border checkpoints, certification, which ranges from $350 to in the lawless Sinai Peninsula, the entry while run-down pickups, some lacking $500, depending on the product, also falls point into Egypt for many smuggled license plates, carry their cargo toward
28 I Business Monthly – March 2014 In Depth
side roads, that are perhaps manned by lower-ranking officers willing to pock- et a modest bribe in exchange for free passage. Smugglers often enlist Bedouin traders, who are intimately familiar with the ter- rain and have years of experience operat- ing out of the sight of the government, to move goods through Port Said’s south- eastern border and through the desert to storage facilities on the outskirts of Cairo, where wholesale vendors buy the mer- chandise and distribute it to street vendors and traffic hawkers. Another popular method of bypassing CIQ regulations is to stop en route with Chinese cargo in ports such as Vietnam, Jordan and the UAE, where importers simply switch stickers on the crates, falsifying the coun- try of origin. “This practice has been done for some time now,” says Zananiry.
For years, Egyptian craftsmen fash- SOHA EL GABI ioned souvenirs capturing Egypt’s storied OVERTAKEN: EVEN CHINESE-MADE CARS, LIKE THE GEELY PANDINO, ARE SELLING IN EGYPT. ancient history, from King Tut key chains and Sphinx boxes to busts of Queen with Chinese imports; small-scale local Nefertiti. But nowadays, even these sym- manufacturers around the globe have Caveat Emptor bols of Egyptian history and pride are been driven out of business by the inex- While they’ve found an enormous mar- increasingly made in China. “If you walk pensive wares churned out by China’s ket among the poor in Egypt, Chinese down El Moez Street or in Khan El massive factories. Still, some point out goods are sold to all walks of life. At Khalili, the majority of shops are selling that Egypt’s failure to keep pace with new Alfa Market, a Cairo supermarket Chinese-made pharaonic, Islamic and technologies and business practices has chain popular with expatriates and Coptic souvenirs,” says Abdel Rehim hastened its demise. Mahmoud Hussein, well-heeled Egyptians for its large Rehan, an official with the Ministry of who runs an accessories shop in the stock of imported goods, the kitchen- Archeology. Rehan, an advocate for the Jewish Quarter, where’s he’s been selling ware and electronics departments, to preservation of Egypt’s history and cul- goods for more than two decades, says he name two, are filled with “made in ture, laments the fact that cheap Chinese sees fewer and fewer items coming out of China” stickers. “If it weren’t for imports have replaced authentic the small, “under the staircase” work- Chinese products, I think we’d be buy- Egyptian-made knickknacks, weakening shops that once flourished in the district. ing so much less,” says Mohamed yet another once-vibrant local industry, Without adopting modern equipment and Abdallah, 39, an auditor and father of but he acknowledges that, like a lot of methods, “Of course the quality of the two who was perusing some Chinese- products, the Chinese versions are simply product was going to deteriorate,” says made candlestick holders at the Alfa cheaper and offer more variety. Noha Hussein. Moreover, as the pound has branch in Maadi one recent Saturday Mohamed, a university student studying plummeted in recent years, some larger afternoon. French literature, complains that she Egyptian factories have focused exclu- While Egyptians of all ages and recently spent LE 250 at a downtown sively on catering to an export market, social classes hardly think twice about shop for an Egyptian-made leather hand- where they can make a profit in hard buying such products, several media bag. “This is a lot of money, so I thought currency. Tarek Salah, a nearby toy shop reports of smuggled or sub-standard it would be of good quality,” she says, but owner, used to sell pencils from the imports from China have frightened within two weeks, both the strap and the National Pencil Production Factory, a consumers. Late last year, hundreds of zipper had broken. The black artificial local family-owned company. “A packet owners of battery-powered flying toy leather handbag she now carries cost her of pencils was LE 17. The Chinese pencil horses and yellow teddy bears reported LE 50. “And no one knows it’s Chinese,” packet was LE 6, and I never got any headaches and numbness when han- she says. complaints about the Chinese one,” he dling the toys for more than a few min- Of course, it’s not just Egyptian manu- says. The National Pencil Production utes. Lab tests revealed that the levels facturers that are struggling to compete Factory has since shut down. of electromagnetic waves emitting
Business Monthly – March 2014 I 29 In Depth SOHA SOHA EL GABI UNDER THE TABLE: CHEAP, OFTEN SMUGGLED BRAND-NAME KNOCKOFFS MADE IN CHINA ARE AVAILABLE IN EVERY IMAGINABLE STYLE AND COLOR. from the toys’ batteries were double the Counterfeit imported goods can pose Chinese-made products, like Egyptian level considered safe. The incident other kinds of problems as well. An ones, vary widely in both price and took place despite a 2012 law requiring unreported number of Chinese-made, quality, agree traders, sellers and officials. more stringent tests on imported toys. LE 1 coins were discovered in circula- Even if Chinese-made goods aren’t It’s worth remembering that Egypt tion starting in 2011. Officials said they always cheaper and better than competing imported LE 2 billion worth of toys had been smuggled into Egypt inside products made in Egypt, the wild popu- from China last year. In 2013, 4,726 toys. The fake coins, which were actu- larity of foreign-made products in general shipments of toys totaling 47 tons ally worth around 20 piastres, were may go back to a widespread prejudice arrived in Egypt—and that’s only smaller and lighter than the real thing against goods manufactured at home that counting those that arrived legally. but otherwise looked identical. Ahmed has been ingrained over the years in the Officials insist that there is rigorous Abou Gabal of the Cairo Chamber of minds of Egyptian consumers, says Soad testing of all consumer products enter- Commerce says other items, including El Dieb of the Consumer Protection ing the country. But inefficiency and medications like Viagra, have entered Agency. She explains that since the corruption sometimes help faulty prod- the country inside toys. 1980s, Egypt’s policy has been to protect ucts to slip through the cracks. Around 75 percent of counterfeit goods domestic industries at all costs, with such Descriptions can be missing or inaccu- seized worldwide between 2008 and 2010 measures as raising import taxes. Over rate. Counterfeit cigarettes entering came from China, according to the World time, this protectionism made local indus- Egypt from China have, by all Customs Organization. In recent years, try complacent about quality. A percep- accounts, exploded into a thriving Chinese officials have undertaken efforts tion developed among Egyptians that for- black market business. The latest major to crack down on fake products. The gov- eign-made goods were simply better. In seizure of these illicit tobacco products ernment seems to have realized that while the early 2000s, when the government took place in December, when 28 mil- being “the workshop of the world” may opened up the local marketplace to com- lion black market Chinese cigarettes— be a good thing, China’s reputation as a petition, these factors worked together in shipping containers with CIQ certifi- source of counterfeit products worldwide against local manufacturers, leaving them cates stating that they were household is not. For example, last summer, follow- at a distinct disadvantage. “The Chinese appliances—were smuggled into the ing a joint sting with Chinese authorities, product is a foreign product, and it’s also country via Ain Sokhna. The cigarettes U.S. customs officials seized 243,000 significantly cheaper than its Egyptian were found to contain higher-than-nor- fake electronic products slated for export counterpart,” says Dieb. “Of course, it mal carcinogenic chemical levels. to American consumers. was always destined to succeed.”
