Investment Sector &Snapshots

for a Brighter Future gypt fora

General Authority for Investment & Free Zones 1

for a Brighter Future

Egypt

Population: Net International Reserves (NIR) 85 million (Oct 2013). USD 15.5 million (June 2012). Capital: USD 14.9 million (June 2013). Cairo. USD 18.9 million (Aug 2013). Official Language: Foreign Direct Investment Arabic. USD 3 billion (2012/2013). Common Languages used: Unemployment English, French. 12.7% (2012) Currency: Exports Egyptian Pound (EGP). USD 26 billion (2012/2013). GDP Growth Rate: Imports 2.1% (2012/2013). USD 57.5 billion. GDP per Capita (USD): Exchange Rate (2012/2013) USD 3,426 (Oct-Dec 2012). USD = 6.45 EGP GDP in Current Prices: EUR = 1.29 USD USD 71.66 billion (Oct-Dec 2012). £.E. = 1.56 USD S&P raises Egypt sovereign credit rating to B- from CCC+

1 GAFI Contents

1 Why Egypt? 5

1-1 A large, Trained, Competitively Priced Labor Force 5 1-2 Large Consumer Market 6 1-3 Developed Infrastructure 6 1-4 Competitive Tax and Custom Rates 6 1-5 Population 6 1-6 Political System 7 2 Economic Development 9

2-1 Economic Road Map 9 2-2 Proposed Plan to Encourage Investment 10 2-3 Investment Map 11 3 Investment Regime 13

3-1 Inland Investment 13 3-2 Egyptian Free Zones 14 3-3 Investment Zones 17 3-4 Special Economic Zones 19 3-5 One Stop Shop 20

2 for a Brighter Future

4 Key Investment Regulations 23

4-1 Investment Laws Incentives and Exemptions 23 4-2 Mechanisms of Reconciliation and Arbitration with Investors 26 4-3 Key Investment-Supportive Laws 26

5 Sector Snapshots 29

5-1 Agribusiness 29 5-2 Tourism 35 5-3 Textiles 40 5-4 Petrochemicals 45 5-5 Real Estate 50 5-6 Building Materials 55 5-7 Logistics and Transportation 60 5-8 Communication and Information Technology 66 5-9 Retail 70 5-10 Automotive 74 5-11 Healthcare 79

for a Brighter Future 1 Why Egypt?

1-1 A Large, Trained, Competitively Priced Labor - Each year, around 300,000 Egyptians obtain university Force degrees, of whom 20,000 are trained engineers and 15,000 have degrees in science and technology. In ad- - At about 27 million, Egypt’s labor pool is the largest in dition, about 22,500 graduate with foreign language the region. For decades, Egypt has had a reputation as skills. a net regional exporter of educated, skilled labor. How- ever, as domestic demand for skilled labor rises, young - Skills-intensive and service-based sectors such as ICT, people are increasingly choosing to pursue opportuni- financial services and tourism are among Egypt’s eco- ties at home. Complementing world-class universities nomic leaders. Wages in these sectors are very com- and technical schools, a new national industrial training petitive and more stable than wage levels in other program is training workers to fill some 500,000 new countries. jobs in manufacturing.

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1-2 Large consumer market band is readily available in urban areas. The country’s 15 commercial ports serve the nation’s exporters and import- - Egypt has emerged as a consumer market of significant ers alike, while an expanding, upgrading airport network importance in the region, as witnessed by the arrival of caters to both passengers and cargo traffic, Egypt’s Air dozens of global brands and the sharp expansion of re- Cargo Airport currently has three cargo terminals, deal- tail sales in the past few years. This is partly due to the ing with textiles, vegetables and many industrial prod- sheer size of Egypt’s population that puts it as the most ucts. The country has also a well-established network of populated country in Africa and the Middle East, as well railways and roads. as the fact that 50% of Egyptians are between the age 15 and 44 has also impacted spending and investment Egypt also provides competitively price and reliable sup- trends. plies of power, water and gas. Egypt possesses an abun- dance in natural resources that can easily meet the needs - Egypt has access to large key markets through vari- of agricultural, industrial and mining activities. ous multilateral and bilateral trade agreements with the USA, European, Middle Eastern and African countries; 1-4 Competitive Tax and Custom Rates

which secure benefits to Egyptian-based producers Tax Systems supplying these markets. As part of the government`s ongoing efforts to improve - Key global markets in Europe, the Middle East, Africa Egypt to become the most attractive investment destina- and the Indian Subcontinent are all readily accessible tion in the MENA region, it modified the Tax Law, which from Egypt. Closer to the European and North Ameri- reduced corporate tax rates from 42% to 25%; personal can markets than other major exporters including India, tax from 32% to 25%; and sales tax/value added tax China and the Philippines, Egypt is also located on key 10%; and 40.55% tax on companies operating in the ex- international logistics routes. ploration and production of oil and gas.

- Egypt enjoys the existence of the Suez Canal, which Customs Systems is considered to be the shortest link between the east and the west due to its unique geographic location. Ap- Within its efforts to improve Egypt’s position as a global proximately 8% of the world’s maritime shipping passes manufacturing hub, tariffs range from 0 to 30% according through the Suez Canal each year. to the degree of processing and 0 to 10% on machinery and equipment used in manufacturing. 1-3 Developed Infrastructure 1-5 Population Egypt boasts a world class infrastructure base. Three independent mobile (cellular) phone networks cover nearly Since ancient times, Egypt has been carrying census for 100% of the country’s inhabited land. Wire line broad- its population. The first census was carried out in 1882.

6 for a Brighter Future 1

The population was estimated at 6.7 million citizens. Egyptian Population by Age Group The government carries out a census every decade. The 6% last one was held in 2006 by the Central Agency for Public 13% From 15 to 44 10% Mobilization and Statistics (CAPMAS) and concluded that From 45 to 59 the population in Egypt had reached 76,500,000. Above 60 21% From 1 to 4 Egypt is one of the highest population densities and From 5 to 14 50% ranked 15 internationally and third in Africa. Source: CAPMAS

1-6 Political System The Arab Republic of Egypt is an independent united sovereign country and does not accept division. It adopts a democratic system. Sovereignty is for the people; they practice and protect it and safeguard their national unity. The people are the source of authority.

Egypt adopts a republican presidential system where the Egyptian president is the actual head of state and head of executive authority. He rules by virtue of the constitu- tion and law in the presence of the legislative and judicial authorities. At 1st October 2013, Egypt’s population reached 85 mil- The political regime is based on principles of democracy lion according to the daily population counter as an- and citizenship which renders all citizens equal in terms nounced by the Central Agency for Public Mobilization and of rights and duties. The regime is also based on a multi- Statistics (CAPMAS). party system, peaceful rotation of authority, separation of Meanwhile the estimated number of Egyptian exports is authorities and balance among them, the rule of law and 8 million according to figures released by the Ministry of respect of human rights and freedoms. Foreign Affairs. It is not permissible for a political party to be established The capital Cairo has the highest population density on the basis of discrimination between citizens because of where 10.7% of the population resides followed by Giza gender, ethnicity or religion. The political systems works where 8.6% of the total population resides. to safeguard the national security, defense of the home- land and protection of Egypt’s land and views it as an honor and sacred duty.

for a Brighter Future 2 Economic Development

Successive Egyptian governments have been convinced 2-1 Economic Road Map that they should be committed to achieving economic The most important features of the Economic Road development through reform and economic liberalization. Map are: Therefore, the Egyptian governments adopted a series of reforms covering a range of sectors, such as finan- - Established time frame work for both urgent and long- cial, stock market, trade, exchange rate, and economic term projects in order take advantage of them now and growth, as well as the business environment and invest- in the future (with coming governments). ment climate in general. - Providing stimulus investment package in order to hit a 3.5% development rate by the end of 2013/2014.

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- Raising investment rates at this phase, depending on 2-2 Proposed plan to encourage investment the government investments, especially in labor-inten- - An integrated plan to support, encourage and attract sive projects, and the completion of projects that were Arab and foreign investments is underway based on the launched earlier and then stopped. removal of barriers and obstacles to foreign investors - Enacting legislation contributing to attracting foreign and opening up new areas for investment in nation- investment; resuming reconciliation with businessmen; wide, especially in infrastructure projects.

introducing amendments to rules, regulations and in- - Offering more investment opportunities and projects in vestment environment; and encouraging financial insti- various economic sectors. tutions to take risk and finance. - Organizing promotional visits for foreign delegations to - Achieving social justice through a variety of service update them on the advantages of investment in Egypt. projects in the field of housing, such as the construc- - Cooperation and coordination with international invest- tion of 50,000 housing units for low-income categories. ment institutions to brief them about the benefits of - Completing the infrastructure of the industrial zones in investment in Egypt and the measures that have been order to contribute effectively in boosting production taken to improve the investment and business atmo- and creating more job opportunities. sphere.

- Launching a project for streamlining the procedures - The government is also considering injecting about EGP of licensing businesses and land from one place within 5 billion as a second stimulus package to stimulate local four months. economy in the short term. The decision to inject the new package came after the government had envisaged - Encouraging investment in infrastructure projects, the cost needed to complete the above-mentioned proj- which provide more jobs and inject liquidity in the local ects, which it had set up about 80 % of them. market. Energy in general, whether oil or electricity, is an important sector which the current government is - Developing the Golden Triangle in Upper Egypt, which giving due care through maintenance projects and the reflects the State’s interest in maximizing the advantage creation of gas stations. In addition, development of of Egypt’s natural resources and mineral wealth in Up- the textile sector is underway. per Egyptian governorates. - The State is planning to establish a range of new free - The national project for the development of level cross- zones, aiming at boosting Egyptian exports, providing ings on the railway network aims at raising safety rates more job opportunities, transferring technology, and and securing railways. strengthening ties with the companies operating in the

10 for a Brighter Future 2

local market. There are nine free zones in various gov- 3. Naming the government body entitled for land alloca- ernorates, and the government is keen to establish new tion, making sure that there are no problems related to ones. the establishment of the proposed activity.

- Coordination with banks and business organizations to 4. The availability of the necessary utilities to these lands assist the stuck and closed factories in the new indus- in order to establish the project confirming that the trial cities through rescheduling their debts in order to concerned ministry should back serious investors to re-operate. obtain the licenses required for the establishment of projects. - Security is most important. Achieving political and security stability is a main point in the Egyptian gov- 5. Defining the method of launching investment opportu- ernment’s strategy. The ministries of Investment and nity for investors (direct bidding, public-private partner- Interior implemented security measures to secure the ships [PPP program] according to the law of bids and projects in the free and investment zones. This has led tenders) as well as the scheduled programs relating to to noticeable stability and remarkable improvement in bidding. the security situation in Egypt. 6. The “first stage” of the investment map currently- in 2-3 Investment Map cludes 293 projects which have met the above mentioned standards (262 projects in the Governorates, As the government is keen to make investment opportu- 9 projects are PPP, 6 national projects, 4 projects nities available and establish national projects to ensure launched by the Ministry of Petroleum, and 12 projects sustainable development, the Ministry of Investment sur- launched by the Ministry of Transport). veyed the whole investment opportunities available at all ministries and their agencies and governorates. This is aimed at making a master investment plan available for investors.

The projects listed in the map should be compatible with the following standards:

1. Complying with the established local development plans.

2. Outlining the land available for investment, its geo- graphical location and the type of activity proposed to be established on it.

for a Brighter Future 3 Investment Regime

3-1 Inland Investment container terminals, and grain silos. Investment Law No. 8 of 1997 - Air transport and related services. Covers the following activities and fields: - Sea transport. - Reclamation and cultivation of barren and desert land. - Oil services relating to digging and exploration, as well - Animal, poultry and fish production. the installation of natural gas facilities and natural gas transport. - Manufacturing and mining. - Housing projects for non-administrative purposes. - Tourism: hotels, hotel flats, motels, resorts and tourist transportation. - Infrastructure projects for drinking water, sewage, electricity, roads and communications. - Transportation of cooled goods and freezers of keeping agricultural produce, processed goods, foodstuffs, - Medical facilities.

13 GAFI

- Financial leasing. Partnership between the public and private sectors in - Securities underwriting. Egypt is governed by Law No. 67 of 2010 that regulates the private sector’s participation in infrastructure proj- - Venture capital. ects, services and public utilities. This law also provides - Computer software and high-tech products. guarantees to partnership contracts, as it does not allow - Projects funded by the Social Fund for Development. sequestration or taking any action against facilities, ma- Section Two of the law covers the investment guarantees, chinery and equipment allocated to the execution of the while Section Three reviews the investment incentives participation contract and operation of the project. (tax incentives in accordance with the Tax Law No. 91 of The law also defines the institutional framework for the 2005, land allocation, free zones). Section Four has been partnership between the public and private sectors, rep- added under Law No. 13 of 2004 and includes articles resented in the Supreme Committee for Partnership Af- related to facilitating investment procedures in Egypt. fairs and the Central Unit for Partnership. Corporate Law No. 159 of 1981. 3-2 Egyptian Free Zones This law regulates joint stock companies, companies limited by shares, and limited liability companies and their respective provisions. It also provides for the provisions relating to merger, liquidation and changing the entity of the company.

