Interviews – Daily News Egypt https://dailynewsegypt.com Egypt’s Only Daily Independent Newspaper In English Fri, 23 Jun 2017 13:32:56 +0000 en-US hourly 1 Herzone for e-commerce aims to enter Saudi Arabia next year https://dailynewsegypt.com/2017/06/21/herzone-e-commerce-aims-enter-saudi-arabia-next-year/ https://dailynewsegypt.com/2017/06/21/herzone-e-commerce-aims-enter-saudi-arabia-next-year/#respond Wed, 21 Jun 2017 06:00:46 +0000 https://dailynewsegypt.com/?p=629765 We plan to deploy our services in the Middle East, North Africa, and the United States, says Hassan

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Herzone, a website specialised in e-commerce for women’s products, plans to expand its operations by entering the Saudi market next year. The company also plans to expand its operations by launching in Middle Eastern and North African markets, as well as that of the United States of America.

Diaa Hassan, chairperson of the company’s board of directors, said during an interview with Daily News Egypt that the company also aims to increase the number of exhibitors and shops to 200. Hassan pointed out that the company is also working to negotiate with a venture capital fund to obtain an investment in order to finance the company’s expansion.

Your site is primarily geared to women. Why is that?

Our website is primarily geared to providing women’s needs through the internet, but there are some products for men.

Statistics show that in Cairo alone, 5.8 million women use the internet and social network platforms. This indicates a strong presence of women on the internet, and this creates an investment opportunity in the market.

What are the main challenges facing you in Egypt?

The weakness of internet speeds in some areas makes the online shopping experience difficult for many customers, which is a major challenge in the growth of the electronic commerce industry. In addition, there is a proliferation of the parallel market for electronic commerce through Facebook pages or unsafe electronic commerce sites, which causes clients to have bad experiences that make them reluctant to use e-commerce again.

How can a consumer differentiate a safe website from one that isn’t?

This is easily seen through the URL. A safe site will have a URL starting with HTTPS, which indicates that the website is safe to visit. This is present in many e-commerce websites in Egypt.

What are the most prominent products offered through your site?

We have many products, such as electrical appliances, clothing, bags, shoes, and healthcare products for women, accessories, and mobile phones. We have 50 exhibitors on the Herzone platform now, and we plan to increase the number to 200 by the end of the year.

What is the basis on which products are selected?

We have two types of products, one of which belongs to well-known brands, while the second type includes those of small enterprises and workshops. The first type is supported by the company’s guarantee and trademarks. The other type, we test and make sure the exhibitor owns a commercial record and a tax card for the product.

In addition, the purchase process is made online, but the payment process is made after the receipt of the product (cash on delivery). This enables clients to check the product when it arrives before paying for it. We ensure all legal rights to our clients, and they can return or replace the products within 14 days of purchase.

How many visits does your website get now?

The website is quite young, yet we have been seeing 120,000 visits per month. Purchases made reached 3,000 transactions in March during Mother’s Day. Average monthly purchases range around 1,000 transactions. We aim to boost the purchases to 3,000 per month by the end of the year. It’s worth noting that, based on our indicators, about 27% of visitors who used the website have used it again.

How many logistics centres do you have?

Currently, we have two centres, one in 6th of October City and the other in Moqattam. Through the centres, the products are divided and packaged according to the destination to be delivered.

What is the geographical distribution of your customers?

At the beginning of our work, we expected to have the bulk of our users located in high-end areas where women use Facebook and the internet intensely. But, after a few months in, we found out that the opposite is true, where most of our clients are located in low-class areas.

Cairo has the largest share of our sales, but we sell very well in Alexandria, Suez, the Nile Delta, and Upper Egypt.

Currently, we deliver the products by ourselves through our fleet, as well as two contracted shipping companies. The shipping time does not exceed 72 hours now, but we aim to bring it down to 48 hours at most.

Do you have plans to launch an application for the site?

The application for the site has already been created and is expected to be launched over the next few days with huge discounts to encourage customers to use the application. It will be available on devices operating iOS and Android.

For the electronic commerce system, what is missing?

The system needs to be further regulated. It is necessary to eliminate the parallel market for electronic commerce, as it damages the market and gives customers a bad experience.

Moreover, there are not enough financiers to fund existing projects. For example, banks do not finance such projects, which is a major obstacle. Existing business incubators are also suitable for the conversion of ideas into projects. Financial institutions that help existing enterprises to grow more efficiently are very few.

How do we overcome this problem?

The Ministry of Communication and Information Technology needs to establish a financing body for investment and financing projects for the sector.

Are there negotiations to receive investments from investment funds?

We are already in preliminary negotiations with one of the venture capital funds in the United States. There were simple talks about the website’s specific details.

Are there negative effects of the decline in purchasing power of the Egyptian consumer?

Indeed, the past period witnessed a decline in the purchasing power of many Egyptian consumers. However, the measures that have been taken will help improve the situation in the coming period. The Egyptian market has more than 90 million consumers, of which 50% use smartphones. The market can absorb many players in the e-commerce market because it is a virgin market.

Egypt’s e-commerce market is also a good growth opportunity when compared to other markets. For example, in England the number of online buyers is three times larger than the number of traditional shoppers. In the United States last year, during Black Friday, there were 10 million online purchases—more than were done in shops.

What are your plans for expansion during the coming period?

We plan to expand into the Saudi market in 2018 and head to the US market in the coming period. We also plan to operate in North Africa and the Arab world.

What distinguishes you from your competitors?

We are distinguished by providing sophisticated customer service throughout the day, and we have more than 500 exclusive products. This happened even though we just launched six months ago.

What are your plans for the Egyptian market?

We aim to denominate a large market share before the end of the year, but we find it difficult to announce that share now. We also plan to reach 100 sales per day by the end of the year and 1,000 sales per day by the end of the coming year.

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Kazyon to take number of opened branches to 300 by end of 2017: marketing head https://dailynewsegypt.com/2017/06/20/kazyon-take-number-opened-branches-300-end-2017-marketing-head/ https://dailynewsegypt.com/2017/06/20/kazyon-take-number-opened-branches-300-end-2017-marketing-head/#respond Tue, 20 Jun 2017 06:00:36 +0000 https://dailynewsegypt.com/?p=629636 Ramadan offers started mid-April and will continue until the end of the holy month, says Ismail Hafez

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As is the case with several sectors in the Egyptian market, the retail sector is facing challenges in light of the economic fluctuations and the increasing inflation and interest rates. Discount supermarkets are no exception. However, Kazyon, one of the largest discount supermarkets in Egypt, is handling fluctuations positively, especially in Ramadan where it provides its customers offers throughout the holy month and even a while before it started.

Daily News Egypt sat with Kazyon’s marketing head, Ismail Hafez, who said that despite the difficulty of the challenges, the market will eventually overcome them. Hafez said that his supermarket is expanding and will continue to do so over the upcoming months. By the end of 2017, Kazyon is expected to have a total number of 280-300 branches, especially with its ability to open up to 10 new ones every month, according to Hafez.

Daily News Egypt sat with Kazyon’s marketing head, Ismail Hafez

What are Kazyon’s offers in Ramadan for its customers to help them cope with the increased prices of goods during the month?

First of all, I must note that to us, the season of Ramadan is not just exclusive to the month itself, but it also includes the several weeks ahead of it. Our offers to customers started in mid-April to include May, all the way to June.

We have a diverse group of offers and discounts on the basic goods we sell, and we are proud to say that our prices are highly competitive and that our sales are good, especially with the Ramadan cartons, which are being very well received by customers.

What makes Kazyon distinctive among other hard discount supermarkets?

First, Kazyon is almost present everywhere, now with its large number of branches. This means that we are close to any of our customers’ homes, workplaces, and basically any place they regularly go to. We serve about 500,000 customers monthly, and customers pay us visits within the range of 1.5 million to 2.5 million visits every month. The quick spreading of our branches has enabled us to create a large customer base.

Second, Kazyon offers its customers the main commodities they look for, but for relatively low prices compared to our competitors in the market. We always aim to have the lowest prices all year long, not just during certain seasons, and this has certainly attracted a large number of customers over our three-year presence in Egypt.

Do you think that the initiatives taken by the government such as Ahlan Ramadan are fair competition to you, or are your sales negatively impacted?

I find such initiatives by the government very beneficial. After all, the aim of these initiatives is to control and regulate prices and help deliver the basic goods to citizens for reasonable prices. Communication usually takes place with supermarket chains before such competition exists, and they are given the choice to either take part in these initiatives or not.

How are you impacted by the inflation rate?

Currently, we are not impacted by this inflation as it took place only very recently. So far, we have no changes in our prices. I also believe that not much will change in our business. However, I expect that investments in Egypt in general may be negatively impacted as investors will have to think a lot before opening a business in Egypt with the current inflation rate. Of course, businesses will suffer from this rate and will have their sales impacted because when there are high prices, there is less demand, but markets eventually accommodate such changes. Currently, specific segments of customers are having a difficult time take in all the fluctuations in prices, so they resort to either switching to a brand of a lower price.

How does the increase in interest rates affect your business?

We are not really affected. However, when increases in prices take place, this is mostly beyond our control. Our role as retailers includes displaying the goods provided by suppliers. We have a goal to achieve a specific profit margin and deliver products of a good quality and reasonable prices to citizens, but as a supermarket chain, I cannot control prices, because they are up to manufacturers to decide.

What we try to do in Kazyon is absorb increases in prices if we sense that they may be passing. In that case, we deal with the price increase from our side through not increasing the prices for consumers, especially when it comes to basic products such as sugar, oil, and the like. In cases like those, we wait instead of increasing prices right away in case the increase is actually temporary due to perhaps a shortage in the product in order to not shock consumers with unexpectedly increased prices. This might impact our profit margin sometimes, but we are okay with that if this happens for a month so that we don’t burden consumers. But the case is different for more luxurious products whose prices we increase right away.

When prices do increase in cases where you cannot absorb them, how does this impact your work?

In most cases, we can absorb these increases or avoid them altogether. This is mainly the result of our prices being much cheaper compared to the prices in other markets, and this is our main goal. Even when prices do increase, our prices are still considered acceptable with a high quality, and this is our main goal.

Our prices are incredibly competitive, making our customer loyal to Kazyon. They rely on basic goods, and this is what we mainly sell at Kazyon. In some cases, consumers are more sensitive to any changes made in prices, and they try to look for cheaper alternatives, and even then we provide them with this alternative in the form of low-priced products.

It is also worth mentioning that prices of products across Kazyon in all governorates are the same. This means that even when a problem or shortage of a specific product takes place for any reason in any governorate, our prices remain unchanged even with a lower supply and a higher demand.

However, Kazyon, one of the largest discount supermarkets in Egypt, is handling fluctuations positively, especially in Ramadan where it provides its customers offers throughout the holy month and even a while before it started

What are your most recent expansions?

In May, we had about five new branches open, which takes our total number to about 200 across 14 governorates across the country, with the most recent ones opened in Giza, Tanta, Alexandria, and Mansoura. We open on average about 8 to 10 branches every month, and sometimes we open only four depending on circumstances.

What is your plan for future expansions over the upcoming period?

We plan to have about 280-300 branches opened by the end of this year. We will be present in the same number of governorates but with more branches in each. For example, we have 18 branches in Alexandria so far, and we aim to take the number to 25 branches.

Do you have a plan to increase your capital or offer shares in the stock exchange?

Increasing capital is never off the table. We have already increased our capital before, and that resulted in total investments worth EGP 800m, and the amount is constantly increasing.

Regarding offering shares in the stock exchange, we do not have a plan to do this now.

In your opinion, what does the retail sector in Egypt currently need in order to improve and grow in light of the current circumstances?

The only challenge we face in retail, although this is significantly becoming less of a problem, is finding a proper location then obtaining licences and permits to start operation in it. If the procedures of permits were facilitated, this will allow retail to expand better on a wider scale.

Other challenges include road networks. Many trucks carry our products on a daily basis to our warehouses in 10th of Ramadan City and 6th of October City, so if road networks improved, this would help deliver more products every day and improve our overall performance. However, several new roads and bridges were recently established and have certainly facilitated the transport of our products.

What is your opinion of the current investment climate in Egypt?

I believe it is improving, which has already been proven to be true by many international institutions that issue reports noting that investments might be flowing more steadily into Egypt. There is relative stability, and the reports are more positive right now, sending assurance messages to investors. After all, investors want to make sure their investments are not in danger. There were predictions over the past period that the dollar will increase, but the rate the dollar is currently standing at is actually good in my opinion. While this might not be the most suitable rate the dollar can reach for businesses in Egypt, I personally believe it will continue to improve over the upcoming period.

Dollar rate fluctuations affect importers and manufacturers the most when it comes to pricing, and it makes any decision-making difficult for them. This repeatedly happens now with the constant changes of the Egyptian pound’s value.

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Market is in need of good security solutions: sales and customer support director at Trend Micro https://dailynewsegypt.com/2017/06/14/market-need-good-security-solutions-sales-customer-support-director-trend-micro/ https://dailynewsegypt.com/2017/06/14/market-need-good-security-solutions-sales-customer-support-director-trend-micro/#respond Wed, 14 Jun 2017 08:30:46 +0000 https://dailynewsegypt.com/?p=628988 Company blocks more than 73,000 malicious URLs, 334,000 spam mails, 59,000 malware per month

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With challenges comes creativity. Amid the world’s increasing security threats, more companies emerge to offer tools to block these threats. One of these companies is Trend Micro Saw. Its sales and customer support director, Leonardo Bonomi, said that the market is in dire need of good security solutions, noting that many of the world’s governments have shortages in security tools.

Bonomi pointed out that his company alone blocks over 73,000 malicious URLs, 334,000 mails, and 59,000 malware threats on monthly basis.

He added that the company’s Egypt’s office is considered the biggest cybersecurity office in the market, and he highlighted that education, government, manufacturing, real estate, and technology are the top five most affected sectors.

How do you see the current local market and the opportunities for investing in the data security sector?

The market is in a real need of good security solutions, as many governmental sectors have shortages in security tools and infrastructure as well.

These shortages open up many opportunities for investing in the security sector and for raising cybersecurity talents to fulfill the market’s needs, whether for Trend Micro or many other companies in the sector.

What are the most prominent investment opportunities in the data security sector?

Investing in developing anti-malware and ransomware protections, as well as advanced threat protection solutions against targeted attacks.

What are your latest data security solutions?

Trend Micro has multiple solutions that cover different protection layers. Trend Micro has released the new “Xgen platform”, which integrates the traditional anti-malware solutions with the latest innovative protection layer, such as machine learning and behavior analysis, that’s integrated with the elite advanced threat protection solutions from Trend Micro. For data centre and cloud security, Trend Micro just released the new innovative version of “Deep Security 10” that covers all the needs of the hybercloud industry.

Why did data security solutions become necessary?

Usually in Egypt, customers or enterprises pay much attention on securing their servers and hardware environment while giving less attention to data, which is the most valuable and important thing to secure.

The data from Trend Micro Smart Protection Network verifies this fact that data security has become necessary, as we were able to block more than 1.4 million threats (malicious URLs, spam, malware) in Egypt for Q1 2017.

On average, we were able to block more than 73,000 malicious URLs, more than 334,000 spam mails, and more than 59,000 malwares per month.

What are the current challenges for the data security market in Egypt?

Lack of skilled calibers and a limited budget when it comes to information infrastructure and technologies. The unparalleled growth in investments compared to the acceleration of malware families in Egypt, such as SALITY, VIRUX, and DUNIHI, which can infect files, as well as spread through network shares and removable drives (e.g., USB sticks).

On the other hand, the budget for investments in information security still is not big enough to meet the high risk blinded threat generation. So users and organizations need to plan ahead to patch their systems regularly and set proper protocols and policies in place with regard to restrictions in shared folders and device management.

Which sectors have seen a demand for data security in Egypt?

The top five most affected sectors are education, government, manufacturing, real estate, and technology.

It should be noted that education, government, and manufacturing were also among the top five sectors in 2016. It is possible that these sectors are most affected because of the nature of their networks, which may open them to vulnerabilities like legacy systems, low restrictions, and in-house programmes that may use outdated applications/APIs.

What is your plan for the Egyptian market in the coming period?

Trend Micro is adapting a new role model scenario to help the Egyptian market to recover as we launch an elite community office for Trend Micro based in Tahrir Square.

Moving towards our vision to make the world safe for exchanging digital information, we incorporate Egypt to lead cybersecurity innovation among the region in the Middle East and Africa.

Our Egypt office is now considered the biggest cybersecurity office in the market, with our engineers that have direct contact with presales, sales, technical support centre, and threat research labs to help our customers and enterprises in Egypt to establish a solid and sustainable base of security.

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Ambitious plan to restructure public sector companies during 2016-2018: Minister of Planning https://dailynewsegypt.com/2017/06/13/minister-planning-monitoring-administrative-reform-daily-news-egypt-ambitious-plan-restructure-public-sector-companies-2016-2018/ https://dailynewsegypt.com/2017/06/13/minister-planning-monitoring-administrative-reform-daily-news-egypt-ambitious-plan-restructure-public-sector-companies-2016-2018/#respond Tue, 13 Jun 2017 06:00:43 +0000 https://dailynewsegypt.com/?p=628825 EGP 10 billion allocated to infrastructure and public utilities across Egypt during 2017/2018

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Daily News Egypt sat with the Ministry of Planning, Monitoring, and Administrative Reform, Hala El-Said, to find out more details about the measures taken by the government in its economic reform programme and about her expectations of the future of the country’s economy. The minister asserted that she is optimistic about the Egyptian economy’s performance in the coming period and that Egypt is on the right track.
Your plan included new social protection measures for the families most affected by the reform. What are these measures?

One of the main objectives of the reform programme recently adopted by the Egyptian government is the effective reallocation of resources and the strengthening of social safety nets by targeting the poorest households and the most marginalised people.

Accordingly, the government has worked on reviewing the databases related to social programmes as well as developing them technologically to effectively reach targeted groups.

The Takaful and Karama programmes currently covers about 1.7 million families (more than 6 million Egyptians in total) from the country’s poorest and most vulnerable. The funds allocated to both programmes increased to EGP 2.5 billion on 29 May 2017.

It is worth noting that Takaful is an income support programme for families with children who are up to 18 years old, designed to produce human development outcomes. This entails commitments to families regarding child health and nutrition for children aged 0 to 6 years, school enrollment, and 80% attendance for children aged 6 to 18 years, and maternal care for pregnant and lactating mothers.

On the other hand, Karama is a social inclusion programme for persons who cannot work, specifically the elderly aged 65+ and persons with disabilities. The programme is designed to provide social protection and a decent life to the most vulnerable people.

The government is also expanding on Social Housing Projects to enable low-income and poor citizens purchase decent housing facilities. Based on the 2017/2018 plan, the government aims at establishing 250 thousand housing units.

You talked about the fact that population growth in Upper Egypt is one of the highest worldwide, which is killing development. What are your plans to control it? Are you enacting legislation to regulate that matter with parliament?

The “Sustainable Development Strategy (SDS): Egypt Vision 2030” emphasises the importance of human resource development and of the population’s contribution in generating income.

The two main important aspects of human development include the quality of health and education provided to citizens, and the distribution of the population across Egypt. In these regards, the government increased its investments in social services, namely health and education to boost human development, whereby government spending on health services increased by 15% in the 2017/2018 plan compared to the 2016/2017 plan and a 19% increase on education.

In tandem, mega projects serve the goal of achieving regional development with projects like Suez Canal Area development project, and 1.5 million acres development project. In addition, to the establishment of new cities to achieve the goal of increasing the inhabited areas by 11% by 2030.

In addition to that, the government is focusing in rural areas on awareness campaigns and is working on different incentives for small families.

the Ministry of Planning, Monitoring, and Administrative Reform, Hala El-Said
(DNE Photo)

What are your tools to curb inflation, which is currently standing at 32.9%?

The government has already embarked on many measures, with the ultimate aim of curbing inflation. These work on both the demand and supply sides.

Regarding the supply side, the government aims in several ways to increase the supply of all commodities, especially basic ones. First, it aims at increasing the domestic production capacity of basic commodities, such as oil and sugar, by doubling the domestic production of oil to reach 624 thousand tonnes in

2017/2018 and by increasing the domestic production of sugar by 80 thousand tonnes to reach a total of slightly more than a million tonnes in 2017/2018.

Second, we aim at developing the storage system to increase the storage capacity by 9 million tonnes on an annual basis to maintain a safe strategic stock of basic grains and to reduce the wastage of these cereals by 20%.

Third, there is a plan to establish commercial and logistic areas and supply chains, as the Ministry of Supply aims to cooperate with the private sector at establishing 149 commercial chains spread across 4,470 acres in all governorates.

As for the demand side, the Central Bank of Egypt (CBE) increased interest rates by 3% in November 2016, and by 2% in May 2017. This should contribute to curbing the effects of inflation on the citizen, whereby the higher interest rates will help increase the saving rates of households.

You expected the CBE would keep interest rate unchanged, but it decided to raise it by 2%. How do you see the consequences of this measure on inflation and on debt payments in the budget? Why do you think the interest rate was hiked?

The interest rate was unchanged from November 2016 till May 2017. As part of the reform process, and as part of the inflation targeting process, the CBE increased the interest rate by 2%.

Economic policies, tools, and measures could differ from one economist to the other. As a previous member of the CBE’s Monetary Policy committee (MPC), we used to discuss different macro policies and their impact on the macroeconomy at large. Each economic policy has its costs and benefits, and we usually weigh the benefits against the costs, and, in the end, we all reach a consensus on the optimum tool that would best serve the country at that specific time.

The plan targets an unemployment rate of 11.3% in the next fiscal year. What is the size of investments needed for that. What is the average cost of employment in Egypt?

The plan targets an unemployment rate of 11.8% for the fiscal year 2017/2018 based on an estimate of targeted total investments reaching EGP 646bn. Accordingly, the average cost of employment is estimated to be EGP 1.2m. This cost differs among sectors. For example, the average cost of employment in the manufacturing sector is estimated to average EGP 370,000. Whereas, the average cost

of employment in the construction, education, wholesale and retail trade, and agriculture sectors is estimated to be EGP 1.8m, EGP 2.6m, EGP 700,000, EGP, and EGP 633,000 respectively.

How will you stimulate saving? And what are the new savings vessels expected to be offered? Are we facing weak saving rates or negative saving, as the state finances the budget deficit with citizens’ savings?

The saving rate is weak, reaching 5.8% in 2015/2016, compared to an investment rate of 15%—hence, a saving gap of 9.2%. In the 2017/2018 plan, a target of 15.9% for investment rate is set, with a 7.1% savings rate. These targets are to be reached through the government’s reform programme, including the rationing of government expenditure, financial inclusion policies, and boosting economic growth, all of which aim to raise people’s income. The increase in interest rates also contributes to raising savings. The MPC decision, which sets many measures, will promote financial inclusion and hence raise saving rates.

What are your tools and financial allocations to raise the standard of living of people living in slums, disadvantaged, and dangerous areas?

The government has targets to eliminate insecure areas in 2030 and reach less than 5% of the informal settlements in urban or rural areas. Between 2016 and 2018, the government intends to develop 24 squatter settlements in six governorates, with a total of about 29,000 housing units. In 2017/2018, the government aims at developing 87 areas in 16 governorates, which includes about 57,000 housing units, at a total cost of EGP 10bn.