30 I Business Monthly – March 2014
Technology
CONNECTED Broadband access in the Middle East Published by the World Bank Analysis by Rachel Scheier
t became fashionable in the months following the As Egypt and other developing nations struggle to keep up with 2011 uprising in Egypt to refer to January 25 as the global transition to “knowledge-based” economies, access to “the Facebook revolution.” Journalists and acade- the Web is a key component to creating jobs and raising living mics, especially in the West, penned exuberant standards of the poor. “There is growing consensus that broadband analyses about the newfound power of digital tools Internet is critical in fostering sustainable economic development to affect change in long-oppressed societies. Three and job creation, and is strategic to the goals of reducing poverty, years on, the intelligentsia is not quite as sanguine, as peo- enhancing job opportunities, and fostering trade integration,” write the World Bank researchers. Broadband Internet access—meaning ple realize the limits of social media as a key to democratic a relatively speedy connection that is always on—has the power to reform. Nonetheless, the growth of the Internet in Egypt and influence many different economic sectors, from water to trans- the Middle East has undeniably played a role. A new report portation. For example, factories can improve their performance by the World Bank, “Broadband Networks in the Middle I via so-called IT-enabled supply chains. Reliable, reasonably- East and North Africa,” describes how “social networking priced Web access is a key factor in foreign direct investment, tools have the potential to enhance citizen engagement in which has fallen precipitously in Egypt since the January 25 rev- the region, promote social inclusion, and create opportuni- olution. Broadband also enables “smart” infrastructure, including ties for employment, entrepreneurial activities, and social electricity grids and meters, and “intelligent” transport systems. development” among a population that is increasingly With the country facing a serious and deepening energy crisis, the young and urban. As of mid-2013, Egypt had some 14 mil- report points out that such digital infrastructure “can greatly lion Facebook subscribers, accounting for more than a quar- enhance the performance of the electricity grid, reduce peak load ter of all Arab users. Despite this, the region lags behind the energy requirements, allow for better integration of renewable rest of the world in terms of Internet access, the creation of energy sources, and promote effective energy use.” digital content and the development of infrastructure to While it has not created the egalitarian utopia that some initial- enable these things. Across much of the country and the ly envisioned, the Internet’s key role in the Arab Spring also region, the price of broadband access has remained prohib- demonstrates how the increased access to information and com- itively high, while take-up has been slow—largely because munication can foster social inclusion, accountability and human of a market structure that historically treated telecommuni- rights. Around three-quarters of the approximately 46.5 million cations as a monopoly utility service. Arab Facebook users are between the ages of 15 and 29, 80
38 I Business Monthly – March 2014 Democracy
percent of whom spend at least an hour each day updating their for the growth of mobile broadband (see “Signals fuzzy as Egypt profiles. The report stresses that “social media is not only a domain counts down to digital,” p. 18). Once again, the report empha- for liberal youth,” however, pointing out that three of the top five sizes the importance of fostering competition and eliminating most-followed Arab personalities on Twitter are religious preach- market barriers to promote growth, which will in turn foster ers. Social networking tools can provide a forum for things like wider usage, increase efficiency and bring the prices of equip- job-seeking and entrepreneurship as well as social improvement. ment down. Egypt and other MENA countries are well posi- Again, the region lags behind in this area, though Internet pene- tioned to follow the example of Eastern Europe, which inherited tration rates are growing rapidly. Arabic digital content only “decrepit, ill-planned and obsolete” network infrastructure from amounts to 0.162 percent of the total online, while just 0.198 per- the Soviet era. Within a few years, however, “thanks to an effec- cent of websites are hosted in the MENA region. Governments in tive market liberalization approach, combined with effective the Middle East are “faced with a historic opportunity to leverage measures to lower deployment costs,” some of them surpassed social media to better advance various development agendas for the West in terms of broadband speed and penetration rates. their increasingly youthful societies.” Lithuania, for example, where there is a wide array of Internet Between 2012 and 2017, Internet traffic in the Middle East is service providers, 81 percent of all households had broadband expected to grow at a faster rate than in any other region in the Internet connections by the end of 2012. world, placing increasing demand on existing infrastructure. Even with an unencumbered free marketplace to promote Even wealthy countries are exploring new, innovative models— faster, more widespread Internet connectivity, however, the such as public-private partnerships—to meet the investment World Bank researchers note that a “digital divide” persists, challenges of building new infrastructure to meet this growing especially in poor, remote areas, where the cost of basic demand. In 2011, Egypt launched a new ICT strategy for broad- service often remains prohibitively high. There is also a 34 band in response to snowballing demand for more bandwidth percent gender gap in Internet usage in the Middle East, the and the growing appetite for news and other video content and highest in the world after Sub-Saharan Africa. Government multi-media services. The “eMisr National Broadband Plan” subsidies, imposing coverage requirements for telecom firms proposes creating a so-called special-purpose vehicle, with and exploring alternative technologies are measures that have existing operators as shareholders, as an option. Another strate- helped extend Internet access to poor, remote areas in other gy that has been discussed is partnering digital service providers countries. Canada, for example, established a policy whereby with the real estate industry to provide broadband Internet ser- underserved, rural areas could access broadband via satellite. vice in new developments. Chile used a so-called reverse subsidy auction—in which Thanks to its strategic location on the Red Sea corridor, Egypt firms compete by bidding down the value of the subsidy—in is home to some 13 submarine cables, more than all other coun- order to develop its broadband network in areas where tries in the region except the United Arab Emirates, meaning the companies did not otherwise have an incentive to operate. country has adequate international connectivity to meet demand There is plenty of opportunity for a whole array of players in the short and medium-term. However, the country’s “back- to satisfy the enormous appetite of the “young, technology- bone infrastructure” is solely controlled by state-owned savvy population” for broadband Internet service in Egypt Telecom Egypt, which owns and operates a 15,000 kilometer and other countries in the region. As well as creating jobs, fiber-optic spine that extends to nearly all populated areas. efficient Web connectivity can bring “global knowledge” to “With TE having a monopoly on fixed infrastructure, no com- local markets. Encouraging the development of such net- petitive offerings to its fiber-optic backbone by alternative infra- works will involve measures like enforcing regulatory structure operators have been allowed,” states the report. reform, eliminating monopolies, licensing more operators “Although recent steps have been taken towards allowing and getting rid of high fees and bureaucratic regulatory barri- mobile operators to build their own core infrastructure, their ers. However, as the report points out: “This kind of reform licenses do not allow for infrastructure leasing to other parties. almost always involves addressing local resistance to change, As elsewhere in the region, “the lack of competition and limit- often coming from those economic and political agents that ed open access regulations pose significant constraints to the are profiting from existing rents. This is a tall order indeed.” effective use of international and regional connectivity,” keep- Facilitating such change will mean exploring new and innov- ing consumer broadband prices relatively high. ative ways to coordinate civil works with digital networks to Outside of the Gulf, Egypt has the highest penetration for meet the demands of “a young, urbanized population” for mobile broadband connections (via smartphones and other both housing and broadband Internet access. Lastly, a strate- devices) in the region, and that number is expected to grow gic regulatory framework “at the national and regional exponentially in the coming years, depending on how the coun- levels” has the potential to launch the rapid expansion of try manages the impending transition from an analog to a digital these networks. “The stakes are high, and they are elevated by broadcasting signal, a change that’s considered an opportunity the existing sociopolitical pressures for reform.”
Business Monthly – March 2014 I 39 Dining Out SOHA EL GABI SPANISH CONFUSION BY BRENDAN MEIGHAN
aybe it should American South, is a close cousin of north of 26th of July Street in Zamalek paella have been a tip- , the Valencian specialty. That’s along Ahmed Heshmat Street to avoid off that the idea, I suppose, that Jambalaya is a the discordant symphony of car horns. Jambalaya, a melding of cuisines and cultures. But Its bright yellow façade stands out new “Spanish with dishes like Pure de Garbanzos con against the dusty, cracked pavement. fusion” restau- Chorizo (hummus with spicy sausages, Glass doors open onto a small coffee rant in Zamalek, is named for a dish that LE 28) and the Hamburguesa de Paella bar, with a staircase leading to the din- is actually from New Orleans. It’s true (a “Paella Burger” of chicken, chorizo ing room. On a recent Monday evening, that the signature Louisiana Creole dish, and shrimp, LE 65), Jambalaya takes the restaurant was empty despite the shisha a rice-based concoction that mingles traditional dishes from southern Europe crowd smoking at a nearby out- French, Spanish and Caribbean influ- and North America well outside of their door café. Mences with hot peppers, sweet onions, comfort zones. Jambalaya tries hard to let us know shrimp and other staples of the The restaurant is nestled far enough it’s Spanish. And the simple wood and
40 I Business Monthly – March 2014 Dining Out
strong hints of onion and garlic and seafood, the essence of the dish, were nowhere to be found. Its mildly savory, vaguely greasy tang might have impressed me if it were the microwaved leftovers of a home- cooked effort, but not as the flagship dish of a restaurant attempting to spe- cialize in Spanish cuisine. It tasted more like a midnight snack. Oddly enough, it was the Pasta con Chorizo (LE 44) that finally delivered, despite my diminished appetite and the somewhat odd notion of eating pasta in a Spanish restaurant. The simplicity helped—I can personally attest to the fact that pasta is hard to screw up. Nevertheless, it featured generous chunks of the tasty, spicy-sweet sausage in a smooth tomato cream sauce that bound the elements of the dish together without overpowering them.