Public Private Partnership

In 2006, the Egyptian government developed a new long- term policy for activating partnership with the private sector in order to boost the private sector’s contribution to investment in infrastructure projects. Therefore, the Egyptian government activated the partnership policy and program with the private sector through the establishment of the Central Unit for Partnership with the Private Sector at the Ministry of Finance. Egypt is implementing Egypt started the establishment of free zones more than many systems of partnership contracts between the pub- forty years ago in order to support the national econo- lic and private sectors, including the PPP (Public-Private my through the creation new jobs, increasing sources of Partnerships) and BOT (Build, Operate and Transfer), in foreign exchange, attracting foreign investments, intro- addition to other mechanisms.

14 for a Brighter Future 3 ducing advanced technology, developing labor skills and - Pricing products. managerial capabilities, and bringing about integration - Importing and exporting without being restricted to the between the companies operating in free zones and those Exporter and Importer Register. working inside the country. Absence of: What is a Free Zone? - Restrictions on the nationality of capital. Free zones refer to designated areas within a State’s territory. Despite the fact that they fall within the State’s politi- - Capital Limits. cal borders and are subject to its administrative authority, - Subjecting the project’s imports and exports to the im- they have a special status in terms of customs, imports, port and tariff regulations applicable in the country. monetary and other issues related to imported/exported Exemptions: goods. The country’s normal economic procedures are not applicable generally to free zones. - Capital assets and production requirements of the project are exempted from taxes and customs duties. Objectives of Free Zones - Imports and exports of the free zone projects are ex- 1 Providing job opportunities and making a qualitative empted from taxes and customs duties. leap in skills. - All domestic components are exempted from customs 2 Boosting Egyptian exports to foreign countries. duties if the products are sold in the local market. 3 Introducing advanced technology, especially in the in- Guarantees: dustrial and service fields. - Free zone projects are guaranteed against nationaliza- 4 Attracting and accumulating capital. tion or expropriation. 5 The establishment of integration between free zone - Public lawsuits may only be filed against the projects companies and those operating in the domestic market. after the General Authority for Investment (GAFI) ap- Incentives and guarantees granted to free zone proval. projects: Also Freedom of - Residence facilitation is granted to incoming foreign in- - Choosing the field of investment. vestors.

- Transferring profits and invested capital. - Foreign workers are granted residence permits at the - Importing from domestic or foreign market. request of the project.

15 GAFI

Types of Free Zones Public Free Zones are:

1- Public Free Zones - Alexandria Public Free Zone

The public free zones refer to a plot of land fenced from - Nasr City Public Free Zone all sides where a range of industrial, service and storage - Port Said Public Free Zone projects are set up. (The land is allocated to the projects - Suez Public Free Zone on an annual rent/m2 basis). This runs in accordance with - Ismailia Public Free Zone the characteristics and requirements set forth by the In- vestment Law No. 8 of 1997 and its amendments. - Damietta Public Free Zone

There are now nine public free zones scattered nation- - Shebin El Kom Public Free Zone wide and which are provided with utilities and infrastruc- - Keft Public Free Zone ture necessary for operation (including roads, electricity, - Media Production City in 6th October drainage stations, water systems, telephones, etc.). In 2- Private Free Zones: addition, there are integrated customs, police, and security units at every zone working around the clock. It A project can be established outside the area of a public has been taken into account that the free zones in Egypt free zone in case there is no enough space in the pub- should be distinguishably located in major cities where lic free zone or if the project site is a key factor for its economics, such as being near to raw material sources or a certain seaport or road for considerations related to transportation of raw materials or products. In this case, the project is called “a private free zone” that should be confined to a single project. The investor selects the project site which should be either owned or rented by him. GAFI welcomes the establishment of the project as a private free zone that is compatible with the following requirements: Key fields and activities permitted: - Harbor development services and logistics-related services. labor and supportive potential are available, in addition to - Specialized petroleum-related services and industries. being close to seaports and airports. - Reinsurance.

16 for a Brighter Future 3

- Design, construction, management, operation and Incentives maintenance of power plants of different sources. - Business homogeneousness in the single zone, offering - Some major (labor-intensive and high value-added) in- operating and marketing competitive costs thanks to dustries. industrial integration. 3-3 Investment Zones - Companies which are established in the investment zones are exempted from stamp and documentation Investment Zones were created under Law no. 19 of taxes for a period of five years starting from the date 2007, which introduced a new investment scheme never of registering the company at the commercial register, included before in the Investment Guarantees and Incen- as well as the contracts for land registration which are tives Law, which is the Investment Zones regime . The necessary for company’s establishment. new law allowed the establishment of investment zones as per a Prime Minister decree No. 1675 of 2007 issued - Companies and establishments within the investment and specialized to regulate work at investment zones in zone shouldn’t be nationalized or Confiscated. whatever investment domain stipulated. - It is not permitted by an administrative way to impose Mission receivership on companies and enterprises or seizure or freeze its money and assets. Support Egypt’s economic growth through effective in- - Is not permissible for any administrative party to inter- vestment system characterized by the ease and conve- vene in the pricing of companies ‘products or to deter- nience in dealing with investors mine its profit. Objectives - Is not permissible for any administrative party to can- - Establishing integrated clusters in all fields. cel or suspend the use of real estate licenses, which - The investor (the developer) is the core element in the permits the use of a company or the establishment in establishment of the investment zone as it bears the whole or in part except in the case of violation of the main burden of implementing the infrastructure and license terms also provide all the services to the zone, whether the - The board of directors is responsible for approving the developer is a private company or governmental au- projects that will be established in the investment zone thority. and entitle to issue all licenses required to facilitate the - Widening the scope of economic and social development procedures. across the country with the best employment of the The Established Investment Zones: country’s competitive advantages. There are (13) investment zones specialized in various - Investment development in Small and Medium Enter- fields and distributed among (7) Egyptian governorates prises (SMEs). as follows:

17 GAFI

Zone Activity Governorate Location Area(Acre)

Industrial zones

CBC Egypt for Industrial Develop- 1 Building materials Giza 6th of October 357 ment

2 Polaris International Industrial Park Textile industries Giza 6th of October 463

3 The Industrial Development Group Auto-feeding industries Giza 6th of October 463

4 Pyramids Industrial Parks Engineering industries Sharqiya 10th of Ramadan 262

5 Al-Tajamouat Industrial Park Textiles and RMG Sharqiya 10th of Ramadan 261

Small and medium enterprises (SMEs)

6 Meet Ghamr SMEs Dakahlia Meet Ghamr 17.6

7 Al-Saf SMEs Giza Al-Saf 40.4

Higher Education and Scientific Research

City of Scientific Research and Tech- 8 Nanotechnology and biotechnology Alexandria Alexandria 135 nology Applications

Higher education and scientific 9 Cairo University Giza 6th of October 749 research

Higher education and scientific 10 Ain Shams University Qalyubiya Obour 163 research

Higher education and scientific 11 Fayyoum University Fayyoum New Fayyoum 150 research

Communication and Information Technology

12 City of Scientific Research Information technology Cairo Maadi 75

Commercial and service activities

13 Cairo Airport Investment Zone Commercial and service Cairo Cairo Airport 2.289

18 for a Brighter Future 3

3-4 Special Economic Zones (North West Gulf of facilities, complete functions, advanced technologies, ex- Suez) SEZone cellent environment, rational industrial structure, highly developed productivity and all round economic and social Brief progresses. The land area earmarked for the SEZone is In 2002, the Government of Egypt enacted Law No. 83 approximately 20.4 km2. for the year 2002 for establishing Economic Zones of a Vision Special Nature. North-West Gulf of Suez Special Economic Zone (SEZone) which is located in the Suez Governorate To be a premier international investment destination by in the Sokhna area and adjacent to the Sokhna Port near creating a superior business environment for attracting the southern entrance to the Suez Canal. investments to Egypt while ensuring maximum benefits to the local community that upgrades the quality of life over the coming 15 years.

Mission

Establishing a state-of-the-art special economic zone in the heart of the Suez Gulf in Egypt. The SEZone has develop an international recognition and reputation for being a competitive business location that provides Egyptian and foreign investors with top-class infrastructure, market access, and streamlined administrative procedures.

Development Objectives

• Establish and develop the North West Gulf of Suez Eco- nomic Zone according to the highest international stan- SEZone is considered the first economic zone with a spe- dards. cial nature to be established in Egypt by Presidential De- • Attract foreign direct investments to the Zone for the cree no. 35 for the year 2003. purpose of establishing industrial and service projects SEZone enables customers to provide world-class value- capable of competing with their counterparts regionally added supply chain activities. Fully self-sustaining, SE- and internationally. Zone is a key benchmark in the evolution of Egypt. • Direct employment creation, labor skills upgrade, and SEZone is a landmark area, with perfect infrastructure income generation.

19 GAFI

• Increase Egypt’s share in the international trade. ministrative decisions accompanied by submissions to suspend their enforcement, the dispute shall only be • Increase exports, not only in terms of accelerating ex- referred to court after having been submitted to the port growth, but export diversification as well. Dispute Settlement Center and that the panel has ren- Incentives and Benefits dered its decision or after 60 days from the date a mo- tion was filed to appeal the decision and the panel did • 10% unified income tax in the SEZone (versus 25% not decide the appeal. outside of SEZone) applicable on the profit of the capital companies and on income of natural persons and on Contact revenues derived from land and non residential build- Email: [email protected] ings. Web site: www.sezone.gov.eg • 5% income tax. (versus 10% - 25% outside the SE- Zone) 3-5 One Stop Shop

• A one-stop shop through legislation that provides the Definition body with single-point authority over other government One Stop Shop is one of twelve departments assigned to agencies in core areas. provide services to investors whether during the phase • The Authority has a supreme committee that supervises of establishing companies or post establishment services the taxation system in SEZone. Objectives • The Authority has a special customs service under the Its principle objectives are as follows: supervision of a Supreme customs committee. • Aggregation of all government agencies with which in- • Lowest cost production center in the Middle East-North vestors interact in one location for the purpose of ob- Africa in many sectors. taining approvals, permits, and licenses needed for the • Allowing enterprises access to the domestic market, du- establishment and operation of companies. ties on sales to domestic market will be assessed on the • Facilitate investors’ access to nearby and integrated ser- value of imported inputs only. vices with continuous developments. • Access to productive skilled Egyptian labor in a number • Overcome obstacles which investors face through the of manufacturing sectors at competitive costs. presence of governmental agencies with which they in- • Except for those submissions laying within the jurisdic- teract in one location; development of its performance tion of the Summary courts and requests to revoke ad- for the satisfaction of investors, and an improvement

20 for a Brighter Future 3

of the investment climate through easier governmental c. Change of legal form (merger, division and transition procedures. to the domestic investment system).

• In years 2006, 2007, and 2008, the One Stop Shop won d. Liquidation of companies. the second place in a competition for best Governmen- e. Endorsement of minutes of meetings of Board of Di- tal Service Outlet for Citizens, organized by the Ministry rectors. of State for Administrative Development. f. Approval of Ordinary and Extraordinary General As- • In 2009, the One Stop Shop got “The Development of semblies. Performance of Governmental Services Outlets” award, in the Competition for the excellent Outlet, organized B. Technical Services by the Ministry of State for Administrative Development a. Endorsement of Import and Export Bills. for the fifth year. b. Recommendations for customs release (Implemen- • Awarded a Certificate of Appreciation from the Ministry tation of unified 5% Customs Tariff on machinery and of Tourism in 2011 for an excellent performance in the equipments necessary to start the business). enrichment of the tourism industry. c. Recommendations for exemption of land contracts, Services provided by the One Stop Shop mortgages and loans from Stamp Tax and registra- 1. Provides services related to the establishment of com- tion and documentation fees. panies according to the Investment Law No. 8 for the d. Recommendations for external parties. year 1997, and Corporate Law No. 159 for the year 1981. C. Governmental Services

2. Provides post-establishment services, which include a. Recommendations for granting residence permits to the following: foreigners.

A. Legal Services b. Recommendations for granting and renewal of work permits for foreigners. a. Adoption of the minutes of meetings of extraordinary assemblies. c. Recommendations for recruitment of labor subordi- nates. b. Issuing legal decisions of the amendments to the contract and statute. Change of the legal form (merg- d. Approval of representative offices (registering, er, division and transition to the inland investment amendment, cancellation). system).

21 GAFI e. Approval of foreign companies branches (recording, sistance in the establishment of a similar One Stop amendment, cancellation). Shop. f. Other recommendations. • Many countries sought Egypt’s assistance in the establishment of a similar Investment Services Com- D. Announcements in The Investment Journal plex. GAFI contributed in transmitting its experiment a. Publishing of contracts and statutes of companies. to the following countries: b. Publishing of amendments of decisions and statutes - Arab Countries: Yemen, Syria, Sudan, Libya, Iraq, of companies. and Comoros. c. Publishing some special decisions. - African Countries: Nigeria, Botswana, Kenya, Mali, and Seychelles. E. Tax Exemptions Services a. Formation and endorsement of committees to start business and determine the executive position of companies. b. Automatic tax exemption for companies and issuance of certificates thereof.

F. International Assessment a. In 2007 Egypt was named “The Most Reformed Country” in the Doing Business report issued by the World Bank. It remained among the ten most reformed country during 2009 and 2010. b. The World Bank held two workshops in Abu Dhabi and Cairo to study Egypt’s experience in the “one- stop shop” service for the Investment Authority. c. The World Bank praised Egypt’s leading experiment in the One Stop Shop “Following the example of Egypt’s One Stop Shop, it will be examined in other countries. It is designed in a manner that encourages its emulation. “Many countries asked for Egypt’s as-

22 for a Brighter Future 4 Key Investment Regulations

4-1 Investment Laws Incentives and Exemptions 2. Poultry production, beekeeping, livestock production, fisheries and fishing boats for a period of 10 years from 1- Investment Law No. 8 of 1997 the date of commencement of the activity. Multiple tax exemptions 3. Interest earned by individuals from their deposits and - Enjoy a life-time tax exemption for your project if it is savings accounts at banks and post offices as well as in- established under the free zone regime. vestment, saving and deposit certificates issued by the

- Invest in Egypt and enjoy tax exemptions on the profits Central Bank of Egypt (CBE) or other banks registered of the following activities: in Egypt.

