Interviews – Daily News Egypt https://dailynewsegypt.com Egypt’s Only Daily Independent Newspaper In English Tue, 12 Feb 2019 08:15:16 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.1 Egypt among countries that have made great strides in achieving financial inclusion of SME’s: IMF Middle East, Central Asia Adviser https://dailynewsegypt.com/2019/02/12/egypt-among-countries-that-have-made-great-strides-in-achieving-financial-inclusion-of-smes-imf-middle-east-central-asia-adviser/ https://dailynewsegypt.com/2019/02/12/egypt-among-countries-that-have-made-great-strides-in-achieving-financial-inclusion-of-smes-imf-middle-east-central-asia-adviser/#respond Tue, 12 Feb 2019 08:15:16 +0000 https://www.dailynewsegypt.com/?p=689618 Increasing access to finance lays foundation for higher, more inclusive regional growth

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Nicolas Blancher, adviser at the IMF Middle East and Central Asia department explains in an interview with Daily News Egypt, how small and medium-sized enterprises’ financial inclusion is at the core of economic diversification, growth, and job creation in the MENA.

The Middle Eastern countries including Egypt, have taken several measures to realise the inclusion of small and medium-sized enterprises (SMEs) into the formal sector, in order to boost economic growth.

Nicolas Blancher, adviser at the IMF Middle East and Central Asia department

How do you evaluate these measures, and what do these countries need to do more to attain this objective, noting that the current percentage of inclusion is very low?

       A key conclusion from our work is that there is no magic bullet to increase SME financial inclusion in a meaningful, safe, and sustainable manner. Partial policy approaches that have sometimes been pursued, such as those solely based on public credit guarantees, have not sufficed to achieve this goal. In contrast, we highlight that holistic reform strategies are required. Such strategies encompass broad priorities in terms of macroeconomic stability and institutional quality, as well as improvements to the business environment and specific regulatory and legal reforms that will support SME lending, such as with regard to the availability of credit information or contract enforcement.  A growing number of countries have been designing and implementing such holistic reform strategies. Their implementation will take some time, but this is a very encouraging development in which the IMF, together with several other regional and international organisations, will increasingly play a supportive role.

Egypt is among the countries that have made great strides in achieving the financial inclusion of SMEs. The Egyptian authorities have recently been formulating a comprehensive approach and vision for the integration of SMEs into the formal sector and thus achieving financial capital. IMF representatives are working on this file with the Egyptian authorities  and providing them with the necessary technical support to formulate the necessary strategy to achieve this. Daily News Egypt interviewed then to investigate further into this matter the transcript for which is below, lightly edited for clarity:

What are the main challenges facing SMEs regionally generally, and Egypt particularly?

As regards the overall development of SMEs in the region, our November 2018 REO publication had a specific chapter addressing this issue. Its main conclusions are that increasing access to finance, investing in education and infrastructure, reducing the role of the state in the economy, and improving government effectiveness and governance would unlock private investment, laying the foundation for higher and more inclusive growth in the region.

Nicolas Blancher, adviser at the IMF Middle East and Central Asia

Can you give us a recipe of inclusion success in the MENA region, mentioning some success stories?

There is no recipe in the sense that again, there is no magic bullet or one-size-fits-all approach to achieve meaningful improvements to SME financial inclusion. Instead, we emphasise the fact that each country needs to define its own specific strategy. This may encompass a variety of reforms, as already mentioned. They key is to identify and prioritise those reform areas that, in each country, are the main obstacles to SME financing. 

This being said, key issues that seem to explain most of the ‘SME financial inclusion gap’ in the Arab region as a whole are: economic development in general (which captures quality of infrastructure and education); governance and control of corruption; credit information availability; economic competition; and the quality of the business environment. The SMEs represent 95% of the total of the enterprise in MENA and half of the employment

Several countries in the region have implemented or initiated comprehensive financial inclusion strategies that should allow for considerable progress if they are fully implemented. For instance, this is the case in Jordan, Lebanon, Morocco, or Saudi Arabia.

How can SMEs inclusion into the formal economy, boost economic growth?

The inclusion of SMEs into the formal economy gives them potential access to larger amounts of financing through the banking system or through alternative sources of finance, such as capital markets. Our work shows that increased financial access can be a source of substantial benefits for economies in the region, both in terms of growth and job creation.

In addition, the holistic reform strategies that we recommend to achieve greater SME financial access could also bring about broader economic benefits, as they could trigger a virtuous circle of greater transparency and reduced informality of SMEs.

How can we improve SMEs access to finance in the Middle East?

As noted, key priorities in the region are economic development in general, governance, and control of corruption, credit information availability, economic competition, and the quality of the business environment.

Let me also highlight here the potential importance of alternative or new channels of SME finance. Experience in other regions shows that capital markets and, increasingly, fintech, can play a role in facilitating SME access to financing. In these areas, again, the region has a lot of progress to make to develop the ecosystems needed to scale up these channels.

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Accepting failure necessary for boosting entrepreneurship: Kurtenbach https://dailynewsegypt.com/2019/02/11/accepting-failure-necessary-for-boosting-entrepreneurship-kurtenbach/ https://dailynewsegypt.com/2019/02/11/accepting-failure-necessary-for-boosting-entrepreneurship-kurtenbach/#respond Mon, 11 Feb 2019 08:30:28 +0000 https://www.dailynewsegypt.com/?p=689462 The Egyptian finalist of ATX + EGY will attend SXSW in March 2020

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While Egypt’s government pays remarkably increasing attention to boosting entrepreneurship sector, in collaboration with its international partners including the US embassy in Egypt, the African Development Bank (AfDB), the European Bank for Reconstruction and Development (EBRD), and others development partners. Austin city in Texas is considered the best place in the United States to start a business. Austin is a successful model that Egyptian authorities can benefit from its flourishing experience.

“Accepting failure is a key to boost entrepreneurship in Austin. We have a very supportive community which doesn’t refuse trying. Austin’s business environment is open and welcoming all start-ups’ ideas,” David Kurtenbach, international programme coordinator at Austin’s Economic Development Department, said.

Daily News Egypt sat down with Kurtenbach for an interview over his last week’s visit to Egypt for launching the ATX + EGY entrepreneurship programme. The interview’s transcript is below, lightly edited for clarity,

Would you please tell us about the purpose of your visit?

I am here to attend the launching of the ATX + EGY entrepreneurship programme under sponsorship of the US embassy in Egypt. My main goal is to boost Austin’s international relationships and help Austin’s businesses expand. We are a small team, but we work very hard.

ATX + EGY is a training programme including 30 participants in Cairo from various areas in the Creative industries, including visual reality, gaming, visual arts, music, fashion, and food.

ATX + EGY is a type of cooperation project between Egypt and Austin for boosting entrepreneurship in Egypt. We will bring the participants down to 10 finalists who will be hosted in Austin for 10 days in May 2019 to attend the Austin Small Business Week. We will help them to enter the US business. An eight-member delegation from Austin will visit Egypt to participate in the RiseUp summit in December. We are looking for investors and decision makers to participate in the event, and then we will take one Egyptian finalist to Austin in March 2020 to explore business opportunities with American investors.

The project will cost about $300,000. The main partners are Austin city and the American University in Cairo (AUC). Egypt is a strong emerging market (EM) and home to one of the most promising start-up scenes in the world as the population is robust with a rich supply of dynamic and talented young people influencing the local community with their cutting-edge ideas.

Egyptians are historic powerhouses in the creative industries: film, media, food, and music. Like many countries, Egypt is currently focused on rebuilding their economy, but with a little access to resources and capital, according to the US embassy in Egypt.

Lack of access to resources and capital is a barrier to the success of many promising start-ups in Egypt. Limited funding resources for digital or technology-based products or services in Egypt’s creative sector is an inhibiting factor in the overall growth of the local start-up ecosystem.

Lack of exposure to potential investors in international markets means the talents and potentials of many entrepreneurs in Egypt go untapped. Additionally, Austin companies are pursuing international expansion into Ems, like Egypt, but lacking contacts and technical resources to expand.

We will help entrepreneurs to know how to break in to Austin’s market and to the US generally. Austin’ small business week has a significant programme for fashion and arts. Austin has a very creative scene.

The programme’s finalist will participate in South by Southwest programme (SXSW) – an annual conglomerate of film, interactive media, music festivals, and conferences – which will take place in mid-March in Austin.

The SXSW is a massive cultural music festival where many companies were launched, for example Twitter was launched there. It is a centre for creativity and innovation. Last year, representatives from about 95 countries participated in.

What about the Egyptian applicants? Which sectors are they interested in?

Egyptian applications were very diversified. There are very wide areas, including accessories, wood supplies, building materials, virtual reality, and traditional applications.

Will you invest in one of those applicants’ projects?

We do not have that direct aim as we just help the applicants to better implement their ideas, then we can put them in touch with angel investors. Angel investors do not regularly invest in ideas, but people. They also take into consideration the social and environmental dimensions.

What will ATX + EGY do?

ATX + EGY will connect the vibrant community of entrepreneurs, creatives, and investors in Austin’s start-up scene to those in emerging startup communities in Egypt to help achieve the following objectives:

The programme will introduce Austin entrepreneurs to creative talent, production, and potential growth opportunities in Egypt.

It will provide formalised opportunities for Egyptian start-ups to introduce their companies to potential US investors, Venture Capitalists, Private Equity firms, and mentors in order to grow their businesses domestically and internationally.

The programme will also provide a platform for entrepreneurs and start-up incubators/accelerators in Austin and Egypt to collaborate on.

These projects will strengthen the entrepreneurial ecosystems in their respective communities. The programme will explore collaboration opportunities between Egypt’s thriving technology, consumer, and creative industry and Austin’s creative and technology industries.

The progamme will also provide a critical joint talent development training for Austin and Egypt-based start-ups to build a pipeline of strong human capital which is key to long-term success.

Developing a comprehensive entrepreneur tool will help growing start-up businesses which also will include effective pitch development and preparation strategies, international travel and business registry applications guides, understanding term sheets, etc.

The AUC Venture Lab will work with lead incubators like: GrEEK Campus, Injaz, Al Maqarr, Flat6Labs, Nahdet el Mahrousa, TIEC, Egypreneur, and Shekra to distribute the critical skills tool-kit to strengthen the capacity for startup activity beyond the reach of this year-long programme and extend an enduring impact to non-programme participants.

Is ATX + EGY’ entrepreneurship programme governmental?

It will be conducted under the sponsorship of the US Department of State, but we have like a partnership with the private sector. In Austin, we are linking governmental and private entrepreneurship efforts, so it is more than governmental programme.