SOHA EL GABI Rejuvenated, and thirsty, I requested a Fresca Limonada (LE 16) as well as a metal tables and chairs, earth tone pat lemon and chilies should bring to the glass of non-alcoholic Sangria (LE 18). terned floor and muted lighting do feel dish. If there is one thing Egypt always gets vaguely European. Specials of the day The sample portions of red and white right, it’s juice. The Limonada, a straw- are listed casually on a chalkboard Gazpacho (LE 20) were delivered in berry lemonade, was neither too sweet hanging on the wall, and a sign face- shot glasses. This was a cute touch, but nor too tart. The Sangria was a little tiously warns patrons, in Spanish and sufficient to say that a shot glass is less exciting, but then again, grape English, that Jambalaya does not have probably not the optimal delivery vehi- juice is not really a substitute for wine, Wi-Fi and they should talk to each cle for soup. While it wasn’t bad, the which is traditionally the main ingredi- sangria other instead. “Keep calm and eat chilled vegetable concoction was on ent of . Jambalaya had also tapas,” advises a poster near the door. the bland side compared to other ver- added a substantial amount of spice, the The menu is a mish-mash of items sions I’ve tasted of this classic summer most prominent being cinnamon, with some connection—in some cases soup. And at LE 20, Jambalaya’s two which gave this summer drink a discor- a rather tenuous one—to Spain. A shots of gazpacho weren’t really worth dant, Christmas-ey flavor, like mulled case in point is the Mexican the trouble. wine. It wasn’t bad—it just wasn’t real- sangria Guacamole (LE 32). It arrived quick- When the waiter returned, I already ly . Which is perhaps the prob- ly along with tortilla wedges (as it had my menu open with my finger lem with Jambalaya, which is a restau- should have, considering I was the pointing to the Paella Marinera (LE rant in search of an identity. Its name only patron in the restaurant). But the 79). Given the restaurant’s name, I comes from Louisiana; it’s décor from crucial thing about guacamole, which thought perhaps this would be the dish Spain, and its food from those places is basically mashed avocado with they’d get just right. When it arrived, plus Italy, Mexico and Egypt. Lacking some spices, is that it’s fresh. Beyond everything looked exactly as it should. a plan for how these disparate cuisines the garnish of few fresh chopped Jumbo prawns perched atop a mountain are supposed to fit together, fusion tomatoes, this version was of a pallid, of saffron-colored rice with peppers becomes confusion. military-green hue that suggested it and peas, and mussels were neatly had been prepared a few days ago. arranged in their shells around the cir- Again, guacamole doesn’t necessarily cular edges of the cast iron dish. (Some Jambalaya paella need a lot of embellishment, but both believe “ ” originates from the 37A Ahmed Heshmat Street baqiyah the avocado and tortilla were notable Arabic word “ ,” meaning left- Zamalek for their blandness, lacking the zesty overs.) But looks aren’t everything. It 01100220077 kick that a touch of onion, garlic, salt, lacked the necessary punch, those Open daily 3 p.m. to midnight
Business Monthly – March 2014 I 41 Food WHAT’S COOKING? BY MAT WOLF COURTESY COURTESY OF CHEFS EGYPTIAN ASSOCIATION’S
hen it comes to food, Peter Reda Gerges Chinese dim sum, chicken and shrimp dumplings typical of believes in keeping things simple. Too many the Cantonese finger food popular around the world, Gerges young chefs, he believes, get lost trying fancy, needs little more than meat, wrappers and his bamboo steam- experimental ingredients and techniques er. That was enough to snag the 21-year-old former sous chef they’ve read about on the Internet rather than simply follow- at the Renaissance Cairo Mirage City Hotel the Best Chinese ing what they’ve learned in the kitchen. For his signature Dish award at the Egyptian Chefs Association’s annual W cooking competition last month. “I practiced this dim sum in my kitchen for a long time, and went over the recipe in my head many times,” he says. The cook-off, originally slated for last November but post- poned due to political unrest, took place against the back- drop of the HACE Hotel Supplies Exhibition at the Cairo International Conference Center in Nasr City. Over four days, some 200 culinary professionals and aspiring chefs squared off in singles and teams, in events from Vegetarian to Mediterranean to American Beef. A panel of judges from restaurants and chef’s associations around the globe award- ed LE 50,000 in prizes to the winners, which included such categories as Junior Chef of the Year and Female Chef of the Year. This year, all dishes were made from locally-sourced ingredients chosen by the chefs themselves. High-end restaurant goers in Egypt, like others around the world, are increasingly aware of the importance of sustainable, green cooking, says Chef’s Association Executive Director, Mirjam van IJssel. “In the rules this year, it has to be Egyptian cuisine, Egyptian flavor,” she says. “If they want to do pasta, they have to find local pasta; if it’s meat, it has to be good quality local meat.” The Asian cooking event, in which competitors had 30 minutes to prepare a dish for two inspired by the cuisine of
COURTESY COURTESY OF CHEFS EGYPTIAN ASSOCIATION’S the Far East, is judged by a panel led by Australian chef Alan
42 I Business Monthly – March 2014
Food
delivery, takeaways—they’re great businesses,” he says, dragging on a cigarette. “And when you’re a good chef, you get more business—or you can charge a little bit more to make a return on your investment.” While Iten praises the aspiring young chefs participating in the competition, he laments what he calls the mediocre quali- ty of much Egyptian cuisine, which is often greasy and lacks freshness. A lot of the problem, he believes, is that there’s not enough formal training. Most kitchens don’t teach techniques and basic recipes, leaving novice cooks to more or less wing it. “They don’t get the right sequence of events to prepare a dish correctly, and they don’t have the right temperature and weight ratios.” While it’s true that the tourism industry is cur- rently in a state of freefall, tourists will eventually trickle back to visit Egypt’s ruins and beaches, Iten says, and when they stay in five-star hotels, they’re going to expect food to match. “As soon as all the hotels are 100 percent booming, we have to think about what our biggest weaknesses are.” Meanwhile, the judges are ready to sample the contestants’ cre- ations. The smattering of family and friends watching from the bleachers applaud supportively when the judges make positive comments about the food. Ezzat’s mystery poultry dish is dis- missed—unsurprisingly—for a lack of clarity on what it actually is. Slurping up Mohamed’s noodles, Orreal reflects that the dish is perhaps 80 percent Thai, 20 percent Vietnamese. The chef nods
COURTESY COURTESY OF CHEFS EGYPTIAN ASSOCIATION’S attentively. But the highest praise is reserved for Gerges’ dim sum. Asked about his equipment, he shows off his bamboo steamer. Orreal, the food and beverages director at the Shanghai It’s the only piece of equipment he uses for the dish, he explains, Disney Resort and co-host of “The Big Break,” a reality because it’s simple and traditional. His strategy has apparently show that searches for undiscovered culinary talent. The paid off: As well as taking first place in the heat, Gerges won a contestant chefs worked side by side at compact cooking sta- silver medal in the overall Asian competition. tions enclosed by a tall plastic sneeze guard. Wearing a tall, white chef’s hat, Eman Mohamed of the JW Marriott Hotel Cairo (who would later place second in the best female chef contest) furiously chopped basil and carrots hoping to add color and flavor to her Thai-inspired glass noodle dish, which was adorned with a single pink shrimp, while along- side her Mohamed Ezzat of the Renaissance Cairo Mirage City Hotel concocted a brown-sauced dish described as “Chinese Chicken.” Gerges, meanwhile, is enveloped in a steamy plume as he removes his finished dumplings from the bamboo steamer and plates them. Organizers say the competition aims to showcase high- lights of the Egyptian culinary scene and promote the profes- sion to a younger generation. While the local hotel and restaurant business has suffered seriously in the wake of declining tourism in the last three years, Egyptians them- selves are eating out more than ever, according to the ECA. Not only have restaurants become increasingly fashionable in Cairo and other urban centers, more women are working, leaving them with less time to cook at home. You don’t need to be a five-star chef to open a restaurant, says ECA President Markus Iten, but professional culinary training can reap long-term benefits for restaurateurs. (The ECA runs training centers in 6 October City and Luxor.) “Restaurants, home COURTESY OF CHEFS EGYPTIAN ASSOCIATION’S