1. Land reclamation or land farming “for a period of 10 4. Revenues of the individuals’ dealing in securities listed years from the date of commencement of the activity”. on the Egyptian stock market.

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5. Revenues obtained by individuals from: curities issued by joint stock companies are exempted from the tax on floating capital. A. Yields of bonds and financial instruments of different types listed on the Egyptian stock market. - Revenues resulting from corporate merger or split or from changing the corporate legal entity are exempted B. Dividends on the shares of shareholding and limited from taxes and fees. companies, shares of capital in limited liability companies, partnerships, and shares of non-shareholders - Yield of re-rating in-kind portions, which are included in joint stock companies. in capital of the associations of capital when they are established or when their capital is increased, are ex- C. Projects funded by the Social Fund for Development empted from the tax on profits. (SFD) within the limits of this funding (for five years) from the date of commencement of the activity. Customs exemptions

Exemption of contracts - Full customs exemptions for free zone projects.

- The charters of establishment, the mortgage and loan - A unified customs tax of 5% on machinery, equipment agreements related to the activities of the companies and devices. are exempted from the fiscal stamps and authentication - All imports of free zones are exempted from customs fees for five years from the date on which such compa- duties except for passenger cars. nies are registered in the Commercial Register . - Transit goods destined to other ports across the Egyp- - The title of deed of lands allocated to build such; com- tian territory are exempted from customs duties. panies are exempted from fiscal stamps and authentication fees - A unified customs duty of 5% and a sales tax are to be paid for the machinery, equipment and devices im- Other Exemptions for Inland Investment ported by the companies operating in the country. - An amount equal to a percentage of the paid-up capital - An importation card is not required. of the joint stock company shall be exempted from the corporate profit tax. This percentage is determined by 2- Incentives for investment in Upper Egypt gov- the Central Bank of Egypt lending and discount rates, ernorates provided that the company’s stocks are listed on the Allocation of lands for free in Upper Egypt gover- stock exchange. norates - Revenues of bonds, financial instruments and other se- Under Presidential Decree No. 58 of 2001, provisions of

24 for a Brighter Future 4

Law No. 5 of 1996 concerning the rules of free dispos- - Workers should be primarily from the governorate al of desert lands owned by the State or public juridical where the factory is established, not working in its persons, or renting them at a nominal rental value for branches outside the governorate. establishing investment projects on them or expanding 2. Application of incentives by 100% on all industrial them are applicable to the lands on which industrial areas zones approved in the gover- are designated in the provinces of Minya, Assiut, Sohag, norates of Aswan, New Valley, Qena, Aswan and New Valley. The city of Beni Suef was Minya, Assiut, Sohag, Qena and included to this decree, therefore investors can dispose of Luxor city and by 50% on Beni the lands that include buildings for free, provided that the Suef. ownership may not be transferred to the beneficiary before the completion of the implementation of the project 3. These incentives are not ap- and the actual start of production. plicable to the projects that are granted tax exemption or any Employment incentives other incentives.

Under Minister of Trade and Industry’s and Minister of This incentive is given through a Finance’s Decree No. 719 of 2007, projects that are set payment receipt for the consump- up and get operation license and industrial register within tion of electricity, fuel, water, insurance, sales tax, and three years subsequent to the issuance of the decree shall any government expenditures. These incentives are paid be granted additional incentives as follows: in batches during a period of 60 days from the date of 1. An amount of EGP 15,000 for every actual job oppor- application through the Industrial Zones Development tunity provided by the project at a maximum of 70% of and Support Fund at the Industrial Development Author- the total annual wages. This is applicable to the new ity (IDA). projects and expansions of existing projects whose in- 3- Streamlined procedures issued by Ministry of vestment costs exceed EGP 15 million, according to the Trade and Industry following requirements: - Reducing the value of the letter of guarantee’s fees for - The worker should get a certificate approved by the the industrial lands in the new cities and governorates, Board of Industrial Training stating that he passed a with retroactive application to previous letters in force training in his profession or job. in accordance with the applicable rules at the IDA.

- Technical labor should not be less than 80% of the - The investor has the right to recover liquefied letters of total number of the factory workers. guarantee if the reasons for liquefaction are proven.

25 GAFI

- A permanent industrial register can be issued and re- 4. Contract Committee at GAFI: It resolves any dis- viewed every five years if the conditions are met. pute that may arise between investors and various government agencies through the commercial contracts - Inspections that were carried out by the Industrial De- that were previously signed. velopment Authority are cancelled, but they can be made by IDA chairman if requested. 5. Amended Investment Law No. 8 of 1997 accounts for reconciliation between the investor and the govern- - Activating the role of the IDA’s offices nationwide to ment in cases of proven fraud (value of total settled serve as the main headquarters in issuing full licenses disputes amounted to more than USD 10 million). except for the allocation of land. Criteria of reconciliation with investors - Paying the subscription fees of the Chamber of Industry and the Federation of Industries in the One Stop Shop. Of the most important criteria for the reconciliation nego- tiations are the value of disputed land price and location, - Increasing IDA branches in a number of governorates percentage of constructed facilities on it, and the extent to finish all approvals and licenses for investment fa- to which the company is willingto inject additional invest- cilities without reference to the main headquarters in ments at this critical stage. If the project reached an ad- Cairo. vanced phase of implementation, settlement will be given - Launching an initiative to provide the necessary re- a much higher priority. sources to the Credit Risk Guarantee Program to devel- 4-3 Key investment-supportive laws op small and medium-sized enterprises and help them to get financing. 1- Labor Law in Egypt 4-2 Mechanisms of Reconciliation and Arbitration The Egyptian labor market is regu- with Investors lated by the unified Labor Law No. 12 of 2003. The law comprises 257 1. Investors Care Management: It was established to articles that address all the legal support and guide investors to settle any dispute they aspects regulating the Egyptian may face with various government agencies. labor market. The law aims at in- 2. Dispute Settlement Center: It was established in creasing the private sector involve- 2009 to achieve reconciliation in disputes between busi- ment and at the same time striking ness partners. a balance between employees’ and employers’ rights. Amongst the 3. Cabinet-based Investment Dispute Settlement most important issues that the law Commission: The General Authority for Investment addresses is the right of an em- (GAFI) hosts its technical secretariat.

26 for a Brighter Future 4 ployer to fire an employee and the conditions pertaining Legal Working Hours to this as well as granting employees the right to carry - Employees should not work more than eight hours a day out a peaceful strike according to controls and procedures or 48 hours over a six days working week. prescribed in the law. - Most private sector employees work 5 days a week, usu- Conditions for foreign residents ally Sunday to Thursday. The number of working hours Legal work permits and work licenses from the workforce may be increased to 9 hours a day in certain circum- office are required. A certificate of experience is required stances. from each foreign worker to be approved by either the - Employees are entitled to one whole working day-off Ministry of Foreign Affairs or the respective Egyptian em- each week. Certain exceptions apply when work is in- bassy abroad. tended to prevent a serious accident or to cope with a Conditions of entry & exit of foreigners (visas) heavy workload. In such situations, the employee must

Tourists and visitors are generally permitted to enter the be paid overtime. country with a minimum of immigration formalities. Ex- Foreigners’ Record cept for nationals from certain countries who must obtain - The number of non-Egyptian employees in any institu- visa from the Egyptian Consulate in the country where tion must not exceed 10 percent of the total workforce they live, most visitors are required to get temporary visas for unskilled or semiskilled workers; in contrast to a 25 to enter Egypt. These are issued at ports. percent foreign limit on skilled workers.

A. Tourist Visas - The total compensation of foreign employees must not Tourist visas are issued to foreign nationals visiting Egypt exceed 30 percent of the total payroll of the establish- for recreational purposes or to foreign nationals whose ment. stay in Egypt will not exceed three months. It is possible - The minister concerned may designate certain activities to renew this visa for similar durations. which cannot be exercised by foreigners in Egypt, as B. Temporary Visas well as the maximum number of foreigners to work in

Temporary visas are issued to foreign nationals who are establishments in Egypt. entering Egypt for reasons other than recreational pur- - In an attempt to enforce control on employing foreign- poses and whose stay will exceed three months but will ers, the ministry obliges organizations employing for- not exceed one year. eigners to make a record including the following:

To work in Egypt, all foreigners must obtain a work permit • The foreigner’s name, surname, nationality and re- from the Ministry of Manpower and Immigration in the ligion relevant Governorate.

27 GAFI

• Birth date in 2002, guided by obligations and rules under TRIPS. The core objective of this law is to protect intellectual • Job title and exact job description property rights in Egypt. • Qualifications The law covers patents, industrial designs, semiconduc- • Date and number of his employment permit tor chip layout design, trademarks, copyrights, and plant Repatriation of Salaries varieties.

Article 111 of the Law No. 88 of 2003 Promulgating the 3- Law on Protection of Competition and Preven- Law of the Central Bank, the Banking Sector and Money, tion of Monopoly Practices amended by Law No. 162 of the Year 2004 and Law No. Law No. 3 of 2005 and its amendments in Law No. 193 of 93 of the Year 2005 states that every natural or legal 2008 ensures practicing economic activity in a way that person may maintain all the foreign currencies transferred does not lead to preventing, restricting or harming the thereto, or owned or possessed thereby. He shall have freedom of competition through a set of regulations. the right to conduct any foreign currency transaction, including inward and outward transfers, and local dealing, providing these transactions shall be made via the banks authorized for dealing in foreign currencies.

Labor (Trade Unions)

There are no legal restrictions on establishing private sector unions, although such unions are uncommon.

There are 23 trade unions, belonging to the Egyptian Trade Union Federation (ETUF), which supervises the nomination and election procedures for trade union of- ficers and entitles public authorities to intervene in union financial activities.

The wage (Article 13 of MD 136 of 2003)

2- Law on Protection of Intellectual Property Rights

Law No. 82 entitled “Law on the Protection of Intellectual Property Rights” was issued by the Egyptian government

28 for a Brighter Future 5 Sector Snapshots

Agribusiness

With a growing population of more than 80 million, Egypt represents one of the largest markets in the region, agriculture contributed to around 14.5% of Egypt’s GDP in 2011/2012.

The government has made development of the agricultural sector a priority ensuring continued levels of investment, the country’s food production industry is better developed than that in many neighboring states, creating strong export opportunities.

29 GAFI

Competitive Strengths and Capabilities

Core Areas for Investment: Agricultural product cultivation, infrastructure proj- Agribusiness ects, mega farms, production and exports.

Diversity: A wide range of fruits and vegetables are already being grown in the country and the foundation is being laid for expansion. With government support, the Food Products Exporters’ Council is now targeting an export goal of USD 1.5 billion annually by 2020.

Climate: Egypt’s climate - which allows for extended and extra growing seasons - • Egypt represents one of the and significant groundwater resources make it particularly conducive to agribusiness largest markets in the re- projects. Especially beneficial to the sector is the ability to cultivate winter crops from gion; agriculture contributed to around 14.5% of Egypt’s November to May, when agricultural production becomes very limited in Europe and GDP in 2011/2012. northern Asia. • There are 6,130 companies operating in the Agribusi- Preferential Access: Egyptian agriculture and food exports enjoy preferential ac- ness space in Egypt with cess to important markets including the European Union and the Arab world. total capital reaching EGP 50 billion and manpower of Location: Straddling Africa and Asia, situated on the Mediterranean, and midway 5 million (4 million indirect between East and West, Egypt is ideally located for exporting agricultural products to employment and 1 million all major consumer markets. The country’s geographic location makes exporting to direct employment). Europe and the Gulf fast and painless. • Total exports of agriculture products during the pe- A Robust Infrastructure: Several years’ planning for mega-farm projects in North riod (January-June) 2013 Sinai and the Toshka region of Upper Egypt have resulted in extensive infrastructure reached USD 1,44 billion and the means to export rapidly to international markets. representing 12% of total exports. Area-specific investments will target dedicated corridors to reach the closest airport • Land reclamation increased which will greatly reduce the start-up time needed to prepare future projects. Egypt during the FY 2011/12 to is also looking to reduce the cost of logistics in supplying importing countries with reach 40504 acres from 16071 acres during the FY agricultural goods. 2010/11.

30 for a Brighter Future 5

A Large and Growing International Consumer Base: With a total cultivated area of 2.86 million hectares, Egypt is one-of-a-kind in the region. Gulf Cooperation Council countries have a strong desire for products they cannot produce locally and that carry familiar brand names. In fact, the Gulf region is the main market for Egyptian processed food exports, accounting for more than 50% of total exports, followed by the EU, North Africa and the USA.

A Large Local Workforce: Egypt has the largest agribusiness workforce in the region, with an estimated 6 million employees, representing 30.2% of the country’s total labor force. Plans to further enhance productivity include construction of labor communities in close proximity to areas of cultivation as well as educational centers teaching state- of-the-art technologies related to the field.

High Export Potential: Egypt is ranked among the top five exporters of vegetable and fruit juices in the Mediterra- nean region, and number eight among the top olive producers worldwide. Government plans to expand the harvested area aim at positioning Egypt as the third most important olive producer in the world by the year 2010.