You talk about accelerating the pace of implementation of government investments, while we are still suffering weak implementation rates in the current fiscal year budget. What are the rates of implementation now?

The Ministry of planning is aiming at modernising the planning and monitoring process. This includes a new planning law; an automated planning and monitoring system used by all ministries, different entities, and all governorates applying for investment funding; new planning manuals; and training. In addition, we are giving priorities to the projects that are about to finish and to those that are providing services to the citizens and aiming at improving their lives.

Why should the public sector not go hand-in-hand with the private sector to lead development and growth by stimulating the private sector and restructure the public one?

The “Government Programme for the years 2016-2018” targets the development of the public sector through an ambitious plan to restructure companies, nominate new boards for the companies, adopt a monitoring system that includes performance indicators and Z-scores, and boost the implementation of current projects that started years ago. The government is prioritising the restructuring of textile companies.

We still suffer from the lack of competition and centralization, besides slowdown of the procedures for starting economic activity. How do we go beyond that to attract investment?

The government has taken several steps towards improving the business climate and attracting investment. The most important achievement is the New Investment Law, which the parliament has recently ratified. The New Investment Law provides incentives and aims at simplifying procedures. The government continues to move ahead on the economic reform agenda, including a new system for land allocation, finishing the Unified Corporation Law and activating the decisions of the Supreme Council for Investment, and creating a new entity that will consolidate all agencies responsible for developing short and medium enterprises (SMEs). In addition, it should be noted that the bold reform measures adopted by the government contribute to a more stable macroeconomic environment.

Do we have a plan that identifies the required sectoral and geographical incentives and link them to the areas in most need for development, taking into account the rate of contribution of each geographic region to GDP?

The geographical dimension of development in Egypt is mainly considered in the annual socioeconomic development plan, which aims to reduce the geographical gaps by allocating more public investments especially in the most deprived areas. In the 2017/018 sustainable development, more than EGP 10 billion are to be allocated to improve the infrastructure and public utilities in 22 governorates, in addition to EGP 2.5m that will be allocated to provide municipality services in the poorest governorates. A new vision for the development of governorates is currently prepared to empower local units to provide more efficient services to citizens.

How does the Minister of Planning explain the high interest rates on government debt instruments even though it is an investment with guaranteed return without risk?

The point of the issuing debt instruments with high interest rate is to improve competitiveness of the Egyptian economy in the world market and attracting foreign investments, and to be compatible with the interest rates on the local level. Egypt has raised $4bn in the first public bond offering in January 2017. In addition, it should be noted that Egypt suffers from a financing gap that is financed through diversified

tools, including attracting foreign direct investments (FDIs) and issuing debt instruments.

Administrative and institutional reform is a necessity. We will not attract investment, and we will not achieve development without them. Are we about to see renovation and restructuring within the government apparatus and the use of private sector leaders? How will you deal with the maximum wage?

Yes, we are about to see renovation and restructure within the government apparatus through several mechanisms, such as employing associates and experts from the private sector in the various ministries. In addition, using private sector executives as consultants in various fields, of course we are currently guided by maximum wages. We are starting outsourcing of several government services from the private sector, especially in the field of information technology and software application.

What are the preliminary indicators for the fourth quarter of the current fiscal year in terms of growth, unemployment, inflation, and foreign direct investment?

In a few weeks, the indicators for Q3 FY 201/17 and the estimates for Q4 will be issued. However, it is estimated that the growth rate for FY 2016/17 will be at 4%, and unemployment rate will be less than 12%.

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Flotation, raising interest rate sparked competition between leasing companies: Global Lease  https://dailynewsegypt.com/2017/06/12/flotation-raising-interest-rate-sparked-competition-leasing-companies-global-lease/ https://dailynewsegypt.com/2017/06/12/flotation-raising-interest-rate-sparked-competition-leasing-companies-global-lease/#respond Mon, 12 Jun 2017 07:00:37 +0000 https://dailynewsegypt.com/?p=628751 Global Lease current portfolio is approximately EGP 1.4bn, says CEO

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The government is moving towards adopting mechanisms to support the non-bank financial sectors and activities, including financial leasing, which witnessed an increase in the number of companies operating  during the past two years, besides, the emergence of many new entities in conjunction with the major projects being implemented, according to Global Lease’s CEO, Hatem Samir.

Daily News Egypt interviewed Samir to talk about the financial lease and its effect with the current economic circumstances and also its effect in return on the real estate sector.

How do the liberalisation of the Egyptian pound and the raising the interest rate by 2% affect the financial leasing sector?

The sector witnessed many challenges following the floating of the liberalisation of the Egyptian pound and the Central Bank of Egypt’s decision to raise the interest rate on lending twice a year to reach about 16% from 9%, which could seize growth rates targeted by the companies operating in the sector.

The liberalisation of the exchange rate has negatively impacted the sector because it contributed to raising the prices of equipment, which led customers to rethink and reconsider the temporary expansion plans.

However, this situation has also contributed to increasing the competition among companies operating in the market to acquire the limited operations.

The interest rate on the leasing activity reached 21%, which is the same percentage of participation with the client.

Despite the challenges, the sector faces and citizens and economy as whole as a result of the Egyptian pound floatation and raising interest rates. These steps are important to restore the stability of the economy, since raising the interest rate is necessary to control the increasing inflation rates. The Egyptian pound floatation will contribute to stimulating foreign investment and export and to the influx of foreign currency. It will also contribute to increasing the size of the labour market and economic development. The current period is difficult and will achieve positive dimensions targeted over the long term.

What are the measures taken by the government to support the financial leasing sector?

The government is taking positive steps to support and revitalise the sector and remove challenges that companies face.

For example, the Egyptian Financial Supervisory Authority (EFSA) recently announced a decision to allow leasing companies to apply for licences to do other financial activities, such as factoring [this is a financial transaction and a type of debtor finance in which a business sells its accounts receivable] and real estate financing without the need to establish separate new companies.

Moreover, the amendments on the laws related to leasing and factoring are also being discussed in the parliament, which will remove obstacles and push these activities.

What is your opinion regarding the New Investment Law?

The New Investment Law provides incentives that will achieve positive dimensions to attract domestic and foreign investments. Besides, I think it is important to promote the incentives listed in the law abroad and contracting with specialised companies to hold international conferences in order to market the law and its incentives and to present investment opportunities available in the market to attract foreign investment.

How do financial leasing companies participate in reviving the Egyptian economy?

Financial leasing companies have the greatest opportunity and more than others to lead the government’s plan to integrate small and medium enterprises (SMEs) into the formal economy, with the ability to absorb those types of projects more than other sectors.

In the past period, there has been an increase in the number of leasing companies operating in the sector.

With current challenges, companies are obliged to innovate solutions in order to increase competitiveness and attract customers. The competition between companies is to provide a distinguished service and quick completion of procedures, to facilitate customers, and to innovate new solutions.

What is the company’s expansion plan?

The company is seeking to expand its activity in the market despite the challenges that the leasing sector witnesses in the recent period that witnesses an increase the number of players in the market and the intensification of competition. In addition, the company raises the competencies of employees periodically, develops its business policy, and facilitates procedures to be in an advanced positions in the market.

Global Lease has hired international consulting firms to improve its performance and study investment in factoring and real estate financing activities. Give us details.

The company has recently hired two of the major international consulting offices operating abroad to transfer expertise and to update the company’s policies and periodically work on preparing an assessment of the public performance. Global Lease preferred to take this step early, despite the short period of its presence in the market to keep pace with the rapid developments and changes in the market.

This step will achieve the company’s effectiveness in making decisions and procedures to meet the needs of customers, and it will achieve harmony in expanding at both the customer and geographical levels.

What is the size of the company’s portfolio?

Global Lease portfolio is characterised by diversity and balance between all sectors and ratios of assets. There is no concentration in a particular sector. The portfolio includes the industrial, real estate, agricultural, service, health, food and beverage, and other sectors. The portfolio does not include the textile and tourism sectors.

The size of the current portfolio of Global Lease is more than EGP 1.4bn, and the number of banks that the company deal with now is 12.

Does the company face any obstacles in the sector?

We don’t face any obstacles so far, which reflects the strength of the company and the success of its policy in the management of activities, as well as the selection of customers with credit worthiness from the beginning, besides accurate studying for the provided feasibility study of projects, by the Research and Credit Department to preservation of assets and portfolio.

What is the size of profit achieved by the company?

The company achieved outstanding financial performance during its second year in the Egyptian market, where the profitability increased tenfold from the company’s plan, which was approved by the board of directors in 2016. Contracts were executed is equivalent to five times the target in the plan. The company was ranked as one of the top five active companies in the finance leasing sector the past year, according to the reports of the EFSA.

Does the company plan to increase its capital?

The company intends pumping a new amount in its capital worth EGP 25m, bringing the total capital of the company to EGP 125m.

What is the size of real estate share in leasing market?

The construction and real estate sector has acquired a large proportion of the granted funding through the finance lease companies recently due to the large projects being offered and being implemented either by the state or by the private sector. Further, the last period witnessed the availability of the dollar and the ease of opening credits in equipment sector which participate in reviving construction sector.

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Samsung agrees with Raya, B.Tech, Mobile Shop to have its phones paid in installments without interest or down payment https://dailynewsegypt.com/2017/06/07/samsung-agrees-raya-b-tech-mobile-shop-phones-paid-installments-without-interest-payment/ https://dailynewsegypt.com/2017/06/07/samsung-agrees-raya-b-tech-mobile-shop-phones-paid-installments-without-interest-payment/#respond Wed, 07 Jun 2017 06:00:17 +0000 https://dailynewsegypt.com/?p=628152 The Egyptian market is promising despite economic shocks: Abo Zeina

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Samsung Electronics agreed with Raya, B.Tech, and Mobile Shop to offer installments without down payments or interest. Installments will span over a period of 24 months on its mobile phones, according to the head of the company’s mobile devices sector, Hisham Abo Zeina.

He said the Egyptian market has promise despite its economic shocks, thanks to the purchasing power of nearly 90 million consumers, the majority being young people.

The mobile market has witnessed a decline in sales since the pound flotation, but indicators say that it will regain growth. How do you see the market this year?

We believe that the current circumstances are investment opportunities. We work to benefit from them to increase our investments and enlarge out market share. We are a large company and we rely on innovation. During the first five months of this year we launched several new devices from the A, A5, and A7 family, then we launched S8 and S8 Plus, so we have the ability to lead the growth of the smartphone market in Egypt, as our technological and marketing strength enable us to do so. For instance, we injected investments of more than EGP 3.5m into launching the two A phones early this year.

According to your indicators, what are your expectations for your sales this year?

We are currently moving steadily towards achieving a growth in sales compared to the same period last year, depending on innovation and the development of technology used by the company; however, I cannot mention figures currently. We expected the second quarter to witness growth compared to the same period last year.

What are your competitive advantages?

Having competitors is healthy for the market and consumers, but we mainly rely on providing high-technology phones in comparison to our competitors. We also provide products that are suitable for all price segments of local consumers, as well as accessories for sold devices so consumers feel like they get products worth the value they paid for.

We depend on the value-added services to support our sales in the market, where some major chains have agreed to offer installments on our products over 24 months without interest or a down payment. They include Raya, B.Tech and Mobile Shop.

We also entered into an agreement with Vodafone, Orange, and Etisalat to offer installments with a package to provide a data bundle on every Samsung phone.

We improved our post sales services, especially maintenance, because the current economic circumstances made more customers resort to maintaining their phones and prolonging the lives of their phones.

Currently, we are working to increase post-sale service centres across the country. We also provided the VIP service in maintenance. It allows consumers to replace their phones if any problem occurs, even if it’s a fault in the phone’s usage.

Are their plans to launch new products with medium prices?

At the end of 2016, after the flotation, we launched two new products, which are considered the cheapest with the 4G technology. Our products are characterized by diversity in terms of technology and price. We have products whose prices start at EGP 1,000, reaching EGP 16,000.

What makes the Egyptian market promising?

The population makes it promising, especially that the majority of the 90 million people are young people with more inclination to use technology. This makes the Egyptian market distinct in terms of the purchasing power.

Moreover, Egyptians are familiar with modern technology and love to own it, which also makes the market promising.

Are there agreements with mobile operators to support your smartphones with 4G?

Yes, cheap phones will be able to provide 4G. We started activating this agreement with Vodafone for the J1A and J1 mini devices. The same happened with Orange, and soon we will announce a meeting with Etisalat Misr. As for Telecom Egypt (TE), there is a technical aspect being considered with Samsung’s mother company in Korea, where there is a technical problem with TE’s networks.

What is your current market share?

It is 41.5% out of the sales of mobiles in the Egyptian market. Despite the decline in the market share, we are still number one, according to GFK indicators. The competitors with the numbers that are the nearest to us had declining growth rates over the past three months, so the gap between us is enlarging.

How do you see the usage trends of Egyptian consumers?

Egyptian consumers are distributed throughout several segments. One segment really cares about modern technology. It is the segment we target through our S8 phone, which represents a technological leap through the modern applications and solutions provided by the device.

What are the company’s target growth rates this year?

I will not be able to mention specific figures or percentages, but I will give you an example of our growth over the past period. Earlier this year, we launched two phones from the A family, and their sales achieved growth of more than 270% compared to the same A family products launched in 2016.

How do you learn about the interests of Egyptian consumers?

We carry out research in the market on a regular basis.

Some competitors choose certain features about the phone to be distinct for. Why do you not do the same?

We offer products that meet the needs of Egyptian consumers, whether in terms of technology or the features of the phone. I cannot say I am launching the phone with the best camera or such, in order to be honest with our customers.

How much money does the company spend annually on research and development?

The company has invested nearly $14.6bn in 2013 on research and development. That was the most recent figure announced by the company.

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Real estate prices may increase 80% by year end: Mena for Development Consultancy chairperson https://dailynewsegypt.com/2017/06/05/real-estate-prices-may-increase-80-year-end-mena-development-consultancy-chairperson/ https://dailynewsegypt.com/2017/06/05/real-estate-prices-may-increase-80-year-end-mena-development-consultancy-chairperson/#respond Mon, 05 Jun 2017 08:30:42 +0000 http://dailynewsegypt.com/?p=627845 After issuing the law that grants temporary residence for foreigners in return for buying property, it is anticipated that there will be a 20% to 30% export of real estate, says Fawzy

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In an interview with Daily News Egypt, Fathallah Fawzy, the chairperson of Mena for Development Consultancy, said that the real estate sector has seen growth reaching 50%, and it may show the same increase in the coming years.

What is the maximum increase in real estate units’ prices by the end of 2017?

The cost approximately increased by 30% or 40%. Furthermore, I expect an increase in petroleum materials that will see another wave of rise in prices. Thus, an increase in cost will reach a 60-80% increase, which in turn will lead to the same rise in buying prices.

Does the stabilisation of the Egyptian pound’s exchange rate participate in stablising prices?

This will be made clear in November, since a year would have passed since the flotation. Also, after a year of flotation, the state’s plan in cutting subsidies on petroleum products or other commodities related to the sector that the government considers within the economic reform strategy will also be clear.

In your opinion, why did land prices increase in the current period? In addition, is there a way to handle or offset that increase?

The government is responsible for offering lands; however, the supply is lower than the demand. Therefore, lands are offered at high prices. Furthermore, the government joins partnerships with the private sector to develop lands for building, but the government’s share is about 40% to 45%. This is a high share and, thus, puts burdens on construction costs. In my opinion, I see that the government’s share should not exceed 15%. There are some examples for these partnerships, such as Palm Hills, Mountain View, and Arabia Group.

Which areas will change the real estate “map”?

I think that the eastern Cairo region, which extends from the New Administrative Capital until Ain Sokhna, will cause a boom to the sector, especially in first homes; and it may happen in the coming 20 to 25 years.

When will Ain Sokhna become a market for first homes?

It will take a long time to turn Ain Sokhna to a first home market. I believe it might take approximately 40 years until the development and construction reaches such an area. Only then may it become a market for first homes.

What is your opinion regarding the mechanism of offering lands in the New Administrative Capital?

It is considered a successful offering, as the media is pushing for marketing the New Administrative Capital. Besides, the government pays great attention to the New Administrative Capital, proof of which could be found by the quick development in the new city and the rapid connection established between lands and facilities. Besides, the government’s announcement to move the government’s agencies to the capital gives the area attraction.

What is your expectation of growth in Egypt’s real estate market?

The sector is witnessing a boom, and I think the growth will continue because of the high demand for lands, utilities, and housing units. In recent years, the sector has seen growth reaching 50%. I think growth in the coming years will witness the same increase.

Do you expect an imminent bubble in the real estate market?

There is no bubble in the real estate market, because all real estate projects are sold off-plan. For example, say the developer builds a phase that has 10,000 units. They first offer the units and then build them, so that if the units were not sold, they would not be built—and this is why there is no bubble. This bubble means there is adequate supply and no demand. Furthermore, if the developer offered class A units without the demand to meet it, they would modify the master plan of the project to meet the demand.

Do you think the price increase in units that reached about 40% may change clients’ purchasing preferences?

This is what has already happened in the market, which pushed developers to minimise unit sizes, as the largest space offered currently does not exceed 160-165sqm. Furthermore, some companies and developers gave more options to ease payments, such as extending the payment period and decreasing the down payment.

The Egyptian pound flotation caused some troubles to some construction companies. In your opinion, how did these companies operate in that case?

Affected construction companies can handle the issue with the private developer, but the issue is really with the contractors who work with the government in its social and middle-class housing.

What is your evaluation of the government’s social and middle-class housing projects?

In the current year, the government had great accomplishments in social housing projects. I have a point of view that the government does not have the abilities to develop 90sqm units; I see it can develop social housing with 60sqm or 70sqm.

What are the opportunities that make the real estate sector remain strong?

The demand and the increase in population is the core factor that maintains the sector’s strength. The demand is close to 1m units annually. The demand on the private sector products is estimated at 100,000 units y-o-y.

By the end of 2017, what percent of properties do you think is sold to foreigners or Egyptian expats?

The Egyptian cabinet approves temporary residence for foreigners in return for buying property. Once it becomes a law, it is anticipated that there will be a 20% to 30% export of real estate.

What is your evaluation of the government’s role in the real estate sector?

The government in the current period sells lands and develops projects with prices that are lower than the developers’ projects; in other words, the government is competing with developers that had sold lands to it. I think the government has to define its role in this regard.

Shall we expect new investments in the real estate sector in the coming period?

If the government developed the partnership with the private sector to apply the general developer system, we will see more investments pumped in the sector from Arab and GCC investors, especially Saudi Arabia, as investors are specialists in developing lands and infrastructure.

Why don’t we see foreign investments, such as American or European, in the real estate sector?

Because the mechanisms of the real estate market in these states are very different from Egypt, as the mortgage system there is very effective and more flexible than in Egypt; besides, the interest rate on the mortgage system in these countries is low on grace period—approaching 20 years—while in Egypt, the interest rate is very high, approaching 25%.

What is your opinion regarding the real estate regulation?

It is good, and the most important thing is that it mentioned a specific period of project implementations according to each project’s master plan in order to avoid trading in lands and then selling them later on at a higher price. Any delay will lead the developer to pay fines.

What is the business of Mena for Development Consultancy and its clients?

The company was established a year ago, and we provide real estate consultancy to new developers and companies in order to avoid problems with low cost and achieve the projects with the same planned cost and minimal losses. Our customers are Polaris, Beta Egypt, Mabany Real Estate, Delta Capital, and Abraj Misr.

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Australian companies to participate in international bid in 2017 to explore and exploit gold https://dailynewsegypt.com/2017/05/30/australian-companies-participate-international-bid-2017-explore-exploit-gold/ https://dailynewsegypt.com/2017/05/30/australian-companies-participate-international-bid-2017-explore-exploit-gold/#respond Tue, 30 May 2017 06:00:37 +0000 http://dailynewsegypt.com/?p=627260 Egypt and Australia shared a $554m two-way trade in merchandise in 2015-2016, says Morley

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The Australian Trade and Investment Commission (Austrade) hosted its annual Australia Unlimited MENA Roadshow from 11-19 March, and several leading Australian universities, mining, and healthcare companies were represented.

Australia’s dynamic health research facilities and education providers were profiled during the fifth Australia Unlimited MENA campaign using the theme “collaborate to innovate”. For the first time, Austrade’s mining mission was the focus of the roadshow, which promoted bilateral trade, investment, and cultural ties that exist between Australia and the MENA region. Major activities took place in the United Arab Emirates and Saudi Arabia, and there were associated programmes in Kuwait, Qatar, Oman, and Egypt.

Daily News Egypt interviewed Mark Morley, a senior trade and investment commissioner, during his recent visit to Egypt to talk about the new programmes that Austrade is launching in the Middle East.

Daily News Egypt interviewed Mark Morley, a senior trade and investment commissioner, during his recent visit to Egypt to talk about the new programmes that Austrade is launching in the Middle East.

How does Egypt benefit from Australia’s world class health and mining experts visiting the Middle East and North Africa (MENA)?

Australia’s mining sector has built a reputation as a world leader in the Mining Equipment Technology and Service (METS) sector. Australian firms are competitive across the complete mining supply chain, including exploration, mine development, engineering, minerals processing, environmental management, mine safety, research and development, education and training, and community engagement.

What are the new health research and mining projects that will be launched in Egypt? And when? 

Australia’s mining companies have a lot to offer the MENA region in terms of developing a broad range of projects beyond the energy sector. In the mining sector, Austrade is working closely with Egyptian entities to identify opportunities for Australian companies in the following projects.

The Black Sand Mineral Project in Egypt is a major project with huge expected revenues and aims at extraction of economic minerals from the black sand in Borollos, Kafr El-Sheikh. The sand will be processed to extract six minerals: ilmenite, magnetite, rutile, zircon, garnet, and monazite. These minerals are considered bases for a hundred types of basic, medium, and high technology industries, including ceramics, paints, high-quality water purification and treatment devices, advanced military industries, and transportation.

Furthermore​, the Australian companies intend to participate in the first round of the international bid for the exploration and exploitation of gold in 2017, announced by the Egyptian Mineral Resources Authority (EMRA)—under the authority of the Ministry of Petroleum and Mineral Resources—in January. There is also the Golden Triangle Development Project.

The proposed projects for the Golden Triangle Development Project include mining projects, such as using phosphate ore and constructing fertiliser factories and other projects to utilise raw materials to manufacture cement.

The project also entails tapping into agricultural lands in the Qena governorate and constructing a number of touristic resorts in Dendara, Laqeta, and Qena Valley. It will also develop resorts and tourist villages between the Safaga and Al Qusayr areas.

Talks between Australian companies and Egyptian stakeholders and concerned state agencies are ongoing, and an agreement is hoped to be reached soon.

Alongside Egypt’s mega projects, what are the other projects Australia is interested in?

Well, the interest comes from where Australia has experience. Our experience fundamentally is in agriculture and mining, and Australia is not interested in infrastructure, nuclear, and construction projects.

What other projects has Austrade launched during the current year in the health sector for MENA countries?

Another focus made in the current year was how Australian healthcare service firms can help MENA countries cope with growing demand. Australia’s proven expertise in healthcare is well positioned to assist the MENA region as the public and private sector work to develop a local medical tourism industry and try to prevent the spread of lifestyle illnesses such as diabetes and cardiovascular disease.