Do you implement this programme in other countries?

Yes, this kind of programme is for the emerging markets. We are implementing it in Pakistan, with particular focus on fashion. It is a long-term programme, however it goes beyond its implementation period.

In Austin, we have other programmes with Canada, China, Germany, the UK, Mexico, Australia, Singapore, and others. Austin is the fastest city for growing business in America. Last year, 150 people have moved to Austin daily. It is the number one rated city to start a business.

What are your recommendation to enlarge the sector’s participation in Egypt’s development? How do you assess the local efforts in this regard?

My job here is to get in to the community and meet people who aim to develop their businesses with their international partners. We aim at achieving mutual benefits, so I don’t have the enough knowledge about the situation here to assess it. However, we will help companies to expand and get more customers.

How can Egypt benefit from Austin’s experience in boosting entrepreneurship?

Entrepreneurs don’t have to go in to the cycle, but they have to go as fast as they can. The community in Austin accept failure. Personally, I failed twice before I achieve my current successful project.

We have a very supportive community which helps entrepreneurs to restart and rebuild. People will help you. We have a healthy competition where competitors help beginners and introduce them to people who can help.

Austin is relatively cheap in comparison with other cities, such as San Francisco. Every country has her own experience, so we can’t say that Egypt has to follow particular steps as the US to gain same benefits. There is no one model that can be implemented in all countries. However, the supportive environment is a key element for success.

DNE obtained some information from the US embassy in Egypt about ATX + EGY. It aims at forming meaningful partnerships with economically strong markets, like Austin – the Live Music Capital of the World and No.1 place to start a company for five years in a row, according to Forbes – which will only increase the likelihood of sustained success for the metropolitan centres of Egypt.

Creative industries across the globe are converging with the tech community and Austin is proud to be home to most of the major tech brand innovation centres, like Google, Apple, General Motors, LatinWorks, Merck, Oracle, IBM, Whole Foods Market, and Electronic Arts to name a few. Austin’s people are early adopters to new ideas and understand the immense value of diversity. In fact, over 20% of the Austin population is foreign born, but the city lacks cultural adeptness in the Middle East economy.

As Egypt gains momentum in the private sector, the business community in Austin recommends being a supportive partner in that growth. Lack of access to resources and capital is a barrier to the success of many promising start-ups in Egypt. Limited funding resources for digital or technology based product, goods, or services in Egypt’s creative sector are inhibiting factors in overall growth of the local start-up ecosystem. Lack of exposure to potential investors in international markets means the talent and potential of many entrepreneurs in Egypt goes untapped.

Additionally, Austin companies are pursuing international expansion into emerging markets, like Egypt, but lacking the contacts and technical resources to expand.

Since 1990, as bigger companies cut 4m jobs, small businesses added 8m new jobs, according to the US Small Business Administration.

The US embassy said that ATX + EGY Launch will collaborate with the leading incubators and accelerators in Austin in order to curate a mix of entrepreneurs as well as mentor internationally focused investors to work with the Egyptian start-up companies as they prepare for the final ATX + EGY showcase.

This will provide the groundwork to maximise the potential value for the Egyptian start-ups companies as they explain their organisation’s achievements during the formal pitch session at the conclusion.

The showcase will offer Egyptian start-ups the opportunity to formally seek seed or growth stage funding from a group of investors; furthermore, the investors will also be serving as the judging panel for the ATX + EGY launch programme showcase. Investors will be invited to participate in the showcase based on a high level of interest and ability to fund seed or growth stage investment in Egypt.

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Resilience is core of entrepreneurship: Moustapha Sarhank https://dailynewsegypt.com/2019/02/10/resilience-is-core-of-entrepreneurship-moustapha-sarhank/ https://dailynewsegypt.com/2019/02/10/resilience-is-core-of-entrepreneurship-moustapha-sarhank/#respond Sun, 10 Feb 2019 09:30:33 +0000 https://www.dailynewsegypt.com/?p=689293 Entrepreneur’s journey from ‘tuna can year’ to sound leadership, ethics in business

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Most people know him as one of Egypt’s leading businesspersons, while others will have come across his speeches for MBA students, or the essays which he has been writing for years in the fields of the interrelations between religion and leadership, as well as the role of ethics in business.

On his official profile, Moustapha describes himself as the “custodian of the group’s nine commandments,” which are “divine reverence, paternal admiration, friendship deference, familial awe, modesty, respect, honour, quest for knowledge, and discipline.”

On the characteristics of being a leader, Moustapha has a different perspective. He believes that feelings are the basis of becoming a leader as he asks, “Aren’t we all human beings?” 

When you take a look on the soft-spoken Egyptian businessperson who was born in 1963, the first thing you notice is a cloud of serenity which surrounds the man and his office. He believes that each businessperson has a certain set of priorities which he/she aims to achieve, while most of them believe that it would be failure not to achieve these goals, thus they fully dedicate all their efforts to achieve these priorities. While doing so, they tend to forgo a lot of important things in their life.

When it comes to the work-life balance, Sarhank does not believe in the term as he explains, “I do not think that there are two sides which we need to balance. Rather, they are two facets of the same coin. Why should you live two lives? It is actually only one life which has multiple components, one of which is your work, and the other one is your personal life, there is also an additional third component which is spirituality.”

According to Sarhank, if a person is leading a happy life, he/she will work with the same attitude, similarly if that person is content with his work, he will return home in a delighted manner. The issue is how can a person keep the flare constantly alive, “which brings me to the very beginning of how I started it all,” Sarhank said.

Sarhank graduated from the American University in Cairo with a major in economics. However, he always felt that there was something which he wanted to accomplish, but did not know what it was, at the time. He kept on asking himself whether he wants to continue working in business, or to pursue an academic career. He stated “I always had a feeling that I want to teach, to engage with people, and be able to deliver messages.”

The business leader declared, “At the end, I said so be it, I will further pursue academia, and will get a master’s degree in economics. After completing the coursework, and before my dissertation, I was called upon my family to take care of our business. To be honest, I did not feel that this was the path I wanted to pursue.”

However, he did it anyway and started working as a sales administrator at a company, which at the time, was the agent of a company called Digital Equipment Corporation, the nemesis of IBM.

Moustapha Sarhank

Yet, his feeling that he does not fit persisted, so he started wondering if he should start learning something new. He recalls that at the time, the owner of the company told him that the USAID is providing a fund for Egyptian companies, which provides assistance through the advice of retired officers who previously worked at big corporates.

Afterwards, a retired corporate officer from Booz Allen Hamilton came to assist Moustapha’s employer for six months. Accordingly, Moustapha became his apprentice, and helped him in all ways as he carried his bags, and even picked him up from the hotel where he resided.

During that time, he was handling the formation of a new business unit, which was responsible for mergers and acquisitions (M&As). Sarhank was therefore able to learn about this field, which was completely new to him.

Yet, the same urge that he wants to do something else persisted. He described that there was an inner voice which kept telling him “Moustapha, this is not your path.” After thinking thoroughly, he figured out that he had an affinity for technology, yet he did not know where to start.

At the time when Moustapha started searching for inspiration, just to find out that the world started to move from mainframe and mini frames to a new concept – at the time – called personal computer (PC), which was the focus of various companies, such as DEC, IBM, Commodore Technology, and many others.

“I thought that I need to find something that would give me an edge, consequently, I took the decision to go and knock on the doors of big software multinationals,” he recalled.

In order to achieve that, he went to a business centre – at that time, a business centre was a place which you subscribe at in order to use their facilities, from telex, international calls, etc. He sent a telex for 100 companies, only four of which responded.

For those who responded, Sarhank stated they were “Ashton-Tate, WordPerfect, Computer Associates International, and finally a company called Microsoft,” narrating, “Microsoft, as I found out, specialises in operating systems and office tools.”

Sarhank elaborated, “I felt that it would be a good fit, so I decided to pursue it. In order to do so, I walked up to my boss and asked him to partner with me in order to start a PC related business,” continuing, “I suggested establishing a training centre for PCs, and he liked the idea.”

Afterwards, they agreed that Moustapha’s boss will provide the location and the computers, while Sarhank will supervise the sales and management. The profits’ split was a 70/30.

The leading businessperson recalled, “We started in Cairo’s ‘World Trade Centre’ where he had his company, which was IBM’s agent in Egypt, and it was called the Egyptian Computer Systems. After a year, we reached the break-even point. Afterwards, I decided to leave and start my own journey.”

Sarhank’s entrepreneurship journey started with him establishing his own company, then he travelled to the US in order to meet with representatives from Microsoft, which was a $92m company at the time. After the negotiations, Sarhank became their first agent in the Middle East. “When I started, people did not know what MS-DOS was, and some of them even thought that MS stands for Moustapha Sarhank, however, I faced huge difficulties at the time, the most prominent of which was piracy,” he reminisced with a smile.

As many successful entrepreneurs, Sarhank’s journey was not smooth in its beginning as he had to overcome plenty of pitfalls. For example, after an incorrect product pricing, he went bankrupt, which was the first hit. Yet as an entrepreneur, whom he believes thrive by failing and through embracing failure, as well as by knowing how to fall and stand up again. He recollected, “At that time, I was married, which was a huge blow. I had to sell my watch in order to sustain my life, yet I continued, and after one year I brought another company to Egypt, that company was Oracle.”

Once again, for different reasons, such as a change in customs duties, he went bankrupt for the second year. This time he had to sell his own car. The third time which he named the ‘Tuna Can Year’ as he could only afford eating tuna cans for the whole year, “My wife had to sell her gold so that we can survive,” he said.

He further explained, that one day, as he was reading an article, there was a sentence which stated “Diamonds are formed from pressure,” which made him stop and think, “Since I did not break the first time I went bankrupt, or even the third time, it seems that there is resilience which resided somewhere inside of me,” he told himself at the time.

Afterwards, Moustapha stood up again on his feet, and started working to make both companies succeed, as he was going about that, the family business called upon him, and he was informed that the time has come for him to take care of the family business.

He narrated, “We used to work on different sectors, including defence in which we used to do systems integrations, oil and gas, and especially jet fuel importation, agriculture, and portfolio management. We had a division which is located in Geneva which used to handle all the family holdings in terms of management.”

All of the sudden, he found himself the head of a huge organisation. In order to fulfil his obligations, he decided to ‘close the door’ on himself for a period of six months in order to study everything about his new position. To achieve that, he brought advisers and consultants to re-educate himself.