44 I Business Monthly – March 2014 Chamber news
BOARD OF GOVERNORS PRESIDENT MEMBERS OF THE BOARD Anis A. Aclimandos, Transcentury Associates Ahmed El Daly, Dale Carnegie Training Egypt (Westwood Group) EXECUTIVE VICE PRESIDENTS Amr Allam, Misr Sons Development - Hassan Allam Sons Curt Ferguson, Middle East & North Africa Business Nevine Loutfy, Abu Dhabi Islamic Bank Unit, The Coca-Cola Company Sherif Kamel, School of Business, The American Omar Mohanna, Suez Cement Group of Companies University in Cairo Thomas Maher, Apache Egypt Companies
VICE PRESIDENT, MEMBERSHIP PAST PRESIDENT Dalia Wahba, CID Consulting M. Gamal Moharam, MGM Financial & Banking Consultants COMMITTEE VICE PRESIDENT, PROGRAMS Amr Talaat, IBM CHIEF EXECUTIVE OFFICER CHAIRS Hisham A. Fahmy VICE PRESIDENT, LEGAL AFFAIRS (July 2013 to June 2014) Said Hanafi, Orascom Hotels & Development
TREASURER Sherif El Kilany, Allied Accountants-Ernst & Young International Cooperation Chair: Hanaa El Hilaly, Social Fund for Development � Co-Chair: Magda Shahin, The American University in Cairo
Entrepreneurship and Innovation Investment & Capital Market Agriculture and Food Security Chair: Ahmed Bedeir, Dar El Shorouk Chair: Alaa El Affifi, Citadel Capital Chair: Tarek Tawfik, International Company for Agricultural ��� Co-Chair: Nader Iskander, Egypt & Middle East Co. (EME) Co-Chair: Sherif A. El Akhdar, Beltone Private Equity Production & Processing Co-Chairs: Tony Freiji, Wadi Holding Seif ElDin ElSadek, Agrocorp For Agriculture Investment Health & Pharmaceuticals Legal Affairs Chair: M. Maged El Menshawy, Manapharma Chair: Ahmed Abou Ali, Hassouna & Abou Ali Law Offices Co-Chairs: Ahmed Ezz El Din, Johnson & Johnson Medical Egypt � Co-Chairs: Emma El Meligi, Pepsi-Cola Egypt Banking and Finance Mohamed S. Roushdy, Amoun Pharmaceutical Co., SAE Girgis Sarwat Abd El Shahid, Sarwat A. Shahid Law Firm Chair: Hussein Abaza, Commercial International Bank (CIB) Co-Chair: Zeinab Hashim, National Bank of Egypt Marketing Chair: Hisham Ezz El Arab, Danone Egypt Human Resources Co-Chairs: Tamer Hamed, Procter & Gamble Egypt, Ltd. Chair: Somaya El Sherbini, Microsoft Egypt, LLC Corporate Social Responsibility (CSR) Tamer Elaraby, Nielsen Co-Chair: Maisa Galal, General Motors Egypt, SAE Chair: Mohamed El Kalla, Cairo for Investment & Development Co-Chair: Shereen Shaheen, Pepsi-Cola Egypt Real Estate Chair: Mohamed Abdallah, Coldwell Banker Affiliates of Middle East & Greater Africa. Industry & Trade Customs and Taxation Co-Chair: Hala Bassiouni, Egyptian Housing Finance Company. Co-chairs: Mostafa El Halwagy, The Egyptian Company for Chair: Hassan M. Hegazi, Master Trading, SAE International Touristic Projects (Americana) Co-Chairs: Hossam Nasr Transport & Logistics Omar El Derini, FAOM Consult/ Red Wing Sherin Noureldin, Moore Stephens Egypt Chair: Alfred Assil, Menarail Transport Consultants Suresh Narayanan, Nestle Egypt � Co-Chairs: Amr Kabil, National Stevedoring Group Amr Tantawy, DHL Express Education Information & Communications Technology Chair: Amr Ezzat Salama, The American University in Cairo Chair: Bassel Mubarak, Oracle Egypt Travel & Tourism Co-Chair: Elizabeth Khalifa, Binational Fulbright Commission in Co-Chair: Reem Asaad, Raya Holding Egypt Chair: Karim El Minabawy, Emeco Travel � Co-Chairs: Cesare Rouchdy, Four Seasons Hotels and Resorts, Egypt Roland Bunge, Carlson Wagonlit Travel Energy Insurance Chair: Khaled Abu Bakr, TAQA Arabia Women in Business Chair: Alaa El-Zoheiry, Arab Misr Insurance Group|gig Co-Chairs: Basil El Baz, Carbon Holdings Chair: Hala El Barkouky, Allied Business Consultants Co-Chair: Rabih Abdel Khalek, Pharaonic American Life Insurance Osama ElSaid, Masa Electro Co-Chairs: Ghada Hammouda, Citadel Capital Company (Metlife Alico) Thomas Thomason, Egyptian Refining Co. Jailan Shindy, Shindy & Associates, Inc.
American Chamber of Commerce in Egypt – Tel: (20-2) 3338-1050 – Fax: (20-2) 3338-1060 For more information about AmCham services and news, please visit www.amcham.org.eg or our US mirror site www.amcham-egypt.org AmCham, Egypt- U.S. Business Council Joint mission to Washington
s part of continued efforts to maintain and foster a robust Egypt-U.S. relationship, AmCham Egypt and the Egypt-U.S. Business Council from February 10 to14 made a joint trip to Washington, D.C., where they met with members of Congress, the executive branch, think tanks, media and the business commu- nity. The AmCham-EUSBC delegation included 25 leading members of Egypt’s business community, representing U.S. companies operating in Egypt as well as Egyptian companies engaged in U.S. trade, commerce and investment. AThe mission came at a pivotal time in the history of the bilater- al relationship. With relations following the events of June 30 con- stantly changing, it was especially important for Egypt’s business leaders to present their points of view and convey the realities on the ground as well as overcome and transcend any differences during the rocky transition period. More than 50 meetings were scheduled for the five-day trip. Mounir Abdel Nour, minister of industry, foreign trade & investment The delegation met with 28 prominent members of Congress, including Senator Roger Wicker (R-Mississippi), Senator John McCain (R-Arizona), Senator Johnny Isakson (R-Georgia), Senator Ted Cruz (R-Texas), and Representative Ed Royce (R- California), as well as key staffers for members of the relevant Senate and House committees including Foreign Affairs, Ways and Means, Appropriations, Finance and Homeland Security. The delegation met with top officials from the U.S. Department of Commerce, the treasury, U.S. trade representatives, the National Security Council and USAID. They also spoke with rep- resentatives of several think tanks including the Carnegie Endowment for International Peace, the American Security Project, the Brookings Institution, Freedom House, the Atlantic Council, the Washington Institute for Near East Policy, the Center for Strategic and International Studies and the Congressional New York Times Research Service as well as columnist Thomas Friedman. Unfortunately, several meetings had to be cancelled on the mission’s last day due to a winter blizzard hitting the East Coast. Members of the delegation discussed the importance of the Mohamed Tawfik, Egyptian ambassador to the United States U.S.-Egypt relationship and the role of Egypt’s private sector in
46 I Business Monthly – March 2014 Sen. Roger Wicker (R-Mississippi), deputy whip and member of the Senate Sen. Ted Cruz (R-Texas), member of the Senate Armed Services Committee Armed Services and Commerce Committees
Sen. Johnny Isakson (R-Georgia), ranking member of the Subcommittee on International Trade, Rep. Dana Rohrabacher (R-California), chairman of the Subcommittee on Europe, Eurasia, Customs, and Global Competitiveness of the Senate Finance Committee and Emerging Threats of the House Foreign Affairs Committee
Sen. John McCain (R-Arizona), member of the Senate Armed Services and Rep. Ed Royce (R-California), chairman of the Foreign Relations Committees House Foreign Affairs Committee