What is the size of the GCC’s spending on the health sector?

By 2020, spending in the Gulf Cooperation Council (GCC) countries alone on healthcare will reach $69bn. It is estimated that by 2020, there will be a shortage of 15,000 physicians and 1.8 million nurses and midwives. So the need to enhance skill levels in the healthcare sector also offers clear opportunities for Australian education and training providers.

What is the expected size of trade exchange between Egypt and Australia in 2017?

Egypt and Australia shared a $554m two-way trade in merchandise in 2015-2016, including $37m worth of imports of trade in services, which was 5.7% higher over the previous year.

We export mostly food and agriculture products; most of the products are wheat, meat, and dairy.

Do you expect growth in Australia’s investments in Egypt in 2017? If yes, please mention the amount of current and expected growth?

In 2015-2016 the total Australian investments in Egypt was$106m. Egypt is a country with a huge wealth of untapped natural resources, and it enjoys a strategic location in the Middle East and the roads of international trade. These are key elements for investment attractions. We have good relations with the General Authority for Investment and Free Zones (GAFI) and are watching closely the developments in the investment environment in Egypt. We hope in the near future that Egypt may be able to attract leading Australian investors in the mining, health, and education sectors, as well as food and agriculture.

Shall we expect an Australian delegation of businesspeople and companies to visit Egypt to discuss investment opportunities? If yes, please tell us the number of these companies, and when is the visit scheduled?

Through a series of high profile forums, targeted roundtables, and official meetings, AU MENA provided introductions between Australian companies and key government officials, industry stakeholders, and projects in the United Arab Emirates, Saudi Arabia, and Egypt.

Furthermore​, we have regular and ongoing contact with delegations of businesspeople coming into Egypt and the region.

What are the challenges that face Australian investments in Egypt?

We are aware that Australian companies raised in the past a number of issues regarding mining regulations, particularly around mining investments. We have had a number of exploratory meetings with EMRA and other ministries regarding Australia’s capability in mining, and our willingness to assist with the regulatory and investment aspects of Egypt’s legislation around mining.

What is your opinion regarding the investment climate in Egypt after the recent reforms?

We understand that the reform laws are still under consideration by the relevant Egyptian authorities and the parliament. We will study the Investment Law closely and look for the opportunities relevant to Australian companies. We are particularly interested in what this may mean for mining companies.

In your opinion, does the EGP flotation have a positive effect on investment?

The EGP flotation is certainly a positive step. However, it is a challenging economic move that adds to the pressure on the Egyptian management and local Egyptian market.

Has Egypt provided any privileges to boost Australian investment?

Given the now increasing stability of the political and economic situation in Egypt, and refreshed support from the Australian exporter community, Australian businesses are now coming back to Cairo in greater numbers. Australian companies such as Worley Parsons and Gourmet Egypt are making in-roads in their industries, and Australian gold mining company Centamine is the largest mining outfit in Egypt.

What are the opportunities for Australian companies to invest in Egypt?

Egypt has a significant challenge to improve its education system; both the elementary and secondary education systems require overwhelming improvements—specifically enhancing the quality of teaching and teachers, improving the infrastructure of dorms and expanding the number of occupancy in them, and improving advanced research protocols. Thus, opportunities for Australian providers exist in research collaboration, curriculum development, professor exchange programmes, career development consultancies, and accreditation consultancy.

The country is dependent on imports across a range of key food and beverage commodities to meet the needs of its growing population. Currently, Egypt imports 50-55% of their wheat requirements, which is expected to increase as a result of the high growth of population versus the flat increase in production rates. Food consumption is expected to grow at a double-digit annual rate in both absolute and per capita terms to 2019, although this will be partly fueled by high inflation. Meat and livestock exports to Egypt are robust and continue to play an important part of Australia’s export mix. Water and sanitation are areas of increased focus and cooperation with private and public organisations in Egypt.

Aside from its gold deposits on offer, estimated at 6.7moz (million ounces), Egypt is home to an abundance of mineral resources, including phosphate, iron ore, and kaolin. Egypt also has 48 million tonnes of tantalite (fourth largest in the world), and 50 million tonnes of coal. Demand for mining equipment, training, technology, and services (METS) will also invariably increase as both the government and private sector pursue investment in mine sites. Australia’s mining legislation and mining code will be well suited to Egypt’s environment, as well as our royalty system.The Egyptian government has embarked on an ambitious investment attraction exercise.

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Propertyfinder receives demand requests for property worth EGP 4.6bn in Q1 https://dailynewsegypt.com/2017/05/29/propertyfinder-receives-demand-requests-property-worth-egp-4-6bn-q1/ https://dailynewsegypt.com/2017/05/29/propertyfinder-receives-demand-requests-property-worth-egp-4-6bn-q1/#respond Mon, 29 May 2017 08:30:14 +0000 http://www.dailynewsegypt.com/?p=627112 12% growth in hotel industry in Egypt, says Propertyfinder’s executive manager

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In an interview with Daily News Egypt, Mohamed Hammad, the executive manager of Propertyfinder, a real estate website that has been providing the tools to help consumers find the properties that fit their needs, said that the real estate sector will witness an increase in prices by approximately 30% during 2017.

What areas have the highest demand for apartments?

The top six areas are New Cairo, 6th of October City, Sheikh Zayed, Ain Sokhna, Nasr City, and Maadi.

What is the size of demand for residential properties on Propertyfinder?

The demand for residential units and properties constitutes about 70% of all total searches.

When did Propertyfinder start its business in Egypt?

Propertyfinder is a multinational company based in the United Arab Emirates (UAE) that was established more than 10 years ago and started its business in Egypt in 2013. We don’t buy units, but we are a channel to market units. Furthermore, we operate in six countries besides Egypt: Saudi Arabia, Qatar, UAE, Bahrain, Lebanon, and Morocco.

What is the size of demand that Propertyfinder received in 2016?

We received purchase demands estimated at EGP 3.3bn in 2016. We expect more in 2017 after the flotation of Egyptian pound.

What is the percent increase in prices in real estate units during 2017?

I expect an increase of 15% to 30% and it may reach 60% during 2017.

Does the increase in prices redirect the clients in their sale preference?

The clients who target class A don’t change their preferences. However, there are some clients who redirected their sale preferences from class A to B according to their budget.

Furthermore, I expect that demand on rent will increase by at least 50%.

What is the percent of rent demand that Propertyfinder receives?

30% of our clients demand renting units in the top six mentioned areas.

What are the areas that have the highest price per metre?

The highest is Fifth Settlement. However, the price of the metre depends on facility management and services. The average of the metre price in New Cairo is between EGP 11,000 and EGP 14,000.

Do you expect a real estate bubble?

After the Egyptian pound floatation, the local real estate market became attractive to expats, especially those from the Gulf Cooperation Council (GCC) countries, and those arrive during the summer season. Furthermore, Egyptians believe that the real estate is a safe haven in which to invest money. I don’t think that there will be a real estate bubble in Egypt, but prices may stabilise with no increase—besides, offering long-payment periods that could reach 15 to 20 years. The saturation is in class A; thus, developers will focus in the coming period on classes B and C.

How does the appreciation in the dollar value affect the real estate market?

In the residential sector, the dollar value will have both a positive and a negative effect. Positively, it will increase Egyptian expatriates’ sales. Negatively, it will increase the prices of construction materials.

Which areas will change the real estate “map”?

The New Administrative Capital will change the map, although land prices are high; however, the government provided discounts of 25% on lands.

Do you receive demands to buy residential units in the New Administrative Capital?

Yes, people are searching all the time for property in the New Administrative Capital and El Mostakbal City.

What is the demand in percent of Egyptian expatriates on property?

The demand is approximately 5% to 10%.

What is the size of demand requests that the company received in Q1 2017?

It is EGP 4.6bn, which is higher than the whole of 2016 and 2015.

Do you receive requests for property in Upper Egypt?

We receive few requests for property in Upper Egypt.

What area has the highest demand for people to purchase second homes?

In the recent period, Ain Sokhna is the highest, but I think that after Ramadan, the North Coast will witness a great boom, as during the summer, there are more services to be provided in the North Coast than there are in Ain Sokhna.

Which areas are more developed and could become candidates for clients’ first homes?

Ain Sokhna will witness attraction after New Galala City.

What are the challenges that Egypt’s real estate sector faces?

There is no monitoring on the secondary real estate market, besides the successive increases in prices and the developers’ commitment in delivering units period. Furthermore, providing units for class B and C.

What is the size of growth in Egypt’s hotel industry?

The sector is growing by 12%.

What is the total size of units the company marketed?

The total number of sold units is 525,725, for a total of an estimated 34 million sqm during 2016.

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Ali El-Din Hilal:Al-Sisi is still a candidate of necessity and will win elections of 2018 whoever the opponent is https://dailynewsegypt.com/2017/05/29/ali-el-din-hilalal-sisi-still-candidate-necessity-will-win-elections-2018-whoever-opponent/ https://dailynewsegypt.com/2017/05/29/ali-el-din-hilalal-sisi-still-candidate-necessity-will-win-elections-2018-whoever-opponent/#respond Mon, 29 May 2017 08:00:21 +0000 http://www.thedailynewsegypt.com/?p=627062 Egypt is still in a political transition period, there's no opposition 

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Ali Al-Din Hilal, a professor of political science and former dean of the Faculty of Politics and Economics at Cairo University, is one of the few people who have the ability to dissect the Egyptian political scene in depth and put forward visions of what must be done to avoid the accumulated mistakes that Egypt has been witnessing since the 25 January 2011 revolution.

Hilal, who served as a minister of youth and sports during the time of president Mubarak, says that Egypt is still in a political transition period that has not ended and it has not yetreached its final future form.

He called for activating the role of parliament to face the expansion of thepolitical Islamic current in the Egyptian street.

He furthermore stressed the importance of young people’s participation in parties in the future, not only in presidential meetings or in the presidential programmme.

Hilal also admitted that there is no opposition in Egypt, and there is no difference between the Egyptian parties in their orientations, programmes, and their absolute support for President Al-Sisi.

He said that the decline and rise of the popularity of presidents is a global phenomenon that happens to everyone. It goes up and down according to the performance of each president, which is normal to happen in a country facing the same conditions Egypt faces.

He called onPresident Al-Sisito manage expectations of the citizens and achieve an improvement of the situation. He also demanded for protection of the other runner in the presidential election to prevent a distortion of the democratic process.

He concluded that the president is still a “president of necessity”, and that he still feels more intimate in dealing with the military, therefore there is not a varied political kitchen.

He expected that after the second presidential term of Al-Sisi, some people will call for granting him another chance to complete what he started.


What is your take on the current political scene in Egypt?

All the phenomena that we see should be put in the context that Egypt is still in a period of political transition. We had a road map, but it has ended in the legal sense. There are many phenomena of which we cannot imagine that they will continue.

We have a president, but he has no political party. The number of independents in the parliament is greater than the number of parties; some of them are not partisan. There is no hint of parties, even in the major disagreements that took place in the parliament recently on the investment law and other topics. Even the supporting alliance of Egypt is not apparent. Powerful MPs are more visible than partisan entities.

We don’t understand the relations between the government and the parliament, and the government and the president. Laws should be issued through an initiative by the parliament, which is common all over the world.

After the Second World War—more than 70 years ago— 80% of the legislations​ were issued by the governments, so we are in a transitional period and these manifestations are evidence that the relations are in a period of formation, while relations between the main actors of power and governance in Egypt haven’t yet stabilised.

Do you think the form of the new parties is different from the historic parties in Egypt, and will they have an influential role in shaping the post-transition period?

There is no substitute for this because parties are the engine of democracy and the only authority that competes with the parliament and the governments in the democratic system is the parties. However, the indicators are not encouraging, as you see the largest political party in the country, the Free Egyptians Party (FEP), is suffering from internal strife and currently has two presidents. Most of the parties were dissolved and their newspapers are what is left of them.

Where is the problem?

Political parties of an urban nature are not existent outside of Cairo and there are no clear differences between their political programmes. They all will probably support President Al-Sisi in his candidacy for the presidency again. There is no party, for example, that says that it’s a party of capitalism and wants globalisation. All parties take a typically neutral position in everything.

Your words mean that parties won’t play a role for a long time?

Yes, it will take a long time. We hope to find groups of popular MPs who are elected properly and have a popular basis to emerge and form the nucleus of political parties. This nucleus has started to emerge but it will take a long time.

Do you see an entity or a party that can be classified as an opposition party?

At this moment the answer is no. Perhaps due to special interests and calculations with the state, but it does not mean that this will not change. A large percentage of political workers in Egypt have been excluded after the revolutions of 25 January and 30 June for various reasons, interests, and ideologies.

The National Democratic Party (NDP) was dealing with its representatives as representatives of the Egyptian state and it was the party of the state. For an intellectual reason or because there are those who see them as an obstacle in their way, the party has been eliminated. In the political analysis there are whims, alliances, and interests that are controlling the trends.

Those interests are harmful to the homeland?

I do not think that there is a politician in the world at any time that deliberately destroys public money, but the appreciation of the public interest is a matter of disagreement in vision, and not all that we see well can be applied.

Is that appropriate at the current stage?

Are the circumstances suitable for fiveministers to argue in the parliament on the investment law? And is it appropriate that members of the economic committee made amendments to the law without the knowledge of the government and the concerned ministers? Of course it is not appropriate, but it is reality.

 

Ali Al-Din Hilal, a professor of political science and former dean of the Faculty of Politics and Economics at Cairo University
(Photo by Asmaa Gamal)

Where is the head of state in all of this and where are the promises he made before his election?

Professor Heikal called Al-Sisithe “candidate of necessity” if you remember, which means that he is irreplaceable, so do not look at his pros and cons. There is no alternative to the president of necessity regardless of your assessment, and I feel that in 2018 he will continue to be the candidate of necessity in light of the issues of the political forces. There is no opposition or other political forces, and the closest one to that is Professor Hamdeen Sabahi.

 

Despite the decline in his popularity?

We are a people who criticise the authority but go along with it. Talk about the low popularity of the president is a phenomenon all of the world, even in the strongest republics. It goes up and down according to the events, but I think that the president will nominate himself and will win regardless of the competitor. This is not a call for him to run alone. It is very important to have more than one competitor.It is not in the best interest of the president that competing political figures get their image distorted. He would become even more respected and appreciated if we have leaders and political parties respected by people inside and out of Egypt, regardless of their criticism of the president and the government.

Who is worthy of competing for the presidency of Egypt?

It is important to have alternatives, electoral battles, alternative proposals, and discussions on basic issues. I will not mention names, but would rather like to focus on specifications. Candidates must have a political history known to the public. Secondly, a candidate’s history should not include links to foreign countries in order to emphasisepatriotism. When things turn over, they should not leave the country and flee. A candidate cannot have sought foreign intervention. Western countries provide a service to the president through criticising him. When people talk about his days approaching an end, more people gather around him against the criticising West. Egyptians forgive many mistakes for rulers, but not stealing and relying on foreign countries.

We described Abdel Nasser as clean handed, despite our criticism of him.

About 12 intelligence services could not find lands, wealth, or bank accounts owned by him in Egypt or abroad. This is one of the major battles in Egyptian history—integrity of governance. This is an everlasting battle in Egyptian history, which makes it very important.

 

But you do not see the need for a specific political backingfor the president?

We are all in trouble, so there must be a political backing for political stability. But it is impossible to achieve this because this man is supported by the people. You cannot ask him to pick some of his supporters and have them set up a party. You can’t also take all of them, or it will repeat the experience of the Socialist Union. When Sadat thought about the establishment of the National Democratic Party, he had to select a number of MPs at the time, but he was surprised to see all MPs traveling to him in Alexandria and telling him they want to join.

 

What is the solution?

Time can find solutions. Through movement and political activity, new elite will be formed. The president’s meetings with youth create a niche of elites among them. The entry of a number of officers into political life creates a special form of elite. Within a few years, he may have the opportunity to choose between them. He may have more opportunity to do so in the second phase than he does in the first.

Time passes and people are tired of the economic pressures and the decline of all indicators, but are still required to endure. How long will this last?

People do not eat numbers and do not care about the macroeconomic indicators. People only think of their purchasing power. We must be aware that this power declined by 100%. Talk in the media about the people having to endure more is not correct. More than half of the population is already very pressured. The president understands that and may use the help of the army. People walk on their bellies. So talk on social media must be considered seriously by the government before things get out of hand.

 

Does the president have a professional political staff?

Clearly, without diminishing anyone, there is no political staff in the conventional sense. The president has national security and terrorism advisers, but it is difficult to show their role.

There are no political figures in the show. The only place with political figures is the parliament, because some MPs have been engaged in politics forsome 40 years. In the government, with the exception of Ali Meselhy, there are no politicians.

A politician must have had engaged with reality at some point and formed his personality through public work.

Therefore, the political force active on the ground in Egypt is the Islamic political trend, which is supported by the Salafists. The army cannot reach down to their level and compete with them socially as they do. Political parties cannot also do so. If I can give advice, I think MPs must spearhead the movement against extremism. This is a possible solution now. If we do not prepare, the local council elections can come with many surprises, especially as the Muslim Brotherhood is lined up in rows for leadership and many of them are unknown to the security. The elections in 2005 are proof of that.

 

Who sets these policies and directives?

There are supreme policies, related to the activity of the president, the parliament, and the government. There are also people’s impressions, their conversations, what they think, and what their problems are.

In the most democratic countries, there are surveys. But here, there is no reliable centre, except for Baseera.

Does the president not realise that he needs professional politicians to help him?

He is very aware of that, but it seems he still finds it more comfortable to deal with the military. They are the closest to them and are from the same culture. This could be part of the transition.

 

What about five years later?

We first have to stop putting timetables for things we cannot control. The president should move away from putting schedules and timeframes. If things change, an explanation for breaking pledges must be made. For example, there was talk about large fish-farms. It must be explained why the prices of fish did not go down. If I ask you to stand with me, I have to explain to you why you stand with me and what I will do.

 

Do you believe we were deceived by promises that did not bear fruit?

It is well understood that the president had to raise the level of dreams of the Egyptians. The New Suez Canal, the New Administrative Capital, and the 1.5-million-feddan projects are all long-term projects. I must not ignore telling people an explanation. Managing expectations is very important.

But it is necessary to manage the expectations of citizens, because if they went too high, it would turn negatively on the state.

 

I would ask again:what about five years from now?

I confirm that in 2021, some people will call to change the constitution to give the president a third tenure to complete what he started.

Then we are not talking about a democratic shift in Egypt?

We cannot claim that Egypt is a fully democratic state, but it is at the stage of democratic development. General Omar Suleiman, former head of the General Intelligence Service, said in 2011 that Egypt is not ready for democracy. The president hinted the same during the Ismailia youth conference when talking about the Egyptian experience.

 

When can we say we are en route to democracy?

What is the indicator for this? Maybe see whether freedom is increasing or declining.We want a community consensus on a set of indicators to bring us closer to the democratic society we want. We want to respect the law and for it to be like death that applies to everyone. We want a minimum of political and economic rights for all people

 

Are you talking about the basics?

You have to start with modest goals to reach major dreams.Everyone must be held accountable, including the head of state. All officials should be liable to questioning.

Why don’t we move in this direction?

Because we did not agree on those goals, and because there is debate about Egypt’s priorities. Unfortunately, it is also because of the endless discussions that bear no fruits.

 

What do you think of youth conferences?

Youth conferences are a unique experience. There were similar conferences during the last year in Sadat’s regime. Dr. Ahmed Morsi, youth secretary of the Socialist Union, and president Sadat used to sit down with the youth and talk to them. This is good for democracy and encourages the youth to participate in developing their country. But I think that the president has to meet with the youth of political parties, as those have already worked in politics, which has given them political awareness. At some point, the Ministry of Youth used to meet with these youth. I suggest to the president to meet them and host them during his conferences. This would also convey a message that the president supports political parties and believes in making them more active and engage them into participating more.

 

What about the youth of the presidential programme to prepare them to become leaders of the future?

The youth of the presidential programme have been placed in different jobs. But they should not be discriminated against by their counterparts, so they do not become opponents of the employees in the various agencies. It is neither their right nor their role to monitor the government. Otherwise, the programme will be doomed, because that is the role of the parliament and regulatory bodies. Encouraging them should not raise expectations.

In 2017, the Local Council Elections Law will come out. These elections are the true school for politics in the west. If 25% of elected officials are youth and women, they will become important future leaders.

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The state has succeeded in lifting most travel bans imposed on Egypt: Soha El Torgoman https://dailynewsegypt.com/2017/05/25/state-succeeded-lifting-travel-bans-imposed-egypt-soha-el-torgoman/ https://dailynewsegypt.com/2017/05/25/state-succeeded-lifting-travel-bans-imposed-egypt-soha-el-torgoman/#respond Thu, 25 May 2017 06:00:56 +0000 http://www.dailynewsegypt.com/?p=626701 Procedures for adding the path of the holy family to the UNESCO have started, which will secure financing to develop the areas

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Soha El Torgoman, general manager of Ramses Hilton Hotel and a member of the Egyptian Tourism Authority (ETA) and the Technical Secretariat of the Supreme Council for Tourism, said that tourism in Egypt is improving. In an interview with Daily News Egypt, she explained all aspects related to the Egyptian tourism situation.

What is your assessment of the current status of the tourism sector?

The situation has become very different now than before the crisis of the crash of a Russian airliner.

What are the differences you see?

I think that the Egyptian tourist situation is improving. All the countries that had a travel ban imposed on Egyptian destinations following the fall of the airliner have been lifted, except Russia, which is still intact due to political reasons, and Britain on Sharm El-Sheikh only.

Do you think that the tourism sector has begun recovering from the crash?

Yes, the situation began to recover. This is evident by the fact that all nationalities are coming to Egyptian destinations​ after 18 months since the crash.

Do you see a change in the inflow map?

The Egyptian tourist map has completely changed during the last period. The sector used to rely on specific nationalities and certain markets, which made it very vulnerable to changes. I think that the Egyptian tourism sector has begun to rely on new markets and adopted new types of tourism that were not included before.

What are the most important new markets?

India, China, and Ukraine, as well as Latin America, which grew by 200% in the first quarter of the current year. The tourism from the Gulf has also increased significantly.

What are the new types of tourism?

The classic or cultural tourism that was customary before 2011 relied only on floating hotels. But now, Luxor and Aswan are seeing a boom across floating and traditional hotels.

Are there new nationalities starting to appear in tourist destinations?

The Gulf tourism began to emerge in areas that were not dependent on the Arabs, such as Aswan and Luxor, in addition to their interest in Sharm El-Sheikh, which was limited previously. The North Coast region began to heavily attract Arab tourism. I expect to see rental and buying prices go up there amid the growing Arab attention that will follow Ramadan.

Has there been a significant difference in the marketing of Egyptian tourist destinations?

For the first time, the Egyptian tourism sector relies on online marketing through bloggers and international reservation sites. It has become the first method of marketing in the world and we have to rely on it without the need for paper and printed publications and advertisements. The bloggers also have a great impact on global tourism marketing.

Did the use of electronic marketing increase inflow?

Electronic marketing has helped to limit the control of travel agents and major tour operators that had a monopoly over Egyptian tourism. It enabled us to reach tourists without dealing with operators.

What other new tourist patterns has Egypt started to introduce?