After years under his management, in 2007, the US technology giant, IBM, acquired Sarhank Group’s stake in an IT firm called Internet Security Systems Middle East.

During his journey, Sarhank reached a very interesting set of views on spirituality and ethics, as he believes that ethics and business cannot be divided. It is either you are ethical or you are not, “We should really stop and think about what we call the Sunday-Monday disconnect. We should not switch camps, going on Sunday to the church, or Friday to the mosque, and then on the following day, we start to act differently,” he stated.

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Egypt on right track, patience required till full implementation of economic reform plan: Elgarhy https://dailynewsegypt.com/2019/02/06/egypt-on-right-track-patience-required-till-full-implementation-of-economic-reform-plan-elgarhy/ https://dailynewsegypt.com/2019/02/06/egypt-on-right-track-patience-required-till-full-implementation-of-economic-reform-plan-elgarhy/#respond Wed, 06 Feb 2019 08:00:57 +0000 https://www.dailynewsegypt.com/?p=689028 I am optimistic about future of Egypt’s economy; government, businesspersons alike must do more

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Within the past few years, a number of emerging businesspersons, in their late 20s and early 30s, proved themselves in various fields, employing the implementation of the economic reform policy to play a role in supporting the state to continue its achievements.

In an exclusive interview with Daily News Egypt, Mohamed Gamal Elgarhy, Vice chairman ang managing director of El Garhy group, member at the metallurgical chamber at the Federation of Egyptian Industries (FEI), head of the specialised committees secretariat at the ‘Mostakbal Watan’ party and a member of Al Ahly Sporting Club’s board, revealed how he could played multiple roles in a short period of time.

Elgarhy also expressed his optimism about the future of Egypt’s economy, but the government, in his perspective, must work hard to ease the impact of the economic reform methods, and called on all businesspersons to stand hand-in-hand with the state to finalise it.

He also thought that it is too early to evaluate what has been achieved in the economic reform plan till the entire implementation of its procedures.

An onto the text of the interview, the transcript for which is below, lightly edited for clarity:

As a businessperson, how do you evaluate what has been implemented in economic reforms until now?

It is too early to judge the reform plan and its procedures, but, without question, economic reform procedures are successful till now. Economic stability is tangible, and the market really feels it now. In addition, all declarations that were stated and the indicators that are measuring our economic reform from international authorities reflect the improvements that the Egyptian economy is achieving. I consider what we accomplished until now is a starting point for further development. The economic reform programme is not yet not fully completed for it to be judged or evaluated.

Does it mean that the reform plan is not yet effective?

It is no longer true. It was necessary to implement this economic reform plan at this time. Undoubtedly it caused some troubles for all Egyptians and we are still facing them, however, we need to be patient and to be responsible until the plan’s procedures are completely implemented, in order to overcome its difficult aftermaths. So, I call on all businesspersons in Egypt to play a role in overcoming the consequences of the economic reform, and to lend a hand to citizens as a key role in getting over this serious stage. For instance, our company coped with this through increasing salaries by 30% to ease the financial burdens on our employees.

Some think that the timing of this plan was not ideal, what do you think?

It is certain that this plan is necessary for Egypt’s economy to move in the right direction, with a proper execution to ensure success. And I am sure that the average person is going to reap the benefits of these procedures and perceive its positive consequences, especially that a notable share of the state’s resources are allocated to serious sectors such as the health care sector, with President Abdel Fattah Al Sisi’s efforts to beat HIV through the ‘100 Million Health’ campaign, in addition to his ‘Nour Hayah’ initiative which aims to treat diseases which cause blindness and poor vision, targeting the inspection of five million elementary school students and two million needy people nationwide. Under it, one million prescription glasses will be provided and 250,000 eye operations will be performed to those who need them. Such significant efforts cannot be denied not only in the health care sector, but in other important sectors including education, infrastructure, building, and construction sectors.

For the private sector, what is the role it should play in this serious phase?

The private sector has become the main provider of employment in Egypt, so to speak. It is the engine to jump-start Egypt’s economy. I believe that it has to play a key role in social responsibility. A ‘better Egypt’ should be its target, helping the state to ease the burdens shouldered by ordinary people. Playing this role is important in order to be able to produce, as, eventually, people are the customers who consume our products and we must keep them and play a role in their lives, especially in this critical period. In this regard, many initiatives have been launched until now aiming to stand by the people, in addition to fixing the negative impacts caused by implementing the new economic policy.

Do you mean supporting the state to overcome all obstacles?

The state cannot provide such efforts alone. The private sector, including Egyptian businesspersons, must stand side-by-side with the state to provide relief to poor and low-income families and to all who are suffering now through participating in development and charity efforts. Allow me to use the example of the economic downturn that hit US in the 1930s and how the social responsibility of the private sector played a key role to push the markets to improve, mitigating the impact of this recession that hit the globe.

Then, what is the role you are currently playing now in view of that?

We are already playing our role in this regard, cooperating with number of charity entities, such as the ‘Tahia Masr’ fund and introducing food aid to the most needy villages in addition to boosting the ‘Dignified Life’ initiative recently launched by President Al Sisi to serve the neediest people through introducing some aid to the neediest villages. In this regard also, we are in the process of establishing the El Garhy for Social Development Society to play our social role in a regulatory framework.

Are you optimistic about the future of Egypt’s economy?

The economic reforms which have been achieved in the past few years enhanced Egypt’s competitiveness, putting Egypt’s economy on a course where it could thrive. Actually, I am optimistic about the future of Egypt’s economy, but the government should exert more effort to educate people of the significant benefits of the economic reform procedures simultaneously with their implementation in order to overcome any attempts to frustrate people.

And what about the investment atmosphere?

The improvement that Egypt’s investment atmosphere is experiencing currently is clear, and we are seeing all the efforts introduced by the state to lift the burdens that investors are facing. The proof in this regard is Mercedes-Benz’s return to the Egyptian market. Furthermore, Apple expressed its interest to inject new investments in the Egyptian market. Undoubtedly, such big corporations would not come to invest in our market if they did not trust the investment climate in Egypt. They are positive of the benefit of investing in our market.

But investment is a constantly changing sector, so it needs continuous reform procedures and facilities, and not simply settling for what has been achieved.

As an investor in one of the most important industrial sectors, steel manufacturing, which competencies make El Garhy able to prove itself among other giant rivals?

El Garhy Steel has all the strong, fair competitiveness factors, as we have qualified technical staff who are enhancing our competition in the market. Our vision is based on considered economic plans and integrated strategy which aims to improve our working mills along with establishing new steel mills, to produce the required essential lines that the steel industry is founded upon. These essential lines, actually, are partially imported. Following that line, we enhance our products’ quality, thereby increasing our business share in the market, as we plan to double our production by 2020 after adding new production lines.

In view of higher global steel prices and the impact of the floatation of the Egyptian pound, what is you forecast for steel prices?

It is strange that some thought that the price hikes of steel in the last years caused increases in investors’ profits in this sector, considering it as an increase in profit margins. Indeed, steel is a strategic commodity. However, although Egypt’s market is currently following a free enterprise economy which set commodities’ prices according to supply and demand rules, steel prices are set according to lines’ prices that are mostly imported which already have experienced significant hikes in their prices in recent years. Moreover, higher prices of fuel and gas are essential inputs in the steel industry.

You have succeeded to become a part in the sports and political scene as well. What about your political role now?

The secretariat is one of the party’s central secretariats which is responsible for considering and preparing projects and documents related to public policies in all fields. Once I am tasked, I carefully prepare a strategy which stems from the party’s general strategy, aiming to make the secretariat a source of new initiatives and creative ideas in addition to drafting new laws. So we rely on experts, public figures, former ministers, and academics to work professionally without have it conflict with our policy of empowering the youth.

Does this role add to your experience?

The ‘Mostakbal Watan’, (A Nation’s Future)  party has become one of the most important parties in Egypt, as it has a large number of members, especially from the youth category, and has premises and activities in governorates from all over Egypt. The party also carefully and consistently improves all its structures. So, it has a notable existence in the political scene now. On the other hand, it has an influential, large parliamentary bloc that plays a significant role in the legislative reform process, contributing in preparing new draft laws and discussing others. I think that ‘Mostakbal Watan’ has all the potentials; political, human, and technical capabilities which can be tapped to achieve significant amendments in Egypt’s legislation which can make Egypt thrive, forming a nation’s future identity. We cannot also deny its role in social activities, and its close connection with the people and their daily sufferings, as well as introducing some social initiatives to cope with the hard impacts of the economic reform measures.

What about ”Ataqa’s’ performance in 2018 as one of the biggest companies in Elgarhy group?

Misr National Steel “Ataqa “is one of El-garhy Group’s companies and its financial performance in fiscal year 2017/18 positively affected the equity performance as the company registered EGP 200m in 2017 in profits, reached over EGP 190m estimated profits till the third quarter of 2018. Its equity was trading at a lesser value with an estimated profit factor did not exceed three times only.

Let’s talk about your role in the sports scene as a member of Al Ahli Sporting Club board?

Indeed, investment in the sports atmosphere in Egypt needs serious legislative amendments, especially that since the new Sports Law has been released in 2017, the market did not experience the establishment of any company for sports investment, although it dedicated an entire chapter in the law for investment.

How do you assess the new sports legislation and the investment chapter included?

Actually the law needs to be reconsidered. It requires essential amendments. In this regard, the secretariat of specialised committees in the ‘Mostakbal Watan’ party, in collaboration with the sports committee in the parliament, has prepared a proposal for a new sports draft law aiming to improve the investment atmosphere in Egypt.

Is the sports field an attractive sector for investors to compete in to become members in popular club boards or to finance their activities?

Sports in general, and football game in particular, are an attractive sector for investment. Remarkable businesspersons all over the world significantly invest in such sectors in recent years. Although the football industry in Egypt has not developed yet, yet there is a chance to attract investments to this sector. Let me say that the social responsibility for businesspersons is to motivate the entry into this sector as football games have become one of the key factors which inspire people, making them happy. For sports in general, our role is to sponsor Egyptian champions in various fields, helping the state through this sponsorship to achieve triumphs in all games, and on the other hand to relieve the burdens on the state.

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Chile likely to discuss inking free trade agreement with Egypt in 2019 https://dailynewsegypt.com/2019/02/04/chile-likely-to-discuss-inking-free-trade-agreement-with-egypt-in-2019/ https://dailynewsegypt.com/2019/02/04/chile-likely-to-discuss-inking-free-trade-agreement-with-egypt-in-2019/#respond Mon, 04 Feb 2019 07:00:48 +0000 https://www.dailynewsegypt.com/?p=688765 Bilateral trade exchange to increase by 20% per year, says former Chilean ambassador

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Chile aims to discuss inking a free trade agreement with Egypt during 2019 which will increase the trade exchange at least by 20% per year, according to Fernando Zalaquett Sepúlveda, former ambassador of Chile in Egypt.