Business Monthly – March 2014 I 47 the transition, including firsthand accounts of what has taken place, the current economic situation and how companies are addressing the challenges facing the country and managing to remain profitable. The delegation also addressed ways in which Egypt and the United States could leverage their relationship to create an environment conducive to economic development by looking at policies both governments could enact to enhance bilat- eral trade and promote U.S. investment in Egypt. Additionally, the delegation also talked about the interim gov- ernment’s efforts and policies aimed at building greater business confidence, including the injection of two stimulus packages geared toward encouraging investments in infrastructure projects, boosting the economy and creating jobs. Delegates pointed out that the economy has seen some very positive signals for the first time since January 2011: Ratings agency Fitch recently upgraded Egypt’s economic outlook, and the stock market rose by 45 per- cent in the last quarter of 2013. A common message among economists with whom the delega- Rep. Tom Latham (R-Iowa), chairman of the Subcommittee on Transportation, Housing and Urban Development of the House Appropriations Committee tion met was that Egypt must renew its efforts at serious econom- ic reform. They added that aid from other Arab states was not sus- tainable in the long run and stressed the need to push for an agree- ment with the International Monetary Fund in the near future to lend more credibility to the reform process. Delegates were also asked about the prospects for increased economic stability following the current political transition. It was stressed that security and stability would lead to prosperity, and members pointed out their endorsement of government measures to control violence and fight terror. Other questions focused on the political situation, the leading candidates in the upcoming presi- dential elections, parliamentary elections and security issues. These active dialogues were important and productive. The delegation also met with Mohamed Tawfik, Egypt’s ambassador to the United States, who briefed them on the general sentiment toward Egypt in Washington as well as the embassy’s efforts to portray the Egyptian point of view of the events follow- ing June 30. On Feb. 11, the U.S. Chamber of Commerce hosted a special Rep. Adam Smith (D-Washington), ranking member lunch in honor of Egyptian Minister of Trade and Industry Mounir of the House Armed Services Committee Abdel Nour. The event was attended by more than 250 guests, including U.S. government officials and company representatives working in Egypt, members of the U.S. Egypt Business Council, the visiting AmCham Egypt-EUSBC delegation and the press. In his speech, Abdel Nour outlined the challenges Egypt has faced over the past three years, ending with the current transition phase, and conveyed a message of optimism about the political and economic road map set by the interim government. He said: “The constitution is the centerpiece of the road map; it is the solid foundation that will bear the construction of the new Egypt. It paves the way for the restoration of order and security and for the normalization of political life, sine qua non conditions to any revival of the economy.” In order to jumpstart the economy, he added: “The government adopted an aggressive expansionary financial policy and approved a stimulus program, the first tranche of which amounts to some LE 30 billion allocated to the execution of infrastructure projects including housing, roads and bridges, grain silos, the completion of the third line of the Cairo metro, upgrading power stations, Rep. David Price (D-North Carolina), ranking member of the Subcommittee completing industrial land infrastructure in 35 industrial zones on Homeland Security of the House Appropriations Committee and upgrading of parts of the Egyptian railway network.”
48 I Business Monthly – March 2014 Finally, Abdel Nour announced the launch of two major pro- jects that should attract the interest of potential investors. The first concerns the development of the Suez Canal region with a view to creating a logistics and industrial services center around the canal, and a strategic commercial hub at the crossroads of three continents. The second aims at developing an area situat- ed between the Nile Valley in Qena in Upper Egypt and the Red Sea, between the ports of Safaga and Kosseir, dubbed the Golden Triangle for its surplus of mineral resources such as gold, phosphate and quartz. A few members of the delegation next went to New York, where they met with the chairman of the Egyptian American Enterprise Fund, the president of the Business Council for International Understanding and senior representatives from Citibank, HSBC and Caravel Management. The visit came at a time when the country is on the road to democracy. More than 20 million Egyptians voted in mid-January in favor of the new constitution, the highest voter turnout in the Paul W. Hamill, chief operating officer and director of external affairs, history of Egypt’s 28 referendums. Presidential elections followed American Security Project by parliamentary elections are scheduled for the next few months. “During the past three years, Egypt’s private sector and U.S. companies operating in Egypt have continued to make profits, cre- ate jobs and grow. We seek partnerships with U.S. companies, both those who already have succeeded in Egypt as well as new- comers to the Egyptian market. This is the message we carry with us on this very important mission,” said Anis Aclimandos, AmCham president. “With Egypt’s strategic location near markets in Asia, Africa and Europe, significant hydrocarbon resources, growing young population and a local market of 90 million consumers, business- es in Egypt are confident in the country's future and are moving forward; many are re-investing and trade is growing” said Omar Mohanna, chairman of the Egypt-U.S. Business Council. “AmCham Egypt and the Egypt-U.S. Business Council are first and foremost concerned with issues related to the promo- tion and expansion of private sector ties between Egypt and the United States. This is the first joint mission to the United States in the history of both organizations, coming at a very critical Dennis Ross, William Davidson distinguished fellow and counselor, time in the history of Egypt-U.S. relations” said Hisham Fahmy, Washington Institute for Near East Policy CEO of AmCham Egypt and member of the Egypt-U.S. Business Council. As part of AmCham’s recently launched Egypt for Business communications campaign aimed at strengthening the Egyptian brand by reaching out to the U.S. and foreign media, several press outlets covered the mission. Many delegates were inter- Foreign Policy viewed by prominent news agencies including , the Huffington Post the Washington Beacon The Washington , , Trade Daily McClatchy National Public Radio , and . The key messages projected through this outreach were that in spite of the turbulence Egypt has witnessed during the past three years, Egyptian and American businesses are still making a profit here. The private sector continues to see huge potential in the market and is increasingly committed to Egypt’s transition. For U.S. companies, opportunities center on the fact that Egypt enjoys the largest consumer market in the Middle East and is an ideal hub for business expansion into the region as well as Africa. Egypt has a vibrant, youthful population: half of Egyptians are under 25. Expanding entrepreneurship has proved critical for Rep. Chuck Fleischmann (R-Tennessee), member of the Subcommittees on Energy and Egypt’s growth, both economic and social. Water Development and Homeland Security of the House Appropriations Committee
Business Monthly – March 2014 I 49 MISSION MEMBERS
ANIS A. ACLIMANDOS, PRESIDENT, AMCHAM EGYPT AND TRANSCENTURY ASSOCIATES
OMAR MOHANNA, CHAIRMAN, EUSBC AND SUEZ CEMENT GROUP
AHMED ABOU ALI, MEMBER, EUSBC AND PARTNER, HASSOUNA & ABOU ALI LAW OFFICES
AHMED EL DALY, MEMBER OF THE BOARD, AMCHAM EGYPT AND PRESIDENT OF DALE CARNEGIE TRAINING EGYPT (WESTWOOD GROUP)
ALAA HASHIM, MEMBER, EUSBC AND CONSULTANT FOR ORGANIZATIONAL RESTRUCTURING
ALEX SHALABY, CHAIRMAN, EGYPTIAN COMPANY FOR MOBILE SERVICES (MOBINIL)
AMR ALLAM, MEMBER OF THE BOARD, AMCHAM EGYPT AND MANAGING DIRECTOR, MISR SONS DEVELOPMENT, HASSAN ALLAM SONS Rep. Dutch Ruppersberger (D-Maryland), ranking member of the House Permanent Select Committee on Intelligence AMR BADR, MEMBER, EUSBC AND MANAGING DIRECTOR, ABERCROMBIE & KENT EGYPT
BASIL EL-BAZ, MEMBER OF EUSBC AND CHAIRMAN AND CEO, CARBON HOLDINGS
CURT FERGUSON, EXECUTIVE VICE PRESIDENT, AMCHAM EGYPT AND PRESIDENT OF MIDDLE EAST & NORTH AFRICA BUSINESS UNIT, THE COCA-COLA COMPANY
DALIA WAHBA, VICE PRESIDENT MEMBERSHIP, AMCHAM EGYPT AND MANAGING PARTNER AND DIRECTOR FOR COMMUNICATIONS & DEVEL- OPMENT, CID CONSULTING
DINA EL MOFTY, MEMBER, EUSBC AND EXECUTIVE DIRECTOR, INJAZ
HISHAM EL KHAZINDAR, MEMBER – EUSBC; AND MANAGING DIRECTOR, CITADEL CAPITAL
HISHAM FAHMY, CEO, AMCHAM EGYPT AND MEMBER, EUSBC
MOUSTAFA EL GABALY, MEMBER, EUSBC AND MANAGING DIRECTOR, ABU ZABAL FOR FERTILIZERS AND CHEMICALS