The path of the Holy Family has become one of the most important tourist patterns during the recent period. It will become the forefront of tourism patterns in two years, as it will attract a large number of Copts around the world to visit Egypt.

How did Egypt start promoting and marketing the path of the Holy Family?

A year ago, the Ministry of Tourism began to pay attention to the path of the Holy Family, when the minister visited Italy and was asked to prepare for the visit of the Grand Sheikh of Al-Azhar and the Pope. The path of the Holy Family will be added to the UNESCO World Heritage Sites.

What are the advantages of adding the path of the Holy Family to UNESCO?

Once it is added, UNESCO will secure the funding necessary to develop these sites, in addition to helping the ministry promote them.

What is the number of sites within the path of the Holy Family?

The path includes 37 sites. The state is working to secure these sites and will begin with eight of them. This was presented to tour operators too.

What is your assessment of the participation of the tourism sector in international exhibitions?

The Egyptian Tourism Authority is currently working to use the help of a specialised company to prepare for the sector’s participation in international exhibitions. The authority aims to make Egypt a trademark on the world map of tourism.

Will Egypt be placed as a trademark as a whole or by placing different marks on the country’s tourism destinations?

We seek to make Egypt, as a whole, a trademark. When Russia and Britain lift the travel ban, we will begin dividing Egypt into different brands. We want to make the path of the Holy Family a brand, as it combines two types of tourism, classic and religious. This will be in parallel with the marketing of other sites.

Why did we recently start to pay attention to the path of the Holy Family at last?

Egypt needed a new tourist product to be presented to the world in light of the recent crises that the state faced.

What are the most important tools used by the ministry and the sector in increasing the inflow of tourists in the recent period?

Changing the charter flights incentive scheme to include regular flights is an important step, as many tourists come on board regular flights.

How did tour operators benefit from this scheme?

There were many complaints about the fees in Egyptian airports. The ministry is now paying these fees on behalf of the tour operators, which brings the total cost down and keeps foreign exchange available in Egypt.

As a lady who manages the Hilton Ramses Hotel, can you tell us how successful Egyptian women are in managing hotels?

I am the first Egyptian woman to manage a hotel in Egypt. I am also the first Muslim Arab woman to manage a hotel belonging to the Hilton Worldwide Group. I am currently training female experts to make them become top choices for Hilton leading positions. Egyptian women can become very successful in managing hotels in Egypt, as they have many advantages, such as patience and tolerance, which were planted in them by God.

What is the role of the Hilton Worldwide Group in empowering women to manage its hotels?

Amongst Hilton’s priorities is putting women in leading positions. There are plans to increase the number of women working at the group’s hotels to 20%, up from 10% previously.

How many women manage hotels in Egypt?

There are only two now, including me. But this is new and likely to increase more in the future.

What are the most important measures you took when you took over the Hilton Ramses Hotel?

When I was first appointed, I attended all meetings for all departments of the hotels for more than three months. This was one of the most important steps that helped me get to know all employees and learn first hand all operations. It also kept an open line of communication with them to exchange suggestions and views.

What has the development of the hotel been like since you took over the management?

I have been very interested in the way we welcome guests and the service quality at the hotel. Egyptians do not have the genes to serve others, but they have outstanding hospitality genes.

Why is the manager of the food and beverages department at hotels always not Egyptian?

Lack of interest in the technical and special study for the hospitality sector has weakened it much in the last few years, along with the poor quality of training for the sector’s employees.

Does Ramses Hilton train staff?

One of the most important activities carried out by the hotel management and the international group is training. The group provides an online university to develop the skills of the staff. There is also a specialised training manager at the hotel. We may cut allocations for training, but we never cancel them.

Are there any directives from the Supreme Council for Tourism to train workers in the tourism sector?

As a member of the Technical Secretariat of the Supreme Council for Tourism headed by President Abdel Fattah Al-Sisi, I stress that we have been tasked to train all the public servants that deal with tourists.

What are the developments in the hotel?

We have completed the first phase of development, which includes upgrading 68 rooms; 63 regular rooms and 5 suites. They will be opened for Eid Al Fitr, including a big suite called Diwan, which overlooks the Nile River. It is also a duplex with a special kids area. There is also more development in the pipeline, such as opening a hall named after the hotel, Ramses, which will include different areas to match all visitors. The second phase of development will include upgrading two floors, the pool, the reception, and restaurants. This will begin in November. After Eid Al Fitr, we will also repaint the outer walls of the hotel in cooperation with Sipes.

Is the development of the hotel related to competition with other hotels overlooking the Nile?

Yes, we are developing the hotel for competition. And we are targeting all types of guests, including the high-spending guests. The renovations will change the personality of the hotels completely.

What nationalities choose to stay at Hilton Ramses?

The Saudis and Gulf countries are at the forefront, as well as the Spanish, the Americans, and the Chinese, followed by Malaysians and Indonesians.

Have you applied the value added tax in the hotel?

Hilton Group is very committed to the implementation of all new laws adopted by the government, including the decision to apply the VAT.

What is the effect of the flotation on revenues and expenses?

The decision to float the pound hiked revenues more than costs. That decision was good for the Egyptian tourism sector, especially foreign tourism.

What is your favorite award?

I was awarded the GM Leadership Award across Europe, the Middle East, and Africa (EMEA). The winner of the award is chosen based on a global internal survey, through which criteria, including team engagement, trust, and leadership effectiveness, are evaluated.

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Egyptian FlyEx.aero aims at expanding in the Gulf and US https://dailynewsegypt.com/2017/05/24/egyptian-flyex-aero-aims-expanding-gulf-us/ https://dailynewsegypt.com/2017/05/24/egyptian-flyex-aero-aims-expanding-gulf-us/#respond Wed, 24 May 2017 06:30:55 +0000 http://www.dailynewsegypt.com/?p=626527 We are negotiating with a number of investors to get seed investment, says El-Masry

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The founders of the FlyEx.aero application plan to attract investments of $200,000 in a first phase to cover the costs of their initial expansion plan.

Founder & CEO Osama El-Masry and Tamer Tayseer, co-founder & digital marketing director, said that the application aims to create a competitive atmosphere between airlines according to the quality of service offered to passengers and based on travelers’ feedback and ratings.

They noted that they plan to increase the number of users to 0.5 million by the end of the year, with a focus on expanding into the Gulf countries and the United States.

What is the nature of the services provided by the application?

The application that we launched provides flight booking services at the cheapest prices, through searching and comparing the prices of hundreds of airlines and websites—like most competitors. Yet what is unique is that we associate airline rankings along with prices to users which enables them not only to choose their flights based on the cheapest prices, but also considering the quality of service offered by each airline. Such a concept has been available for hotels for decades, but not for airlines so far, and this is exactly what we are trying to achieve through the FlyEx.aero app, aiming to change the flight booking industry for good. We have started working on and developing the application over the past two years to make it easy to use and meanwhile providing the best user experience.

It is well known that most airlines compete to provide the best level of service for their First and Business classes, where most of their revenue comes from, although they only account for 10% of total flight seats. Meanwhile, the rest of classes and especially the Economy class is always determined by the price, therefore a focus on comfort and quality of service are almost non-existent and are very similar across most of the airlines. Hence, we aim to change this by creating a competitive environment between airline companies across all classes through giving power to passengers to voice their opinion on the provided services and consequently considering quality as well as price in their booking decision process.

The application allows passengers to express their views in a quick and easy way towards the provided services by the airlines during their flights and their overall flight experience, which directly and immediately affect the ranking order of the airlines in our system index. This is then made available to all users during their search and booking process, which enables them to choose the best airlines to fly with in terms of both service and price.

How did you get the idea for the app?

Initially, I was working on a technological system for traffic management. I traveled to China in an attempt to implement the system there, but the experience was not successful due to the bankruptcy of the manufacturer. This forced me to begin working on a new system related to the problem of high baggage loss rates for travelers, especially during transfers; however, I faced many problems related to aviation authorities’ approvals and corresponding bureaucracy, which was difficult to overcome for a startup company.

While attending an international aviation event attended by major airlines’ executives, where I was discussing the baggage loss prevention system, the idea of generating new revenue streams for airlines through selling ancillary services and their reliance on digital solutions was heavily discussed. This helped form the idea in my head by the end of 2013, until finally the first version was released in September 2016.

What distinguishes your application from other competitors?

The service we provide is not only flight booking and ratings, but we also offer a number of other features and services, such as a flight organiser, flight status tracker, and even setting an automated assuring message to beloved family and friends once the flight departs/lands, while users focus on travel logistics.

Additionally, the application allows tracking flights so users can keep a close eye on flights of their relatives or friends. It also enables users to learn about the time difference, exchange rate, and weather conditions at their intended destination.

Founder & CEO Osama El-Masry

The application also provides information on the flights themselves, including the type of plane and the services provided on board, such as internet and USB ports. This information varies from flight to flight and travelers cannot find them usually, except after some time searching the internet across different websites. Instead, FlyEx.aero app provides them with all this information and more in one app, and even before making their final booking decision.

Furthermore, we also equipped the app with a language assistance service that includes the most important travel statements in 10 different languages to facilitate communicating with local residents, especially in non-English speaking countries, e.g. China, Hungary, Bulgaria, Japan, and Turkey, etc..

In addition to all these features, we are launching a totally new feature, which is airports’ maps for major airports in order to show users how to get around in the airports in terms of gates, lounges, restrooms, and other airport service areas. We are also working on adding mobile services offered by some airlines, such as issuing mobile check-in (mobile boarding pass), modification and cancellation of bookings, and frequent flyer programme access. This is all done from the app itself, which means that users can dispense of other apps on their mobile devices for the various airlines they travel with and rely instead on FlyEx.aero app.

What other features do you plan to add?

In the near future, we plan to add hotel booking services and other essential travel services through the application. Our main driver is to provide the largest number of travel services in one application and hence relieve the burden from the user to refer to multiple other apps/resources to get his travel tasks done.

How many airlines are currently in use?

The application has all the airlines in the world, but the ranking service is only available for 100 airlines so far.

How many downloads has the application seen until now? And what is your target?

There are now more than 5,000 downloads, but we aim to reach 0.5 million downloads by the end of 2017. This relies on our marketing plans and completing an agreement to obtain seed funding from one of the funding platforms.

What is the percentage of Egyptian customers out of the sheer number of users?

Egypt is currently ranked fourth among the number of users of the application, while India ranked first, followed by Pakistan, and then the US in third. We aim to focus on the Gulf and the US in the coming period.

What basis is used for rating airlines?

We have key sections through which the customer rates their flight experience with the airline, such as the flow of the flight, based on the smoothness of the takeoff, landing, and air turbulence management, in addition to hospitality and courtesy of the cabin crew, and of course the quality of meals and beverages offered during the flight, all the way through to the details of the plane itself, in terms of comfort, entertainment system, A/C, etc..

Where do you stand in terms of investments?

We currently communicate with a number of specialised investment funds and we reached advanced stages with one of them. Additionally, we are negotiating with a travel agency company to partner with to cooperate in the field of hotel bookings and holiday package reservations through our application.

What is your mechanism for making profits through the application?

In the first stage, we will get a small margin from the booking transactions, and then in the future, there will be a new mechanism to maximise revenues through offering business solutions to airlines and airports, but this will highly depend on the number of active users then.

What is your target size of investments?

Usually, the seed funding phase aims for $200,000, which is enough for our first phase, allowing us to reach our target of a base of 0.5 million users.

What are your target markets for expansion in the future?

We aim to expand in Europe and the United States, especially as US users are amongst the most frequent users, with a 65% retention rate, knowing that the industrial standard ranges between a 30% and 40% retention rate, which is a pretty good indicator that we are on the right track and targeting the right user profile.

Are there any current negotiations with Airline Companies?

We actually started establishing contacts with one of the Gulf airlines and are working on more approaches with number of airlines in the Middle East region. Yet, since we are an Egyptian startup, we hoped to have our first cooperation with EgyptAir or Cairo Airport Company for mutual benefit and boosting the Egyptian travel industry in such a challenging economy, but as you know, bureaucracy is our greatest enemy.

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Our investments amount to EGP 50m, says Nawara https://dailynewsegypt.com/2017/05/23/investments-amount-egp-50m-says-nawara/ https://dailynewsegypt.com/2017/05/23/investments-amount-egp-50m-says-nawara/#respond Tue, 23 May 2017 08:00:27 +0000 http://www.dailynewsegypt.com/?p=626524 We contracted with Honeywell to use Bendix trademark in Egypt and North Africa, says Nawara

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Daily News Egypt interviewed Ahmed Nawara, deputy chairperson of Al-Manar Group, which works in the field of importing and manufacturing automotive oils.

Al-Manar was established in 1975 as an import company. Yet, 40 years later, the company managed to expand and own four subsidiaries working in importing, exporting, manufacturing, storage, and distribution.

The parent company now has four subsidiaries working under its umbrella: Al-Manar AMIX for import and export, which specialises in importing and exporting spare parts for European cars; Al-Manar AMCF for manufacturing car fluid; Al-Manar AMTD for distribution and trade; and Al-Manar AMSF for storage in the free zone in Alexandria.

Al-Manar imports brake pads, filters, rings, pistons, starting motors, dynamos, lights, plugs, drums, clutch cylinders, and other parts.

What is the size of the company’s investments?

Al-Manar Group invested EGP 500m, including the value of assets and the working capital, in the brake oil plant that was established in 6th of October City. The plant has the ISO 9,000 quality certificate, in addition to ISO 14,000 for environmental management, and ISO 18,000 for industrial safety. The factory’s annual production stands at approximately 3,000 tonnes, of which 2,000 tonnes is brake fluid, with the remaining 1,000 tonnes being other fluid types.

What are your target investments for 2017?

Al-Manar Group has started 2017 strongly by completing a contract with Honeywell to use the Bendix trademark in Egypt and North Africa for brake, transmission, and hydraulic oils and grease products. The agreement will be activated in July 2017. This is an important step in the expansion to foreign markets, which proves the confidence of Honeywell, being one of the Fortune 100 companies.

The agreement represents the confidence of international companies and investors in the Egyptian economy and its positive development, especially in light of the recent economic measures. Al-Manar imports raw materials and mixes and packages them in the parent company that was established in 2000 in 6th of October City.

What is the company’s market share in terms of brake oil?

Since the establishment of Al-Manar Group 40 years ago, our goal has been to provide high quality products. This gave us the confidence of the Egyptian consumers; hence, we obtained 40-45% of the market share in the commercial sector.

What is the production size of automotive fluids?

The factory’s annual production stands at approximately 3,000 tonnes, of which 2,000 tonnes is brake fluid, with the remaining 1,000 tonnes as other fluid types. We aim to boost production to 3,000 tonnes of brake fluid in 2018.

Have you finished extracting a license for the packing plant? Once operative, what would its output capacity be? 

Al-Manar Group succeeded in obtaining the license to manufacture engine, transmission, and hydraulic fluids, beside brake oils and cooling water. We expect the total production volume of the group to double.

What are your stances in the field of feeder industries during the coming period?

In line with Al-Manar Group’s plan to expand in the Egyptian market, we obtained the license to manufacture and package engine oils. We will also expand in the fields of transmission and hydraulic fluids.

Has the company entered partnerships with car companies and service centres to adopt Al-Manar Group as their official oil, like major companies do?

Since the beginning of the company’s work, we have focused on direct sales to specialised traders and service centres.

The spare parts market is seeing a problem of fraud. The group has faced a problem with fake Bendix products before. What measures did you take to protect your products?

The high rate of car accidents in Egypt is attributed to fake spare parts. This pushed us to rely on original brake fluid to help reduce the rate of annual car accidents. Maintaining the lives of citizens through reliance on genuine products has become a necessity. Al-Manar is seeking to raise awareness amongst distributors and traders about the need to check the brand and to warn against fake types. Al-Manar Group also cooperates regularly with the Ministry of Supply by reporting on cases of commercial fraud and dealing in counterfeit products.

What is the impact of the flotation on the company’s performance?

Al-Manar Group is confident in the economic reform measures taken by the state. Just like other companies, we have been impacted by the high cost of raw materials, but we know this is a temporary phase, which we have to traverse with hard work to reach foreign markets and bring hard currency to Egypt. Through the deal with Honeywell, Al-Manar Group has succeeded in becoming the licensed user of Bendix trademark in Egypt and North Africa. This provides confidence for the company and the Egyptian economy. This will also contribute to increasing dollar resources to the group and Egypt.

We have been conducting negotiations with Talaat Ghabbour, who owns a large filters factory in 10th of Ramadan City, to manufacture guard filters. This type of partnership is better than importing and looking for hard currency and will provide continuous supply.

The automotive components makers meet constantly at exhibitions. The possibility of running manufacturing themselves is always under consideration. They could agree to this exchange and trade-offs of products. This could become the new form of investment during the upcoming period. For example, I manufacture engine oils or brake fluids at my factory, while another company manufactures brake pads for me. The deal will then be based on swapping depending on quantity. For example, I give them one tonne of brake fluid in exchange for a tonne of brake pads, according to the prices, and cross-reference the price difference.

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The web can help Egyptian SMEs grow and reach more customers: Google MENA managing director https://dailynewsegypt.com/2017/05/17/web-can-help-egyptian-smes-grow-reach-customers-google-mena-managing-director/ https://dailynewsegypt.com/2017/05/17/web-can-help-egyptian-smes-grow-reach-customers-google-mena-managing-director/#respond Wed, 17 May 2017 06:00:24 +0000 http://www.dailynewsegypt.com/?p=625682 Lino Cattaruzzi is confident in the growth opportunities provided by digital infrastructure

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The web provides a big opportunity for small and medium enterprises (SMEs) in Egypt to export their services and products, according to Google’s managing director for the Middle East and North Africa (MENA) region, Lino Cattaruzzi, in an interview with the Daily News Egypt.

Can you tell us about your partnership with the Ministry of Communications?

We’re in constant communication with the Ministry of Communications and Information Technology to discuss future plans and programmes. We recently celebrated the last graduation ceremony of the two-year Mobile Application Launchpad (MAL) programme, which was set up by Google in partnership with Udacity and the Egyptian Ministry of Information Technology to groom successful mobile app developers in Egypt through training, certification, and career guidance/job placements in the ICT field.

We are very proud of the success of this programme, and the numbers speak for themselves—more than 1,600 enrolled students and more than 1,200 successful graduates.

What led to the high success and graduation rate of the Mobile App Launchpad Program in Egypt?

Firstly, I think that the programme was very well designed. We looked at the local needs in Egypt and partnered with Udacity to offer one-on-one coaching and made sure that it is very inclusive and allowed for everyone to join. More than 65% of the students were from outside of Cairo. Secondly, the students have a high starting base with strong background. For instance, one of the students majored in Physics. Egypt has what it takes in terms of human capital for people to succeed in STEM sciences.

But this not particular to Egypt, this eagerness exists everywhere. The percentage was a little higher in Egypt, but what is striking is that the students are very ambitious and forward looking. For example, the students did not just stop at certification but they were planning what they can do with that certification.

What are your future plans to support entrepreneurs in Egypt?

At Google, we always look to nurture the entrepreneurial talent in Egypt and the MENA region. MAL was tailored specifically for Egyptian developers, and we worked with our partners to determine the best format that would deliver the strongest impact. That being said, we are always looking for new plans and programmes that support developers in Egypt, because inevitably this would lead to a stronger ecosystem. We are currently exploring what the next best steps are, but first we need to make sure we reflect and analyse what we did right and what could be done better.

We have clear areas of exploration, in particular we are focused on digital skills, but the key question here is not just about what we are going to do tomorrow, but more about how we can support this new digital economy to work well for all the SMEs in Egypt and how we can make sure that we maximise the impact of new technology on the life of the average Egyptian citizen.

What are the opportunities that you see in Egypt?

We see a lot of opportunities, considering the size, talent, and potential for development in Egypt. One is in talent specifically; we see an opportunity in building on the talent of the already well-trained population to have a higher impact using technology. The second, is how Egypt can have a higher footprint in the region, the Arab world, Africa, and even globally.

The last one is how you can start your own business or enable SMEs to export and small companies to grow faster.

Egypt and the web are better together. For us, the internet is extremely important; there is a global change in the business, and Egyptians are well equipped to capture this evolution. This is what we are doing by engaging with different players here in Egypt, like the government and associations, to capture this opportunity in order to help businesses grow faster.

For instance, Egypt is filled with incredible artisans producing amazing things, and they should be able to sell them outside of Egypt, and for other people to be aware and for them to capture the value. This is not to sell them to a large company that will take most of the economic wealth, but to enable them to directly communicate with the outside world, to have an easier way of shipping goods and collecting the money directly from the service, and to make them grow their business.

They need to be known and they need to have easy ways to sell what they produce.

What does it take to become the next Google?

I think the first thing to take into consideration is innovation and creativity—creating something new and unique that adds value. It doesn’t necessarily need to be a company; it could be a network of companies or even just an idea that creates value. You need to think big, not small: at Google we call it “10x thinking”. Second, one needs to have the skills to be in the digital world; and third, there needs to be the right environment that can allow individuals and companies to be successful.

There are a number of aspects that will make a simple idea the next big thing and yet it is not just the idea; the key is turning the idea into reality.

Do you think start-ups in Egypt are getting the right funding and support?

There is an abundance of financing for start-ups on a global level; how you articulate them and make them available in Egypt is secondary. If you have the right platform, the challenge is not in the funding but how you scale success and grow it to be regional or global. One of the challenges we have is a lot of talent think that it is easier and simpler to do things in their own country and that reaching other markets means they need to relocate. There are some countries that look to attract these talents and scaling them in order to turn them into big players. Almost every single country is facing that challenge. My recommendation here is make sure that you look at people as part of an ecosystem, and not just as individuals. It’s more about thinking of them as an ecosystem—a number of people that are creating value spills over to create more value for more people. Even if some of them decide to relocate and go to other countries, you still have the ecosystem working smoothly and generating more.

When you think about Google, you need to think about Silicon Valley—there are a number of companies that make it what it is. Think of the ecosystem that provides funding, access to good connectivity and training, exposure internationally, and access to international commerce—all these things that help one grow.

Do you have any plans to invest in local start-ups?

We mainly do this in the US, where we try to acquire some technologies related to what we need as a company, but in the region we believe that it is much more impactful and powerful to invest in developing the ecosystem, because this is where we can positively impact hundreds of thousands of companies.

Google partnered with the Ministry of Tourism back in 2014. Do you have other plans to support tourism in Egypt?

We generally work with different boards of tourism around the world that ask for our support, because we believe that giving users the access and chance to discover different places around the world has amazing value.

Egypt is an icon—a place that I have long dreamt of as a child—so I am happy that our Street View feature has offered people from around the world the chance to get a glimpse of its top landmarks and heritage.

That being said, we recently haven’t been in talks with the government for anything in particular, but we are always very eager to continue this kind of work to make culture and heritage even more accessible to everybody.

Where does Egypt rank in terms of growth for Google in the region?

We generally look at the upcoming growth in terms of people going online, so Egypt ranks very high in that regard. We also focus a lot on KSA [Kingdom of Saudi Arabia] and the UAE [United Arab Emirates].

Do you have any plans for supporting Education? 

I think the big question is what is the future of education and how can you match what the labour market needs with what students are trained in. Even if we make a very good definition of how that looks today, I can guarantee that in 10 years it will be completely different.