Sepúlveda added that the trade exchange with Egypt is estimated at $100m, affirming that his country is keen on boosting bilateral relations with Egypt in all levels including the economic, political, and cultural aspects.

Daily News Egypt interviewed Sepúlveda, where he gave a conclusive look of the situation in Egypt as well as an assessment of the bilateral relations, the transcript of which is below, lightly edited for clarity:

Initially, you stayed in Egypt for over three years, so how do you assess bilateral relations during your mandate?

I left my position as Chile’s ambassador to Egypt on 31 January 2019, after staying here on the top of the Chilean mission to Egypt for about three years and four months.

What is your second destination after Egypt?

In February I will assume my position as new ambassador of Chile in Ethiopia. I will also be a representative of Chile to the African Union (AU) because Chile is an observer country in the AU. It will be a very interesting and challenging new professional destination.

The situation in Egypt is safer than some years ago, so it is a good time for tourists to come and visit the country. I also noticed very important economic improvement under the leadership of president Abdel Fattah Al-Sisi. The country accomplished substantial economic reforms in 2016 which positively affected the country’s economic position.

Are there any new Chilean investments in Egypt?

Actually, we have a very important and big petroleum company which is working in Egypt since 2002. It is our national petroleum company ENAP Sipetrol. It has a joint venture with the Egyptian side. It invests about $400m in five petroleum fields.

On 27 February 2017, the Minister of Petroleum and Mineral Resources, Tarek El Molla, met representatives from ENAP Sipetrol, where the company affirmed its strong desire to expand investments in Egypt’s Oil and Gas fields during the coming period.
The minister pointed out that they reviewed the government’s economic reform programme and methods of creating an investment-attractive environment, as well as the latest developments in the Egyptian petroleum industry, according to a past statement.

Would you please elaborate about the Chilean investments in Egypt?

There is the Crystal Lagoons company in Egypt which is a leading Chilean company working in Egypt’s real state sector.

Crystal Lagoons, a leading international water innovation company, has opened a regional office in Cairo, highlighting the company’s commitment to Egypt, according to past media reports in 2017, adding “Patented in 190 countries worldwide, Crystal Lagoons is now involved in projects worth over $5bn in Egypt, with a total of 13 contracts signed, and a further 10 at various stages of negotiations in Cairo, the North Coast, Ain Sokhna, and Hurghada.”

We hope new Chilean companies will invest in Egypt. We are working on boosting Chilean investments in Egypt and attracting new companies. last year, we signed a commercial agreement with Egypt to boost investments and bilateral trade.

we are looking forward to starting conversations for inking a free trade agreement with Egypt this year. The free trade agreement is key to promoting our bilateral trade, as Chile has signed about 26 free trade agreements involving about 60 countries.

What is the amount of Chilean trade exchange with Egypt?

It is still modest at about $100m. However, after the expected agreement, it will be boosted by 20% at least.

What about touristic relations?

We are working on improving touristic relations. There are only 200 Chilean tourists visiting Egypt annually, but if we can have direct flights from Cairo to some destinations in south America as São Paulo, Brazil and Buenos Aires, Argentina, the tourists figures will hike.

Would you please elaborate about cultural relations?

We always organise cultural activities like presentations of Chilean writers and artists. Last December, we organised a seminar with the National Museum of Egyptian Civilisation (NMEC) to discuss shared experiences in the archaeological field. We have great knowledge sharing in archaeological experience with Egypt. Experts continue this kind of cooperation. I would like to underline that relationship is excellent over all aspects.

Last year, we had our political dialogue. We aim to improve bilateral trade.

We also organised a seminar with the World Bank (WB) in 2016 about the Chilean health reform. Plus, we organised a conference with the National Women’s Council in Egypt, where we hosted a former female minister to exchange experience about human rights in both countries.

We are involved in boosting Chilean investments in Egypt, so we brought a very important public and private delegation in the business sector and held a seminar about business opportunities, and we are also working to establish a joint business council. It was great honour to represent Chili in Egypt.

I think Egypt is a country that has written a universal glory story. There are incredible opportunities in this country. I have received the affection people everywhere.

Who is the new ambassador of Chile in Egypt?

Pablo Arriarán Ahumada who was serving in Argentina, before Egypt. I am sure that he will continue working on achieving an excellent relationship between both countries. We have established our diplomatic relations over 90 years ago in 1929.

During the 1950s, we had a resident ambassador here in Cairo. I think that our relationship is very fruitful and successful, and all the activities are implemented in a spirit of great friendship.

Notably, the Chilean Minister of Foreign Affairs, Roberto Ampuero revealed the appointment of Pablo Arriarán Ahumada as new Chilean ambassador of Chile in Egypt, according to Chilean Ministry of Foreign Affairs in December 2018.

Pablo Arriarán is a public administrator from the University of Chile and a graduate of the Andrés Bello  Diplomatic Academy. He has a master’s degree in International Relations from the University of Victoria, in Wellington, New Zealand (1998), as well as a Diploma in International Economic Relations from the Universidad Mayor de Chile (1994).

During his career he has served in the Chilean embassies in Gabon, Kenya, New Zealand, the United States, Ecuador, and Argentina, where he is currently working.

In Chile, he has served in various directorates of the ministry of foreign affairs, among which are cultural affairs, environment, multilateral policy, international and human security, as well as the General Directorate of International Economic Relations in APEC matters. He has been deputy director of personnel and deputy director of ceremonial and protocol.

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Future of cash: will it become obsolete? https://dailynewsegypt.com/2019/01/30/future-of-cash-will-it-become-obsolete/ https://dailynewsegypt.com/2019/01/30/future-of-cash-will-it-become-obsolete/#respond Wed, 30 Jan 2019 10:00:59 +0000 https://www.dailynewsegypt.com/?p=688421 Transforming Egypt into a digital society starts with online payments

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Egypt’s President Abdel-Fattah Al-Sisi wants to modernise the country by improving the telecommunications infrastructure, establishing smart cities, and enabling citizens to use digital services. “We are on the right path toward a digital society,” Al-Sisi stated at the Cairo International Exhibition and Conference on Telecommunication and Information Technology last December.

This month, Egypt hosted the second edition of the Financial Inclusion Global Initiative Symposium, which is organised by the International Telecommunication Union (ITU), jointly with the World Bank Group (WB) and the Committee on Payments and Market Infrastructures with the support of the Bill and Melinda Gates Foundation.

The country is one of three countries, alongside China and Mexico, to receive technical assistance from the Financial Inclusion Global Initiative community to promote digital financial inclusion.

Daily News Egypt interviewed Bilel Jamoussi, the Chief of the study groups department in the Telecommunication Standardization Bureau at the ITU, and Amr Moussa, the minister advisor for digital economy at the Egyptian Ministry of Communications and Information Technology (MCIT), as well as Ehab Nasr, the head of payment systems at Central Bank of Egypt (CBE), attempting to get a clear picture of how Egypt’s adoption of cashless payment will proceed.

Three challenges face adoption of e-payments: ITU official

How does the ITU see the Egyptian government’s efforts to upgrade the IT services?

The ITU is proud that Egypt is one of the three countries we work together with in order to implement digital financial inclusion, the programme is under the supervision of the ITU, jointly with the WB, and with the support of the Bill and Melinda Gates Foundation.

We work with the National Telecom Regulatory Authority (NTRA), the MCIT, the CBE, and the Financial Regulatory Authority in order to find solutions for legislative and technical issues, so that the implementation of financial inclusion in Egypt happens faster and in a more comprehensive way.

Egypt Post plays a key role since it has the ability to reach all parts of the country, as it exists in all the Egyptian villages and in all regions. Additionally, there is mutual trust between the post’s employees and the community. This trust enables the digital financial inclusion become easier.

Today most of Egyptians have a mobile phone, even if it is a simple mobile phone. By using it, citizens can have an access to banking services through sending and receiving money and by paying for services. This is the objective of the digital financial inclusion in Egypt, China, and Mexico.

Bilel Jamoussi

What are the challenges that could impede the implementation of the digital financial inclusion?

The first challenge is the legislation because the financial and technological sector are different sectors with different ministries. This occurs in all countries of the world and not only in Egypt, so there must be a constructive dialogue between the officials of the telecommunications sector and the banking sector in order to find solutions regarding the legislative and technical issues in order to find solutions for the Egyptian citizen.

On the technical aspect, there are three challenges. The first challenge is the acceptance of electronic payments, so the merchant and customer must have the tools which enable them to use digital payment rather than cash.

The second challenge is the presence of a digital identity, as we cannot talk about digital transactions without a digital identity, it is actually the cornerstone for building confidence in electronic financial transactions.

The third challenge is having a strong infrastructure of cybersecurity in order to encourage people to have confidence in digital financial transactions. The team which deals with this matter should have many protocols to be used to create secure transactions between the citizen, who uses the mobile phone, and the merchant.

Those are the three challenges, and we try to find solutions for each country which applied for financial coverage including Egypt, China, and Mexico.

What are the other programmes which the ITU is working on in Egypt?

One of the most important goals we have is to help facilitate communication in all countries. Today, 50% of the world’s citizens have access to the internet, and the other 50% need to have access as well. This is the most important concern for the ITU. Our duty is to connect citizens and enhance communication in all countries of the world.

Our second task is to build services such as financial services, health services, as well as transport services, those are the ITU’s strategic goals.

Some people have concerns that the use of technology will increase unemployment, what is your opinion on that matter?

The internet, mobile phones, and other technological tools are actually creating new jobs and new opportunities, and the investment in the ICT sector can result in 10 times higher profits. We can create job opportunities, and even export software services. I think this fear is subjective and incorrect. The world’s fastest growing countries have invested in the ICT sector.

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Vicat: 15 years leading cement industry, development in Egypt https://dailynewsegypt.com/2019/01/28/vicat-15-years-leading-cement-industry-development-in-egypt/ https://dailynewsegypt.com/2019/01/28/vicat-15-years-leading-cement-industry-development-in-egypt/#respond Mon, 28 Jan 2019 07:30:21 +0000 https://www.dailynewsegypt.com/?p=688155 'We support Egypt's economy, confident in return of stability to Sinai': Guy Sidos, Group CEO

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Jacques Merceron-Vicat, honorary chairperson of the Vicat Cement Group, said that the Egyptian economy is taking positive and steady steps forward, thanks to the policies adopted by the political leadership over the last four years. He also praised the parliament’s approved laws which have corrected and improved the investment climate, therefore it succeeded in attracting more foreign and Arab investments into the Egyptian market. He informed Daily News Egypt that the company is committed to staying in the Egyptian market even in the most difficult conditions, when the state was facing terrorism in Sinai.