Critical Mass: Egypt has emerged as a destination of choice for multinationals looking to establish cost-effective production and export of agricultural products. Multinationals have experienced the advantage of working with local farmers and the government to turn the Egyptian agribusiness sector into a worldwide producer and exporter.

Feeder Companies Abound: No one knows the local agribusiness sector like the Egyptian companies already operating in it. Partnerships would enjoy an established infrastructure and workforce, as well as knowledge of the ins and outs of the local business climate. Makers of packaging supplies and marketing materials as well as service companies catering to the industry are abundant.

31 GAFI

Policy Support for the Agribusiness Sector

• The Ministry of Agriculture, together with the Ministry of Trade and Industry, has made expanding agricultural exports a top priority.

• The Ministry of Agriculture is focusing on country-specific marketing and re prioritizing the activities of promotion agencies. Making the agenda clear and ensuring seamless coordination between different government agencies is also key.

• The government is committed to improving quality standards in the agribusiness industry. In addition to the industry’s commitment to applying HACCP standards, the Ministries of Finance and Investment an- nounced the establishment of a USD 146 million fund in 2005 to help upgrade agri-food processing operations in Egypt and increase processed food exports.

• Another advantage is Egypt’s membership in several regional free trade agreements, including GAFTA and COMESA. Through Egypt’s COMESA membership, foreign investors in Egypt can benefit from the customs exemptions granted to COMESA member nations, whereas Egypt’s trade pact with the European Union gives Egyptian processed food items duty-free access to the EU market.

32 for a Brighter Future 5 Success Stories

Farm Frites Halwani Bros Established in Denmark in 1971, Established in Saudi Arabia in 1952, Farm Frites is a worldwide enter- Halwani Bros. Opened its Egyptian sub- prise and internationally recognized sidiary in 1970 which currently employs brand producing a wide variety of processed food prod- more than 1,000 skilled workers in its ucts. factory in Tenth of Ramadan City in the Greater Cairo area. In 1989, the company expanded its global operations by establishing Farm Frites Egypt as a closed shareholding Having established itself on the local market, Halwani company. The majority of Farm Frites Egypt’s products, Bros. Now exports to the USA, Canada, Australia, Europe, including frozen potatoes, tomatoes, peas, carrots and Africa, Japan and the Gulf. The company produces pro- strawberries are exported to Europe and GCC countries. cessed meat products, jam, juice, rice and frozen straw- Farm Frites Egypt is a regional force in food production berries, with a total annual sales volume of up to USD 50 and export. million.

Sekem Wadi Food In 1977, Sekem was established on an area Since its beginnings as a 30-hectare olive of 125 acres of desert land 60 km north- grove in 1986, Wadi Food Industries now east of Cairo. Since 2004, Sekem Holding has 930 hectares devoted to the produc- has been overseeing 70,000 hectares of or- tion of organic food products, including ganic farms across Egypt and the Sudan, and it owns sev- olive products, sauces, vinegars and en different companies, including Isis for Organic Foods. fresh produce.

With more than 100 healthy and high-end products, the company is the proud supplier of olive oil and table olives

33 GAFI to Egyptian five-star hotels and restaurants. The company has become a leading exporter of olive products to Cana- da, the USA, Europe and several MENA countries.

In 2005, the company received the HACCP International Food Certificate for its extra-virgin olive oil, and it received the distinguished Organic Agriculture Certificate, declar- ing all Wadi Food farms to be fully organic and all Wadi Food products 100% free of fertilizers and pesticides. It has been ISO-certified since 1999.

34 for a Brighter Future 5

Tourism

Egypt’s tourism industry is among the most diverse and vibrant in the world. Beyond the pristine beaches and year- round sunshine, Egypt’s long and varied history, rich cultural heritage and unique geographic features make it a popular destination for adventure, eco, sailing, diving, health and cultural tourism - and for religious tourism to sites of importance to Christians and Muslims alike. Although well-served by five-star properties, there is considerable room for investment in the three- and four-star hospitality segments. Other highly promising sectors include niche experiences as residential tourism, health and medical tourism, therapeutic tours, providing nature and desert safaris, eco-tourism, and adventures travel. The Ministry of Tourism has set ambitious goals for the next seven years. By 2020 the Ministry is aiming for 300,000 hotel rooms to accommodate 14 million visitors.

35 GAFI

Competitive Strengths and Capabilities Tourism Core Areas for Investment: Hotels, residential tourism, therapeutic tours, nature/desert safari, eco-tourism adventures, medical/health tourism.

Natural Variety and Climate: The diverse nature of Egypt’s terrain, which includes beaches, oases, world-famous deserts, mountains, both the Mediter- ranean and Red seas (with a coastline that resembles that of Southern Italy and Spain) and the Nile River Valley, creates a significant draw. The country’s • Hotels and restaurants sub sector contributed USD 6.5 billion to the mild climate allows for tourism 12 months out of the year - and makes it a economy directly or 3.1% of GDP particularly popular winter destination for tourists from cold-weather locales in 2011/2012. including Russia and Northern Europe. • Tourism sector employed one in every seven Egyptians or 12% of History, Culture and Religion: Egypt is home to countless well-preserved the labor force such that it offers 2.5 million direct and indirect jobs historical, cultural and religious sites. These sites span all corners of the coun- 10.9% of total employment. try. Popular stops include sites along the path that was followed by the Holy • Europe is the primary tourist-ex- Family, as well as ancient Pharaonic, Roman, Greek, Coptic and Muslim monu- porting market for Egypt accounting for 74% of tourists visiting ments. Egypt, followed by Middle East Infrastructure: The country’s well-developed physical infrastructure includes which accounts 16% of tourists visiting Egypt. major roadways, railways, river navigation, and ports, as well as a network of • In 2011/2012: world-class airports in all major urban centers. The airport network provides - Total no of tourist arrivals: 11 million tourists. ease of travel within country, and ready access to major European cities. - Total no of tourist nights: 131.8 Labor Force: Egypt has a large and educated labor force. Annually, more than million nights. - Average Stay:12 night. 22,000 students graduate from Egyptian universities with European language • As of July 2013, the tourism in- skills, including English, French, German, Italian and Spanish. Many of these dustry consisted of 6708 companies operating inland with total students have studied their second language since primary school. Further, the investments of USD 26.4 billion, Egyptian accent is neutral and easy to understand. and 1 company operating in free zones areas with total investments Government Support: Significant government backing for a sector that of USD 29 million. should expand to 25 million arrivals by 2020.

36 for a Brighter Future 5

Tourism Destinations

Beaches and Resorts Catherine’s Monastery in the Sinai, the site of the Biblical Celebrated for its year-long sunny weather, Egypt also burning bush. Tourists can also trace the route of the Holy boasts a vibrant undersea life, with the closest coral reefs Family in Egypt. The capital city is also home to important to Europe located off the Sinai Peninsula in the Red Sea. mosques dating to the earliest days of the Umayyid pe- The North Coast attracts both Arab and European tour- riod (661-750 CE). ists with an environment resembling Southern Italy and Spain. From the resort towns along the Red Sea coastline Eco Sites to diving and snorkeling excursions off the shores of the Egypt has striking natural sites in addition to sunny beach- Gulf of Aqaba, Egypt provides tourists a unique selection es, including desert landscapes, oases, canyons and falls. of vacation destinations. Egypt’s unique Eastern and Western deserts offer some of the most popular desert safari excursions in the world, Historical Sites while treks through the sands and mountains of Sinai are The remnants of Egypt’s long and varied past can still be a chance to explore wildlife and unique eco sites. visited today along the banks of the Nile River, from Upper Egypt at Abu Simbel near the Sudanese border, through Health and Rejuvenation the Greater Cairo Area and on to Alexandria. Sites in Up- Egypt provides the best medical tourism location with the per Egypt, including Abu Simbel, Aswan and Luxor, serve healthy and natural materials in Safaga and the luxury of as links to Egypt’s Pharaonic past. In Greater Cairo, tour- restorative oases at Siwa and Dakhla. ists may visit Egypt’s most iconic destination: the pyra- Just a few hours from the bustle of Cairo is the relaxing mids of Giza and the Sphinx. atmosphere of Siwa, where rivers and quiet gardens mix with traditional local culture. Religious Sites Religious tourism has steadily increased over the past several years. One of the most popular destinations is St.

37 GAFI

Success Stories

Golden Pyramids Plaza (City Stars) Established in 1991, Golden Pyramids Plaza SAE is an Orascom Development Holding Egypt-based company engaged in the fields of entertain- Is a global town developer that ment and hospitality facilities management. specializes in planning, building and operating integrated leisure The Company manages the CityStars Heliopolis Cairo en- and residential towns around the globe. The Red Sea port tertainment complex which is situated in Nasr City and town development of El Gouna was the company’s flag- consists of three international hotels namely InterCon- ship enterprise. Established nearly 20 years ago, El Gou- tinental Cairo Citystars, Holiday Inn Cairo Citystars and na is now a thriving residential and vacation spot, with Staybridge Hotel; shopping and entertainment centers; nearly 15,000 inhabitants and a continual stream of hotel office buildings; residential towers, and a medical center. guests. The town offers first-class amenities, including 15 hotels, with two “6-star” hotels under development. Misr Travel There is also an international school, private landing strip, Established in 1934 by the great Egyptian economist Ta- two marinas, and a European standard hospital. laat Harb, it is one of the oldest travel company in Egypt Orascom HD has extended its business internationally and and the Middle East. is currently active in Oman, Jordan, the UAE, Switzerland, Mauritius, and Morocco, with plans to expand further. Misr Travel is recognized, world-wide, as the most impor- Orascom HD is one of four companies operating under tant leading travel company in Egypt. the banner of Orascom, one of the largest and most suc- cessful groups of companies in the Middle East and Africa. Offering a full service Destination Management Company specialized in inbound to Egypt as well as outbound to travel worldwide destinations as well as assisting with any request, to ensure that both a comfortable and memo- rable stay is secured for all guests.

38 for a Brighter Future 5

Emeco renovated 2,902 hotel rooms across Egypt in the last five Established in 1976, it is a premiere trav- years and plan to renovate around 1,227 existing rooms el agency and destination management and create 320 new rooms our the next three years. company operating travel services, cruis- es, transportation and airlines divisions.

Emeco Travel is the general sales agent for leading airlines including American Airlines, Air Malta, Korean Air, Malev Hungarian Airlines, South African Airways and TAP Portu- gal. Emeco also offers a diversified transportation group offering solutions ranging from 5-passenger vehicles to 50-person buses.

Egyptian General Company for Tourism and Hotels (EGOTH) Is the biggest state-owned hotel owner in Egypt, with 20 hotels and 1 cruise - all well known for their historical value (Mar- riott and Mena House Oberoi in Cairo, Old Winter Palace in Luxor, Old Cataract in As- wan and Hotel Palestine in Alexandria).

Additionally EGOTH own a percentage of the equity in 20 joint ventures in the field of tourism and hotels. Their main activities include accommodations, restoration and catering with the aim to develop tourism in the country and training staff for its hotels.

EGOTH owns nine historic hotels and 20 contemporary hotels in prominent locations across Egypt. They have

39 GAFI

Textiles

Egypt is home to the only fully vertically integrated textiles industry in the Middle East, with the entire production process - from the cultivation of cotton to the production of yarns, fabrics and ready-made garments - carried out domesti- cally. The sector plays an extremely central role in the Egyptian economy.

The government’s strategy is to boost exports to the European garment market by moving up the quality ladder in garments, vertically integrating the garment production value chain (e.g., use local extra long staple (ELS) cotton, improve design and pattern making offering) and defending leadership in low-end garmenting by establishing strong brands at both country and supplier levels. Also on the agenda is restructuring the domestic textile industry by privatizing mills and leveraging on low cost and provided labor in addition to a large domestic supply of high-quality cotton.

40 for a Brighter Future 5

Competitive Strengths and Capabilities

Core Areas for Investment: Cotton production, yarn making, spinning, weaving, knitting, dyeing and ready-made garments. Textiles High Quality Raw Materials: Egypt’s cotton is internationally prized and valued for its quality. Competitively Priced Skilled Labor: The textile industry is labor-intensive, and human resource costs can be a heavy burden on a large company. Wages in Egypt are among the most competitive and stable • Textiles and RMG sector employ about in the region. Additionally, training programs and government initiatives 30% of local employment. continuously upgrade the skills of Egyptian laborers, improving their use- • Total exports of textiles and RMG fulness to textile manufacturers. reached USD 2.94 billion, representing 14% of non petroleum exports in 2012. Strategic Location: The country’s geographic location facilitates export • In 2012 textiles, about 37.9% of the to Asia, Africa and Europe; Egypt is also closer to the US than its com- exports directed to EU Countries, 15% to USA and 12% to Arab Countries. petitors such as India and Indonesia. Egypt has 15 commercial ports to The EU countries represented 46.8% of facilitate exports. Egypt exports of home textiles, 25% to USA and 16.7% to Arab countries. Free Trade Agreements: In addition to Free-Trade agreements with The United States represents 55.9% the EU, COMESA, MERCOSUR Agreement and the Arab World, Egypt’s of Egypt exports of ready-made gar- QIZ agreement with Israel and the United States gives local manufactur- ments, having the largest share of Egypt exports, about 32.9% to EU ers both tariff and quota-free access to the US market on the condition countries and 4% to Arab countries. that 35% of the commodity is manufactured in a qualifying zone, and a • There are more than 7295 textile-relat- minimum of 10.5% of the product is from Israeli inputs. ed companies registered with the In- dustrial Development Authority , with Feeder Industries: Egypt has numerous feeder industries to serve the total investment EGP 44.68 billion. textiles industry. The established and growing agricultural industry is ca- • As of July 2013, the textiles industry consisted of 4136 companies, of which pable of supplying high-quality raw materials needed for textiles produc- 3,937 companies operating inland and tion. Numerous domestic manufacturers of such inputs as dyes, buttons, 199 companies operating in free zones with total investments of USD 5.69 bil- zippers and packaging (not to mention the textiles themselves) facilitate lion. production in the RMG industry.