It is not about taking a snapshot and making the decision; it is about how much you can cope with this degree of change. Today education is almost everywhere, you go to YouTube and see all those videos that users create on their own about how to do something—whether that was fixing a faucet or learning mathematics. Education is being democratised with people using platforms to create content and educate others, as well as making this universally accessible to consumers. Then there are all these institutions that we partner with, such as Udacity, who we have partnered with here.

What does success look like for Google in Egypt?

We look at success in Egypt in three ways: one is enhancing the experience of internet users on the web and helping them find what they are looking for in whatever form they want, whether on Search or on YouTube.

The second thing is we want to help and equip all these people to export their businesses around the world. The quality of some things that are produced here in Egypt should be exported almost everywhere in the world.

The third is about individuals; we want to make sure that we are ahead of the curve, because things are changing rapidly and we want to help simplify the adoption of new technologies and the transformation of companies.

What is Google doing to support Arabic content on the web?

Arabic content is for a region, not just for a country. There are a number of initiatives that we are leading.

The YouTube space that we set up in Dubai will cater to the region as a whole and will focus on the creation of Arabic content through online videos.

I am learning Arabic and I can tell you it is a complex language. But it is a rich language, especially with all its dialects. With advancing technology and machine learning, the web will better understand what users around the world are searching for, including Arabic.

Another way we support Arabic content is by helping the network of publishers get funded through ads so they can keep creating more content. Around the world, we have distributed tens of millions of dollars to publishers.

How do you see the growth of digital advertising in Egypt?

I think it is a reflection of how people spend their time. We see more people moving and spending more time on their devices, particularly mobile phones. So when you see the consequence of that, just look at yourself and look at how much time you are spending on your phone, computer, or tablet; so this brings about two things.

One is that the way that content is consumed is different as opposed to the past. People are selecting where to go and what to see, and this creates a movement of revenues to the online world for publishers, platforms, creators, etc… and the Arab world is embracing this big time and it is growing very rapidly.

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Tenants negotiate to decrease rent cost after flotation: JLL country director https://dailynewsegypt.com/2017/05/15/tenants-negotiate-decrease-rent-cost-flotation-jll-country-director/ https://dailynewsegypt.com/2017/05/15/tenants-negotiate-decrease-rent-cost-flotation-jll-country-director/#respond Mon, 15 May 2017 06:00:02 +0000 http://www.dailynewsegypt.com/?p=625393 Residential supply grows at a high rate of 11%, says Sami

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Daily News Egypt interviewed Ayman Sami, JLL’s Egypt director, to talk about the real estate market and the tenants’ tendencies in light of the current economic conditions.

OLX Properties Egypt recently published its first annual property report, focusing on user behaviour trends. The report has identified that the top 5 locations searched for on OLX are Nasr City, Maadi, Sheikh Zayed, Heliopolis, and Fifth Settlement. Can you explain us the clients’ demand for these areas?

The data indicates that there is migration from central Cairo and Giza to the outskirts, such as the Fifth Settlement and Sheikh Zayed, with residential supply there growing from 113,000 to 126,000 units between 2015 and 2016. There is still demand for areas like Heliopolis, Nasr City, and Maadi, as all those districts continue to host many multinational corporations.

What does the flotation of the pound mean for the office market?

The current market supply of administrative offices stands at 1,028 million square metres of grade A with an additional 70,000 square metres expected to be delivered during the other three quarters of 2017. 60,000 square metres out of those 70,000 square metres are supplied by Cairo Festival City.

Most of the grade A administrative offices are rented with dollars, and after the liberalisation of the exchange rate, the rent has doubled. Therefore, there are negotiations between tenants and owners to decrease the rent or put a limit to rent costs.q

Ayman Sami, JLL’s Egypt director
(Photo handout to DNE)

What is the percentage of price increases for renting?

For example in central Cairo, rents per square metre decreased by 5.7%, but there were no shifts in West Cairo and New Cairo. I think the decrease is due to some attempts to stablise rent prices, such as putting limits to the dollar value, the current value, and other developers or owners decreasing the rent, as well as other ways, such as extending payment periods. However, some developers and tenants are in the stage of negotiations and the vision may be clear in the second quarter report. Due to the high value of the dollar, some tenants redirected their demand from grade A to grade B. Furthermore, some clients tended to buy buildings to equip administrative offices in these buildings.

What is the percentage of occupancy of administrative offices?

The percent of occupancy of grade A administrative offices is 73%, while it is expected to decrease in the coming period. We don’t have a 100% occupancy, which means that there is a sequential request on administrative offices and this happened in downtown and central Cairo.

What is the demand on the residential market?

The demand is still strong on residential units. The supply is 126,000 square metres with an expected 11,000 square metres to be added during 2017.

The secondary market was strong in the last period but it dropped for some time because people tended to trade in foreign currency. After that, primary sales witnessed a strong demand as clients preferred to invest their money.

What is the size of growth in the residential market?

The growth rate in residential is very high. From 2015 to 2016, the supply reached 13,000 units [113,000 square metres] with an 11% growth.

In the light of the dollar appreciation: what is the size of foreign demand on property?

After the EGP flotation, unit prices decreased by 50% if calculated in dollars​, however, local prices​ increased by 30%. This explains the increase in demand by foreigners. Currently, real estate prices decreased by 35% to 45% according to dollar value.

What is the expected increase in unit prices?

It is about 25% to 30% y-o-y.

What is the supply of retail in the Egyptian market?

The retail supply in Q1 2017 is 1.6 million square metres, the occupancy rate is about 83% grade A. The most important event is the inauguration of Mall of Egypt. Last year, there was a problem in availability of foreign currency, but this year there is a problem related to increases in costs: sales decreased and there is great competition between local products and imported products, which may affect the retail market.

After the great demand that the Cityscape exhibition witnessed in late March, do you expect an increase in supply in residential units?

I expect an increase of 10% in supply.

Which sector is benefiting from the stablisation of the pound?

The residential and the hospitality sector are the ones that benefited the most from the stability of the pound. Therefore, hotel occupancy is close to 70% in Greater Cairo. Egypt is one of the cheapest tourism destinations, as the average daily rate is $89.

What is the most attractive area for offices?

New Cairo is still the most attractive areas for administrative offices.

Is there an imminent real estate bubble?

There is no bubble because the developer always reacts to the market and always reads the market needs.

What is your opinion regarding the New Administrative Capital project?

The New Administrative Capital is the natural extension for New Cairo, as there is no availability of lands in the latter. Besides that, launching projects in El Mostakbal City, which is the area closest to the New Administrative Capital, and demand on AinSokhna revives the demand on the New Administrative Capital.

What are the areas most in demand for second homes?

North Coast is more in demand than AinSokhna because Sokhna still needs development and more services, so prices at North Coast are increasing.

In your opinion, what are possible incentives to attract other Arab and foreign investments to the sector?

Dollar value in the country is an incentive besides other factors, such as the facilities provided by the government to start businesses and how easy it is to transfer profits outside of the country. And of course risk assessment.

What is your expectation for the real estate sector?

We will see a revival in the hotel sector in Greater Cairo. Retail will be the last sector to return to its real growth percentage due to the current economic circumstances. The office market will keep stable and will then start growing again.

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Uber plans to inject more investments into Egyptian market https://dailynewsegypt.com/2017/05/10/uber-plans-inject-investments-egyptian-market/ https://dailynewsegypt.com/2017/05/10/uber-plans-inject-investments-egyptian-market/#respond Wed, 10 May 2017 08:00:40 +0000 http://www.dailynewsegypt.com/?p=624915 40% of Uber drivers did not have a job before

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Emil Michael, Uber’s chief business officer, said that Egypt is one of the most important markets for Uber in the Middle East and Africa.

In an interview with Daily News Egypt, he stated that the company intends to inject more investments into the Egyptian market in the coming period.

He pointed out that 50,000 drivers are working with Uber, 40% of whom did not have a job prior to joining Uber, noting that the company has helped effectively in the development of the Egyptian economy through the provision of jobs.

How do you see the growth opportunities in the Egyptian market, especially after the floatation of the pound?

The Egyptian market is the most important for Uber in the Middle East and Africa, especially after the huge investments we put into the Egyptian market. We are now working with about 50,000 drivers in Egypt. Roughly 40% of them were unemployed before they joined Uber. This highlights the role of Uber in helping Egyptians find jobs.

After the flotation of the pound, the value of the national currency depreciated, which gives our investments more value and helps them achieve more results.

In the coming period, we aim to create tens of thousands of more jobs.

What is the position of the investment plan of Uber in the Egyptian market?

We have made investments in the Egyptian market of about EGP 250m last year. We intend to inject more this year. We also opened a regional customer service centre in Egypt to serve customers of Uber in the Middle East. There are now 250 employees working there, with plans to soon increase the number even more.

How do you see the challenges in the Egyptian market?

The Egyptian market is important for Uber because it is the largest market in the region. I personally care about the Egyptian market because I am of Egyptian origin. We believe that Uber can benefit the Egyptian market through creating jobs and providing good quality services at affordable prices for transporting passengers, easing traffic problems, especially in Cairo, and reducing pollution.

The most important challenge is the absence of legislation regulating the activity. We expect the passage of a legislation soon to govern the market and encourage investments in this field, which would help us provide better service.

Some believe that Uber and similar companies cause more traffic congestion than easing them. What do you think?

This is not true. Our clients want to move from one point to another through Uber or other similar companies and even any other means of transportation. The competition is now not between Uber and other transportation services, but rather between Uber and passenger cars. The goal is to convince people to keep their cars parked and use transportation services. This provides good service and reduces traffic. Instead of moving around in private cars, an Uber driver can transport 10 people in one shift, which means 10 fewer cars on the streets.

For example, in some European countries, customers waste 25% of their time looking for parking for their private cars. This is no longer the case when using Uber.

A short time ago, the Cabinet referred a law to regulate Uber’s and similar companies’ business to parliament. What do you think about this move?

I think that moving to legalise the activity is a positive move that can enable the sector to move forward. There is still a chance to talk about several points in the law, but this is not the time for that now, since the law is only an initial draft at this point. We believe, however, that it will have positive results on the participatory economy in general, not only transportation services providers via smart phones.

It is too early to speak about the law now. It will include many details and we will continue talks with officials in the parliament’s Communication Committee or the Ministerial Committee formed to regulate the sector, to agree on legislation that can govern the market and serve all.

 

Have you started making profits from Egypt?

Egypt is the first and largest market for us in the Middle East and Africa. Cairo is one of the largest cities in the world for our business. We are now in the phase of investing and target expanding our services in more cities in Egypt. Only then we will begin making profits.

It is noteworthy that Emil Michael isited Cairo this week with Uber. During his visit, Michael had a number of meetings with key stakeholders, meeting with Sahar Nasr, the Minister of Investment and International Cooperation, and Hisham Arafat, Minister of Transportation, as the ridesharing technology company works towards pushing governments’ and organisations’ transition to an on-demand economy.

RiseUp, an entrepreneur platform, hosted Emil Michael in a fireside chat, discussing his career and advice for young people in Egypt. During the talk, Michael shared his thoughts about entrepreneurship in Egypt, saying that, at Uber, they are passionately committed to their idea, their product, and their industry. “When I came here to Egypt, I saw the same passion among a lot of startups. I had a feeling that Egypt is the new Silicon Valley; it is a fertile ground for startups,” he added.

Moreover, he noted that the Egyptian entrepreneurship ecosystem is the perfect test market for many types of new products and services at the forefront of technology. And the unique combination of history, resources, and people in Egypt makes us keen to keep investing in the Egyptian market.

He also met with Egypt’s top 20 startups for dinner and discussed raising capital, building and scaling a company, and his perspective on growing a successful business in Egypt.

During his visit, Uber hosted 50 of their top performing driver partners and their families along with two Al Ahly stars, Abdallah El Said and Ahmed Fathy, at a special drivers’ assessment event. “It was great to meet the impressive men and women behind Uber’s success in Egypt. 40% of driver partners were previously unemployed, and we are committed to investing further into Egypt to create more economic opportunities across the country.”

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UTEET looking for contracts in the wind energy business https://dailynewsegypt.com/2017/05/10/uteet-looking-contracts-wind-energy-business/ https://dailynewsegypt.com/2017/05/10/uteet-looking-contracts-wind-energy-business/#respond Wed, 10 May 2017 06:00:59 +0000 http://www.dailynewsegypt.com/?p=624906 On the occasion of the Breakbulk exhibition, Al-Borsa had a talk with the managing director of Universal Transport Egypt (UTEET), Hisham El Dahshan, to shed some light on growth opportunities in the Egyptian market and the challenges his company had to overcome when entering the Egyptian market just recently.   What does your participation at …

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On the occasion of the Breakbulk exhibition, Al-Borsa had a talk with the managing director of Universal Transport Egypt (UTEET), Hisham El Dahshan, to shed some light on growth opportunities in the Egyptian market and the challenges his company had to overcome when entering the Egyptian market just recently.

 

What does your participation at the Breakbulk exhibition mean to you and what are the benefits?

Universal Transport has been participating in the Breakbulk Europe exhibition and conference with great success for many years now. Being one of the biggest heavy haulage companies in Europe, it is important for us to be present at such an important event. This year, we will be highlighting Universal Transport Egypt’s mega project HL transports. We ask all Egyptian visitors to meet our colleagues at our booth to learn more about the Universal Transport Group.

What are the main challenges for the heavy lift transport industry in Egypt? Does the infrastructure of Egyptian ports represent an obstacle for the growth of this industry?

There are major challenges at the ports due to the lack of a sufficient number of heavy lift cranes. The roads and bridges also represent major challenges. But with our unrivalled new equipment and our highly-trained personnel, we have managed to overcome all obstacles and meet and exceed our clients’ expectations.

What are the features of this market in Egypt in terms of investment size, the number of companies operating, and competition?

Universal Transport only entered the Egyptian market recently. We saw an opportunity in the Egyptian market because of the ambitious mega projects in infrastructure, power generation, etc.  There is a lot of HL cargo movement, and we were aware that there wasn’t enough high quality equipment in the Egyptian market. We invested in brand new equipment and have a team of Egyptians and Germans operating them at the highest standards. So far our operation has been a great success, and we are very optimistic for the future.

Did the specialised heavy haulage companies benefit from Egypt’s execution of several mega projects that required the transport of equipment for new power plants, the New Suez Canal, and the development of the Suez Canal Economic Zone?

As mentioned, we benefited hugely from the mega projects, as they allowed us to enter the Egyptian market with great success. We have been transporting heavy pieces of up to 200 tonnes on our brand new axle lines for the power stations of Beni Suef and the New Administrative Capital.

What is your company’s turnover in 2016 and what were the major projects handled?

Universal Transport group’s turnover is close to €200m. The two major projects in Egypt that we participated in during 2016 and 2017 were the power plants of Beni Suef and the New Administrative Capital.

What are the targets and forecasts for 2017?

We are still busy with the existing HL transport contracts that we have in 2017. We have also been bidding on several projects in the wind energy business for our international customers. Being a neutral heavy haulage operator, we are also serving the requirements of both the big international freight forwarders and the local forwarders in the Egyptian market.

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We are studying offering shares of the company in EGX in 2018: OUD https://dailynewsegypt.com/2017/05/09/studying-offering-shares-company-egx-2018-oud/ https://dailynewsegypt.com/2017/05/09/studying-offering-shares-company-egx-2018-oud/#respond Tue, 09 May 2017 09:00:42 +0000 http://www.dailynewsegypt.com/?p=624800 Increasing the capital of OUD from EGP 700m to EGP 1bn next year, says owner

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Orientals for Urban Development (OUD) plans to develop five million square metres within its real estate portfolio within two years, with initial investments of EGP 4bn. It is also considering to launch its shares in the Egyptian stock exchange (EGX) over the next year.

Mohamed Farid Khamis, the owner of OUD, told Daily News Egypt that the projects planned to be implemented will be a high-end one.

Is the company considering to allow the entry of new developers?

The company is considering the entry of new developers to implement some tourist and residential projects planned to be implemented soon.

Does the company plan to offer its shares in EGX?

The company plans to offer its shares in the EGX next year. This will be preceded by an increase in issued and paid up capital from EGP 700m to EGP 1bn, through shareholders.

Offering shares in the EGX is one of the most suitable solutions for the company to finance future projects without borrowing from banks. However, the company has not yet made agreements with financial consulting companies to prepare the offering process.

What are the company’s plans to expand over the upcoming period?

The company is negotiating with the Engineering Authority of the Armed Forces to allocate a land of 6,000 square metres in the business and capital neighbourhood in the New Administrative Capital to build a residential tower, in addition to allocating 50 acres to implement an integrated residential complex.

The company plans to launch a new tourist project in the North Coast next month on an area of 45 acres with initial investments of EGP 1.3bn.

The project is located on kilometre 206 on the Alexandria-Matrouh road and is developed through a partnership with the land owner.

OUD plans to achieve sales of EGP 2bn from the project within 18 months from opening the door for reservations. The implementation of the project will take 36 months and will be conducted in three phases that include 800 residential units.

What are the projects being implemented by the company and the volume of its investments?

The first phase of the Oriental Coast project in Marsa Alam was completed under the name of Las Cabanas and includes 500 luxurious tourist housing units, and the Sentido Oriental Dream Hotels & Resorts with a capacity of 350 rooms and with total investments of EGP750m. 80% of the units of the first phase of the project is sold to citizens from European countries and 20% to Egyptians.

The sale of 360 units was completed in the second phase of the oriental coast, titled Matangi, with 500 units and total sales worth EGP 750m at a construction cost of EGP 600m.

The two hotels are under construction with investments worth EGP 700m, and the construction works will be completed in 18 months.

The total area of ​​the oriental coast project is 5m square metres, with total investments of EGP 8bn, and the project is self-financed through the company’s shareholders.

The project was being implemented through five structural stages, including 8,400 units distributed on 4,200 tourist housing units and 4,200 hotel units.

The project includes 12 hotels as well as villas, tourist residences, golf courses, a downtown area, an aquapark, a conference hall, and a yacht marina.

The company is currently considering to look for shareholders to complete the development of the project stages through a partnership system as one of the financing ways to implement the project without resorting to borrowing money from banks.

The company sold 80 % of the new residential units project to Heliopolis Hills company during the first month of the beginning of reservations to customers with total sales worth EGP 420m.

Sales were distributed over the Cityscape exhibition with 60% last month, and 40% in two other exhibitions in the United Arab Emirates.

Heliopolis Hills is located in the Sixth District in Obour City, on an area of 18 acres with total investments worth EGP 550m and with 164 villas on areas ranging between 190-240 square metres.

The project is being implemented in four stages, and Yasser El-Beltagy Consulting Office is responsible for the engineering designs.

The company targets to achieve a sales value of EGP 240m in its Al Qurba Royal Residence project in Heliopolis, and ended with sales of 20% of the project units.

The company provided 4-year interest-free payment facilities, and the project targets the upper class of the residents of Heliopolis.

The company has completed the implementation of Al Baron City project for housing on the road to Qatameya on an area of 38 acres and the project includes 63 residential building with 3,700 units on areas ranging between 90 square metres and 200, and the price of a square metre per project ranges between EGP 2,450 and EGP 3,750.

The total investments of the project reached EGP 4bn, and it is implemented in four stages, including Al Baron commercial mall.

The American consulting office Well Gates took over the design and coordination of the site of the project.

He explained that the company has completed the delivery of the fountain park project in New Cairo on a total area of 55 acres. The project includes 130 luxurious villas with an average area of 800 square metres at investments worth EGP 600m.

The company has completed the implementation of the Palm Park residential project in El Shorouk city, which includes 232 units, while it also completed the implementation of the “palm suburb” commercial housing project, which includes El Shorouk academy.

The company delivered 5,550 units in its projects since its establishment in 1994 on a total area exceeding 2 million square metres.

Does the company plan to add new land to its real estate portfolio?

The company is currently looking for lands on areas of 50 to 100 acres in New Cairo and 6th of October City for the development of a housing project through partnership with the private sector.

Did the company raise unit prices in its projects after the flotation of the pound?

The company has increased the prices of its units in various projects after the flotation of the pound by 25% as a result of the price hike of raw materials used in construction at rates reaching 80%.

What is the company’s sales rate through social media channels?

The company depends on a marketing team to sell its projects, and sales of the company through social media channels represent 25% of total sales.

Is the company considering opening new branches?

The company will open three new branches in Port Said, Abbas Akkad, and Mohandessin in June, beside the two branches it already owns in the areas of Sheraton and Qatameya.

How do you see the Egyptian real estate market?

The Egyptian real estate market needs to implement several projects that address the middle and upper middle classes, where prices range between EGP 5,000 and EGP 8,000 per square metre, and areas between 70 and 200 square metres.

The company started implementing its first investment in Egypt through the establishment of the Jasmine residential project in 10th of Ramadan City, on an area of 40 acres including 360 villas and 160 residential units on areas between 150 and 300 square metres.

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GE seeks to participate in Egypt’s 2030 Development Vision through digital solutions https://dailynewsegypt.com/2017/05/09/ge-seeks-participate-egypts-2030-development-vision-digital-solutions/ https://dailynewsegypt.com/2017/05/09/ge-seeks-participate-egypts-2030-development-vision-digital-solutions/#respond Tue, 09 May 2017 07:00:36 +0000 http://www.dailynewsegypt.com/?p=624772 I met with some officials from the Egyptian Electricity Holding Company and Communications Ministry to review our most prominent technological solutions

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General Electric (GE) Power seeks to cooperate with the Egyptian government in the implementation of the country’s 2030 Development Vision, according to Ganesh Bell, chief digital officer of Power Digital Solutions at GE Power. Bell said in an interview with Daily News Egypt that he met with a number of officials from the Egyptian Electricity Holding Company and with the Ministry of Communication and Information Technology, discussing the technological solutions offered by the company to increase the productivity and efficiency of the Egyptian electricity sector and reduce expenses. He added that his meeting tackled the new digital solutions offered by GE Power, namely Predix. It is an industrial cloud-based platform that helps in the management of electricity generation operations, and the analysis of data collected from electricity generation assets, such as turbines.

Why did you visit Egypt? Is there a plan to meet with some government officials?

The reason for my visit to Egypt is to meet officials from the Ministry of Electricity in order to talk about the digital solutions for the electricity sector, which help to raise efficiency and reduce cost, as well as to explain the role that digital solutions can play to implement the vision of Egypt 2030.

We have been communicating with the Ministry of Electricity for several years regarding the means of cooperation between the two sides in digital solutions, in addition to reviewing the priorities of the ministry to find out how to provide suitable solutions for them to implement their development plan for the sector, which we will emphasise during the meetings we are set to attend during the visit.

Who did you meet? And did you sign any deals?

We have met with officials from the Egyptian Electricity Holding Company and officials from the Ministry of Communications and Information Technology. We have not signed any agreements related to digital solutions yet, but the main objective of these meetings is to clarify what GE’s digital solutions can add to the Egyptian energy sector.

How can the digital solutions offered by the company help improve electricity services in Egypt?

Digital solutions generally have a positive impact on sectors such as retail, leisure, travel, and others, and they play a key role in various industrial sectors.

In the beginning, we have to clarify our most prominent digital solutions. We created a platform called Predix, which is a cloud-based one that can be linked to sensors placed on all the assets involved in the production of electricity, such as turbines and nuclear reactors.