“Day after day, we were confident that stability will once again prevail in Sinai,” he stressed. This is what took place thanks to the great efforts exerted by political, military, and security leaders in Egypt. “I therefore emphasise that we are remaining in this country to support its national economy,” he added.

Guy Sidos, chairperson and CEO of the Vicat Cement Group, described the Egyptian market as a one with the tools and the means to withstand all the obstacles it faces. He highlighted Vicat’s pride regarding its presence in the Egyptian market, and the successes it has achieved for 15 years since it started its investments in Egypt in 2003, through its partnership with the Sinai Cement Company. 

DNE interviewed the Vicat company decision makers, the transcript for which is below, lightly edited for clarity:

We would like to know more about Vicat International, can you elaborate?

The company was established in 1853 by Joseph Vicat. It is a family-owned company with its headquarters in Paris. Vicat is currently led by the seventh family generation, who are developing the group and all its branches across the world in order to provide the best materials used in the construction industry to remain concurrent of the great progress the world is witnessing in this industry.

Who is Joseph Vicat?

Joseph Vicat is the great grandparent of the family, who discovered the composition of the present cement mixture over 160 years ago, which is one of the most important inventions in the history of humanity. He offered it to the world for free, as he believed that his invention represents a humanitarian and civilisational value which cannot be monopolised. Vicat shared this invention to participate in the renaissance and development of several nations over a century and a half ago. At Vicat, we are extremely proud of our long history and Joseph Vicat’s invention.

After all this experience, how did you develop?

Vicat Group is one of the world’s leading companies in the cement industry with more than 160 years of experience. It has participated in a substantial number of construction projects around the world, in addition to its efforts to reach new discoveries which can contribute toward the improvement of the industry.

The year 1974 marks a major turning point in Vicat’s success when it acquired the US-based Ragland Cement Plant, which was the first step in the group’s global expansion strategy.

What are your other expansion locations?

Vicat’s expansion plans for the cement industry so far include 12 countries worldwide. For example, we started investing in Turkey in 1991; Senegal in 1999; Switzerland in 2001; Egypt since 2003; Mali in 2004; Kazakhstan since 2007; India and Mauritania in 2008, in addition to Italy and the United States.

When did you decide to invest in Egypt?

Vicat decided to invest in Egypt in 2003, when the board of directors of Sinai Cement asked Vicat to enter as a partner for its competence and reputation throughout the world. Back then, the Egyptian market was one of the most promising markets in Africa and the Arab world. Therefore, we decided to invest in it following comprehensive studies which confirmed its strength, diversity, and ability to expand.

How do you view the current situation of the Egyptian market?

First of all, we emphasise our great confidence in the Egyptian market, and I think that the difficult times have passed, and that in the coming period Egypt will be able to harness the benefits. The Egyptian economy has the tools and capabilities which enable it to withstand and overcome all the obstacles in its way, and it is taking positive, solid steps forward in view of the courageous corrective decisions taken during the last four years.

An important factor which has greatly improved the investment climate in Egypt is the availability of political leadership, the important measures taken by the government, and the economic laws approved by the Egyptian parliament, which provided Egypt with an attractive environment for investment-all confirmed by figures from international financial institutions.

How did you face the recent crisis in Sinai during the escalation of the war on terror?

We believe, like the Egyptian people, that Sinai is indeed the land of turquoise. It is God’s paradise on earth, so we did not abandon Egypt even in its most trying circumstances, although we suffered quite a few losses during that period of time. Day after day, we were confident that calm and stability would return to Sinai once again. This is what took place thanks to the great efforts exerted by political, military, and security leaders in Egypt. I therefore emphasise that we are remaining in this country to support its national economy.

What are the future plans that you intend to accomplish in Egypt?

To begin with, I would like to point out that Vicat has invested over €200m in the Egyptian market since its entry into the Egyptian market. We have an extensive vision of the Egyptian market. We are considering pumping €30m in the coming period to develop the Sinai Cement Factory, as it is the main company stakeholder. We also aim to expand vertically and horizontally, both in terms of production or organisationally to cover all the requirements of the local and regional markets.

What is your role in community service in Sinai?

Vicat is a family company and we understand the importance of development of the communities in which we work. We consider every market we invest in as part of us, so we aim to develop it. Community service is at the top of Vicat’s global priorities. Since our presence in 2003, we had various successful initiatives which benefited plenty of Sinai people. These initiatives were carried out through the Sinai Cement Company and factory, not directly on behalf of Vicat. During the past period we have conducted detailed surveys and in-depth studies to identify the services we can provide in this area to the people of Sinai, especially after calm and stability has been re-established. Currently, we are considering a number of options which are available to us to provide more support to the people of Sinai.

How do you comply with environmental standards at Sinai Cement?

One of the main priorities of Vicat-Egypt is the application of international standards and environmental requirements for the cement industry. This approach is adopted by Vicat’s global strategy and we use the latest scientific research to avoid damaging the environment. You can see this through your visit to the factory, in addition to the strict supervision of the state agencies in this sector.

Can you tell us about Vicat’s products?

Vicat produces various types of cement and concrete mixtures which are suitable for all projects and are compatible with different environments, temperatures, atmospheric pressures, wind, and water. This includes Portland cement, Portland composite, Blast furnace cement, Slag cement, and Pozzolan cement, as well as various types of concrete.

What are Vicat’s most important projects?

Vicat has contributed to several major projects worldwide, which have been directly dependent on our products: hydroelectric power plants in Dumlupınar and Bukakisla in Turkey, where over 66,000 tonnes of cement have been used in construction.

We also built the north highway A41 in France, where we used 70,000 tonnes of cement, which opened in 2008.

There’s equally Saint-Gervais in France; the covered market in Poulencrain, France; the Mesolls tunnel in Switzerland, and the Mediterranean Palace in Nice, France.

Louis Vicat

Vicat: radical new family that changed world

Vicat Group takes pride that it was founded and has continuously expanded under the designation of Louis Vicat, the inventor of cement. The group managed for over 160 years to preserve the family spirit, appreciative of what their grandfather presented to mankind. The seventh generation of Vicat grandchildren are now managing the group. They were able, through continuous research, to enhance the products and cope with the latest construction technologies, in order to contribute to the development of various nations around the world.

Vicat produces a large variety of products including cement and concrete mixes that suit all types of projects. They also suit various environmental conditions, temperatures, and air pressures. The products include:

Cement 1 (Portland cement), Cement 2 (Composite Portland Cement), Cement 3 (Furnaces Slag Cement), Cement 5 (Slag Cement), Cement 6 (Buzlana Cement).

This is in addition to the concrete produced by the group including self-compacted concrete, high performance concrete, added concrete, and coloured concrete.

Vicat Group participated in a large number of substantial projects all over the world which directly depended on their products.

The group operates in more than 11 countries around the world.

Their first investments was in the US in the late 1970s, then in Turkey in 1991, Senegal in 1999, Switzerland in 2001, Egypt and Italy in 2003, Mali in 2004, Kazakhstan in 2007, Mauritania in 2008, and in India in 2012.

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Egypt’s reform programme revives growth: French Ambassador https://dailynewsegypt.com/2019/01/28/egypts-reform-programme-revives-growth-french-ambassador/ https://dailynewsegypt.com/2019/01/28/egypts-reform-programme-revives-growth-french-ambassador/#respond Mon, 28 Jan 2019 06:30:43 +0000 https://www.dailynewsegypt.com/?p=688128 Large French business delegation will visit Egypt in the coming month, says Romatet

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Last week, Prime Minister Mostafa Madbouly met French Minister of Economy and Finance Bruno Le Maire and his accompanying delegation in preparation for the upcoming visit of French President Emmanuel Macron to Egypt.

During the visit, Madbouly stressed the need to strengthen ties between Egypt and France. Moreover, both countries showed interest in deepening mutual cultural cooperation.

The Egyptian-French cultural year 2019 is going to hold several surprises, such as a special cultural programme will be established to reflect the scientific, historical, cultural, and artistic cooperation between the two countries, according to Egyptian ambassador to France and Egypt’s permanent representative in the UNESCO, Ehab Badawy. 

Badawy praised the cultural co-operation between Egypt and France which reflects the solid ties between the two states.

French ambassador in Cairo Stéphane Romatet told Daily News Egypt that Egypt has exerted significant economic reform efforts, rendering it as one of the biggest countries in the Mediterranean region in terms of growth rates.

Romatet noted that France supports Egypt and informs its European partners that the Egyptian government is on the right track in terms of economic and social reform.

He noted that France is keen on expanding bilateral relations between Egypt and France on all levels in the current period.

Daily News Egypt interviwed Romatet to discuss his vision regarding the Egyptian economy in the new year and the French government’s efforts in supporting Egypt , the transcript for which is below, lightly edited for clarity:

What are your expectations regarding the Egyptian economy in the current year?

If you compare the Egyptian situation today with what it used to be even two years ago, the change is dramatic and positive, as growth is back and the deficit is down,  and confidence is growing. Of course, there are some difficulties, however, inflation is down and reserves are better. French companies are seeing that things are moving in Egypt and they are now paying great interest to the Egyptian market.

Indeed, after 2011, all the Egypt’s foreign reserves faced difficulties and Egypt was not the best place to invest in, but now after the improvements in the economic situation, and with the prospects in terms of growth, along with all projects going on in Egypt, reveal that Egypt is back.

Moreover, I feel when I discuss with French companies that that they now consider Egypt as a place of investments.

Do you think that in 2019 there will be French foreign direct investments (FDIs) coming into the Egyptian market?

We are working toward that because we sent very simple messages to French companies that this the best time to come and invest in Egypt.

What are the most promising sectors for French companies in Egyptian market?

I think it is infrastructure; the field in which French companies are strong in, especially in the light of Egypt’s megaprojects and French companies should have a presence in these projects. In addition, the smart cities which are being developed by Egypt need energy and innovative models of transportation and other infrastructure. Plus, pharmaceuticals is another field of interest too.

In your opinion, what are the most important megaprojects the Egyptian state is currently developing?