41 GAFI

Strong Government Support for the Textiles Industry

The Egyptian government is actively looking to attract new private investments into the industry’s upstream segments in order to sharpen the nation’s competitive advantage in the global market.

The IMC provides services that include training, technical assistance and export support, consulting in management and marketing, technical advice and training for individual companies.

The General Authority for Investment and Free Zones (GAFI) operates a One-Stop Shop that streamlines and expedites investor services - most businesses can incorporate in 72 hours.

42 for a Brighter Future 5 Success Stories

Al-Arafa Investment and Consulting Export: About 20 million US Dollars per year to all Eu- Arafa Holding is a leading global textiles ropean countries, USA, Canada, Arab Countries, and Far and apparel manufacturer and retailer East. based in Egypt, with a network reaching Number of workers: about 2400 workers more than 70 countries worldwide. The group serves a diverse global audience, including top international brands Egyptian Spinning & Weaving Company (ESW) Was established in 2005, and is located and global retailers. Joint ventures have seen the com- in Sadat city. A private company owned pany gain ownership of prestigious leading brands and by one of the leading group in the tex- partner with leading fashion houses. tile sector in Egypt. ESW produces and exports a diverse range of Egyptian cotton yarn. The company’s business activities are fully integrated, ESW has a production capacity of 11 tons per day, and covering the luxury wear, formal wear and casual wear exports its products to Italy, Portugal, Spain, Switzerland, markets, as well as the full value chain from textiles to Germany, Brazil, Turkey, Bangladesh and the Middle East. apparel & tailoring to retail & distribution. This cross-ver- tical-integration provides a key buffer against economic El-Nasr Clothes and Textiles (KABO) downturns and political upheavals in key markets, while Established in 1940, El-Nasr Clothing and at the same time positioning the company for organic Textiles Co. (KABO) is one of the pioneers in the textiles and garments field in Egypt. growth. KABO is a recognized manufacturer and exporter of high quality knitted underwear, lounge-wear and intimate ap- Alexandria Spinning & Weaving Co. (SPINALEX) parel for men, women and children as well as sportswear. Was established in 1959 as one of the lead- A vertically-integrated manufacturer of apparel, with ing spinning companies in Egypt. operations encompassing weaving, dyeing, knitting and ready-made garments. The company’s flagship product is Annual production: about 1200 tons, the Jil brand, manufactured under license from Jil Inter- 100% Egyptian cotton yarns for export all national. An Egyptian household name; and it represents over the world. roughly 90% of the company’s products.

43 GAFI

Chourbagi Moderne for Clothing and Textiles S.A.E. (Charmaine) Is an Egyptian company established in 1977, producing cotton underwear and sleepwear for men , woman and children in addition to ladies hosiery. Today they function as a vertically integrated company, with the production line starting at knitting and going through dyeing, finishing, cutting, sewing and final packaging and distribution. “Charmaine” and “Pink Powder Room” brands continue to find local market appetite and their international export division maintains a robust sales portfolio of customers such as Hema, Hugo Boss, and Calvin Klein. Their current production ratio is 95% export and 5% local sales, with the capacity of 1.5 million pieces a month.

44 for a Brighter Future 5

Petrochemicals

The prime mover in petrochemicals in the country is Egyptian Petrochemicals Holding (ECHEM), a state owned enterprise under the supervision of the Ministry of Petroleum.

The company was created in 2002, during a period of economic reform and modernization, and has multiple mandates as an investor and participant in the sector with minority stakes in some of the country’s main production facilities.

It is also in charge of marketing the sector abroad and long-term planning.

45 GAFI

Competitive Strengths and Capabilities

Core Areas for Investment: Egypt ranks 12th in liquefied natural gas exports worldwide, which has helped boost the petrochemicals industry. Natural gas proven reserves reached 2.2 trillion cubic meter, with cumulative gas production 61.3 billion cubic meter.

A wide variety of products: Plastics, fertilizers and acrylics are already being produced in the country. Egypt’s exports of organic and inorganic chemicals, plastics and fertilizers reached USD 1.55 billion in 2013, according to the Egyptian Chemical and Fertilizers Export Council.

Increase in Global Demand: Demand for urea fertilizer is expected to rise globally due to population increases. Manufacturing and exporting fertilizer from Egypt allows producers to benefit from discounted feedstock prices. More- over demand for ethylene is expected to grow at 4.7% over the next few years reaching about 153 million metric tons by 2015.

Competitive Production Costs: As natural gas prices continue to rise, the production of petrochemicals is migrating towards countries with lower natural gas costs, such as Egypt.

Exports: Egypt supplies petrochemical products to about 50 countries worldwide, with Europe being the largest market for Egyptian exports.

• Oil and Gas contributed to around 15.48% of Egypt’s GDP in 2011/2012. Petrochemicals • Natural gas proven reserves reached 2.2 trillion cubic meter, with cumulative gas production 61.3 billion cubic meter, in 2011. • As of July 2013, the petrochemical industry consisted of 91 companies operating inland with total investments of USD 4.65 billion, and 14 companies operating in free zones areas with total investments of USD 182.64 million. • Total Exports of Chemicals and fertilizers products during January - June 2013 reached USD 2,089 million, representing 18% of total exports.

46 for a Brighter Future 5

Strong Policy Support for Petrochemicals Industry

The Egyptian government continues to work with the pri- As a bonus facility offered to investors, 33 million square vate sector to expand business opportunities in the petro- meters of land in 7 governorates are reserved for pet- chemical sector through public private partnerships (PPP). rochemical projects. The proposed locations for petrochemical industries are: Alexandria, north Gulf of Suez, Egypt outlined an aggressive expansion strategy for the Damietta, Post Said, Zaafarana and Rosetta. petrochemicals sector in 2002 with the creation of ECHEM and the unveiling of a 20-year master plan to carry the sector through 2022.

47 GAFI

Success Stories

Middle East Oil Refinery (MIDOR) The majority of the gas exported is used to supply the MIDOR is an Egyptian joint stock company new ‘cleaner’ gas-fired power stations in Spain. This LNG established in 1994 under Investment Law project was the first facility of its type in Egypt and is one No. 230 of year 1989 and its amendments. of the world’s largest capacity single train facilities. MIDOR Refinery is classified as a deep con- version refinery using the latest scientific Construction of the facility began in September 2001. The and technological methods to suit the fluctuating market complex will initially produce 5.5 million t/yr (7.5 billion needs, the refinery investment is almost USD 1.4 Billion. m³/year) of LNG by air-cooled refrigeration and fraction- ation. The complex requires 270 personnel and produc- MIDOR refinery occupies approximately 500 acres within tion is around 600 t/hr (24°C ambient air temperature). Amerya Free Zone, West Alexandria City constructed on Estimated investment for the construction of the original 5 terraces utilizing the topographical nature of the site. facility was USD 1.3 billion. MIDOR is one of the first refineries in the Middle East that is designed to cope with the most demanding world en- Sidi Kerir Petrochemicals Co (Sidpec) vironmental standards for effluent treatment and product Sidpec is an Egyptian joint stock com- specifications. pany established on 16 November 1997. The Spanish Egyptian Gas Company (SEGAS) The Spanish Egyptian Gas Company (SEGAS) liquefied Sidpec is considered the first integral step towards the natural gas (LNG) complex in Damietta, Egypt, is situated petrochemicals future in Egypt. on the Mediterranean Coast 60 km west of Port Said. Sidpec utilizes the latest available technology and designs The complex came on-stream during the final quarter of in order to satisfy the Egyptian environmental regulation 2004 and exports LNG to the Spanish market via a receiv- and requirement. ing terminal at Sagunto in Spain.

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The trade name of SIDPEC polymers is named “Egyptene” polymer portfolio includes linear low density polyethylene (LLDPE) and high density polyethylene (HDPE).

Oriental Weavers (OW) Oriental Weavers (OW) is one of the most recognized brands in the machine woven rug and carpet industry today. Established in 1980.

Alexandria Carbon Black Established in 1994 with an initial capacity of 20,000 tones, Alexandria Carbon Black is located in Amreya near Alexandria in Egypt, an Indo-Egyptian joint venture of the Aditya Birla Group of India and is the only producer of carbon black in the MENA region.

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Real Estate Egypt is home to the largest population and market in the Middle East, this implies a steady – if not growing – need for residential and commercial property. Real estate is one of the most important sectors contributing to economic growth and affecting more than 90 industries related to construction. It is considered a labor-intensive sector as it accommo- dates at least 8% of the total labor force. There is a great demand for residential construction in Egypt where there is a high population growth rate and a high urbanization rate, such demand is mainly driven by the demand for low and middle income housing; a gap that is yet to be satisfied. It is important to know that 29% of the population is under 40 years old and almost half the Egyptian population is under 19 years old implying a growing demand. Additionally, the Egyptian Ministry of Housing and Devel- opment has pledged to provide 1 million affordable housing units over the next five years. The construction sector growth rate is expected to reach 5.63% by the year 2014 with an important role of the private sector.

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Competitive Strengths and Capabilities

Core Areas for Investment: Residential, compounds, commercial, Real Estate industrial, hospitality, administrative , cultural and educational buildings in addition to hospitals and other real estate.

Large consumer market: Egypt’s large population makes it an attractive market for residential construction. It is important to know that 29% of the population is under 40 years old and almost half the Egyptian population is under 19 years old implying a growing • As of August 2013, the real estate industry demand. consisted of 9,759 companies operating inland with total investments of USD 26.58 Investment haven: Egypt appears to be a safe-haven from the in- billion, of which 302 companies with total ternational turmoil in the property market, thanks to restricted mort- investments of USD 1.48 billion in housing, 4152 companies with total investments of gage and lending practices. However, prices started stabilizing as the USD 10.5 billion in contracting and 5305 price increase curve drops, even though demand continues to exceed companies with total investments of USD supply. 14.58 billion in urban development . • Housing unit needs are estimated to be 7.5 Government support: Government policies aiming to attract for- million units during the period from 2007 – 2022. By adding current housing needs eign investment by streamlining and easing property purchase for this number is expected to climb to 8 mil- overseas buyers. lion in 2022. • The average rent for a three bedroom villa in New Cairo is currently USD 3,100 per month while two bedroom apartment rent- als average almost USD 1,000 per month. • For 6th of October, the average rental for three bedroom villa is around USD 2,800 per month while two bedroom apartments rent for around USD 850 per month. Average quoting rents for prime line stores in Regional & Super Regional malls in Greater Cairo is from USD 920 to USD 1,410 per m2 per annum.

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Leading Opportunities in a Dynamic Market

As we move into 2014, the dust is now beginning to settle and more clarity is returning to the market. This is resulting in increased levels of confidence and activity. Evidence of this includes:

• Current and active demand for between 5,000 and 15,000 m2 of office space from a number of international Fast- moving consumer goods and petrochemical occupiers. • Retailers continue to open new stores with recent examples including American Eagle and Pinkberry opening their first stores in Egypt at City Stars and Sun City mall in Heliopolis. • Some real estate projects will continue towards completion in 2013. Cairo Festival City delivered its first office phase in mid-2012 and Damac is looking to open its retail and office project opposite Dandy Mall. The market is witnessing a revival of other mixed use projects driven mainly by Gulf countries developers.

With strong domestic economies and balance sheets, the positive long-term potential of the Egyptian market is an attractive prospect for those firms with the liquidity to buy patience. This view is compounded by the results of the 2011 Colliers International Global Investor Sentiment Survey, which revealed that property investors from the Middle East are keen to invest their money in residential real estate and hotels, with Egypt a particular target due to its historically robust tourism sector.

Large new developments within central Cairo are almost non-existent with the exception of the Uptown Cairo project by Emaar Misr leaving the private sector with an unprecedented opportunity for expansion. Despite delays in some projects, the supply of retail malls is expected to increase further in 2013 and 2014. The major new addition in 2013 will be Cairo Festival City, which will add a further 160,000 m2 of high quality retail space into the market in New Cairo.

