Future of company is in setting up cities, El-Mehdi says
CAIRO: Siemens’ approach to Egypt focuses on the country’s human capital, the company’s President and CEO in Egypt Mohammed El-Mehdi said in an exclusive interview with The Daily Star Egypt.
“Siemens must play a bigger role in Egypt in the area of human capital, he said, citing areas such as engineering, IT and the training of blue and white collar workers.
El-Mehdi added that “the aim is to make a bridge between Europe and the Arab countries and Africa, exporting goods and know-how to countries around us.
He talked of how Europe has an aging population and needs expert labor in specific fields and how Egypt can fill that.
When queried on Europe’s stringent immigration laws and how that can be an impediment, El-Mehdi said: “We will not be able to change immigration laws in Europe. Germany and France have demand for expertise in certain fields. But if we can be a bridge to these nations, we don’t need to send anyone. We can play that role.
He added that exchange of experience was, however, open to Siemens customers and employers.
This human capital-based market plan differed from Siemens’ market plan for other countries. “We have a split approach in that respect. We have countries that are major players in the manufacturing side, such as India and China, he said.
El-Mehdi said that Egypt is facing a specific set of challenges, and with cooperation with all facets of the economy and government, these challenges can be met head on.
“The intention is to cooperate. The challenges for Egypt are clear: infrastructure and people. Expertise with political will and financing will deal with existing problems, he said.
And the challenges are numerous. El-Mehdi pointed to several areas in which Egypt faced challenges that must be dealt with. Additionally, he urged for further reform while praising the efforts that have been made in this domain till now.
“Tax reform is very effective. We still need restructuring of the logistics area [transporting goods, where delays raise costs] and the financial environment. Logistics must be streamlined and speedy. Customs still need some reform, El-Mehdi said.
He added: “For the financial environment, we have a multitude of multinational banks that are not working in the same streamlined way they work abroad. There are issues in credit approval, in financial transactions, there is too much paperwork.
Transport was also an issue El-Mehdi felt needed to be addressed more thoroughly. “Can someone start analyzing how our GDP can increase by maybe 0.3% or more if we can save some time on the street?
El-Mehdi felt that Siemens could contribute to facing these challenges.
“We see challenges to Egypt. On the demographic side, there are a lot of young people coming into the job market, he said, “and also in infrastructure challenges, where we come to the focal point in which Siemens is coming into a bright future: how to set up a city.
Forty percent of all electricity in Egypt is supplied by Siemens machinery. Half of Cairo’s electricity is powered by Siemens and 50 percent of the world’s total population now resides in cities and urban areas.
“We have knowledge in different areas, El-Mehdi said. “Power is one of our strongholds, transport too. Also, the water supply needs to be addressed: a valuable resource which needs to be managed effectively.
He added: “We would be able to support all this. Our portfolio is a comprehensive cover for these challenges.
The Siemens Egypt head did praise government efforts in creating an environment where these challenges can be met.
“There is a clear government strategy to that; it’s not a haphazard approach. We have the IMC [Industrial Modernization Center] with funding from the EU. It’s a win-win situation and the process is transparent, he said.
Siemens signed an agreement with the IMC and the Industrial Training Center (ITC) last February to set up 50 vocational training centers in universities and vocational schools across Egypt.
On this agreement El-Mehdi said “[Egyptian Prime Minister] Ahmed Nazif is aiming to create 600,000 jobs a year. It’s a huge challenge. Globalization is hitting all countries. In that approach, what is set currently will change. How do we compete in that arena and how do we raise the skills of Egyptian workers? You need to have modernization in industries, some are up-to-date, but some are not. If we don’t modernize in these industries we are set to fail.
“You can’t play the game alone, he said. “If we are not competitive enough, we will fail. So training the people on how to analyze industries, bring them up to scale to compete and how to set up skills, this is the arena we are working in.
As for the training centers themselves, El-Mehdi said that Siemens is setting up a full program which would train 1,000 technicians.
“On the engineering side, I’m not that pessimistic, but we have a black hole in the area of technicians, he said.
El-Mehdi talked about creating a middle ground between white collar and blue collar workers. “We can’t create 600,000 white collar jobs. We are on the right track, but we need to bring about more reform.
Siemens also agreed with the IMC to upgrade machines in 50 factories across the board, in sectors ranging from chemicals to textiles.
On the upgrading process El-Mehdi said: “We have to upgrade factories in various industries to be able to compete. Egypt must compete on the regional level at least.
He referred to this upgrade agreement as a “small step in the right direction , adding that “you have to do a lot of small steps; it’s about consistency. The government and IMC must not stop.
“There is no pause in this game.