All the projects of new cities such as the New Administrative Capital, New Alamein, New Mansoura and other cities that have been recently launched by the state.

There are also the megaprojects in the transportation field such as high-speed trains, the monorail, the metro as well as tramways in Alexandria, where we are working hard to present French offers.

These projects are of great interest in France, especially the remarkable cultural projects such as the Grand Egyptian Museum, as well as the museum of the city of arts that will be established in the New Administrative Capital because France is a country of culture. Therefore, everything related to culture we would be interested to work with Egypt in.

Do you think that in this year we will see a flow of French tourists coming to Egypt?

The situation is better because of the stability of the country. Recently we have modified our travel ban to Sharm El-Sheikh so we see now French tourists coming back to Sharm El-Sheikh.

Figures are on the rise and this is a good time to come back to Egypt. In 2010, French tourists reached one million and the numbers of our tourists were very low in the years following 2011. However, we hope to see 300,000 French tourist visiting Egypt in the current year. Nevertheless, I think year after year and with the improvement of the situation and the floating of the currency, will make Egypt a very attractive tourism destination.

We work hard to promote Egyptian tourism to French people as they have a passion for Egypt and we are used to saying that Egypt is a French passion. They want to come back to visit the country, especially with the improving in the security situation and its very positive economic state after the devaluation of the Egyptian pound value. All of these conditions are very good catalysers for French people to come to Egypt.

For example, this year, which is a high season after 2011, you will hear many people speaking French, who are coming back, and these figures will increase and the trend is very positive.

Therefore, I expect that French tourism will flourish again in Egypt following the political stability and security experienced in Egypt over recent years. The number of French tourists who visited Egypt last year reached about 150,000 people.

What are other educational and culture cooperation between Egypt and France?

Cairo and Paris exchange views on reinforcing cooperation in the cultural and educational arenas, including developing the French University in Egypt.

Furthermore, France is interested in enhancing its relations with Cairo, especially in educational and research joint projects.

Over and above, France is ready to provide French expertise in the health sector to Egypt.

How do you see Egypt’s current reform programme? Additionally, what are results you imagine see happening?

It was very difficult decision but it was quite courageous.

These decisions revive growth, and the global economic outlook will of course be positive, but we cannot ignore that it has some social consequences and difficulties and that is why France provides a social protection aid for Egypt as the success of the economic reforms is very important.

Noteworthy, in the coming years we will continue to support this programme and expand our cooperation with Egypt in this regard.

What is the amount of funds allocated by the French government for Egypt?

Every year we finance several projects in Egypt, namely social protection projects, budget assistance technical and strategic assistance too, in addition to supporting other developmental projects.

I hope that we can work even further in this technical assistance and financial support because Egypt needs to succeed in its reform project.

We are now preparing for our four-year programme which will be announced soon, and hopefully we to be able to do even better in term of assisting Egypt for the success of its reform programme and its vision.

What is the value of French investments in Egypt?

The French embassy is coordinating with Egyptian partners to attract foreign investments in different sectors, especially energy. Egypt and France are bound together by good economic relations. French investments in Egypt amount to about €4bn and the number of French companies operating in Egypt are about 160 companies.

Shall we expect a French businesspersons delegation visiting Egypt this year?

Yes, we are working on a big French business delegation to visit Egypt in the coming month comprising of large companies and small and medium-sized-enterprises (SMEs) in different sectors because I think that there are many opportunities are available for SMEs in Egyptian market.

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Developing reserves, increasing revenues, reducing pollution priorities in 2019: Environment minister https://dailynewsegypt.com/2019/01/27/developing-reserves-increasing-revenues-reducing-pollution-priorities-in-2019-environment-minister/ https://dailynewsegypt.com/2019/01/27/developing-reserves-increasing-revenues-reducing-pollution-priorities-in-2019-environment-minister/#respond Sun, 27 Jan 2019 16:28:14 +0000 https://www.dailynewsegypt.com/?p=688062 Greenhouse gases in Egypt are 1% less than global level

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The Minister of Environment, Yasmine Fouad, said that the ministry’s plan this year focuses on three axes, which are to develop the natural reserves, increase their revenues and marketing, establish landfills for waste and intermediate stations, as well as to reduce pollution.

She added that the coming period will witness the entry of three environment-related laws into the House of Representatives as a system without legislation will not be useful. These three laws include the Law of the Economic Commission for Natural Reserves, the Waste Law, as well as the Environment Law, which seeks to integrate the environmental dimension in all fields.

She explained that natural reserves must achieve an economic return, and to be utilised in proportion to their current conditions. The ministry also aims to market these reserves in order to attract tourists and increase revenues.

Moreover, studies and plans for the establishment of landfills and intermediate stations have been completed. Plans have been finalised for 27 governorates, and studies were carried out in order to develop each governorate separately, in addition to completing the Waste Law.

Fouad elaborated, “We have an integrated system for the number of landfills and dumps needed in each governorate. There is a cost for building and equipping the landfill, and therefore it is a medium-term plan which will be carried out over two years.”

She referred to the signed agreements worth €25m to finance the pollution control projects in industrial establishments within the Industrial Pollution Control Programme, which is a tool assisting industrial facilities to adjust their situation through a 20% grant, and the rest through a soft loan.

The minister also said that the government is striving to achieve the UN goals for sustainable development in order to protect the environment. The tourism, energy, and industrial sectors are some of the most affected sectors from climate change, which is considered a developmental challenge, and such a project today helps to achieve gains for all the sectors.

Greenhouse gases in Egypt are 1% less than the global level, and everyone is seeking to eliminate them. Egypt is capable of undertaking several initiatives in all the sectors in order to achieve the success of the environmental system.

Furthermore, Fouad stated that the ministry of environment prepared a clear roadmap and has thorough information on the problem of waste collection across the country. The ministries of military production and local development both have the necessary tools to achieve the overall system’s success.

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Ericsson encourages legislators, regulators to reduce investments obstacles, ensures 5G frequency allocated: CEO https://dailynewsegypt.com/2019/01/27/ericsson-encourages-legislators-regulators-to-reduce-investments-obstacles-ensures-5g-frequency-allocated-ceo/ https://dailynewsegypt.com/2019/01/27/ericsson-encourages-legislators-regulators-to-reduce-investments-obstacles-ensures-5g-frequency-allocated-ceo/#respond Sun, 27 Jan 2019 15:30:57 +0000 https://www.dailynewsegypt.com/?p=688026 Company’s investments in R&D positioned it to benefit from strong momentum in global 5G market, says Ekholm's

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In an attempt to turn the tides after the company suffered an operating loss in the last three months of 2016, Ericsson hired as CEO, Borje Ekholm, a Swedish business insider and veteran board member. Since Ekholm’s surprise appointment as CEO in 2016, Ekholm has been working toward restoring profitability by shedding costs, terminating unprofitable units and contracts, and making the networks business a 5G market leader.

In the third quarter (Q3) of 2018, the wireless network maker’s results indicated the growing interest of worldwide carriers in investing in 5G services.

Daily News Egypt interviewed Ekholm, during the World Economic Forum annual meeting 2019, in Davos, to find out about Ericsson’s future plans, his method for improving profitability, keeping the current growth momentum going, as well as his thoughts on how the 5G technologies would change the way we are living.

And onto the interview, the transcript for which is below, lightly edited for clarity:

Ericsson’s Q3 results showed earnings increase beating analysts’ expectations, what are the main drivers for growth?

There is strong momentum in the global 5G market with lead markets progressing. The global radio access market is recovering from several years of negative growth and our investments in research and development (R&D) have well-positioned us to benefit from this development.

Can the company’s witnessed growth in North America be replicated in other regions, especially in the MEA, considering the fierce competition from other regional players?

North America is indeed the leading 5G market. But there is a great interest and positive momentum in all parts of the world. One critical factor is the availability of the frequency spectrum and other factors that may slow down 5G investments. This is, for example, one of the reasons why Europe is somewhat behind.

What is Ericsson’s competitive edge when it comes to 5G?

Ericsson has a large established base in networks around the world, and as of 2015, we have shipped base stations that are software upgradable to 5G. This is something that is quite appreciated by our customers. Another thing is that we have a favourable long-lasting customer relationship with mobile operators across the world.

Do you see 5G as the new ‘space race’ between nations?

Ericsson’s focus is on our customers and to deliver competitive solutions based on our leading technology. However, obviously, 5G is important for all countries since it will be a critical part of countries’ infrastructures.

How can we decrease the connectivity gap, and reduce the inequality of access to technology?

The information and communications technology (ICT) offers an important platform for achieving the UN’s Sustainable Development Goals. Every goal – from ending poverty and halting climate change to fighting injustice and inequality – can be positively impacted by ICT. Ericsson was one of the first pioneers of what is today referred to as “ICT for development,” with some of our main efforts dating back to the mid-2000s.

What can governments do, to increase the affordability of 5G, and increase its implementation rates?

The buildout of 5G networks is essential in order to enable new services and faster connectivity that will benefit consumers, businesses, and society. Ericsson encourages legislators and regulators to ensure that investment obstacles are reduced and that the frequency spectrum for 5G is allocated without delay.

How will 5G transform the way we currently live?

5G will take mobile communication toward a new era, connecting not only people but also anything that will benefit from being connected. We call this the internet of things (IoT) and it will positively contribute to the digitisation of entire countries, particularly through enhanced industrial competitiveness, improved socio-economic conditions in service sectors, and last but far from least contribute to a sustainable society. In addition, experience shows that new communications technology will lead to new innovations that today we may not be able to predict.

Recently, national security concerns have been on the rise, with doubts over the implementations of 5G by some companies, do you believe those concerns towards 5G are exaggerated?

We focus on providing competitive solutions and technology that comply with the high-security requirements demanded by customers and authorities. Furthermore, security is a core design feature of the 5G standard and architecture and compared to 4G networks, as 5G offers important improvements from a security point of view, hence providing strengthened security for end-users.     

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Minister of Petroleum, Mineral Resources: realisation of 11 gas, oil projects during next FY https://dailynewsegypt.com/2019/01/27/minister-of-petroleum-mineral-resources-realisation-of-11-gas-oil-projects-during-next-fy/ https://dailynewsegypt.com/2019/01/27/minister-of-petroleum-mineral-resources-realisation-of-11-gas-oil-projects-during-next-fy/#respond Sun, 27 Jan 2019 15:29:54 +0000 https://www.dailynewsegypt.com/?p=688058 Egypt's natural gas production increased to 7.5 bncf/d

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The Ministry of Petroleum aims to operate and develop 11 projects for the production of gas and oil during the fiscal year 2019/20, in the deep water areas of the Mediterranean Sea, the Delta, the Gulf of Suez and the Western Desert.