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Talaat Moustafa Group (TMG) Holding Emaar TMG is the leading community real estate A Dubai-based Public Joint Stock Compa- developer in Egypt, with a land bank of ny operating in Egypt under its subsidiary 50 million square meters. The group has Emaar Misr for Development S.A.E, Emaar a strong track record of over 37 years in is a global property developer and provider the housing and real-estate development industry, hav- of premier lifestyles and also the largest foreign direct ing developed 8.5 million m2 of land so far. Amongst the investor in Egypt’s real estate sector with an investment group’s largest and most prominent development projects portfolio of EGP 43.3 billion (AED 29.27 billion, USD7.97 are “Al Rehab City”, East of Cairo, spread over 9.9 million billion). Its most notable projects include: m2 to host 200,000 residents, and “Madinaty” project, Marassi: a Mediterranean-styled development close to started in July 2006 spanning over 33.6 million m2 of land Alexandria and a few miles away from the historic city of with 600,000 target residents, making it the biggest all- El Alamein along the magical shores of Sidi Abdul Rah- inclusive enclosed city in the Middle East. TMG’s achieve- man bay. It has a network of lagoons line townhouses ments also include signature compounds like May Fair in and luxury resorts with up to 3,000 guest rooms while Al Shourouk, East of Cairo and Al Rabwa I & II in 6th of a bustling community centre fosters a thriving sense of October City, West of Cairo. community living. TMG’s activities also extend to the hotels and resorts Mivida: an upscale residential community, near the new segment. It has developed three large scale luxury hotels, campus of the American University in Cairo. Nestled with- Nile Plaza in Cairo, San Stefano in Alexandria, and Four in the fifth district of New Cairo City, this new develop- Seasons in Sharm El Sheikh, all managed by the interna- ment of around 5,000 luxury homes unfolds on nearly 3.8 tionally reputable Four Seasons chain, in addition to two million square meters of gently rolling landscape. other Hotel & Resort projects currently under development.

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Sodic their work on Allegria. The project has also received two SODIC was incorporated in Egypt in CNBC Arabian Property Awards in 2008, for Best Develop- 1996 , Today it is one of Egypt’s lead- ment and Best Golf Development in Egypt. The project is ing real estate companies. Egypt’s SODIC, the country’s an investment of EGP 2.5 Billion. third-biggest listed real estate firm, registered almost 570 Eastown: To the east of Cairo lies EASTOWN, the bus- million Egyptian pounds (USD 96 milion) worth of sales to tling town centre of New Cairo and Kattameya. EASTOWN the end of September 2011. Its net profit in Q1 2012 is comprises of 860,000 m2 of land and has a built up area EGP 35,7 million. of 920,000 m2. It will include 1,600 residential units, 1,000 ‘Class A’ offices, 2,000 boutiques and retail outlets Sodic’s projects: and up to five hotels. Beverly Hills: was one of the first ever large scale residential compounds to be developed in Sheikh Zayed City, Amer Group off the Cairo-Alexandria Desert Road. With over 1,800 vil- 25 years ago, Mansour Amer founded las and apartments, Beverly Hills has become a sought Amer Group based on the core values out address in west Cairo. As a result, property value in of “character, courage and integrity”. Beverly Hills has more than doubled in the past six to 12 Today, Amer Group continues to ensure commitment to months. Beverly Hills, SODIC’s first venture, is a 1.75 mil- those values, while raising the standards for innovation, lion square meters mixed-use residential and commercial outstanding design, quality & superior market value. development that generated over EGP 1 billion in revenue Amer Group is a leading real estate developer, offering for the company. mixed-use, family oriented destinations. Amer has diver- Kattameya Plaza: Located in the heart of New Cairo sified businesses in the primary and secondary homes on 126,000 m2 It marks a new standard in contemporary market, as well as hotels, shopping malls and restaurants. apartment living. Kattameya Plaza is designed and mas- • Real Estate Portfolio: 9 current projects (including one ter-planned by ArchGroup - the distinguished firm that in Syria) with total land area of 7.5 million m2 - Six up- designed the Grosvenor House in Dubai, and landscaped coming projects with total BUA of 2.7 million m2. by Greenscape. The project is an investment of EGP 334 • Hotels: 5 operational hotels in Egypt with 919 keys with million. total revenues of EGP 67 million. Allegria: Located in Sheikh Zayed City, off the Cairo-Alex- • Restaurants: 6 brands, 59 restaurants with 9,696 seats andria Desert Road on 2,430,0000 m2. The master-plan with total revenues of EGP 214 million. for the project was designed by the world renowned New York-based firm EDAW, which won an award of merit from • Meeting point malls: 5 meeting point malls in Egypt with 2 the American Society of Landscape Architects (ASLA) for GLA of 52,087 m . • New Ventures: Porto Vacation Club (PVC).

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Building Material

The construction and building material industry is considered one of the most dynamic sectors in the Egyptian Econ- omy, and has been growing rapidly since the eighties. The sector continues to encourage related industries such as cement, iron, and ceramic industry.

The growth in the construction sector is expected to be driven by the government plan to boost investments in infrastructure projects, as well as low income housing and industrial development projects, in addition to the improvement of under developed areas in Egypt. Furthermore, the private sector investments in the residential, commercial and hospitality real estate segments are expected to support the construction sector, as well.

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Competitive Strengths and Capabilities

Core Areas for Investment: Strong future domestic demand, where the strong demand for housing and increasing population as well as urbanization have resulted in the government undertaking major urban planning programmes.

Competitive Production cost: Availability of local raw materials at reasonable prices. One of the Egyptian’s cement competitive advantage is represented in the abundant quantities of the necessary raw materials (limestone - clay) throughout Egypt at a very high quality which have the major advantage of existing above soil level thereby reducing the cost of extraction.

Increase in global demand: The demand for the building materials is expected to rise globally due to the increase of population, manufacturing and exporting of cement, steel and other building materials from Egypt allows construction companies worldwide to benefits from discount feedstock prices.

A wide variety of products: Strong domestic companies that work in the building materials (Steel, Cement, Marble & Granite, Pipe, Sanitary tools and Ceram- ics), with high level of technical ability.

Largest trained workforce in the region: At about 27 million, Egypt’s labor pool is the largest in the region.

• The sector maintains the lead in the value of exports, total exports of building Building Material materials during Jan - June 2013 reached USD 2.77 billion, representing 24% of total exports of the country. • Construction is one of the most active sectors of the Egyptian economy, the sector accounts for 4.57% of national GDP in 2011/2012. • As of July 2013, the total number of companies working in the building material sector as well as Iron and Steel fabrication were 2,293 Companies, of which 2,288 companies operating inland and 5 companies operating in free zones, with total investment of USD 7.8 billion.

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The Major Sub- Industries in the building material sectors

Iron and Steel Industry Approximately 70% of the Egyptian cement sector is partially or wholly owned by international cement firms. The Egyptian Steel Industry is the backbone of Egypt’s Multinationals were attracted to Egypt due to the large economy which provides the impetus for the growth of and growing market with healthy margins. Also the low major and leading industries including construction and energy and labor costs were a bonus. building, ship building, automotive industry, and consumer goods industries. The Egyptian steel industry is domi- Consequently, cement producers in Egypt increased their nated by the private sector which controls over 95% of production capacities and enhanced their production lines total market capacity. to meet the surging local cement demand. In 2002, Egypt turned out to be a net exporter of cement and later in The Egyptian Steel Industry is divided into two segments 2004 Egypt stopped importing cement and became one based on steel product: of the largest cement exporting countries in the world. • Steel rebars: which are long steel products either in the form of rods or bars, and are used primarily in the Ceramics Industry construction and real estate sectors. • Flat steel: which is directed to the industrial sector in- Due to the availability of raw materials and domestic de- cluding the automotive industry, ship building industry, mand (feldspar, kaolin, clay and quartz), Egyptian inves- and consumer goods industry, etc. tors, formerly ceramic tiles importers or traders, started to invest in ceramic tiles sector to satisfy the domestic Cement Industry needs. Recently, they entered the sanitary ware industry to meet the emerging needs of a growing population. Egypt is one of the oldest countries in cement manufacturing in the region, as it started cement production in the early years of the 20th century, specifically in 1927 with the construction of Torah Cement Company.

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Success Stories

Ezz Steel ASEC Cement Ezzsteel is the Middle East’s leading ASEC CEMENT is a platform for in- producer of high-quality long and flat vestments in emerging cement mar- steel for use in a wide range of end applications, the com- kets in the Middle East and North Af- pany produces long and flat products. rica Region and was created in November 2005 by Citadel Ezzsteel is the market leader in Egypt for long products, Capital, the MENA region’s leading private equity firm. which consist principally of rebars and wire rods, which ASEC Cement plan on having cement plants in high- are used for strengthening concrete in building and other growth markets in Egypt, Algeria, Syria, Sudan and Kurd- construction applications, and also in flat products, which istan in order to be able to satisfy the continuously in- consist of hot rolled coil, which are thin gauge sheets creasing demands for cement in these countries. manufactured to precise specification for makers of con- ASEC CEMENT is continuing its effort to streamline opera- sumer goods and industrial products. tions and make the most of the opportunities that still exist in the region in order to create value for its customers Solb Misr (Suez Steel) as well as for its shareholders with the help of the new Solb Misr is an Egyptian Steel Group pro- management team that combines international experi- ducing a wide range of steel by-products, ence and in-depth knowledge of local markets. semi-finished, finished and downstream steel, in keeping with international stan- Assuit Cement Company (CEMEX) dards. Assiut Cement Company is part of CE- The Group operates through an integrated steel complex MEX, a growing global building mate- that produces steel from raw material. It is comprised of a rials solution company that provides products of consistently high quality and reliable service Direct Reduction Plant, 2 melting shops and 4 rolling mills, to not only customers but also communities. all located in the Suez area. Assiut Cement Company is located in the center of Egypt, Through its collaboration with top-notch equipment and 400 km south of Cairo, with a plant of 3 cement produc- raw material suppliers, Solb Misr offers infallible quality tion lines. of steel.

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While ACC had an original production capacity of 3.8 million metric tons/year, CEMEX invested to increase the capacity to 5.7 million metric tons/year, almost 50% more.

Lafarge Lafarge is a leading producer of building materials in Egypt. Lafarge products - cement, concrete and aggre- gates (sand and gravel) - are essential in creating the structures that shape our landscape, from homes to hospitals, bridges, roads and monuments.

Lafarge works with all actors in the building industry of Egypt, from do-it-yourself builders to large construction companies, architects and local artisans. Whether supplying high-quality cement to a craftsman or helping leading architects explore and deliver creative possibilities, Lafarge Egypt is committed to providing solutions that fit the needs of all its clients.

Lafarge Egypt clients benefit from the technical expertise and product innovation that are the hallmarks of Lafarge, an international leader in building materials with a global presence and over 175 years of experience. In Egypt, Lafarge offers a range of innovative, high-performance products - from Artevia, a collection of decorative con- cretes, to Agilia, a highly fluid, labor-saving concrete that flows easily into any form using gravity alone.

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Logistics and Transportation The transportation sector is the main pillar of economic growth, as transportation networks are considered the arteries which economic and social activities flow through, where all sectors of the national economy depend on the services and facilities of this sector to link both production and consumption markets together, besides having the access to the needs of raw materials and services and operating.

The government is pushing for Egypt to become a global logistics hub and is opening up opportunities for foreign investment across the sector. Industrial free zones are often located at or very near major ports.

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Competitive Strengths and Capabilities

Core Areas for Investment: Road terminals and transit points, rail line expansion, connections and terminals (road – rail), value-added services around ports Logistics and dry ports, airport infrastructure.

Unique Geographic Position: Located at the crossroads of international trade between Europe, the Middle East, Africa and Asia, Egypt is positioning itself to become a major global logistics hub. Businesses are increasingly seeking to base Statistics: themselves in Egypt as a springboard to Europe and booming regional markets. • 8% of the world’s maritime A growing domestic demand for imports and a rapid Rising Domestic Demand: shipping passes through the rise in export-oriented businesses are creating strong demand for logistics and Suez Canal. transportation services in a market that is far from saturated. • Accounting for 4.1% of Greenfield Opportunities: Greenfield opportunities exist in subsectors such as GDP, transportation, stor- the road network, which is the most used means of transporting freight but cur- age and Suez canal sector represents 11% of the rently has no logistics provider with a consistent distribution infrastructure. Almost government economic plan all areas have reached capacity ceilings, providing rich opportunities for investment 2012/2013. from infrastructure to specialized value-added services.

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Strong Policy Support for the Logistics Sector

Transportation: 2012/2013 Master plan

The main strategic issue in this plan is to provide security, safety and comfort ability aspects for all transportation, facilities networks and beneficiaries of its services.

Railway Air Develop, maintain and upgrade trains, stations, signal The main goal is to reduce the operation, Supporting the systems, tracks, bridges, tunnels….etc. operation network.

Under Ground Metro Maritime Completion of the three remaining phases of the third line To Develop, maintain and repair the satellite monitoring with total estimated cost of EGP 35 billion, of which EGP system and the maritime navigation systems in the Medi- 3.5 billion as investments in 2013/2014. terranean sea, Marsa Matruh and Aqaba Bay. The most important development projects in the plan are Roads and Bridges networks in Red Sea ports, Alexandria ports, Port said port and To construct new roads and bridges to face the traffic Damietta port. congestion in the Nile Delta zone, with a total budget of EGP 2.7 billion.

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KGL PI provide international track and trace services through an Kuwait and Gulf Link Ports Inter- alliance with Germany’s Schenker Logistics, its worldwide national (KGL PI) is a subsidiary partner in air and sea services. Land transport is handled of Kuwaiti transport giant KGL. by the company’s own fleet of trucks and trailers. Egy- In 2006, KGL PI signed a 40-year concession agreement trans acquired Egyptian Transportation & Logistics (ETAL) with Damietta Port Authority (DPA) to build, finance and in 2001. operate a USD 1 billion container terminal in Damietta. The company has more than 350 employees and 8 branch Leader Group offices in Egypt, its revenue rose 6.5% from EGP 134.37 Founded in 1996, Leader Group million to EGP 143.11 million, while net profits climbed is a freight forwarding and ship- by an even greater margin, rising 15.1% from EGP 10.64 ping agency with a total of five million to EGP 12.25 million. About 48% of revenues were offices in Alexandria, the Greater Cairo Area, Port Said generated by the company’s Alexandria operation. and Damietta. In 2007, the Alexandria based agency was fully acquired by the multinational integrated supply chain Mediterranean Shipping Company (MSC) solutions company Agility. Aiming to provide more com- Founded in 1970 in Geneva, Swit- prehensive service to its Middle East customers, Agility zerland. MSC launched its first ser- was attracted by Leader Group’s extensive experience in vice between the Mediterranean customs clearance, haulage, sea and air freight, project and South and East Africa in the logistics and shipping agency services. mid-1970s.