NEVINE LOUTFY, MEMBER OF THE BOARD, AMCHAM EGYPT AND CEO AND MANAGING DIRECTOR, ABU DHABI ISLAMIC BANK Jeremy Sharp, specialist in Middle Eastern affairs, Congressional Research Service SAID HANAFI, VICE PRESIDENT LEGAL AFFAIRS, AMCHAM EGYPT AND CHIEF OF STAFF AND GENERAL COUNSEL, ORASCOM HOTELS & DEVELOPMENT
SCOTT GALLO, STRATEGIC SECURITY AND OPERATIONS DIRECTOR, COCA-COLA EGYPT- ATLANTIC INDUSTRIES
SEIF EL SADEK, MEMBER, EUSBC AND CEO, AGROCORP FOR AGRICULTURE INVESTMENT
SHERIF EL KILANY, TREASURER, AMCHAM EGYPT AND MANAGING PARTNER, ALLIED FOR ACCOUNTING & AUDITING
TAREK ZAKARIA TAWFIK, MEMBER, EUSBC AND VICE CHAIRMAN & MANAGING DIRECTOR, INTERNATIONAL COMPANY FOR AGRICULTURAL PRODUCTION & PROCESSING
WALEED EL-ZORBA, MEMBER, EUSBC AND CEO, NILE HOLDING
SYLVIA MENASSA, ACTING EXECUTIVE DIRECTOR, AMCHAM EGYPT
DINA NAWAR, DIRECTOR OF PLANNING AND COMMUNICATIONS, AMCHAM EGYPT, AND EUSBC COORDINATOR
NADA ABDALLA, SENIOR COMMITTEE OFFICER, AMCHAM EGYPT Rep. Jason Smith (R-Missouri), member of the House Judiciary Committee
50 I Business Monthly – March 2014
Events
HOUSING AND URBAN DEVELOPMENT Building Egypt
“In 1920, Egypt's population was 20 million. In 2014, it’s five times that. Yet we still roughly live on the same 6 percent of the land,” said Ibrahim Mehleb, then minister of housing and urban development who late last month was appointed Egypt’s new prime minister. Addressing a Feb. 2 AmCham luncheon at the Conrad Cairo Hotel, “This directly affects each and every one on the street—rich and poor, living in a high-end neighborhood or a small village.” This population boom, coupled with almost no horizontal growth, has resulted in a poor quality of life for many Egyptians, with many denied access to basic necessities. Mehleb blamed these problems on a “lack of planning over the years,” which is “why 94 percent of Egypt's land remains undeveloped and empty.” Meanwhile, infrastructure in Egypt’s populated urban centers has been pushed to the limit. The situation has caused “chronic short-term problems,” for which the ministry has been working on finding sustain- able, permanent solutions. One strategy has been to finance “sunken projects” that were almost finished but then for some reason forgotten. “But we can’t afford to only play the on the high flow of international trade along the canal. role of an ambulance,” he added, citing a CAPMAS projec- These efforts will also help decentralize the government tion that Egypt’s population would reach 160 million by decision-making process. “As developments east and west 2052. “Forty years passes quickly, and it is therefore of crit- start to grow, it will make more sense for each region to have ical importance for us to start our planning today.” decision making powers,” he said. The first of these planned projects is to develop infra- The Ministry of Housing and Urban Development is also structure on the northwest coast of Egypt and extending 240 responsible for providing housing for the poor. According to kilometers inland. The second is to build highways from var- Mehleb, the government fields new requests for 550,000 ious Upper Egypt governorates to the Red Sea. The idea is apartments every year. Because supply hasn’t been able to that communities will start to form around these major road- keep up with demand, the ministry needs to build 880,000 ways, thereby spreading out the population by creating more units annually to fill the gap but currently can only supply development in Upper Egypt, which has the strategic advan- around 200,000 per year. “The government can’t do this tage of being in proximity to commercial ports along the Red alone,” said Mehleb. The ministry is also trying to accom- Sea. The third project, which Mehleb called The Golden modate the homeless with very low-income projects. “The Triangle, involves doing geological studies on an area main obstacle in any government-subsidized housing project extending from Qena to Keft to Al-Qusayr that has been is that there is no law to ensure that those who are using this found to contain a high concentration of metals and miner- privilege are the ones who really need it,” he said. als. “Currently, there is a committee from different ministries Despite the huge scope of the plans, the minister said that is planning for the project. Eventually, there will be a there is plenty of financing. “It is now just a problem of will. dedicated authority to develop this triangle,” he said. We have been asleep for three years, and getting the wheel The Suez Canal Axis project is also in the cards with going again is always difficult,” he said. For 2014, the Mehleb promising that first auctions will begin by June and Ministry of Housing and Urban Development has an invest- construction will commence by next year. The project will ment budget of LE 7 billion. “This is an unprecedented bud- include assembly plants, storage facilities, freight service get,” he said. “The most important thing going forward is to stations and even tourism and telecom projects to capitalize confront problems and be transparent.”
52 I Business Monthly – March 2014 BANKING AND FINANCE Mixed blessings
Egypt is becoming part of a phenomenon called the “global sandwich,” or more specifically, the “Africa sandwich,” where- by countries with emerging market currencies and large fiscal and current account imbalances are coming under increasing pressure, David Cowan, Chief Economist for Africa at Citibank, explained at a Jan. 27 meeting of AmCham’s Banking and Finance Committee. Cowan said that there was increasing interest in emerging markets as “the future of the world.” Africa’s outlook is also starting to change with the realization that economies can’t con- tinue along their current path. Although the Egyptian economy could witness a slight improvement, he said it would still lag behind those of Morocco and Tunisia in the near future. Cowan said. “On top of that, you have a huge transfer of funds Remittances to Egypt from the Gulf have managed to support coming into the country, which has also improved the current increasing consumption, he said. Egypt has been through a tough account situation,” he said. This flow of funds at the end of 2013 three years economically, with the rate of inflation averaging has also helped to stabilize the Egyptian pound. According to around 9 percent and ongoing foreign exchange restrictions and Cowan: “We are in a new period of temporary stability.” shortages continuing. Wage pressures have also been on the rise. Subsidy reform is a must, he added. “The idea that the state But it wasn’t all bad news. From 2012 onwards, the weak can keep subsidizing all this is coming under question.” He also exchange rate, foreign currency shortages and reduction in stressed that Egypt's growing debt is a fundamental barrier to imports all contributed to shrinking the current account deficit, progress, and resolving it is the only way out.
ENERGY Powering the future Substantial investment is needed in Egypt’s burgeoning electric- ity sector, according to Hafez El Salmawy, Managing Director of the Egyptian Electric Utility and Consumer Protection Regulatory Agency. He was addressing a Jan. 21 meeting of AmCham's Energy Committee entitled “Prospects of the Power Sector in Egypt by 2020”. Salmawy provided an overview of the power sector and its development. He explained that the first regulatory framework was established in 1997 as part of a reform program based on a 1995 Merrill Lynch study that recommended the corporatization He added that the agency monitors the balance between sup- and unbundling of the electricity sector. EgyptERA was estab- ply and demand and identifies sources of imbalance. lished following a presidential decree in 2001. “Renewable energy is part of the security of supply and of Egypt has only one electricity regulator, though Salmawy diversifying the supply pool,” he said. stressed that efforts to establish one for oil and gas are under- Energy projects are expected to exceed $50 billion by 2020. way. Egyptian Electricity Holding Company and its affiliated Around 6 percent of GDP will be allocated to the sector each companies fill the role of electricity service-provider, while year to respond to mounting power demand. With regard to the job of EgyptERA is to regulate and supervise electricity- recent calls for energy subsidy reform, Salmawy said there were related activities; ensure the availability of supply; ensure fair three main areas in which these are currently taking place: in the competition and transparency; and protect consumer interests. electricity market, renewable energy development and taxes.