Sensors can collect and analyse data. Through the analysis of the data, the customer can understand the performance of the equipment involved in electricity production, which allows controlling the system, thus increasing productivity and saving expenses.

Statistics show that every 2% of saved fuel can provide financial savings of up to $3bn over 12 years.

Are any of these technological solutions mentioned in Egypt?

Currently, none of these solutions are implemented in Egypt, but we believe that these solutions will provide added value to the Egyptian electricity sector. Therefore, we seek to implement them in Egypt in the coming period, especially as it corresponds to the “Sustainable Development Strategy: Egypt’s Vision 2030”, which aims to rely on technology information in advancing the national economy. The energy sector is one of the most important sectors that require technology to raise its efficiency and reduce costs.

In the long run, all these solutions are important and have strong economic effects, but are they expensive?

There is no significant cost to use these technological solutions. Customers who will use these solutions will receive positive results—not only in the long run, but also in the short term. For example, using these technological solutions will enable the state to avoid electricity failures and blackouts. These sensors predict the failures and send the report directly to officials to fix the problems, which saves money and effort, next to help avoiding blackouts.

The cost of obtaining this service is not only paid once, but is paid in a subscription format, making it almost inexpensive. These solutions also guarantee immediate positive results in productivity and economic savings.

Are some of these solutions applied to markets neighbouring the Egyptian one?

We have already implemented these solutions in the markets of Pakistan and Qatar, in addition to the Saudi market, which is similar to the Egyptian market in terms of production capacity of the electricity sector. The Saudi market produces 40 gigawatts of electricity per day, while the Egyptian market produces 35 gigawatts. Saudi Arabia has linked all production lines to the Predix system, which improves productivity and reduces costs.

In my opinion, it was better to use these technological solutions during the period of modernisation of the electricity system, which took place during the past two years. What do you think?

This is true, but Egypt has many opportunities to achieve growth, and there is still an opportunity. There was once an industrial revolution. Now, in Egypt, we are embarking on a technological revolution. This is why I think Egypt has a great opportunity to achieve a boom in the electricity sector depending on information technology, especially with hardware integrating with software.

What are the most prominent features of your plans for the Egyptian market during the coming period?

We see good opportunities for growth in the Egyptian market in a number of sectors such as manufacturing, electricity, energy, healthcare, and transport. In this regard, Egypt has many young talents that can be employed to serve the sector, especially that there are many young Egyptians distinguished in the software sector. We aim to make Egypt our hub in the Middle East for young experts trained on software.

In this regard, one of the competing companies announced the establishment of an engineering plant in the new technological park. Do you have similar plans?

We must first set a road map to highlight the experts we need locally prior to developing their skills. We now have a large number of employees in Egypt, but we seek to expand in investing in locally trained human resources.

Can you use technology parks that the Ministry of Communication is currently implementing?

Indeed, we can use technology parks, especially since a large part of our work depends on software developers. GE currently has more than 22,000 software developers globally, and we aim to use many Egyptian application-developers.

How much is allocated for R&D? Can Egypt become your regional centre?

In 2016, we spent about $5.5bn on research and development. As for making Egypt our regional centre, this relies on the commitment of the state to develop the sectors based on information technology. This will be followed by an increase in employees and increased investment opportunities in the sector. This could help in making our decision about setting Egypt as a regional R&D regional centre.

One study suggests that digital solutions can create 3 million jobs a year globally and help boost revenues by $1.3tn.

There are many challenges in Egypt. How do you face these challenges? How can these challenges turn into investment opportunities?

Egypt has a plan to have 20% of its energy production generated by renewable energy by 2030. This is a challenge on its own, and it cannot be achieved using the current infrastructure. This is what Predix can help with.

There are many economic changes witnessed in the Egyptian market during the last period. How do you see the impact on your company in Egypt?

We believe in Egypt’s “Sustainable Development Strategy: Egypt’s Vision 2030”. We aim to be Egypt’s partner in realising this vision. We help our customers in the country, not only by providing technology solutions for energy, but by providing an integrated solution and providing the necessary financing for some of the solutions provided to our customers in Egypt.

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ARCO launches new signature project in North Coast https://dailynewsegypt.com/2017/05/08/arco-launches-new-signature-project-north-coast/ https://dailynewsegypt.com/2017/05/08/arco-launches-new-signature-project-north-coast/#respond Mon, 08 May 2017 10:00:35 +0000 http://www.dailynewsegypt.com/?p=624611 AUR Capital for Direct Investment will be launched during Ramadan, says chairperson and CEO

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ARCO’s total investments in the Egyptian real estate market over the next five years will reach EGP 32bn in various projects.

The company expects contractual sales of EGP 25bn over that period, reflecting the company’s confidence in the local real estate market, which depends on real demand based on the population growth enjoyed by Egypt, according to Ashraf Salman, the chairperson and CEO of AUR Capital and executive president of ARCO.

Salman added that real estate investment contributes 17% to the GDP.

Daily News Egypt interviewed Salman to talk about the company’s business and the future of the real estate market.

What is the targeted percentage of sales to Arab and foreigners?

In the next three quarters of the current year, we target EGP 3bn in sales, 60% of which will be from sales in Egypt and 40% from sales in foreign and Arab countries.

What are the main other markets the company targets?

We seek the United Arab Emirates’ (UAE) open market; however, during the next five years, we will pay great attention and develop projects in the Egyptian market.

What are the new projects that the company plans to launch?

We will launch a new signature project in the North Coast. The project will have new designs. However, real estate projects in the North Coast are traditional with high prices and a short payment period. ARCO will innovate a new design of 85sqm chalets that are so close to the lagoon that they will give the image of floating on it. Each of those chalets has a garden in front of it. FC Barcelona star Neymar will lend his name to the Neymar signature homes on the lagoon at City Stars Sahel.

What is the size of investment of the project in the North Coast?

The investment does not exceed EGP 1.9bn, and the payment period will be 10 years.

The first phase will be delivered after three years, the second phase after four years, and the third after five.

What is your opinion regarding the new real estate regulation?

The new real estate regulation is good and will participate in reviving the sector once it is issued.

Does ARCO plan to partner with the government in projects?

ARCO is ready to collaborate with any partner, whether the New Urban Communities Authority (NUCA), the New Administrative Capital, and also private sector developers in line with its strategy. Additionally, we are ready to collaborate with the government as long as the partnership will help reach the target where 60% of customers will consider those units their first homes, and 40% will consider them their second.

ARCO signed a memorandum of understanding (MoU) protocol with NUCA to develop South Marina in El Alamein. What is the situation of the project?

We signed a MoU with NUCA in 2015 to develop South Marina in El Alamein with investments of EGP 26bn to develop 2,800 acres, but the MoU was not agreed upon so a contract was not signed. In the coming period, we may negotiate the project again, and we may also negotiate other projects.

What is the increase in the percentage of prices approximately six months after floating the Egyptian pound? Besides, shall we expect other increases?

ARCO increased the prices by 15% on its units, and, in the next period, we will offer other payment methods. The increase depends on the market.

What is your vision for the future of the real estate sector? 

I see that Egypt’s real estate sector will continue growing between 15% and 25% on average annually during the coming five years. This vision is based on three things: first is the attractiveness of prices; second, there is a demand in various housing units A, B, and C; and third, Egypt in the coming period will be an attractive destination for Arab and European countries.

Are Egyptian real estate companies ready to buy real estate projects for foreigners?

Egyptian companies are ready for that because there were outstanding projects established during the last five years. Besides, there are innovative ideas provided by some real estate developers up to international standards. What we need is to market our products to Arab and foreign markets to achieve our target sales.

What is your opinion regarding the new Administrative Capital project?

The New Administrative Capital project is very well planned, because it takes into consideration all problems that faced the new cities, such as plumbing and electricity. It will be a natural and good development for new Cairo, and we have plans to establish projects in the New Administrative Capital.

Why didn’t ARCO participate in the first phase of the New Administrative Capital? And what is your opinion regarding the first phase?

We weren’t ready for the first phase, and, at this time, AUR Capital hadn’t acquired ARCO yet. Land prices were affordable and were not overpriced, and this helped developers develop and sell their projects.

AUR Capital acquired ARCO. Please explain to us the process of acquisition.

AUR Capital is a direct investment company operating in five areas. The first is real estate investment, and the company has established AUR Misr for Real Estate Investment Company, which has acquired ARCO in February.

AUR Misr for Real Estate Investment is working on developing ARCO’s brand equity and its land bank and investment.

The second fund is the non-banking financial fund, which will be established in cooperation with the Egyptian Gulf Bank (EGBank). The third fund to be launched is the Health Fund. AUR Capital for Direct Investment and Egypt Capital for Direct Investment will be launched during Ramadan.

AUR Misr for Real Estate Investment put a new budget for ARCO, for the period between April and the end of the year. We allocated most of the budget to communicating with customers and providing services.

What about facility management?

We have a facility management department, and it will be separated soon so that it would become an independent company that will provide services to other developers.

What is the size of the gap of luxury real estate units?

There is an annual shortage in luxury housing estimated at 100,000 housing units per year, 200,000 housing units in middle-class housing, and 200,000 in economic housing.

Do you think that the Egyptian real estate market is exposed to a real estate bubble?

I think that Egypt’s real estate market is not exposed to a real estate bubble, contrary to what some experts think. The Egyptian real estate market is characterised by a large population. There is an annual demand of 500,000 housing units. This demand is higher than the supply and will continue to be so in the next five years.

Furthermore, real estate prices in Egypt are the lowest in the region. Prices per square metre in the UAE is not less than $3,000, Morocco at $2,500, and at Nigeria $3,000. In Egypt, however, the highest price per square metre does not exceed $1,000.

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Financial inclusion needs strategic vision and government support: Visa director in Egypt https://dailynewsegypt.com/2017/05/08/financial-inclusion-needs-strategic-vision-government-support-visa-director-egypt/ https://dailynewsegypt.com/2017/05/08/financial-inclusion-needs-strategic-vision-government-support-visa-director-egypt/#respond Mon, 08 May 2017 07:00:58 +0000 http://www.dailynewsegypt.com/?p=624587 Egyptian government is striving to spread financial inclusion and is taking concrete steps to achieve this, says Mahfouz

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Tarek Mahfouz, director of Visa in Egypt, said that financial inclusion needs a strategic vision to be achieved and government support for its implementation.

In an interview with Daily News Egypt, Mahfouz pointed out that the Egyptian government is striving to spread financial inclusion and is taking concrete steps to achieve this. He added that mobile phones are an effective way to spread electronic payments and activate financial inclusion, provided that adequate infrastructure and legislation are available.

He stressed that education and awareness-raising related to payroll cards are considered the pillar of the success of Egypt in its electronic payroll programme​ for government employees.

He pointed out that the technological infrastructure is one of the most important factors for the spread of financial inclusion because it enables financial institutions to absorb large sectors within the banking system and also allows citizens to deal with banking institutions using various technological means that are adapted to serve them.

Mahfouz said that the banking sector is one of the main players in the efforts to push forward financial inclusion in Egypt, but there are other parties that should support it, pointing out that Visa is currently working on the formation of committees in cooperation with major companies in the field of consumer goods and the production and distribution of medicine to expand the scope of electronic payments acceptance.

 

What role does Visa play to help Egypt achieve financial inclusion?

I would like to point out that financial inclusion means that all citizens and segments of society enjoy financial services with dignity and transparency, next to the availability of multiple options for financial services provided to consumers.

Financial inclusion needs a strategic vision to be achieved​ and government support to implement it, which we are currently seeing from the Egyptian government, which is hurrying to spread financial inclusion and is taking concrete steps to achieve this.

These include the payment of government employees’ salaries and suppliers’ entitlements through electronic payment cards.

As for the role played by Visa to help Egypt achieve financial inclusion, there is a great effort executed by the company in this regard. The most recent activity in this context was the organisation of a workshop with the Egyptian Banking Institute and Banque Misr for the representatives of government agencies who are mandated to distribute payroll cards to state employees.

The main objective of the workshop was to inform the commissioners of the basic messages of government payroll cards, including that the government payroll card can be used to pay for purchases and services, and that they are completely safe and provide convenience and smooth financial transactions.

Such activities by Visa contribute to the efforts towards financial inclusion. Awareness and the dissemination of digital payment culture are the most important mechanisms for spreading financial inclusion.

How do you see the role that electronic payment cards can play in achieving financial inclusion?

The world is moving towards paying salaries through cards, in order to save costs of managing cash and issuing checks.

In the United States, there were about 3.7 million employees who receive their salaries by cards, compared to 11.8 million employees who receive their salaries by checks. In 2015, the number of payroll cards reached 7.4 million, compared to 6.7 million employees paid by checks. It is expected that the number of payroll cards will reach 21.2 million cards in 2019, versus 2.2 million employees who will be paid by checks.

I see education and raising awareness related to salary cards as the core of the success of Egypt in the programme​ to pay the salaries of government employees by cards.

Looking at the United States, which is one of the most advanced countries in the spread of payment cards, we find that 8% of salary cardholders withdraw all their salaries from ATMs, while 59% of them withdraw only part of the salary from ATMs, while also using the card for some purchases.

Thirty-three percent of US payroll cardholders use the card only to conduct all their daily financial transactions.

Visa depends on its close partnership with the government and financial institutions. We also rely on these partnerships to implement the government payroll services.

The programme is implemented by ministries and government agencies, which requires close cooperation of all parties, including Visa, the Egyptian Banking Institute, and government agencies, as well as financial institutions issuing payroll cards, in order to ensure coordination and harmony in the process of drafting the messages received by the cardholder.

What are the main challenges for Egypt in the path for achieving tangible progress in financial inclusion?

The most important challenge is to raise awareness and digitise government payments and the government’s revenue. We are working with the Egyptian government to achieve this quickly.

The strong technological infrastructure in the Egyptian market must be exploited to spread financial inclusion.

Mobile phones are an effective means of spreading electronic payments and activating financial inclusion, provided that adequate infrastructure and legislation are available.

With the proliferation of the internet, coupled with the proliferation of smart mobile phones, we see that Egypt has a growing opportunity to achieve significant revenues from electronic commerce, which Visa has studied extensively. We provided a full study about it to the Egyptian Ministry of Communications for them to take advantage of.

The technological infrastructure is one of the most important factors for the spread of financial inclusion, because it enables financial institutions to absorb large sectors within the banking system and also allows citizens to deal with banking institutions using various technological means adapted to serve them.

A survey commissioned by Visa recently found that 53% of Egyptians are permanent internet shoppers, with one in every ten Egyptian citizens using e-commerce sites almost daily, compared to 47% who shop online every 2 – 3 weeks. This means there is a great opportunity to further expand the sector over the coming years.

Youth accounts for the largest proportion of Egyptians who shop online. Sixty-three percent of young people between the ages of 18 and 25 use the internet to shop at least once a week, and they spend the most. About 31% of the youth that shop online spend EGP 5,000 or more per month. The average monthly expenditure for all age groups is EGP 3,758.

I want to point out that when South Korea returned to using electronic payments in the process of collecting taxes, it succeeded in raising the tax revenue by about $30bn in four years.

In South Africa, the government used Visa cards to provide social support to its beneficiaries, including 7 million children receiving government benefits. In Moscow, 3 million Russians receive their pensions through Visa cards.

One of the main reasons for the lack of financial inclusion is the limited scope of acceptance of electronic payments, which is something we are currently tackling with the government through innovative solutions, such as mVisa, which operates on internet-linked smart phones. This expands the scope of accepting electronic payments at different merchants.

QNB Al-Ahli recently announced the launch of the service, which is a breakthrough in the field of digital payments.

The mVisa service targets the majority of merchants for its ease of operation and spread. It is an ideal tool to expand payment acceptability. Anyone who carries a mobile phone can use it to buy products and services, thus saving time, effort, and cost associated with transportation. The service can also be used to pay utility bills.

This service is used by placing an mVisa code for each merchant. The cardholder can then take a snapshot of the code through the mobile camera or enter the code manually to conduct transactions.

Because of its widespread nature and low costs, acceptance of mVisa payments is increasing. This service also lowers, or even eliminates, the risk of fraud, because the consumer is the one who enters the amount to be paid on his mobile phone without having to use the card or pass it to the point of sale. The merchant receives a message on his phone confirming the receipt of the amount from the consumer.

Moreover, the mVisa service is easy to use for all merchants everywhere, especially in remote areas. The service can become a vital financial inclusion tool in Egypt.

How do you see the role of the banking sector in achieving financial inclusion in Egypt?

The banking sector is one of the main players in the efforts to push for financial inclusion, but other parties also play a major role in achieving this, including the government agencies concerned with technological infrastructure, such as the Ministry of Communications and Information Technology, which is making great efforts in this regard.

We are cooperating with the Federation of Egyptian Chambers of Commerce in this field. We started with the General Computer and Software Division to prepare a pilot project for the settlement of electronic payments in the retail and pharmacy sectors.

We are also working on forming committees in cooperation with leading companies in the field of consumer goods, as well as pharmaceutical production and distribution companies, in order to reach the best ways to expand the acceptance of electronic payments to ensure the payment and consolidation of financial inclusion efforts, achieve financial transparency, and save time and effort associated with cash transactions, as well as reduce the risk of cash circulation suffered by companies and traders alike.

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Lack of financial inclusion impedes economic growth: UNB-E vice chairperson https://dailynewsegypt.com/2017/05/08/lack-financial-inclusion-impedes-economic-growth-unb-e-vice-chairperson/ https://dailynewsegypt.com/2017/05/08/lack-financial-inclusion-impedes-economic-growth-unb-e-vice-chairperson/#respond Mon, 08 May 2017 06:30:51 +0000 http://www.dailynewsegypt.com/?p=624581 “Public and private sectors should work together based on a well-studied plan to achieve financial inclusion in Egypt”

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The lack of financial inclusion hinders economic growth and deprives citizens of better job and life opportunities, says Mohamed Nasr Abdeen, vice chairperson of the Union National Bank Egypt (UNB-E).

Abdeen told Daily News Egypt that the public and private sectors should work together based on a well-studied plan to achieve financial inclusion in Egypt, asserting the need to raise the young generation’s awareness and give them the chance to enter the banking sector.

He added that the expansion of the customer base supports the financial system and has a positive impact on the economy.

According to Abdeen, the Egyptian banks started to pay attention to electronic payment systems and benefit from modern financial services via mobile phones, and he noted that UNB-E constantly develops its products to meet the needs of customers.

How do you see the importance of financial inclusion for Egypt?

Financial inclusion has become necessary—especially after the volume of money exchanged outside the banking system has been doubled in recent years—as the absence of financial inclusion hinders economic growth and deprives citizens of better employment and life opportunities.

The expansion of the customer base in the banking sector by adding new segments of society supports the financial system. It also has a positive impact on economic activity, which leads to increased savings and investment rates and helps to achieve the optimal utilisation of human resources.

What is the role of the bank in supporting the state’s efforts to achieve financial inclusion?

UNB-E has adopted some measures to support the Central Bank of Egypt’s (CBE) efforts to achieve financial inclusion. The bank has signed a cooperation protocol with the Dar Al Maaref to raise awareness about financial inclusion.

This protocol includes a number of initiatives to increase young people’s knowledge about financial inclusion and its importance and role in achieving economic growth and financial stability in the country.

The bank will also sponsor the publishing of a series of children’s books that will develop a culture of children’s savings. These publications are due to be distributed to school students across the country, in particular Upper Egypt, in addition to releasing them online to reach the whole society.

The bank has also participated in the Financial Inclusion Week out of its awareness of the importance of financial inclusion in supporting the Egyptian economy.

During the Financial Inclusion Week, the bank facilitated all the transaction procedures, paying attention to the poor and low-income people and raising the awareness of clients, especially those who do not benefit from financial services in the governorates of the Delta, Upper Egypt, and Suez Canal regions, in addition to other areas.

How can Egypt achieve financial inclusion from your point of view?

The country should pay attention to the young people and raise their awareness about the banking sector and the necessity of dealing​ with legal institutions.

The financial inclusion initiative basically aims to develop the banking culture of citizens, which requires the appointment of trained bankers to take care of this new segment of customers.

Since the financial inclusion initiative aims to help low-income people to benefit from financial services at a reasonable cost, the expansion of the customer base will contribute to the empowerment of society as a whole and enhance the financial independence of individuals.

The bank’s strategy also targets to raise awareness of school and university students, through media outlets and social media networks.

One of the obstacles facing the implementation of the financial inclusion initiative is that most of low-income individuals are located in remote areas, which limits their ability to benefit from available services.

We should also limit the risks of operating outside the framework of the official financial system and offer financial services and products in accordance with the rules and laws.

It is also important to encourage citizens to save and invest their money in the best way, through the preparation of programmes allocated for specific groups to promote their culture of savings and investment.

Is the technological structure of the banks operating in the Egyptian market capable of achieving financial inclusion?

Egyptian banks started to pay attention to electronic payment systems and benefit from modern financial services via mobile phones, which has a positive impact on the transfer of cash transactions into banking transactions to ensure flexibility of payments between individuals, governments, and various economic activities.

UNB-E constantly develops its products to meet the needs of customers.

One of the modern services provided by the bank is “UNB-E Utility”, which helps customers who wish to pay their utility bills through UNB-E to avoid the hassle of bill payment at various service providers. They can also conduct all bank transactions through the mobile phone (UNB-IVR) and text messaging (UNB-INSTANT) services.

The bank will also complete its project of providing banking services to customers through the internet and mobile phones, in order to cope with the developments in the Egyptian banking market and enhance the bank’s position among the local banks.

What are the major obstacles for financial inclusion in Egypt?

I believe that there are no obstacles, but it requires more cooperation between the public and private sectors based on a well-studied plan.

We should have a strategy to measure the levels of financial inclusion for citizens and assess the gap between supply and demand by conducting a comprehensive field survey.

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EAB is most capable bank for achieving financial inclusion: chairperson https://dailynewsegypt.com/2017/05/08/eab-capable-bank-achieving-financial-inclusion-chairperson/ https://dailynewsegypt.com/2017/05/08/eab-capable-bank-achieving-financial-inclusion-chairperson/#respond Mon, 08 May 2017 06:00:46 +0000 http://www.dailynewsegypt.com/?p=624579 We have 1,210 branches, equivalent to about 27% of the total number of bank branches in Egypt, and we can reach about 40-50% of the total number of citizens, says El-Kosayer

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Chairperson of the Egyptian Agriculture Bank (EAB) El-Sayed El-Kosayer said that the EAB is the most capable bank to achieve financial inclusion in Egypt.

He told Daily News Egypt that the bank has 1,210 branches, which is equivalent to about 27% of the total number of bank branches in Egypt, with access to 40-50% of Egyptians.

He added that the bank’s presence in various regions of the republic, including villages, rural areas, and low-income districts, gives it a competitive advantage over other banks operating in the Egyptian market, stressing at the same time that achieving financial inclusion in Egypt does not depend on the readiness of the banking sector and other financial institutions as much as the citizens themselves believing in its importance.

 

How do you see the importance of financial inclusion in Egypt?

Financial inclusion is a major cause of economic growth and financial stability, by integrating individuals and institutions into the formal financial sector.

It also enables financial institutions to develop their products and create a climate of competition in order to offer cheaper and easier financial products and take into account the interest of customers by obtaining transparent treatment and excellent services with ease.