The projects are expected to add about 2.5bn cubic feet of gas per day (bncf/d)and more than 32,000 barrels of crude oil and condensates to increase production and compensate for the natural decline rates of the wells, according to Tarek El-Molla, minister of petroleum and mineral resources in an interview with Daily News Egypt.

El-Molla explained that the projects include the completion of the development of the Zohr field to reach maximum production, and the development of the Raven gas field, which represents the third phase of the fields of northern Alexandria, the West Nile Delta and the fields southwest of Baltim, Western Borlos and the stage 9 B West Delta and the second phase of the fields of North Sinai, along with several projects in the Delta.

This is in addition to the implementation of projects north-west of October in the Gulf of Suez and the development of the Bat, Iris, and Qasr in the Khalda Petroleum Company fields in the Western Desert, as well the project to increase the capacity of marine shipping facilities for crude oil for the Western Desert Operating Petroleum Company (WEPCO).

He pointed to the increase in gas production rates to about 7.5 (bncf/d), crude oil and condensates to about 700,000 barrels per day, during the next fiscal year (FY) to contribute to secure the needs of the domestic market of fuel products.

Furthermore, he noted that the Italian Edison Company has allocated about $4bn for gas exploration in two areas of the Mediterranean.

The investments are divided into about $2bn for each region. The ministry and the Egyptian Natural Gas Holding Company (GAS) are following up on the operations currently carried out by the company in exploration programmes in both regions, he indicated.

He said that the company has completed a three-dimensional seismic survey programme for an area of more than 2,600km in the area north of the Theka concession area and plans to begin digging another exploratory well in this area during the current year.

Edison also plans to dig another exploratory well in the north-eastern region of Ras Habi during the same period, after the completion of the ongoing programme to reprocess three-dimensional seismic data for an area of 2,000km.

The minister of petroleum said that three international bids will be put forward for oil and gas exploration this year by the Egyptian General Petroleum Corporation (EGPC), EGAS, and Ganoub El Wadi Petroleum Holding Company, which will float the first bid for the Red Sea research.

El-Molla said it is planned that foreign investments during the current FY will reach over $10bn to search for oil and gas and develop the discovered fields.

Moreover, he pointed to the growing oil activity and projects implemented as a result of the success of the ministry’s strategy to attract more investors and encourage international companies operating in Egypt to pump more investments.

Investment in exploration and field development also recorded $10bn in 2017/18 and 2018/19, he said.

In a related context, the minister of petroleum, said that the plan is to complete the implementation of the direct gas pipeline between the Aphrodite field of Cyprus and Egyptian liquefaction facilities in four years.

Moreover he remarked that the preparations for the implementation of the project, after the signing of the joint government agreement between Egypt and Cyprus—which is the first of its kind in the region— will maximise the economic utilisation of Egypt’s infrastructure in the field of natural gas and the discoveries of Cypriot gas in the eastern Mediterranean.

The ministerial meeting of the Eastern Mediterranean Gas Forum that will be held by the end of April to discuss and complete the establishment steps of which is an important and necessary move, paving the way for activating Egypt’s role in the exploitation of natural gas in the eastern Mediterranean through the infrastructure it owns, declared the minister of petroleum.

He added further that the forum will contribute to achieving great returns for Egypt to become a regional centre for energy trading.

The forum will also contribute toward achieving the optimal economic exploitation of the infrastructure of natural gas and attracting more investments, securing energy sources to meet the needs of the country and provide jobs, and the provision of foreign exchange.

Meanwhile, the minister of petroleum said that the government is continuing to implement the reform programme for the energy subsidies system, which started in 2014 for rationing the subsidy, while taking many measures for the social protection of lower-income classes to protect them from the effects of correcting the pricing structure of petroleum products.

He added that the reform of the system of energy-oriented subsidy comes with the aim of correcting the pricing system of petroleum products, which will positively contribute toward achieving optimal economic utilisation of petroleum products and rationing consumption.

El-Molla also mentioned the provision of fuel subsidies to increase spending on social protection programmes and necessary services such as education and health, and to achieve liquidity for the oil sector in order to enable it to continue to playing its primary role in meeting the needs of the domestic fuel market.

He imparted that the energy subsidy had negative effects on the Egyptian economy, and did not benefit the target groups, while the wealthiest seized the largest portion of the subsidy allocations.

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Egypt is capable of independently manufacturing its weapons: Minister of Military Production https://dailynewsegypt.com/2019/01/27/egypt-is-capable-of-independently-manufacturing-its-weapons-minister-of-military-production/ https://dailynewsegypt.com/2019/01/27/egypt-is-capable-of-independently-manufacturing-its-weapons-minister-of-military-production/#respond Sun, 27 Jan 2019 15:21:11 +0000 https://www.dailynewsegypt.com/?p=688056 Ministry aims to increase cooperation with private sector, not to control market

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Mohamed El-Assar, the minister of military production, said that the ministry is seeking to meet the needs of the armed forces in some projects, as the threats currently present in the region and instability surrounding Egypt at the regional and international levels may continue.

He told Daily News Egypt that Egypt is capable of producing its weapons independently and could cooperate with foreign countries to establish factories to manufacture weapons, as well as develop them in order to manufacture 100% Egyptian-made weapons.

Furthermore, he said that the ministry’s participation in the ongoing national projects does not distract it from its main and basic tasks with respect to the military’s production of products of the armed forces. He stressed that military products of the armed forces are the ministry’s primary role.

Moreover, he pointed out that all military production projects in the current year are aimed at the welfare and service of the youth and the national economy, as well as export development and the reduction of imports.

In addition, he referred to the project of water saving faucets which were afforded to all bodies and houses, stressing that the faucets provided are currently available in the market at a price of EGP 40.

The ministry of military production launched three guidance and awareness issues within the water conservation campaign: ‘Water Saver, Water Catalogue and the Extension Video’, within the framework of the expanded campaign between the ministries of endowments, military production, water resources and irrigation to ration the use of water.

Al-Assar stressed that the factories and military production companies pay all their financial obligations such as taxes, customs, insurance, water and electricity in order not to be a burden on the state, but an added value in both military and civil production.

Furthermore, the ministry of military production and its subsidiaries increased revenues in the fiscal year 2017/18 by 30% over the previous year to reach EGP 11.6bn compared to the previous year of EGP 8.9bn.

He added that the ministry’s participation in the new waste system will be based on scientific perspectives, and will not be limited to the ministry’s factories but will include the private sector and foreign companies.

Likewise, he declared that the military production aims to increase cooperation with the private sector for economic integration, which is in the interest of the Egyptian economy, and that the ministry does not seek to dominate the market and perceives genuine honest competition.

Al-Assar said that the vision of military production is to be an advanced industrial institution that is keen to provide added value in the state’s 2030 strategy.

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5G here, to reach 17% of subscriptions by 2024: Fida Kibbi https://dailynewsegypt.com/2019/01/27/5g-here-to-reach-17-of-subscriptions-by-2024-fida-kibbi/ https://dailynewsegypt.com/2019/01/27/5g-here-to-reach-17-of-subscriptions-by-2024-fida-kibbi/#respond Sun, 27 Jan 2019 15:00:12 +0000 https://www.dailynewsegypt.com/?p=688021 In Egypt, 5G will become reality in 2020, says VP, Head of Marketing, Communication Ericsson MEA

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The 5G hype has been ongoing for years, from extremely fast gigabit speeds that will allow users to download full-length films in mere seconds, to disrupting the world of conducting business.

Now 5G is finally becoming a reality, as in October 2018, Verizon started offering 5G fixed internet wireless access in the US using Ericsson technology, and the real commercial beginning of 5G is expected this year.

To get a glimpse of how the 5G revolution would affect the Middle East and Africa region (MEA), Daily News Egypt interviewed Fida Kibbi, VP and head of marketing and communications for Ericsson MEA.

Kibbi revealed during a media visit to Ericsson’s Experience Centre in Santa Clara, California, that in the MEA, total mobile data traffic is expected to grow by nine times between 2018 to 2024, marking the highest global growth rate.

She also revealed that by the end of 2018, over 20% of all the MENA’s mobile subscriptions will be for long term evolution (LTE), while in Sub-Saharan Africa, LTE will make up just over 7% of subscriptions.

Futhermore, she added  that Ericsson expects commercial 5G deployments with leading communications service providers by 2019 in the MENA region to reach significant volumes by 2021.

Kibbi also explained that 5G adoption rates would be extremely fast, reaching unprecedented levels, even faster than the way 4G subscriptions grew. Consequently she believes that out of the total of 8.9 billion subscriptions expected by 2024, 17% will be 5G.

And, onto the interview, the transcript for which is below, lightly edited for clarity:

What are the main challenges that face 5G in the MEA region?

When it comes to demand, the telecommunications industry is in great demand. People want to remain connected. Also, it is not a problem of technology, as Ericsson’s innovation, and that of others, solves this problem. The main challenge is the business model, for data monetisation, automation, or digitisation is still not 100% well structured by telecom operators.

Plus, it is a spectrum, when we speak of availability, regulations, challenges, etc.

We have a study which we will publish soon, called “The sunset of GSM”, extolling the utilisation of the GSM infrastructure to support 5G, once that is achieved.

What about Egypt’s case, any future plans?

We consider Egypt as a very important market, with substantial potential. We are planning to increase our activity in the country, to meet this increased potential.  During Cairo’s ICT 2018 we signed a memorandum of understanding with Telecom Egypt to explore 5G options.

The four telecom operators in Egypt expressed great interest to launch 5G, but, to be frank, it will take some time, as 4G was just recently launched in the country, so it not yet fully tapped.

For consumers, 4G delivers the experience, such as decreased latency, greater capacity, etc.., so for the time being it is still desirable. Handsets won’t be a challenge, the technology is already here. But companies don’t want to offer the devices as 4G is still not yet fully utilised, so perhaps by 2020 5G will become more of a reality.

In you mobility report, we can see a remarkable increase in data consumption per capita, and the main driver is affordability, so how can we make connectivity more affordable?

When it comes to affordability, it is not just about networks, governments too play a very critical role in the operation of, for example, how to secure coverage in rural areas. Also, taking into consideration the macro economic challenges and differences between countries-along with smartphone affordability-some manufactures offer very affordable handsets, which will increase connectivity.