Egyptian Transport & Commercial Services SAE In 2003 it became the second largest container shipper Founded in 1973, (Egytrans) runs in the world, and remains in that position. The carrier freight transport and integrated operates 200 direct and combined services weekly, call- forwarding services. Its activities ing at approximately 335 ports. It has 421 offices in 145 cover: sea freight, airfreight, land transport, specialized countries and employs more than 30,000 staff. cargo, packing insurance, warehousing and customs clearance. Egytrans issues its own bills of lading and can

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EGYPTAIR HOLDING

EGYPTAIR is the world-renowned EGYPTAIR HOLDING Company has a highly reputable national airline of Egypt, based and advanced Training Centre which provides training in the cosmopolitan city of Cairo. programs in various fields for EGYPTAIR companies and It started operating on the 7th of other international companies. Furthermore, EGYPTAIR May 1932 as the first airline in the Training Centre includes the latest flight simulators in the Middle East and Africa and the seventh in the world to Middle East. On the 11th of July 2008, EGYPTAIR officially join IATA and become a treasured brand. Throughout its became the 21st member of Star Alliance. 80 years of service, EGYPTAIR has experienced significant growth. EGYPTAIR is the nation’s flag carrier and will strengthen

64 for a Brighter Future 5 the alliance network throughout Africa and the Middle East.

EGYPTAIR CARGO established its 1st cargo terminal in May 1981. Since its foundation, EGYPTAIR CARGO has been on the forefront of transporting and handling of general and special cargo.

In September 1991 another cargo terminal at Alexandria International Airport was established with a capacity of 20,000 tons/year to better serve the northern region of Egypt. Both terminals are connecting their operations through a surface transportation in addition to the domestic flights.

In February 2006 another cargo terminal at Luxor Inter- national Airport was established sharing 50% with The Egyptian Company for airports with a capacity of 20,000 tons/year to better serve the southern region of Egypt.

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Communications & Information Technology

Egypt’s communications and information technology sector is a leading global outsourcing destination, Egypt is the leader in the MENA region and 4th worldwide on A.T. Kearney’s 2011 Global Services Location Index(GSLI) . This puts Egypt ahead of competitors in the region including UAE which ranked 15th. Egypt, one of the highest-growth potential IT markets in the Middle East, is receiving increasing attention from tier-one vendors and distributors, most of which are already very familiar with the market. Given the huge population, rising economy and relatively low PC penetration, the country will continue to be an important market over the forecast period. Leading global players ranging Intel and Oracle to Orange and Vodafone have established product development divisions and call centers serving global operations. Home-grown players are making their marks nationally, regionally and globally.

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Competitive Strengths and Capabilities

Core Areas for Investment: Business process outsourcing, key-process outsourcing, call centers, localization and Arabic-language development. A Pro-Business Government and Regulatory Body: Egypt’s Ministry of Communications and Information Technol- ogy is widely credited with having created the conditions allowing the sector to flourish. The National Telecommunica- tions Regulatory Authority promotes competition in broadband, fixed-line and mobile telecommunications. And the Information Technology Development Authority helps IT players based in Egypt become more globally competitive. A Robust Infrastructure: Egypt is served by three mobile networks (Vodafone, Mobinil and Etisalat). Competition between the 3 operating is positively reflected on the cost of services, introducing the 3G network, spreading mobile database services and mobile phones applications as well as preparing for accessing the 4G network. Telecom Egypt (TE), The nation’s fixed-line player, serves 8.63 million subscribers Q1 2013. Wireless and wireline broadband cover every major urban centre in Egypt. A Large and Growing Domestic Consumer Base: More than 33.34 million Egyptians regularly surf the internet - more than the population of many European countries of which over 2.31 million subscriber has ADSL line. A Skilled Multilingual Workforce: Egypt generates tens of thousands of university graduates each year that have strong commands of foreign languages and neutral, easy-to-comprehend accents. University graduates entering the workforce 2011/2012 about 40.00 thousand received professional ICT training, compared to the 42.06 in 2010/2011, representing an annual increase of 4.6%; Egypt has more than 217,780 working in the ICT sector in Q1 2013. Critical Mass: Egypt has emerged as a destination of choice for multinationals looking to establish cost-effective product developments and call centers. Developments such as Smart Village, the premiere technology park in the Middle East and North Africa, create key industry clusters providing high-tech Telecom and IT infrastructure. Feeder Companies Abound: Major global and Egyptian companies based in Egypt can call on the exper¬tise of thousands of proven Egyptian niche players.

• Egypt has three advanced mobile phone networks (Mobinil, Vodafone Egypt and Etisalat Egypt). I.C.T All three have 3G and 3.75 G infrastructure, they serve over 94 million subscribers as In Q1 2013. Growing by 2.43% since Q1 2012 – and hitting a penetration rate of 113.20% • There are more than 33.34 million regular internet users in Q1 2013. • Over 2.31 million subscribers enjoy ADSL line in Q1 2013, with annual growth rate of 21.7%. • Fixed line subscribers 8.63 million in Q1 2013. -As of ِAugust 2013, the ICT industry consisted of 5450 companies operating inland with total in • vestments of USD 10.78 billion, and 38 companies operating in free zones areas with total investments of USD 100.95 million.

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Policy Support for ICT Industry Investment

• The government’s Information Technology Industry Development Agency (ITIDA) supports the IT and BPO industries in Egypt. • The General Authority for Investment operates a One-Stop Shop that streamlines and expedites investor services - most businesses can incorporate in 72 hours. • Nile University is dedicated to improving technology-related education, and enhancing the skills of the nation’s young labor. • The government provides an incentives package to cater to the investor’s needs:

- Provides data and internet centers, a high-tech Pyramids Smart Village and a free zone (Telecom Hotel) for international call centers and transit regional Internet traffic. - Offers special tax exemptions and reductions for ICT industries. - There are special reductions on land prices for investors in the ICT sector. - Easing of export and import regulations. - Offers training programs for professionals in IT, communications and networks according to investors’ standards and specifications. These training programs are often offered at the government’s expense. - Assigns a government official to facilitate interaction with government organizations.

Inar, the first Egyptian Tablet

Inar is not just the first tablet to be designed and manufactured in the Middle East and Africa, it is more of an initiative to introduce and instill knowledge, open new markets, create new opportunities for hardware industry in Egypt and the region, and above all, make a significant contribution to the global content industry.

ITIDA intiated Inar, a brand owned be the entity, to be distributed among university students, university staff, and government officials during the first fase of the project.

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Etisalat Misr Egypt. 2006 witnessed another important step as Voda- Is a leading international telecom fone Egypt launched its off-shore operations under the company operating in 15 countries name of Vodafone International Services. This subsidiary around the world. Egypt is one of the countries where is dedicated to outsourcing business processes and IT ser- operation was launched in May 2007 as the first 3.5 G vices for Vodafone operators and beyond. Both its Busi- operator. Etisalat’s entry to the Egyptian market ushered ness Process Outsourcing and Information Technology in a new era for the Telecom Industry. Outsourcing business units have seen success year after Today, Etisalat Misr’s 2G and 3G robust and high qual- year with over 2,200 employees who collectively speak ity network covers and serves 99% of the population in ten different languages to provide world class customer Egypt. Moreover, Etisalat Misr is the first and the only op- and technical support for customers in 80 countries. erator in Egypt that has an exclusive international gateway Vodafone Egypt has grown over the years to become the and its customers enjoy competitive international rates to leading mobile operator in Egypt, not only in revenue all destinations around the globe. In order to complete share but also to become the number one mobile op- Etisalat Misr’s product portfolio, two well-established ISPs erator in Egypt with the largest customer base. Vodafone (Internet Service Providers) were acquired and provide proudly serves more than 36.3 million customers (Decem- broadband services to customers while at home and while ber 2011) offering the most advanced technology for its on the move. customers, the best working environment for its 6,500 employees and the strongest corporate responsibility ini- Vodafone Egypt tiatives for the community. In 1998, Vodafone Egypt (Ex Misrfone Telecommunication Company/Click GSM) Global Telecom Holding entered the Egyptian Telecom Market as Global Telecom Holding began as the second operator; a consortium be- Orascom Telecom Holding (OTH), tween Vodafone international, Air Touch, and local/ inter- a member of the Orascom group national partners. of companies established in 1976. In January 2002, Click GSM was rebranded to Vodafone

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Retail The key factors behind Egypt’s forecasted growth in retail sales are an extremely large and youthful population, the emergence of a more affluent middle class, a vibrant tourism industry and the growing acceptance of modern retail concepts. Factors such as more women entering the workforce and Egyptians having increasingly busy lifestyles are likely to see the value of the retail segment increase by 79.7% in local currency terms, from an expected EGP 192.66 billion (USD 35.48 billion) in 2012 to EGP 346.29 billion (USD 63.77 billion) by 2016, with long-term political stability the only question mark. Booming retail sub-sectors include autos as sales forecast to increase by 126% between 2012 and 2016, over-the- counter (OTC) pharmaceuticals with sales expected to grow by 96.6% from by 2016 and consumer electronics with sales forecasted to increase by 50.8% in 2016. Wages in the wholesale and retail sector average USD 32.20 weekly.

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Competitive Strengths and Capabilities

Core Areas for Investment: Large shopping centers, modern grocery distribution, hypermarkets, supermarkets, retail and mixed-use real estate development.

Growing Domestic Market: Average annual GDP growth of 4.2% is predicted by BMI until 2015. With the population increasing to a forecast 88.2 million people by 2015, Retail GDP per capita is expected to rise by 70.0%, reaching USD 4,957.

Retail Greenfield: Still populated by micro enterprises, the Egyptian retail sector is a Greenfield for investors. 70% of the grocery retail sales were from non organized and independent enterprises in 2007; this number is expected to fall by 7% in 2017. The top five retail players hold only 1.8% of total market share, leaving plenty of The value of the retail seg- space for new market entrants, while regional centers outside of Cairo and Alexandria ment is forecast by BMI to are virtually untouched markets with millions of under-served consumers. grow by 63.4% in local cur- Growth Potential: The global retail development index ranks Egypt 15th in the rency terms over the review world in terms of growth potential and second in terms of low market saturation. And period, from an expected EGP with the retail market increasingly saturated in previous key growth countries such 223.82 billion (USD 41.22 billion) in 2013 to EGP 365.73 as China and Russia, retailers are turning to the Middle East for new opportunities. billion (USD 67.35 billion) by Egypt’s location is good for trade as it has access to the Mediterranean and the Red 2017. Sea, not to mention the Suez Canal that connects Europe with Asia.

Low Cost Base: The Egyptian labor force is internationally recognized for its high-skills and low-cost. Wages in the wholesale and retail sector average USD 32.20 weekly. Every year, more than 324,000 university graduates enter the workforce, manual labor is in abundant supply, and high school graduates speak European languages. Businesses in Egypt also enjoy some of the lowest energy costs in the world, while the domestic building materials industry - including cement and steel producers - are amongst the world’s cheapest suppliers, making retail space affordable.

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Strong Policy Support for the Retail Industry

The Egyptian government has proven its commitment to improving the ease of doing business in the country, which was reflected in recent tax reforms and the cutting of red-tape for foreign investors.

The government is looking to develop an efficient retail environment supporting various sectors of the growing economy.

To this end, it sees itself as a key strategic partner in the coordinated development of Egypt’s retail sector and is keen to attract foreign investment to enhance competition and modernize the retail environment.

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Metro Supermarkets GB Motors As a Mansour Group company, Metro The largest Egyptian automotive supplier by sales reve- supermarket was introduced in Egypt nue, market share and production capacity is Cairo-based in 1998. The first branch was opened in GB Auto, which has regional reach in the Middle East and Khalifa Al Ma’moun, Heliopolis. Since its North Africa. It is a holding company for a diversified operation in the Egyptian market, the group of subsidiaries which are involved in the assembly chain has expanded now to 43 branches covering Cairo, import and distribution of Hyundai passenger cars, and Giza, 6th of October, Helwan, Alexandria, Mansoura, Is- the distribution of imported and locally assembled Volvo mailia, Sharm El Sheikh, Hurghada and Port Said; and Cars, Mitsubishi Motors, Hyundai Motor and Ghabbour more stores are to be opened soon to meet the growing commercial vehicles, as well as retail sales of Bajaj two- needs of our diversified customers. and three-wheelers.

Carrefour HyperOne • Carrefour Egypt started fully • USD 17.6 million in sales at two stores functioning at the end of 2002 and with an average sales area of 10,000 m2. the other stores opened thereafter. • Owned by Egyptian retailer El-Hawary. • International company operating with regional partner • More discount oriented than Carrefour, targeting aver- Maijd Al-Futtaim Group. age and lower income. • Market leader, driving trend towards hypermarket shop- • Located outside central Cairo. ping in Egypt.

• Carrefour plans to be operating 17 hypermarkets and 70 supermarkets in Egypt at the end of a five-year development plan to 2014.