The aim of the application of financial inclusion is to ensure that all segments of society have adequate opportunities to manage their money and savings in a safe and secure manner so they would not resort to non-official means, which are not subject to any supervision, and may be scams.

It is known that there are only 11 to 12 million citizens who deal with banks in Egypt, out of the 54 million citizens who are eligible to deal with banks. This means that the majority of Egyptians are outside the banking system. Banks and other financial institutions should strive to include them.

The banking sector aims to widen the circle of beneficiaries of banking and financial services. The entry of all citizens into the banking system reduces the liquid money in the society. It also allows citizens to manage their money through the official channels in a safe manner, which ultimately leads to the financial and monetary stability of the country.

Although the Central Bank of Egypt (CBE) is making a lot of efforts to achieve financial inclusion, through the initiatives launched from time to time, we hope that there will be the quick passage of laws that integrate the informal economy into the formal economy and provide incentives for that.

What is the role of the EAB in achieving financial inclusion?

I always stress that the EAB is the most capable bank in achieving financial inclusion in Egypt, as we can reach about 50% of all Egyptians.

The bank has a branch network of 1,210 branches spread across the country, equivalent to about 27% of the total number of bank branches over all. This gives us a spread that no other bank in Egypt has and access to places inside the villages that other banks cannot operate in.

The bank’s customer base is currently about 2 million, most of whom are farmers and peasants, as well as owners of microenterprises.

The number of farmers in Egypt amounts to 6 million, next to temporary agricultural labourers of about 4 million. This means that there are 10 million people in the agriculture sector. If every one of the 10 million provides for a family of four or five people, that means that the bank can access 40-50% of all Egyptians.

The bank also participates in the national project “Mashrouak” that aims to provide job opportunities for youth in villages, neighbourhoods, cities, and towns in all governorates; achieve sustainable development; reduce migration from villages to cities; improve quality of life in Egypt; and put the youth on the right path to form a new generation of investors.

The bank accounts for 27% of total loans granted by the six banks that are part of the project. It is only second to Banque Misr. If we hope to achieve financial inclusion in Egypt, the EAB is the way for it.

We are currently studying the provision of a range of services to suit the nature of the bank’s customers. We aim to develop the banking services system and start to provide technological services to serve the bank’s customers, who are farmers and their families.

As mentioned before, we aim to attract the 6 million farmers in Egypt to join the bank’s customer base. The “Farm Card”, which will be launched in cooperation with the ministries of agriculture, military production, finance, and planning, may help us achieve this.

Do you think that the technological structure and geographical spread of banks enable the state to achieve financial inclusion?

As I previously said, the banking sector, including the EAB, already have the ability to achieve financial inclusion.

But the road to financial inclusion does not rely only on banks, but on other financial institutions that can help, such as Egypt Post, NGOs specialised in microfinance, and the Social Fund for Development, along with e-payment companies, such as Fawry.

I would also like to point out that dealing with banks is no longer limited to dealing with branches or even ATMs and electronic payment points of sale (POS). There are a lot of transactions that are conducted through mobile phones, which are in the hands of all citizens. Some people even have more than one phone. This means that achieving financial inclusion should be an easy task, provided Egyptians believe in its importance.

This is not related to the readiness of the banking sector or other institutions to achieve financial inclusion, as it is related to the degree of conviction of the citizens themselves in the importance of conducting transactions through banks. This requires changing the culture of the people to make them understand that the banking sector is the safest place for savings and financial transactions.

I would also like to stress that the role of the media is also very important in helping the state achieve financial inclusion because it has the ability to influence public opinion and convince the citizens. Furthermore, I believe there should be an additional curriculum at schools that highlights the importance of financial inclusion.

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Egypt’s economic reforms on right track, but still plenty of room for improvement: Robert Tashima https://dailynewsegypt.com/2017/05/07/egypts-economic-reforms-right-track-still-plenty-room-improvement-robert-tashima/ https://dailynewsegypt.com/2017/05/07/egypts-economic-reforms-right-track-still-plenty-room-improvement-robert-tashima/#respond Sun, 07 May 2017 10:30:04 +0000 http://www.dailynewsegypt.com/?p=624539 Providing an inclusive basis for growth and improving the lives of the average Egyptian is more important than GDP growth

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Oxford Business Group (OBG) is a global publishing, research, and consultancy firm, which publishes economic intelligence on the markets of the Middle East, Africa, Asia, and Latin America.

To learn more about OBG’s views of Egypt’s economy, and the recently adopted economic reform programme, Daily News Egypt interviewed Robert Tashima, OBG’s Africa’s managing editor, who reviewed the economic performance of Egypt during the last period and the impact of economic reforms on the life of the average Egyptian.

How do you view Egypt’s economic reform programme?

I mean, first off, I think one thing I should make clear from the beginning is that a lot of my perspectives are going to be from OBG’s vantage point. We’ve been present in Egypt for about 14 years now, speaking with private sector stakeholders, government officials, and civil society to get a sense of what’s going on in the country, where the opportunities and what the challenges are. We communicate that to foreign investors, and we come to these sorts of issues with a very particular external view points. What we seek to do is not just to take a look at the Egyptian market in isolation, but also to take a look at how Egypt performs relative to other markets in the Middle East and North Africa, because generally, our subscribers are members of the foreign investment community whether companies or sovereign governments. These look for a place to invest their money, but they study a number of economies to seek the best return for their investment.

In terms of Egypt’s economic reforms, I would say no they’re not sufficient, but I think that every economy has room for improvement, but I think it has been noticeable over the past couple of years that the Egyptian government has made concerted efforts to listen to the needs of the private sector and make an aggressive push to the overall attractiveness of the economy.

However, by taking a look at Egypt from a different perspective, it’s very clear that the reforms and the changes have not been perfect, but I think there is a high degree of political will in terms of improving Egypt’s attractiveness to both local and foreign investors, such as the new tax exemption, and fiscal incentives, proposed over the past couple of years. You’ve also got this unified customs tax for equipment importation, and you have a new corporate tax and a value added tax.

These efforts go a long way, and, again, even if they did not achieve the intended results, I think that for the government to actually conduct them goes a long way in terms of improving investor confidence. One thing that has been really impressive from our perspective was the effort taken by the government to address the very difficult and tricky issue of subsides, which date back to the bread riots of the 1970s.The government has managed to reduce the subsidy bill, and the government has been trying to reduce this burden on the state, which can have a number of knock-on effects when you’re paying more in current expenditures for things like subsidies that reduce the amount that the government can spend on things like road maintenance or schools for example.

Consequently, I think the reforms that have been carried out over the past couple of years—whether fiscal incentives, tax regime changes, subsidy cuts, or even currency flotation—have gone a long way in terms of strengthening the attractiveness of the Egyptian economy, at least in the short term, and as we go through these programmes, they will hopefully meet the target and the long-term outlook for Egypt’s attractiveness will continue to improve. I mean, there hasn’t been any major change yet in business confidence or investor confidence surveys. The PMI for March was actually slightly down what it was in February or January, so obviously we’re not seeing that kind of turnaround, but I think it will take time.

But, you know, we in OBG just recently completed our first ever business barometer, which is a survey given to Egyptian CEOs, where we talk to top executives in the country to get a sense of what they are thinking about the economic outlook and the reforms being carried out. And we found that 80% of the top executives in the country are either positive or very positive about local business conditions, which was surprising.

In your point of view, what are the amendments and modifications that can be applied to the reform programme to increase its efficiency?

Given that Egypt is currently ranked the 122nd rank in terms of the World Bank’s “doing business ranking” report, which that shows that there is a lot of room for improvement in terms of business environment, especially in terms of dispute settlements and arbitration.

One of the things that we often hear when we’re doing our research in Egypt from the private sector is the challenges related to land transactions: how burdensome they are, how slow they are, how expensive they can be. I think that, currently, the time it takes to register property in Egypt is roughly twice that of the regional average. For example, if you’re a developer looking to build a mixed-use use project or if you’re an industrial company or a factory, the fact that you have to wait for 50 to 60 days to just register the property.

This is a huge disadvantage in terms of efficiency of your investment, so that’s certainly a challenge, and there is obviously plenty of room to address those issues. We’ve seen improvements in construction permits and investor protection. But the land act is certainly one area where there’s room for improvement, as well as the challenges faced with the new lottery system, and the revenue sharing model. There is growing concern whether those are viable options.

Moreover, I believe that another area where there’s certainly room for improvement is where you’ve seen the Central Bank of Egypt (CBE) and the government take a lot of efforts to improve the access to finance. There has been a lot of talk about boosting not just small and medium enterprises (SMEs), but also the private sector credit. I think that this is particularly challenging for Egypt’s banking system.

Doing that is not a question of whether or not Egypt’s banks have the capacity to lend or whether they have healthy balance sheets. Egyptian banks’ non-performing loan ratio is declining, and they have a loan to deposit ratio between 40-42%, which is one of the lowest in the region.

This means that there’s a lot of capital and a lot of liquidity for banks to lend. However, I think the pressure is coming from the rapid growth of locally held government debt in the banking system. You’ve got a lot of government bonds that banks currently hold, and it has grown by 300% since 2010. As a result, the banks’ incentive and ability to lend to the private sector is reduced.

How do you view the soaring inflation rates, and how it can be controlled?

I think that a 32% inflation rate is one of the highest in a decade. This is obviously exacerbated by the currency flotation and the reliance on imported products and equipment, which means that households and smaller businesses in Egypt are very vulnerable to price increases.

The subsidy cuts also made it worse. Natural gas prices rose by around 100-150%, which was really just a crazy amount for your taxi driver or your average household to suddenly have to start dealing with. I think the inflation peak has passed and that things are beginning to stabilize, but certainly it is a big concern for the large proportion of households.

There have been proposals from the International Monetary Fund (IMF) to potentially look at tightening monetary policy, by pushing up interest rates to help address that. The government is really trying to reduce unemployment and boost export revenues in order to ensure that the economy is growing in a sustainable fashion. This is also besides the fact that they are attempting to improve the level of inclusiveness and achieve a higher growth rate than they currently have, which means they need to continue to push for recovery, and tightening the monetary policy won’t help that in any way, as it will just delay the prospects for recovery.

The government is attempting to maintain a very tricky balance, where they are trying to control things like subsidies and improve the broader stability of the macro economy by floating the pound and reducing the pressure on foreign reserves, all while trying to reach higher growth rates and minimise the pain on lower-income households. In my opinion, figuring out how to balance that is really going to be the single most difficult task for the government in the next twelve months.

Can we achieve the government’s target of 7% growth rate, and what is the sufficient GDP growth rate to achieve the aspirations of the Egyptian people?

It is very clear that the current growth rate in Egypt is not close to the target. We are expecting that, by the end of this fiscal year (FY), there will be a growth of around 4%. The aim was to have it 2-3 percentage points higher. But I believe there are things that can be done to support improvement in terms of household income, employment, and, more importantly, providing a more inclusive basis for growth. One of those is education, not only by improving matriculation rates, but also ensuring that what people are being taught will improve their employability.

This can be achieved by not only improving enrolment in universities, but also by boosting technical and vocational training and providing internships and apprenticeships for people who might want to work in high-end manufacturing facilities, such as automotive plants or telecoms and IT activities.

Every year, 700,000-800,000 people enter the workforce in Egypt, so providing them with jobs is really crucial. However, it is not only a supply issue; it’s not just about creating jobs that provide employment, but also about ensuring that people who graduate from universities or high schools have the skills necessary to find quality employment—and if they didn’t find quality employment, they should have the ability to start their own business.

Consequently, even if GDP growth doesn’t reach the target, there are various ways to improve the life of the average Egyptian, one of which is to improve access to affordable housing. There’s a huge housing deficit in the country and particularly in Cairo and Alexandria. The price of formal housing is out of the average citizen’s capability. It is estimated that there are between 15 to 20 million people in Egypt that live in informal houses.

In regards to creating job opportunities, I think that SMEs can play an integral role. You’ve got a segment of the economy or a collection of businesses that could employ something like 70% of the total workforce.

Even if the GDP didn’t reach that magical 7% number over the next year or two, I think that certainly at the moment it looks like it will take longer than the next year to hit that rate, but there are, nonetheless, a number of ways to improve people’s living condition.

What is your evaluation of the Egyptian-American relationship, in the wake of the recent visit?

We can say that the US-Egyptian relations are being reset. US officials said they want to renew their relation with Egypt, but I think the discussions that they had in Washington DC focused on the joint cooperation between them in the fields of security and countering terrorism. The big question mark here is really more about the US strategy. It is very difficult to discern what the US attitude is towards Egypt, and the Middle East more broadly. It looks like the US is pulling back from foreign engagement. The White House has forecasted a 30% cut in spending on diplomacy, and this is going to be translated into a decreased level of aid. However, the uncertain or unclear foreign policy of Trump’s administration makes it very difficult to measure exactly how it’s going to play out in a concrete way.

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Heavy transportation industry benefitted greatly from Egypt’s mega projects: Dahshan https://dailynewsegypt.com/2017/05/04/heavy-transportation-industry-benefitted-greatly-egypts-mega-projects-dahshan/ https://dailynewsegypt.com/2017/05/04/heavy-transportation-industry-benefitted-greatly-egypts-mega-projects-dahshan/#respond Thu, 04 May 2017 08:00:20 +0000 http://www.dailynewsegypt.com/?p=624292 2016 was a record year for KML, according to its chairperson

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With the Breakbulk exhibition kicking off, Al-Borsa sat down with Mohamed El Dahshan, chairperson of Khedivial Marine Logistics (KML), to talk about the challenges and opportunities of the heavy haulage sector in Egypt in general and his company’s future in particular.

What does your participation at the Breakbulk exhibition mean to you and what are the benefits?

The Breakbulk Europe exhibition is the most important international gathering of project freight forwarding companies, international carriers, and ship agents. It’s an opportunity to meet face to face with the top management and decision makers of participating companies to exchange knowledge and forecasts of new business opportunities all over the world. It’s all about networking and business development. We have been attending the Breakbulk expo for the last ten years, but this year we decided to participate as exhibitors with our own booth.

What are the main challenges of the heavy lift transportation industry in Egypt?  Does the infrastructure of Egyptian ports represent an obstacle to the growth of this industry?

There are major challenges at the ports due to the lack of a sufficient number of heavy lift cranes. We are dependent on using ship cranes for discharging HL pieces of our project cargo. But the challenges aren’t only limited to the ports but the roads and bridges also represent major challenges due to the strict limitations on weights.

What are the features of this market in Egypt in terms of investment size, the number of companies operating, and competition?

I have personally been in the shipping business for over 40 years, and I can honestly say that the policy of the Egyptian government with the new projects all over Egypt has had a positive impact on the Egyptian economy.  It has opened the door for local project forwarding companies to participate in these mega projects.  Our company KML succeeded to participate in a number of these projects, for example the New Suez Canal and power plants.

Did the specialized heavy haulage companies benefit from Egypt’s execution of several mega projects, which required the transport of equipment for new power plants, the New Suez Canal, and the development of the Suez Canal Economic Zone?

All major Egyptian heavy haulage companies benefited greatly from the huge amount of cargo movements. In fact, there were times when there were shortages of equipment in the market and this opened the door for new players to enter the market. I would say that all the big forwarding companies that participated in the mega projects gained excellent experience. It has been a long time since Egypt witnessed these kinds of mega projects with the big number of heavy pieces and over-dimensional cargoes, which posed great challenges in terms of their movement.

What is your company’s turnover in 2016 and what were the major projects handled?

Our company’s turnover for the year 2016 was around $20m. We have been heavily involved in the Siemens power plants of Beni Suef and the New Administrative Capital. Over and above, we have been transporting a huge number of production lines for the manufacturing industry, cement, steel and FMCGs. 2016 has been a record year for us in terms of job orders, transports of low beds, HL pieces, general cargo, containers, and other special cargoes.

What are the targets and forecasts for 2017?

For the first half of 2017, we will still be busy with the existing mega project transport contracts that we have. We have also been bidding on several projects, but none as big as what we have been transporting in 2016. However, we are optimistic that several delayed green energy projects will pick up this year. Other than power generation, the industrial sector is still going strong for us this year.

How will the Egyptian Ministry of Transportation’s decrees 488 and 800 affect the shipping business in general?

It’s self-understood that the aforementioned decrees will have a major impact on freight forwarders and shipping agents in Egypt. Owners will make their studies in which they will compare the cost of calling Egyptian ports with other competitive ports in the region (Red Sea and Mediterranean ports). It’s all a matter of cost versus benefit. Owners will always cut costs, even if it means changing the hub port. Unfortunately, we will have to wait and see the reaction of owners and the resulting impact on Egyptian ports.

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Sound and Light Company negotiates with Chinese investor to establish tourist project in Hurghada: El Shazly https://dailynewsegypt.com/2017/05/04/sound-light-company-negotiates-chinese-investor-establish-tourist-project-hurghada-el-shazly/ https://dailynewsegypt.com/2017/05/04/sound-light-company-negotiates-chinese-investor-establish-tourist-project-hurghada-el-shazly/#respond Thu, 04 May 2017 07:00:27 +0000 http://www.dailynewsegypt.com/?p=624254 Company’s losses last year reached EGP 19m, losses expected to decline by the end of FY to EGP 13m

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The Sound and Light Company, which is affiliated to the Holding Company for Tourism, Hotels, and Cinema, is negotiating with a Chinese investor to establish a hotel and shopping malls, in addition to a food court, with total investments worth $17m, on a 42,000 sqm plot of land owned by the company in the governorate of Hurghada.

Nagwa El Shazly, acting chairperson of the company, told Daily News Egypt that a feasibility study of the project was developed, and the Chinese investor is studying the project. The investor is expected to make an offer during the upcoming few months in order to negotiate the implementation of the project.

There is a piece of land owned by the company in Hurghada. Will a study be held to utilise the land?

We are negotiating with a Chinese investor to establish a hotel, shopping malls, and a food court on a land with an area of 42,000 sqm, with approximate investments of $17m.

According to the feasibility study, the financing allocated for the project is expected to be recovered within six years from the project’s operation, especially since Hurghada is considered one of the most important tourist areas in Egypt and has 20% of Egypt’s inbound tourism annually.

The French company Prism prepared to contract on developing the sound and light shows in the Pyramids area in January 2015.

The cost of the project is $50m. The company is waiting for approval from the Ministry of Antiquities to start implementing the project, which will take 14 months to be implemented.

Prism is currently preparing blueprints of the project and is expected to start working within two months.

What about the company’s losses last year? Is there a plan to reduce them over the upcoming months?

The losses were estimated at EGP 19m. I expect the losses to decline by the end of this fiscal year, with growth in the number of inbound tourists over the past five months.

What are the ranges of the reduction in losses expected by the end of this fiscal year?

Indicators say we will reduce losses by the end of this fiscal year to EGP 13m compared to EGP 18bn last year.

This decline in losses will take place despite the increase of material prices and the inevitable prices in salaries, which represent 70% of total expenses.

This decline in losses will be done through two parallel aspects. The first depends on promoting sound and light shows to increase revenues, and the second depends on reducing expenses as much as possible, including diesel, gasoline, and lighting inside the offices of the company.

This strategy adopted by the company has already enabled it to save 30% of its expenses. A decision was made to not operate ACs before the beginning of May in order to rationalise the use of electricity and lighting. One car was also allocated for the transportation of more than one head of a department in the company instead of allocating one car for each employee separately.

How does the tourism sector see the decision of increasing ticket prices which you have recently made?

The company has decided to activate a new increase in the fees of tickets in early April from EGP 125 to EGP 150 for foreign visitors. The increase is not random, though, and does not compensate the company for losses.

The increase comes against an increase of the costs of operating materials by 300% that took place during the past months in order to keep up with the increase of costs, not to increase the company’s profitability.

The ticket was worth $10 before flotation. The increase was supposed to take the price to EGP 200 in order to equal the current dollar exchange rate.

The company has carried out the slight increase in order to test the market and tourism companies first. The company had addressed tourism companies about the increase, and they have not showed objection.

It is decided that a meeting will be held soon with tourism companies in the presence of the chairperson of the Holding Company for Tourism and Hotels, Mervat Hataba, in order to notify the tourism companies about a new increase in the ticket prices after the agreement of all involved parties.

The Sound and Light Company provides facilitations and discounts for tourism companies and their tourist groups as a kind of promotion for the sound and light shows.

Are there any other activities other than the sound and light shows?

The activities of the company are divided into three activities. The main activity is the sound and light shows that are in five regions, including the pyramids and regions in Upper Egypt. This activity depends on tourism and security.

The second activity of the company is allocated to the implementation of lighting projects for others, such as the Citadel of Salah Ed-Din and Al-Moez Street.

The third activity of the company depends on the establishment of concerts and events, both in the Pyramids area of ​​Giza and the Temple of Phila in Luxor. These concerts are supposed to pay us off, but we always meet several obstacles.

Like what?

There are many obstacles facing the organiser of the concert, such as problems related to the payment of theatre rent and lighting services, in addition to paying another amount of money to tourism and antiquities police for securing the region during the concert, as well as the Ministry of Antiquities, as the area belongs to them.

These costs represent a heavy financial burden on the organizer of the concert, as the organizer pays money to roughly six different parties. If the financial return is good, the concert is held,but if not,then the concert gets cancelled.

In commercial concerts, there is a percentage paid for taxes, as well as paying an amount of money to the Musical Profession Syndicate and arts copyrights.

The company seeks to facilitate concerts to be held in the sound and light theatre, but the other authorities are out of its hands, while the organiser of the concert requests a reduction of the amount of money they pay to those authorities.

The sound and light show capacity in the pyramids area is 3,000 seats, with a courtyard rented by the Ministry of Antiquities, worth EGP 400 per person, compared to EGP 75 previously.

The rent received by the company from the organiser of the concert for the theatre does not exceed EGP 150,000, and there will be a special discount to government agencies and ministries, and the Ministry of Antiquities may get EGP 2m from the event for renting the courtyard for 5,000 people per concert.

What about lighting projects for others that are implemented by the company?

We recently completed a lighting project for four villas in Sheikh Zayed area in 6th of October City, where we are working on the implementation of lighting projects for all sectors, both public and private.

Work is also being done on studies and special measurements for the project of lighting the Fatimid Cairo wall for the benefit of the Ministry of Antiquities.

We are targeting projects for third parties during the fiscal year 2017/2018 worth EGP 10m.

Is there an improvement in the demand of sound and light shows in the current period?

Rates are good and exceeded 50%, and we hope to reach 90% during the coming period with the improvement of inbound tourism to Egypt.

What about scheduling the dues of the company with the Ministry of Antiquities?

The Ministry of Antiquities called for a delay fine against the Sound and Light Company estimated at EGP 7m for the project of lighting in the western Luxor.

The Ministry of Antiquities submitted a complaint to the State Council against the company because of its failure to comply with the date of implementing the project of lighting in western Luxor.

We reached an agreement with Mamdouh Al-Damaty, the former Minister of Antiquities, on scheduling debts owed, with EGP 1m paid per month, and the ministry began to repay it in May 2015.

Upon activation of this agreement, we were surprised that the ministry submitted the delay complaint to the State Council, which approved it.

It was agreed that the Sound and Light Company sent all documents that confirm its commitment to implementing the project in accordance with the time period specified in the contract, which is 13 months.