Business Monthly – March 2014 I 53 Advertorial
SCIB PAINTS MERCEDES-BENZ
As part of its commitment to social responsibility, Scib Paints recently con- The German automotive giant hosted a three-day safe driving event to tributed to the renovation of the Children's Hospital in Abou El Rish and raise awareness about road safety issues in Egypt and showcase innova- the Aquarium Grotto Garden in Zamalek. Staff members painted an entire tions in Mercedes passenger vehicles. The event, which was attended by floor of the hospital with creative designs to entertain the kids being treat- VIP customers, diplomats, fleet customers and members of the media, ed there and did a similar job in the surgery department, decorating treat- was held at the Egyptian Road Safety Training Center in Cairo and includ- ment and recovery rooms with happy designs and positive messages. Scib ed both theoretical and practical sessions taught by professional driving also helped revitalize the historic Aquarium Grotto Garden, which was instructors from Germany. Attendees then took the wheel and practiced established in 1867 and opened to the public in 1902, by painting the observing the road correctly and braking and steering techniques as well landmark attraction’s gate, fences, sidewalks and utility building. as how to maximize fuel efficiency.
KUWADICO UNILEVER
The real estate developer is launching its first development project, Grand The pharmaceutical giant launched new products from top hair care brand Heights, in the western district of 6 October City catering to increasing TRESemmé at an event attended by actors such as Bushra and Mai Selim demand from young Egyptians for accommodation outside the congested as well as renowned Egyptian hair stylists and salon owners. “We are cele- city center but still close enough for daily urban outings. The 38 million brating the launch of the TRESemmé hair care range in the Egyptian mar- square meter project will include a commercial mall, sports facilities and ket after Unilever’s acquisition of U.S. company Alberto Culver. Through this a clubhouse as well as running and cycling tracks via the vast green areas acquisition, TRESemmé products have joined our personal care products and artificial lakes in the compound's Grand Park Zone. list," said Shereen Abdel Moneim, head of the Personal Care Marketing Sector of Unilever Mashreq. TRESemmé products are enriched with natur- al extracts and keratin to suit the needs of all hair types.
54 I Business Monthly – March 2014 COMMERCIAL INTERNATIONAL BANK MASSIMO DUTTI
As the official sponsor for the FIFA 2014 World Cup in Brazil, CIB has The stylish high-end clothing giant is celebrating its 2014 spring/summer launched a new CIB Visa FIFA credit card that offers cardholders a chance collection by opening its latest branch in Cairo Festival City. The new col- to win flight tickets, free accommodation and tickets to the match. lection’s style and colors are inspired by the sea; with sandy hues like Cardholders can increase their odds of winning by having their names khaki, stone and beige combined with ink blues, exuberant purples, entered two more times in the draw each time the card is used for pur- romantic corals and shades of copper as well as natural textures including chases over LE 100 inside or outside Egypt. The receipt for every such pur- silk, suede, leather, linen and cotton. The collection includes shirts, chases will have one letter of the word BRAZIL printed on them, and card- knitwear, light jackets and accessories. holders who collects all six letters will automatically win a four-day trip to Brazil to see the World Cup live.
SAMSUNG KEMPINSKI
The Samsung Galaxy S5 is designed for what matters most to consumers, Kempinski’s Career Day 2014 will be held at Kempinski Hotel Airport including a fingerprint locking screen and Ultra Power Saving Mode that Munich on March 1. The event is a chance for newcomers, students and turns the display to black and white and stops unnecessary features. Also professionals hoping to work at Kempinski hotels to get one-on-one job water and dust resistant, it features a built-in heart rate sensor and other interviews with top Kempinski executives from around the world. Over 70 new health apps that are integrated with the Galaxy Gear 2 and Gear Fit hotel general managers will be on hand as well as board members and wearable devices. The camera is now 16 mega pixels (up from 13 mega over 20 senior executives. Attendees will be limited to 1,000 candidates pixels). The phone also comes with a choice of four leather-effect perfo- selected on a first-come, first-served basis. “We are continuously looking rated battery covers and 4G connectivity that works with Wi-Fi to boost for new talent for our hotels worldwide,” said Vice President for Talent online download speed. Development Michel Gehrig.
Business Monthly – March 2014 I 55 Member News
Personnel changes at member companies
Yasser El Farnawani Category: General Susanne Tewfik Sector: Agriculture Category: Multinational Chairman and Managing Director Head of Sales Egypt Sector: Transportation Misr Pioneer Seed Co., SAE Lufthansa German Airlines
Murat Ozulku Category: Multinational Neveen Mohamed Category: Affiliate Sector: Financial Sector Sector: Academic/Educational/Research & NEA BU General Manager Senior Sales Specialist Development (R&D) Emerging Markets Payments Africa S.A.E. (EMPA) Amideast Egypt
Category: Not-for-Profit Mark Fenton Category: Multinational Susan Silveus Sector: Academic/Educational/Research & General Manager Sector: Transportation Regional Director, Middle Development (R&D) Dana Gas Egypt East & North Africa -Institute of International Education (IIE)
Changes to titles Changes to company details
General Motors Egypt, SAE Category: Affiliate House of Donuts Maisa Galal Sector: Automotive Address: 6 Al Nil Al Abyad Street Lebanon Square HR Director Egypt and North Africa Phone: (20-2) 3302-2738/ 9 Fax: 33039581
Global Brands Category: General Bunge Egypt, SAE Hisham Said Sector: Information Technology Address: 7 Road 218 Degla Maadi CEO Phone: (20-2) 2519-0539 Fax: 25169581 House of Donuts Category: General Sector: Food & Beverages Ahmed Nassier President For any change to contact information, please contact the Membership Services Department at the Chamber’s Office Tel: (20-2) 3338-1050, ext. 0016 – Fax: (20-2) 3338-1060 E-mail: [email protected] CORRECTIONS
Kandil Steel
Address: Obour City, Industrial Zone, Plot 5 Block 13035- PO. Box 111 Tel: (20-2) 4610-0101/2/3/4 – Hot Line (Egypt only) 16010 Fax: (20-2) 46102626 Amr Website: www.kandil.com Kandil CEO Kandil Steel is focused on the continuous development of finished and semi-finished steel products tailored to the required needs. Kandil is a group of industrial companies that is counted as one of the largest producers of cold rolled and galvanized flat steel products in North Africa and the Middle East. Our production lines include: pickling, cold rolling, annealing, galvanizing, color coating and manufacturing steel sheets. Main Sector: Building Materials • Sub-Sector: 17.2 • Membership Type: General
56 I Business Monthly – March 2014 EMP
Electronic payment and card processing company Emerging Markets Payments hon- ored outgoing Bank Processing Division CEO Hoda Shoukry for leading the compa- ny to “outstanding success and achievements” at a Jan. 22 party at the JW Marriott Hotel Cairo. Her replacement, Murat Ozulku, formerly of Citibank, was also on hand for the festivities. The party was attended by high-profile bankers as well as EMP part- ners from Egypt and the region.
SHELL
Shell has announced its return to the Féderation Internationale de l.Automobile World Rally Championship after becoming a title partner of the Hyundai Shell World Rally Team. Hyundai.s all-new i20 vehicle will use Shell Helix Ultra motor oil and feature Shell Helix branding at all WRC events. The new partnership debuted at the Monte Carlo Rally in January and was in effect at the Rally Sweden last month.
ORASCOM AND EZZ ELARAB AUTOMOTIVE GROUP
Orascom Development and Ezz Elarab Automotive Group, the sole Egyptian agent for Budget Rent a Car, have launched a new operating company, Budget El Gouna, to pro- vide El Gouna with affordable transport services. This is the first time that Budget.s com- plete suite of taxis, car rentals, limousines and shuttle services will be available in an Egyptian resort town. The new service will be available beginning this month.
ABB
Global power and automation technology company ABB has been selected to provide the full range of electrical services for the Grand Egyptian Museum, set to be the world.s largest archaeological museum when it is completed in 2015. ABB heating, ventilation and air conditioning components will also be installed in the Giza facility, which is expected to house over 100,000 ancient Egyptian artifacts and art pieces including King Tutankhamen.s iconic golden mask.