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Automotive Industry in Egypt dated back to 1951, when Ford Motor Company established an assembly factory in Alexandria. The earliest beginnings of the Egyptian automotive industry date back to the year 1960. During the socialist era, the government pledged to transform the country from an agricultural economy to an industrial one, and the first completely Egyptian car was produced. Egypt’s large population makes it an attractive market for manufactured goods given robust consumer demand, which is set to increase with the pace of expansion in the overall economy and per-capita income levels. The automotive sector is one of the most important and critical sectors of the Egyptian economy. If one places it on the MENA map, Egypt has a long way to go compared to Turkey, however compared to Morocco, Egypt has a market double the size though very similar in its characteristics. In 2013, Egypt was the third largest car-producing market in Africa, after South Africa and Morocco.

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Competitive Strengths and Capabilities

Core Areas for Investment: Passenger Cars, Local parts supply, Bus- es, Trucks, Commercial Vehicles, Motorcycles.

Largest Trained Workforce in the Region: The labor pool is expanding, as Egypt possesses a large skilled labor force of 18.5 thousand engineers and technicians that graduated in 2011/2012.

Preferential access to Key Global Markets: Egypt has access to large key markets through various multilateral and bilateral trade agreements with the USA, European, Middle Eastern and African countries; which secures benefits to Egyptian-based producers supplying these markets.

Large consumer market: Egypt’s large population makes it an attractive market for manufactured goods given robust consumer demand, which is set to increase with the pace of expansion in the overall economy and per-capita income levels.

Feeder Companies Abound: Around 30 assembly plants churn out models from international brands such as Ger- many’s BMW, Korea’s Daewoo, the US’s Jeep and France’s Citroen to meet rapidly increasing domestic demand. In addition, local subsidiaries of brands such as Nissan and BMW are expanding their operations to better use Egypt’s competitive advantages as an export location.

• Car sales in Egypt rose by 43%, to 17,463 units, in January 2013. Automotive • Total Exports of vehicles and cars component products during Jan - June 2013 reached USD 489 million, representing 4.2% of total exports.

• As of July 2013, the automotive industry consisted of 509 companies operating inland with total investments of USD 1.3 billion, and 19 companies operating in free zones areas with total investments of USD 45.88 million.

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Master Plan 2012/2013 Automotive Sector

Egypt has one of the few production bases in the region, Strong domestic production industry: 65% of units sold are Egyptian built. So Automotive sector aims to reform the Auto sector through new strategy:

• Egypt must attract a diversified base of automotive component foreign direct investment on the basis of low labour costs and other advantages. These companies will bring skills and technology, further strengthening the Egyptian automotive industry and increasing its integration with the global automotive industry. They will also contribute to Egypt’s exports and its reputation as an automotive location. • Egypt must develop a viable vehicle assembly sector, producing for both the local and regional markets. This will require international automotive companies to select Egypt as their regional base for assembling specific vehicles and models. • Egyptian component companies must free themselves from their dependency on the local market, including both assemblers and aftermarket. The most promising companies must move beyond their domestic status to become independent, modern and internationally active suppliers. • Egyptian bus companies must build upon their current skills to become more efficient and cost competitive, making Egypt a leading country in the region for bus production.

Objectives of Automotive sector plan for 2012/2013:

• The government is seeking to maintain a balanced tariffs that leads to growth. • Improving the quality of locally produced parts to encourage the production growth. • Prepare capacity building program for the industry personal.

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General Motors Egypt (GM Egypt) tic market and export markets in the Middle East, Africa GM started assembling vehicles in Egypt in and Eastern Europe. 1985. It produces light commercial vehicles, Opened in 2000, the plant has an annual production ca- light duty trucks and passenger vehicles. pacity of 3,200 buses per shift and a daily production Since 1975, Al-Mansour Automotive, a pri- capacity of six light trucks and four medium or heavy vately held subsidiary of the Mansour Group, has been trucks. MCV exports to 29 countries, including the UK, one of Egypt’s largest importers, distributors and retailers South Africa, the UAE, Algeria and Sudan. It has also set of vehicles. In 2001, the company attained exclusive dis- up a JV with the Cuba’s Transport Ministry. MCV has 2,000 tributorship of GM products in Egypt. employees. GM Egypt has started manufacturing the Chevrolet Move car at its facility in “6th of October” City. Production of Toyota Motor the Move car will use kits supplied by GM’s Chinese joint Toyota Motor operates in Egypt through venture “SAIC-GM-Wuling”. marketing company Toyota Egypt. Estab- GM has invested USD 10 million in developing and in- lished in 1979, the unit serves as the sole stalling new tools at the facility to support plans to make local distributor for the group’s cars, commercial vehicles almost 5,000 vehicles a year for the Egyptian market. GM and spare parts. will start production of the sixth generation of the Isuzu Toyota Egypt has two affiliates: Toyota Automotive Indus- KB range in Egypt in the second half of 2013. tries Egypt SAE, which is dedicated to the service centers, with the main centre in “Abassia” zone and the other un- Manufacturing Commercial Vehicles Company der construction in “Giza”; and Toyota Misr SAE, which (MCV) sells passenger cars, commercial vehicles and brand Manufacturing Commercial Vehicles spare parts. Company (MCV) was established in In April 2012, it was revealed that Toyota launched the 1994 to represent Mercedes-Benz in first production line for its “Fortuner” sports utility vehicle Egypt’s commercial vehicle sector. The company’s plant in at Egyptian carmaker Arab American Vehicles Company “Salheya” zone produces buses and trucks for the domes- (AAV)’s Cairo plant.

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Nissan Motor Established as a joint stock company in March 1995, Nissan Egypt manufactures and assembles the group’s passenger cars, commercial vehicles, SUVs, buses and minibuses, as well as spare parts and components. The company has an annual production capacity of 30,000 units and employs 580 staff. The actual production volume is 5,000 annual units, with the Sunny, Maxima, Patrol and Pathfinder in its core product range.

Nissan acquired the production operations of former agent Modern Motors in 2004 and plans to invest USD 100 million in the facility. The plant produces pick-up trucks, but will be adapted to manufacture the Sunny sedan and X-Trail SUV.

Ghabbour Auto Over the past six decades, Ghabbour Auto has thrived under the leadership of one of Egypt’s visionary business families, transforming itself from a family operation into a leading regional automotive producer and distributor, guided by world-class executives with proven track re- cords locally, regionally and internationally. Ghabbour Auto represents and partner with some of the world’s leading automotive brands, including Hyundai, Geely, Mazda, Volvo, Mistubishi, Marcopolo, Iveco Irisbus, Bajaj, Lassa, Yokohama and Westlake.

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Healthcare

Egypt has a long history in healthcare and medical practice, which dates back to Pharaonic times. In recent decades, the country has achieved several improvements both in health indicators and healthcare provision. The healthcare system in Egypt is dynamic and involves great complexity which incorporates both the public and private sectors of the health insurance market. Healthcare services are provided by three main sectors, the government, the public sector, and the private sector. The Egyptian government has undertaken an ambitious reform of the national healthcare system, to build on a reputation as an excellent source of healthcare in the region and as a major destination for both health tourism and investment. As a result the government pledged to involve the private sector in every aspect of the economic reform process, the healthcare sector is well positioned for a healthy expansion.

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Competitive Strengths and Capabilities

Core Areas for Investment: Private hospitals, health tourism, elective procedures, pharmaceuticals, continuing education programs, platforms and software, Healthcare rural healthcare.

Largest Trained Workforce in the Region: With an annual average of 10,000 graduates from medical schools, Egypt produces more doctors and pharmacists than any other country in the Middle East.

At 27.2 million as of Q2 2013, Egypt’s workforce is the largest in the Arab world and • In 2012, Egypt recorded 8.0 the second largest in the MENA region, after Iran. physicians and 14.2 nursing staff, in addition to 1.4 den- Ongoing Training and Networking: Egypt’s healthcare workforce has an ex- tists, and 2.6 pharmacists cellent reputation in the region for high quality standards and experience. Medical per ten thousand citizen. personnel have access to state-of-the-art training programs from such companies as • No of Healthcare units are Intel and Microsoft, while networking and chat sites allow knowledge sharing. Ad- recorded 5,263 and no of ditionally, Egypt’s doctors have access to online medical journals, allowing them to beds in hospitals reached keep up-to-date on the latest medical innovations. 128,47 in 2012.

High Doctor to Patient Ratio: In 2012, Egypt recorded 8.0 physicians and 14.2 • As of June 2013, the healthcare industry consisted of nursing staff, in addition to 1.4 dentists, and 2.6 pharmacists per ten thousand 2062 companies operating citizen. inland with total investments Upgrade of the National Healthcare System: The government’s plan to over- of USD 1.86 billion. haul the national universal healthcare system will drive new traffic to more than • Total Exports of pharmaceu- 1,607 hospitals and will create additional opportunities for investment, particularly tical and healthcare prod- through the PPP program. ucts during Jan – June 2013 reached USD 231 million, representing 2% of total exports.

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Healthcare Master Plan 2012/2013

Healthcare policy aims to reform the healthcare system and health insurance through the program “Health Insurance for everyone”.

Health strategy focuses on:

• Development of health insurance financially and administratively. • Establishment of family healthcare fund in different governorates of Egypt. • Covering all citizens who are not covered by the current health insurance system. • Expansion of primary healthcare units in all provinces. • Development of public hospitals and health insurance in a manner consistent with the development of insurance systems.

Objectives of healthcare plan for 2012/2013:

• Increasing of life expectancy average to 72.2 years for females and 69.1 years for males. • Reducing child mortality rates of infants and newborns and children under the age of five as well as reducing maternal mortality rates. • Increasing the number of beneficiaries of the health insurance from 52% out of whole population in 2006/2007 to 58% in 2012/2013. • Developing 26 hospitals in 2012/2013.

Target Investments 2012/2013:

Investments in the health sector in 2012/2013 plan are estimated to be EGP 7.6 billion, including about EGP 4.6 billion invested by the public sector and about EGP 3 billion invested by the private sector.

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Success Stories

Misr International Hospital Cleopatra Hospital Misr International Hospital is a joint-stock company, capi- Cleopatra Hospital has received her first patient in 1984. talized at EGP 60 million. Its shareholders include 160 The services focus on two major aspects, clinical excel- university professor and doctors specialized in all fields of lence ethical conduct, in a cost effective single source medicine, the Egyptian banking sector and a number of solution. Egyptian, arab and foreign investors. This is attained by very close collaboration between the Hospital many consultants holding honorary chairs and The purpose of the company is to establish an interna- senior lectureships in the university. The new building tional hospital in accordance with the highest standards of which was annexed to the hospital early 1999 is a mate- technology and equipped with the most modern and up- rial testimony to a success story. Keeping that momentum to-date methods of diagnosis and therapy in all fields of looking to further progress we intend after crossing to the medicine .It is provided with the latest western scientific new millennium. equipment from Europe and the United States. Arab Contractors medical Center Dar Al Fouad Hospital Arab Contractors medical Center has been established in Dar Al Fouad Hospital was founded in 1995 and special- 1981 by Arab Contractors Company (Osman Ahmed Os- izes in a number of fields, including cardio¬thoracic sur- man & Co.). gery, oncology and organ transplants. Arab Contractors medical Center has been launched as a leading healthcare provider in Egypt, focusing on pro- The 42,000 square meter hospital in Sixth October City viding quality medical services, compassionate care and was built in collaboration with Cleveland Clinic Interna- state-of-the-art technology. The unique location on the tional and is renowned for providing high-quality care in top of a widely green hill and the physical design of the state-of-the-art medical facilities. hospital set us apart from others. The hospital is 350-bed, ranging from economic up to Dar Al Fouad Hospital provides the highest quality and luxurious suites. It has been submitted to successive safest healthcare in Africa and the Middle East. The hos- stages of development including the buildings, technol- pital is renowned for its cardiothoracic, cardiology, oncology and equipments, work procedures and information ogy, organ transplant, and orthopedic departments. technology.

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GlaxoSmithKline (GSK) GSK operates in Egypt through its The company has opened 60 labs throughout Egypt and 91%-owned subsidiary GSK Egypt, 14 labs in the Middle East. Throughout the years, the which employs around 1,500 staff. company has served 17 million patients and carried out The subsidiary, established in 1990, 50 million laboratory tests all over Egypt. It was recently principally manufactures ethical drugs, but also markets the subject of a highly profitable private equity takeover. and distributes other pharmaceuticals products and toi- letries.

GSK was listed in Egypt in 1985 and has a market capitali- sation of EGP 1.55 billion (USD 266.45 million). The company has more than USD 100 million of investments in Egypt. According to IMS Health data for September 2009 MAT, GSK ranked first in Egypt, with an 8.7% value share of the market. GSK’s main activities in Egypt are manufacturing, packaging, marketing, selling and distributing GSK products.

GSK Egypt also imports and distributes a range of its par- ent company’s products that are not manufactured in Egypt.

In addition, GSK Egypt manufactures a range of products under licence from other pharmaceuticals manufacturers. GSK’s production capacity in Egypt equates to approximately 107 million medicine units per year.

Al Borg Laboratory Al Borg Laboratory was established in 1991 as a shareholding company and is now the largest private laboratory in the Middle East.

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Published by : General Authority for Investment and Free Zones (GAFI) The Arab Republic of Egypt

www.gafi.gov.eg

Publication Team Design Hanaa Dakroury Akram Emara Rabab Marie Hanan Saad Rasha Makhlouf Akram Emara

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