The Upper Egypt Electricity Distribution Company requested a further study of the project to adjust the cable track, whereby the project implementation period was extended by an additional three months, and the ministry did not mention the reason behind the delay complaint.

How much is the delay fine on your company?

The delay fine for was estimated at EGP 7m, and the company agreed to settle it by deducting 25% of the monthly instalment value that is worth EGP 1m.

We have exerted great efforts to negotiate with the ministry in order to obtain its approval on the repayment through deducting a monthly amount of money to collect the fine, instead of collecting it in one tranche, especially in light of the lack of income of the sound and light shows over the past years.

There is always a delay in the payment of the monthly instalment by the ministry, and it is scheduled to be paid during the first week of each month, in accordance with the agreement between the two parties, due to the lack of financial resources suffered by the Ministry of Antiquities in the recent period.

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10 million customers in the region to use One Global’s services by 2020 https://dailynewsegypt.com/2017/05/03/10-million-customers-region-use-one-globals-services-2020/ https://dailynewsegypt.com/2017/05/03/10-million-customers-region-use-one-globals-services-2020/#respond Wed, 03 May 2017 07:30:17 +0000 http://www.dailynewsegypt.com/?p=624054 We have obtained a license to cooperate with Banque Misr to offer solutions regarding electronic payment for retail merchants

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Mohamed Al-Rashidi, Chairman of One Global, said that “the company currently has 70,000 customers in the local market. It aims to increase the number over the upcoming period after signing a partnership agreement with Banque Misr to offer electronic payment services to a large group of retailers.”

Al-Rashidi told Daily News Egypt that “the company is negotiating with two companies to offer new electronic payment services, one of which is in the field of telecommunications and the other is in the field of device manufacturing.”

How does your company find the investment climate in the Egyptian market, especially after the flotation of the pound?

The flotation increases the attractiveness of the Egyptian market, giving investors larger opportunities to invest. It is a good step to encourage our companies to continue in the Egyptian market. In my opinion, there is large demand by foreign investors on the Egyptian market as a result of the decision.

Why does One Global invest in Egypt?

Egypt shows exceptional potential as a big telecommunication market due to a strong economic climate that actively encourages growth in private investment. There is no doubt the telecommunication and technology sector is one of the most competitive sectors when it comes to investment. Also, the Egyptian market will be able to solve and overcome the obstacles it is facing in the short-term.

The most significant obstacle facing the investors is the exchange rate crisis, which is expected to be resolved soon, and the Egyptian market is large and has many opportunities and high returns on investment.

There are digital services in the financial sector that require approval from the Central Bank of Egypt (CBE). For example, in order to offer cash transfer services, I must have a license from the bank or a money exchange company. Moreover, according to the law, the electronic wallet is monopolised by banks, and this needs to change.

With nearly 100 million people in it, the Egyptian market is a large one. In order to drive Egyptians towards the banking sector, they must all have bank accounts, and this can happen by encouraging them to use electronic cards to receive their salaries and purchase their regular needs from stores through card payments. Legislations should also be made to offer services of the electronic wallet to any company that follows the conditions decided by the CBE, whether for security reasons or any others.

Recently, the National Council for Payments was established. How do you see the impact of this matter on the Egyptian market?

We are optimistic about the new legislations and the National Council for Payments to govern and control electronic financial services in Egypt, and we have heard that the council will work on encouraging digital transformation and establishing a patriotic technological solution for electronic payments instead of relying on the solutions of international companies. This is encouraging and may play a role in improving the climate of investment in the field of electronic payment services.

What are the most prominent investment opportunities in the Egyptian market and your future plans in Egypt?

We are a group that works in four sectors. They include mHealth, mTourism, mContent, and the mFinancial sector (Fintech). For example, we have an entire system that is based on cloud computing, which includes making reservations and payments, in addition to other services that tourism companies need. Therefore, there will be cooperation with one of the largest tourism companies to benefit from the technological solutions we offer.

With regards to the financial sector, we have a cooperation agreement with Banque Misr, and we have recently obtained a license from the CBE to provide electronic payment services. The company will provide e-payment machines at cafes, restaurants, and commercial centres soon in cooperation with Banque Misr.

For the mHealth sector, the company provides a new and advanced technology solution called “Tele-Medicine”, which is a service that allows physicians in remote villages to send medical scans and tests to major health centres for review and send them back via mobile devices.

We met with government officials and discussed how we can cooperate in this sector through our electronic solutions. Additionally, the company holds several negotiations with a number of mobile operators to activate our services.

This year will witness more cooperation between the private sector and the government, as we will launch our electronic payment services through a mobile operator and a smart phone manufacturer.

How many customers do you have in the Egyptian market?

There are about 70,000 people who use credit cards, and we aim for this number to reach 350,000 by 2020.

Do you have any expansion plans for the future?

The company offers its services in 16 countries, and we aim to increase our market share in these countries this year. We have about 2 million e-payment users, and we target to increase them up to 10 million users by 2020.

We have good experiences in implementing a number of large financial projects in some markets, such as Uganda, where we linked a local e-payment service with Visa and MasterCard, as well as telecommunication companies. We also applied this system in Kuwait and Bahrain, which allows Visa and MasterCard holders to use our system.

What are your plans in the Egyptian market, in light of the growing e-commerce sector?

About 80% of the e-commerce operations are conducted through cash on delivery system. Hence, to solve this issue, we are currently working on launching a new service, which is expected to be officially launched in Kuwait during Ramadan. We will then present it to the Egyptian market, especially as many e-commerce companies operating in Egypt have welcomed the change.

What are the main axes of your plans in Egypt?

We seek to activate our license with Banque Misr and benefit from the National Council for Payments’ decisions. We also aim to participate in current electronic connection projects in cooperation with the company of e-Finance. We have already started the implementation of a unified electronic system at Nile University.

What are the main challenges facing the company in the Egyptian market?

The cash payment is our most important challenge. We also suffer from the lack of legal legislation, so we put great hopes on the National Council for Payments.

How do you see the Egyptian market?

The Egyptian market is of great importance to our company. It is on the top of our priorities in 2017. If we managed to implement our targets for this year, Egypt would be one of our major markets; otherwise, it will be a normal market.

What is the size of the company’s spending on the research and development sector?

The company allocates 15% of its total investments to the research and development sector.

What are the main markets for your company?

We provide our services in 16 countries, including Sudan, South Sudan, Libya, Yemen, Bahrain, Jordan, Uganda, and Lebanon.

We also own a 25% stake in an electronic payment company in Nigeria (HeMobile Integrated Services).

One Global is a Microsoft partner, and One Global Money (a subsidiary of One Global specialised in e-payment services) has received official authorisation and compliance certification from the Central Bank of Bahrain, Kuwait Finance House, Warba Bank in Kuwait, Banque Misr in Egypt, Tadhamon International Islamic Bank in Yemen, and many other banks across the region. It’s also PCI/DSS compliant and maintains the highest security level within the financial services industry.

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Sawiris Foundation targets 20% budget increase after flotation https://dailynewsegypt.com/2017/05/03/sawiris-foundation-targets-20-budget-increase-flotation/ https://dailynewsegypt.com/2017/05/03/sawiris-foundation-targets-20-budget-increase-flotation/#respond Wed, 03 May 2017 07:00:30 +0000 http://www.dailynewsegypt.com/?p=623967 SFSD plans to expand El Gouna Technical Nursing Institute through increasing the number of students to 300, says SFSD executive director

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During the third annual CSR conference, held on 10 April, the Professional Development Foundation (PDF) signed a memorandum of understanding with Sawiris Foundation for Social Development (SFSD), the International Labour Organization (ILO), and the Bank of Alexandria to provide employment opportunities for 1,200 young women and men in rural areas, in addition to developing 40 NGOs in targeted areas, training 400 university students on leadership and entrepreneurship skills, and providing loans to start their projects.

Daily News Egypt interviewed Noura Selim, executive director at the SFSD, to talk about the developmental projects undertaken by the foundation.

What is the amount of money allocated for social projects in 2016 and 2017?

In 2016, we provided funding of approximately EGP 130m only for projects. We allocated about EGP 150m for projects in 2017. In our projects, we target breadwinner women and youth, and about 50-60% of the fund is allocated for women, with a concentration in Upper Egypt due to high poverty rates. In Cairo and Alexandria, we focus on projects related to slums and homeless children.

What is the size of loans provided by Sawiris Foundation?

It depends on the beneficiary. We provide grants and in-kind loans and trainings. We provide NGOs with funds for loans to be provided to beneficiaries as Sawiris Foundation doesn’t deal directly with the beneficiaries. The loan amounts range between EGP 1,000 and EGP 5,000 according to beneficiaries’ needs and NGOs capacities.

What is the ratio of loan repayment?

We can say that the ratio is 99-100% as we work with developmental organisations to handle the problems beneficiaries meet together with them. After the 25 January Revolution, there were some issues with some associations, but it was only a very small number of them. Therefore, we have very strict criteria to select the associations that our foundation grants loans to.

Has the foundation resorted to any judicial proceedings in case of non-payment of loans?

Sawiris Foundation has development goals to empower people; however, we didn’t have to resort to courts, as we didn’t have cases where people or associations refused to repay the loans.

Sawiris Foundation developed the Bedouin Village in Taba. Is the foundation looking to conduct similar projects with other villages?

In Taba, we built an integrated village with all services, with costs amounting to approximately EGP 40m. We built decent houses for citizens in Taba, a healthcare centre, a school, and playgrounds. It is the first village developed by Sawiris Foundation, but Orascom Development Holding provided services such as Harram City.

We planned to develop other villages on the same style. We keep on trying to provide job opportunities in all targeted areas besides developing schools and providing child-friendly community schools.

SFSD allocated $2.25m over 4 years, between 2013 and 2016, to ensure the most marginalised children receive a quality primary education. What is the target area and the number of schools?

We have 45 child-friendly community schools in Assiut, Sohag, and Qena in Upper Egypt. We are interested in Upper Egypt because there is a lack of schools, and children have to walk a long distance to reach the closest school, taking around 45 minutes on average.

What is the work plan for development projects and the amount of allocated money?

We allocated between EGP 100m and EGP 120m for projects in 2017. We reviewed our projects’ budget after the devaluation and flotation of the Egyptian pound. Most of the money was directed towards creating job opportunities and the rest towards to health and education services.

How many jobs were created by the foundation, and what is the target for the coming period?

So far, we created 250,000 job opportunities across Egyptian governorates. A year ago, we launched an initiative for two years to create 20,000 job opportunities for youth and women in Upper Egypt by the end of 2018.

What are the success stories in developmental projects provided by the foundation?

We are proud of our projects in the health and education sectors, and our foundation established a Technical Nursing Institute in El Gouna, Hurghada, in 2010. The institute is very important for the society as the graduates work in high-quality hospitals because they acquired all skills and qualifications needed in nursing, and Egypt suffers from a lack of these skills.

We plan to expand the Institute in El Gouna through increasing the number of students joining the institute every year.

We received offers from other agencies and universities that are interested in developing institutes like ours.

We are studying establishing other institutes in the style of El Gouna Technical Nursing Institute, but first we are keen on expanding the existing institute to reach 300 students annually through the National Coordination Office. Fresh high-school graduates from the scientific division who are nominated by the coordination office can join the institute.

Will Sawiris Foundation increase its budget in light of the currency devaluation and increases in poverty rates?

Sure, we will do. We have a strong support from the Sawiris family to support the community. We target increasing the budget by 20%.

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AXA signs shareholder agreement with IFC  https://dailynewsegypt.com/2017/05/03/axa-signs-shareholder-agreement-ifc/ https://dailynewsegypt.com/2017/05/03/axa-signs-shareholder-agreement-ifc/#respond Wed, 03 May 2017 06:00:39 +0000 http://www.dailynewsegypt.com/?p=624035 Al-Borsa sat down with Gilbert Chahine, CEO of AXA Egypt, to discuss the economic environment in Egypt, its recent negotiations with several partners in the regional market and its move to enter the microinsurance business in Egypt. What do you think about the economic environment in Egypt? The flotation of the Egyptian currency has been …

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Al-Borsa sat down with Gilbert Chahine, CEO of AXA Egypt, to discuss the economic environment in Egypt, its recent negotiations with several partners in the regional market and its move to enter the microinsurance business in Egypt.

What do you think about the economic environment in Egypt?

The flotation of the Egyptian currency has been a very bold, strong, and needed move from the Egyptian government. We are fully supportive of this action and the planned reforms that started and will continue taking place in the next period.

All of these measures were needed to reposition Egypt as a prime location from an investment standpoint, enhance economic growth, and solve the crisis that we were in with regards to the availability of foreign currency in the market.

We view them as positive for the Egyptian economy despite some current difficulties in particular when it comes to inflation, which has been a major concern for us and a lot of players in the market.

I believe that the Egyptian market might witness a consolidation in the medium or long term, as a natural maturity evolution that has been experienced in other markets.

What are the latest developments in the negotiations with the Kanoo and Sawiris families to contribute to AXA’s capital?

Our discussions with potential partners were to see whether we can reach an agreement on partnering with some investors here in the market.

Today, we can say that we are very proud to have signed a partnership with the International Finance Corporation (IFC) that will see the IFC entering the capital of AXA Egypt with a 10% shareholding stake.

This partnership is still pending regulatory approval to be finalised, which is expected to take place in the coming weeks.

What about the Kanoo and Sawiris families contributing to AXA?

Today, we are proud of the partnership that we have with the IFC and of our shareholder structure after the finalisation of the transaction with the IFC.

The economic environment in Egypt has materially changed over the past months with the flotation of the Egyptian pound which has impacted the strategy of many investors in Egypt. The Kanoo and Sawiris families will remain privileged business partners of AXA Egypt and we are looking forward to continuing our collaboration with them over time.

What about your cooperation in microinsurance in the next period?

We are discussing that with many different partners—whether in the telecommunications field or governmental institutions like the post office—in the market to make sure that we find the right operating model to reach a large portion of potential customers.

How do you see your chances of spreading to post offices and competing with local companies?

At AXA, we are very innovative and able to leverage our global knowhow in terms of tools, technology, and products in order to come up with a proposal that will be adapted and valued by our partners.

The company is working on many studies on microinsurance programs in Egypt, in collaboration with “MicroEnsure”,  and we are expecting to launch some of them during the second half of 2017.

Egypt has a great demand for microinsurance programs and AXA Egypt is committed to providing a large share of this segment with the needed solutions, services, and support.

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Natural gas surplus by 2020: El Molla https://dailynewsegypt.com/2017/05/02/natural-gas-surplus-2020-el-molla/ https://dailynewsegypt.com/2017/05/02/natural-gas-surplus-2020-el-molla/#respond Tue, 02 May 2017 06:00:46 +0000 http://www.dailynewsegypt.com/?p=623934 Sector will sign five new deals with investments of $154m

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The petroleum sector has achieved numerous developments during the current period in natural gas production. Egypt’s total production of gas reached 5 billion cubic feet per day, following a number of new discoveries. Minister of Petroleum and Mineral Wealth Tarek El Molla explains the developments in an interview with Daily News Egypt.

Is the ministry set to sign new petroleum agreements in the coming period?

The Ministry of Petroleum plans to sign five new oil agreements between foreign partners and the Egyptian General Petroleum Corporation (EGPC) to search for oil and gas in Egypt’s Western Desert, with minimum investments of $154m and signing grants worth $63.2m to drill 30 wells.

What are the main new discoveries? And what is the plan for linking output to production?

The fruits of the new gas discoveries in the Mediterranean are already emerging. The first output from north Alexandria gas fields were placed on the production map recently, reaching 650 million cubic feet of gas per day from the first phase of the Taurus and Libra fields.

The north Alexandria project’s output will rise gradually as we go through new phases to reach 1.4 billion cubic feet of gas per day by mid 2018.

This supports the plans of the petroleum sector to increase gas production, which will reach its peak once linking the output of Zohr field before the end of the year.

The petroleum sector is in a race against time to link the production of the first phase of the Zohr field, estimated at 1 billion cubic feet per day, to the national gas pipeline, to meet the domestic demand.

The production capacity of Zohr field will gradually increase to reach 2.7 billion cubic feet per day. The development of the field has become a unique model for giant gas field projects in the world, not only in terms of its size, but also in terms of the record time it took to develop.

The discovery was made only 18 months after signing the agreement. And six months after discovering the field, it translated into contracts for development. About 28 months later, the output began. This is below the worldwide average of 6-8 years for development.

We are working with our foreign partners, including the Italian ENI and the British BP, to increase production of Noras in the coming years. Earlier this year, the field output was about 1 billion cubic feet per day. In the first quarter of the coming year, the Atoll field will be linked to production.

The coming years will witness more gas field projects that will support the increase in gas production, such as the 9B phase in the deep waters west of the Delta, along with the Salamat and Baltim fields.

The latest discoveries achieved are the Katameya find by BP north of Damietta marine area. This area alone witnessed three major gas discoveries in recent years. This reflects the potential and future opportunities in Egypt in the gas sector.

How much did foreign investments amount to at the end of the current fiscal year?

We expect the size of foreign investments in oil and gas to reach $10bn at the end of the fiscal year 2016/2017. Many foreign companies are increasing their investments after the government paid them part of their arrears and assured them they will receive the remaining part.

Moreover, the sums they received are spent in Egypt to develop and expand refineries. There are a number of projects worth over $8.2bn being implemented now in that sector.

What is the ministry’s plan to provide fuel for electricity during the summer?

We completed preparing a comprehensive plan to provide the needs of power plants by 100% in the summer, in which consumption peaks.

The plan includes the provision of all kinds of fuel, whether natural gas as the main fuel or essential alternatives such as fuel oil and diesel. The plan started already in April and will be in place until the end of September.

We will also secure the needs for the new power plants that will begin commercial operation this year, including the Siemens power plants in Beni Suef, Borollos, and the New Administrative Capital.

More gas-fuelled power plants will also become operative this year. Our plan includes providing fuel for 59 power plants including 57 plants linked to the national gas pipeline.

The average daily volume of fuel that will be pumped to power plants in the summer is 142 million cubic feet of gas, fuel oil, and diesel.

The current growth in natural gas production supports our ability to secure fuel supplies for electricity after the new fields become linked to the production.

We estimate the total size of gas pumped to power plants to reach 5.75 billion cubic feet per day, including 5 billion cubic feet from domestic production and 750 million cubic feet imported through liquefied gas shipments.

We will also provide extra quantities of fuel oil and diesel for emergency backup.

The plan does not only include meeting the needs of electricity, but also that of all other consumption sectors.

The petroleum sector succeeded last summer in providing all types of fuel needed by electricity power plants, which contributed to the stability of the national grid.

What about the foreign partners dues?

The Ministry of Petroleum seeks to pay dues to the foreign oil companies operating in Egypt during the coming period, in cooperation with the Central Bank of Egypt and the Ministry of Finance, as to encourage these companies to investment more in Egypt.

The oil sector is abiding to pay regular dues to partners, including buying their shares of oil and gas for domestic consumption. We are also committed to paying accumulated arrears.

Over the past three years, in cooperation with the government, driven by political stability and economic growth, the oil sector managed to reduce the arrears from $6.3bn to $3.5bn by the end of 2016.

The political leadership and the government are keen to fulfil their obligations with their strategic partners and to find solutions to deal with one of the major challenges that have had a negative impact on the search and exploration for oil and gas development, and the delay in implementing some major projects in the sector.

This is of special importance because paying back foreign partners encourages them to inject more investments and stimulates research and exploration works, which is for the benefit of meeting the domestic needs of petroleum products and natural gas.

How much does it cost to import monthly petroleum and gas products?

The average value of importing petroleum products and gas per month is $800m. The value is also impacted by several factors, such as global oil prices, the exchange rate, the size of domestic consumption, and the size of local production of oil and gas.

Saudi Aramco secures shipments of 700,000 tonnes of fuel per month to Egypt, valued at $340m, which eases demand on foreign currency. The payment plan is also facilitated.

 

What are the measures taken by the ministry to provide the needs of the country’s petroleum products?

The domestic market depends on gaining a major part of its petroleum products from local production that is refined in Egyptian labs. We complete the remaining market needs through imports.

The ministry signed a number of commercial agreements with Arab institutions and companies to secure part of the needs to push forward the economy and meet fuel needs.

This includes the deals with Aramco and the Kuwait Petroleum Corporation, which also includes the importing of crude Kuwaiti oil. Additionally, we recently signed a deal with the Iraqi side to import 1 million barrels of crude oil per month from Basra. This is refined in Egyptian labs.

 

When will Egypt achieve self-sufficiency of natural gas?

The strategy of the oil sector relies on achieving self-sufficiency of natural gas by the end of 2018.

We also plan to achieve a surplus by 2020, which can contribute to achieving added value through the petrochemical industry.

 

What are the details of joint cooperation with Cyprus and Greece in the Mediterranean region?

We were taking steps to enhance cooperation between Egypt, Cyprus, and Greece over the past two years, with the support of the political leadership in the three countries.

Egypt is interested in developing cooperation with the two countries to maximise the use of energy and resources development, especially after the recent discoveries of natural gas in the Mediterranean, in both Egypt and Cyprus.

We agreed on the need for trilateral cooperation in the field of natural gas transfer from Egypt’s and Cyprus’ fields to Europe. There are agreements between the Egyptian and Cypriot governments in this regard.

This is in addition to the establishment of a natural gas pipeline from Cyprus to Egypt for mutual benefit  and to support strategic cooperation in the field of energy, which serves Egypt’s current orientation and strategy to become a regional trading hub for energy in the region.

What are the details of the memorandum of cooperation recently signed with Jordan?

The memorandum of cooperation between Egypt and Jordan was signed early last month during the Third International Conference on Energy in the Jordanian capital. The agreement is related to the field of energy in general and natural gas in particular.

It focuses on cooperation in the fields of training and expertise-exchange in fields of natural gas and re-exporting gas through the natural gas infrastructure in both countries, next to using gasification vessels in Ain Sokhna and Aqaba in emergency situations, and during maintenance periods to cover part of the needs of Egypt and Jordan from gas.

What are the most prominent new petrochemical projects?

The Egyptian Petrochemicals Holding Company (ECHEM) is considering the establishment of a number of new projects in the framework of the national plan for petrochemicals. The value of these projects amounts to $1bn, including projects for the production of propylene and its derivatives in Alexandria, and the project for the production of formaldehyde and its derivatives, as well as the project for the production of resins, in addition to the project for the production of ammonia and its derivatives.

The petrochemical industry in Egypt is currently witnessing a comprehensive renaissance through the implementation of a number of projects to maximise the added value of petroleum wealth, to provide petrochemical products for the domestic market, on which several complementary industries rely.

There is cooperation between the Egyptian Petrochemicals Holding Company (ECHEM) and the Scientific Research Academy to apply the results of studies and research to establish projects that help meet local market needs and using available resources. This includes projects to recycle plastic and strengthening national innovations to support small and medium-sized industries that are based on petrochemical products.

What are the latest developments in the bid for gold that was recently posed?

The Egyptian Mineral Resources Authority (EMRA) received 14 offers from international mining companies in bid No. 1 for 2017 for research and exploration of gold in five areas of the Eastern Desert.

The Ministry of Petroleum and the Egyptian Mineral Resources Authority (EMRA) will form technical, financial, and legal committees to review the bids.

 

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