Business Monthly – March 2014 I 57 Announcements
Jobs AMCHAM RECRUITMENT CENTER Code Vacancies Company Name 77098 Fire Life & Safety Manager InterContinental & Holiday Inn Cairo Citystars Hotels 77061 Marketing Manager SADKO - Group 77023 Trucking Manager DAMCO 76824 Administrative Manager Dakahlia Poultry 76678 Chemical Manager EVA Pharma / EVA Cosmetics 76629 Information Technology Manager Hindawi Publishing Corporation
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 Eight tenders for the construction of 1,000 housing units in Hurghada for completion Red Sea Governorate, the Housing Directorate, March 25, 2014 235,000 LE Construction Projects in 12 months each. Bidders need be registered at the Contractors Federation with Hurghada 1,000 LE Local Administration valid membership and classified for the required works at a suitable grade. Authorities
Two tenders for the supply of (a) spare parts for Hitach traction engines, also (b) other Cairo Public Transport Authority, The Local Contracts March 10, 2014 40,000 & 4,847 $ Industry electric parts for the (old) metro. Ref. 30 & 32/ 2013/ 2014. Department 300 LE Transport
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 Contact Person Tel # March Construction CONEXPO www.conexpoconagg.com Hend El Sineity 2797-3482
Natural Products Expo West/ Health/Beauty Engredea 2014 www.expowest.com Rania Mekhail 2797-3487 Consumer Goods International Home + Houseware www.housewares.org Rania Mekhail 2797-3487 Show April Environmental Waste Expo 2013 www.wasteexpo.com Rania Mekhail 2797-3487
ICT-Broadcasting The 2014 NAB Show www.nabshow.com Hend El Sineity 2797-3482
For more information about these exhibitions, please contact: The Commercial Service at the US Embassy Tel: (20-2) 2797-2330/ 40 - E-mail: [email protected]
*Please refer to the Commercial Service at the US Embassy for any updates on the exhibitions.
58 I Business Monthly – March 2014 Benefits
BAVARIAN AUTO GROUP (BAG)
Is pleased to extend the exclusive tailored discount to AmCham members on BMW various car models, Services and insurance packages: 1- 2% discount on BMW line sticker prices. 2- Original car carpet & Key chain as a gift on your car. 3- BMW insurance with different packages, services and special rates: - 4.25% including taxes, stamps and issuing fees - Road assistance 24/7 4- Premium BMW cars to be traded with the best market price. 5- Several bank finance programs on all BMW cars with a downpayment to start from 25% of the car value. ***Discounts will be granted for AmCham members upon presenting their AmCham 2014 membership card*** Contact information: Rafik George – Fleet Sales Executive - Mobile: (20) 10-611-10030 Email: rafik.george@retail .bmw-eg.com Ahmed El Touny– Fleet Sales Executive - Mobile: (20) 10-610-10002 Email: [email protected] Haitham Osama – Fleet Senior Supervisor - Mobile: (20)10-016-66316 Email: haitham.osama@retail .bmw-eg.com Please visit AmCham’s Cyberlink on http://www.amcham.org.eg/cyberlink for more information on all AmCham benefits This offer is valid until December 30, 2014
THE AMERICAN UNIVERSITY IN CAIRO THE CLUB HOUSE - UPTOWN CAIRO THE CAIRO REVIEW EMAAR MISR FOR DEVELOPMENT Emaar Misr for Development is pleased to offer 20% discount Stay up to date with the Cairo Review’s special reports on subjects such as the Arab on food & Non- alcoholic beverages only at the below venues at the club house Uptown Cairo: Spring, Science and Innovation Policy, the Iran Dilemma, the Future of the City, China, • Oliveto restaurant "Serving Italian food" South Africa, Brazil, and more. • Baslico restaurant "Serving International food" Subscribe to the Cairo Review of Global Affairs with a special offer to AmCham mem- In addition to: 10% discount on Business meetings and social/private events bers: 200 L.E for one year (4 issues) (Excluding weddings and Engagement parties) VIP Treatment “Hot towel, welcome drink” - Usage of the Cigar Lounge anytime. ***Discounts will be granted for AmCham members upon presenting their Free Wi-Fi - Free parking. AmCham 2014 membership card*** *Reservation has to be in advance for the Special Occasions" For more information, please contact: ***Discounts will be granted for AmCham members upon presenting their Dahlia Dowler, Cairo Review administration: (202) 2615-3468 AmCham 2014 membership card*** Or, send a check in the amount of 200 LE, payable to “Al-Ahram Subscriptions Department,” mailed to the following address: Al-Ahram Subscriptions For more information, please contact: Department, Al-Galaa Street, P.O. Box 11511, Cairo, Egypt - The Club House Guest Services: Telephone: (202) 2503- 2133 -Mobile: (20)12-835-57000 - Email: [email protected] Ahmed Maher: Telephone: (202) 2503-2082 Mobile: (20)10-920-11180 Please visit AmCham’s Cyberlink on http://www.amcham.org.eg/cyberlink Email: [email protected] for more information on all AmCham benefits Please visit AmCham’s Cyberlink on http://www.amcham.org.eg/cyberlink for more information on all AmCham benefits This offer is valid until December 31, 2014 Offer is valid until March 1, 2015
The BUSINESS MONTHLY Classifieds section is open exclusively to AmCham member companies. Text ads are £E 150 for up to 30 words, £E 5 per additional word. Abbreviations, phone numbers and e-mail addresses count as one word. Display ads are £E 100 per cm in height, per column (max. 20cm in combined total height). Discounts are offered for regular advertisers and repeat bookings. Insertion orders, payment and ad content must be received by the 15th of the month preceding publication. All classified ads subject to editorial approval. For more information, or to place a classified ad, contact Amany Kassem at (20-2) 3338-9890, fax (20-2) 3338-0850, e-mail: [email protected]
Business Monthly – March 2014 I 59 Media Lite A Glance At The Press
“I’d like to nominate the minister of education for president because he postponed school.”
Al Shorouk, Feb. 7
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.
BLIND LUCK the way to an illicit sale that there was a following day, the local police station police checkpoint up ahead, they decid- was flooded with frustrated would-be Police on an overnight stakeout in an ed to quickly dispose of the evidence by casanovas complaining that the prod- apartment building in Obour City had a smoking it. Unfortunately, their driving uct was a dud. But by that time Mr. stroke of good fortune when a gang of was so erratic by the time they reached Cupid had already shut down his store thieves they’d been trailing for months lit- the checkpoint that police immediately and fled—no doubt until next erally stumbled into their laps. The four- stopped and searched the vehicle. It Valentine’s Day. man gang had walked away with some LE 1 million worth of residents’ property turned out that in their impaired state, Al Shorouk, Feb. 15 from nine different apartments in the these criminal masterminds had forgotten neighborhood over the last six months. about some 12 kilograms of product hid- BAD “CAR”MA den under the driver’s seat. On the night in question, they had plot- A gang of carjackers got more than they Al Shorouk, Feb. 3 ted to break into the flat next door to the bargained for recently after they held up detectives’ lair, but a sudden power cut an expensive German-made car on the sent them astray. The surprised cops— CAN’T BUY ME LOVE Agriculture Road and sped off in the who were busy looking out the window The Beatles may have sung it half a vehicle. Upon reaching their hideout, surveilling the building across the century ago, but the message appar- they discovered a corpse in the trunk. street—placed the bewildered burglars ently still hasn’t gotten through to parts Apparently, this was not their lucky under arrest. of Cairo. On Feb. 14, dozens of local week: The next day, they were arrested Al Shorouk, Feb. 7 lonely hearts flocked to an accessories as they tried to dump the car and its shop in Giza, where an enterprising macabre cargo. A subsequent investiga- DAZED AND CONFUSED vendor was selling a subtly-named fra- tion revealed that the man they had Drugs and driving don’t mix, as some grance called Love Potion, guaranteed carjacked had stolen the vehicle from hapless dealers recently learned the to jump start the heart of the object someone else. hard way. Upon belatedly realizing on of your affection within 24 hours. The various media, Feb. 27
60 I Business Monthly – March 2014
Confidence.. Distinction