And, as I said pricing is essential, as well as finding a way to gain revenues, through packages conceivably, or maybe through focusing on 5G for enterprises. And this is currently happening, perhaps not at a very high pace especially in Africa, where technology adoption is moving slower than in other parts of the world.

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Every Egyptian household would have at least one direct or indirect worker in tourism: Al-Mashat https://dailynewsegypt.com/2019/01/27/every-egyptian-household-would-have-at-least-one-direct-or-indirect-worker-in-tourism-al-mashat/ https://dailynewsegypt.com/2019/01/27/every-egyptian-household-would-have-at-least-one-direct-or-indirect-worker-in-tourism-al-mashat/#respond Sun, 27 Jan 2019 14:44:08 +0000 https://www.dailynewsegypt.com/?p=688049 Structural reform programme includes institutional reforms, legislative reforms,promotion, marketing activities, infrastructural, tourism development

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The tourism sector in Egypt suffered a downturn since the 2011 Revolution, and the sector in Egypt suffered a devastating blow, especially when a Russian passenger plane crashed in Sinai in late October 2015 and all its passengers were killed.

Notably, following the plane crash, Russia imposed a travel ban on Egypt, while the UK suspended all flights to Sharm El-Sheikh amid concerns over the airport’s security measures, banning travel to Sinai

Meanwhile, since 2018 the sector began to revive again, regaining its position once more, as Egypt is a country strategically located on both the Mediterranean and Red Seas, with incredible gorgeous sandy beaches, astonishing landscapes, a warm winter climate, and, undoubtedly the world’s largest collection of historical sites, temples, pyramids, and artefacts

Thus Earlier, Minister of Tourism, Rania-Al-Mashat, said earlier that the number of tourists to Egypt increased by 40% during the first nine months of 2018 (9M18), compared to the same period last year.

Furthermore, an overwhelming majority of tourism experts are projecting that 2019 is the year of opportunities for the tourism sector, thus Daily News Egypt (DNE) was eager to learn from the Minister of Tourism, Rania Al-Mashat, about the ministry’s upcoming plans.

Notably, the minister stated during the 2019 World Economic Forum’s annual meeting in Davos, that 2018 was one of the strongest years for Egypt’s tourism, asserting that the ministry aims to further boost the sector during 2019.

Al-Mashat told DNE that the ministry’s vision is based on reaching a sustainable tourism sector through implementing structural reforms which will strengthen the sector’s competitiveness, and are with international standards.

My ultimate objective as the minister of tourism is to eventually have at least one individual from each Egyptian household working either directly or indirectly in the tourism sector,” she added.

In terms of the government’s plans which aim to develop the tourism sector, the minister noted that there is a structural reform programme which includes different pillars, such as institutional reforms, legislative reforms, promotion and marketing activities, infrastructural and tourism development, as well as the global trends programme.

Al-Mashat revealed, “We are also looking forward to complete developmental projects in 67 touristic areas, through expanding Egypt’s current capacity of 89,993 hotel rooms to a total of 238,114 rooms, by completing the ongoing construction of 55,121 rooms in touristic areas, as well as fostering the construction of additional 183,000 rooms subject to the supervision of the ministry’s Tourism Development Authority (TDA).”

She further elaborated, “In addition to enhancing the existing infrastructure in the TDA’s touristic areas to include 168 water desalination stations with capacity of 222,516 cubic metres per day, 226 sewage treatment stations, 508 electric generators and stations with a capacity of 380.2MW, 478km of road network, as well as  technical and financial support for urban touristic destinations in governorates which are excluded from the TDA’s jurisdiction in order to create new job opportunities.”

Moreover, Al-Mashat pointed out that the ministry is planning to set a strategy for sustainable tourism development to extend until 2030, which aims to diversify Egypt’s tourism product, increase the number of tourists’ nights in the country, as well as create direct and indirect employment with the community’s integration.”

Discussing Egypt’s touristic base, the minister declared that the ministry aims to diversify the revenue streams and increase the sector’s resilience by attracting new markets. She explained that this could be achieved through increasing promotional efforts in new source markets, including Asia (particularly China), East Europe (especially Ukraine), and Latin America. This could be carried out through organising workshops with Arab states (particularly countries of the Gulf Cooperation Council) in order to determine the most effective promotion tools, in addition to participating in national and international conferences to promote Egypt as an attractive and an all-year-long touristic destination.

She revealed that during the period from January to October 2018, European tourists represented 61% of the total number of tourists who visited Egypt during that period, while tourists from the Middle East represented 21.68%, Africa only 7.15%, Asia with 5.62%, and America with 3.94%, while other countries represented only 0.61%.


Furthermore, the minister stated, “We are also seeking to launch a People to People (P2P) campaign, which will portray Egypt not only as a prime touristic destination, but will also shed light on the diversity of the Egyptian people by showcasing Egyptians who master various disciplines to include art, sports, music, and culinary activities.”

“The P2P intends to shift tourists’ perception on the one hand, and encourages community engagement on the other hand,” Al-Mashat explained. 

She ensured that sustainable tourism is not just about places, but is also about the people and communities living in those locations.

The ministry is also looking forward toward promoting the opening of the Grand Egyptian Museum, one of the largest museums in the world.

Moreover, Al-Mashat stated that the ministry seeks also to adopt modern, digital, and competitive promotion approaches through branding by destination, creating an identity for each of Egypt’s tourism destinations, in addition to launching new campaigns in order to showcase Egypt’s contemporary dimension.

She also assured that utilising the ministry’s presence at international travel exhibitions in order to employ its full promotional potential—while focusing on quality not quantity—is very important

Our goal is to improve and elevate the skillset of the tourism sector’s workforce, through different procedures such as cooperating with the private sector, technical and vocational education training, reaching out to donors and supporting civil society organisations, in order to conduct training courses to improve employee skills, and also through rehabilitating and restructuring the ministry’s training centres,” she declared.

Moreover, Al- Mashat continued, “This is in addition to building a pool of accredited trainers and specialists in the various tourism fields, developing and updating the training programmes according to the latest international standards, and establishing a unified accreditation system in order to ensure a streamlined standard of qualification for the entire workforce, which will be issued by the ministry.”

Likewise, the minster explained that her ministry also plans to ensure that the quantity of the workforce, and its quality, meet the labour market’s needs, by implementing a plan to enhance the graduates’ of hotel and tourism faculties qualifications in order to meet the sector’s requirements.

Over and above, Al-Mashat stated that the sector will also be enhanced through developing specialised technical training programmes for graduates and job seekers in various tourism fields, setting criteria for job admissions in cooperation with the responsible chamber, conducting comprehensive assessments of the ministry’s staff training needs, as well as developing programmes in order to enhance the employees’ soft skills

Moreover, we seek to redefine our partnerships with the various intergovernmental organisations and foreign developmental agencies, in order to work toward achieving the sustainable development goals (SDGs) through identifying crosscutting areas regarding the SDGs and tourism, and by identifying national partner ministries to cooperate with on various sustainable tourism projects, in addition to pinpointing international partners to collaborate with, implementing sustainable tourism projects as well as establish a ‘Sustainable Tourism Unit’ within the ministry,” she noted.

Similarly, Al-Mashat stated that the government seeks to integrate the local community and enhance their development—especially those who live around Egyptian cultural heritage sites—in collaboration with international donors through implementing a USAID project on “Sustainable Investment in Tourism in Egypt”, which aims to link cultural heritage assets to tourism developmental activities, and to improve the skills of workers, in collaboration with the ministry of antiquities.

This is in addition to building connections between cultural heritage sites and the surrounding communities, in order to provide incentives for the local inhabitants to protect and preserve the sites. Moreover, the project aims to protect and restore cultural heritage sites from damage caused by ground water intrusion, and to produce sustainable site management plans for cultural heritage sites, in collaboration with the ministry of antiquities,” she further explained.

The ministry wants to ensure that existing international grants are utilised effectively in order to meet the ministry’s vision, through monitoring all the grants provided to the ministry by the various donors, reviewing all the bilateral agreements to ensure their effective utilisation, and through exploring cooperation opportunities with new donors to make use of foreign expertise,” she elaborated

Plus, Al-Mashat revealed, “Our plan also includes liaising and supervising the Hajj and Umrah in order to ensure the successful completion of each season.”

Commenting on the private equity fund, the minster explained that it aims to restructure financially impaired hotels and other tourism establishments through establishing a hotel development fund in order to provide them with capital, which enables the ministry to conduct the necessary investments. The ministry is also coordinating with experts in order to manage the fund, and with Egyptian banks with the purpose of restructuring the debt incurred from the tourism sector’s establishments.

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UNB-E aims to achieve 40% growth rate in 2019: Vice Chairperson https://dailynewsegypt.com/2019/01/26/unb-e-aims-to-achieve-40-growth-rate-in-2019-vice-chairperson/ https://dailynewsegypt.com/2019/01/26/unb-e-aims-to-achieve-40-growth-rate-in-2019-vice-chairperson/#respond Sat, 26 Jan 2019 21:28:24 +0000 https://www.dailynewsegypt.com/?p=687968 Bank has ambitious plans to expand in SMEs to reach various social segments

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The Union National Bank (UNB-E) aims to reach a 40% growth rate in it various activities in 2019, according to the bank’s Vice Chairperson, Mohamed Nasr Abdeen.

In his interview with Daily News Egypt, Abdeen said that the bank has an ambitious plan to expand the small and medium-sized enterprises sector (SMEs), targeting multiple social segments.

He stressed that the bank is exerting continuous effort to support serious investors working in the market. The bank has also played a major role in sustaining some of the companies that excavated the Suez Canal.

And onto the interview, the transcript for which is below, lightly edited for clarity:

What are the projects the bank will focus on funding to serve Egypt’s economy in 2019?

The (UNB-E) will expand in the SMEs sector to attract more clients to this important segment of the economy and improve training programmes and performance, stemming from the deep belief that this sector directly improves economic development. The bank also knows that these training programmes attract more clients.

The SMEs portfolio in the bank is worth EGP 1.3bn, A certain strategy was specified for the bank to fund SMEs to reach a 137% growth in 2019.

The bank offers funding solutions to various financing of SMEs segment clients and services which meet their needs with the highest quality possible. There is also a specialised administration for SMEs with efficient employees with expertise. This administration is constantly working to develop the sector and provide the best opportunities possible for small-scale investors.

The bank is continuously seeking to improve the efficiency of its employees in the SMEs sector to achieve the required growth in the bank’s portfolio for the sector, given its economic importance and ability to create jobs for the youth. It is also considered the backbone of the Egyptian economy and it plays a vital role in generating jobs.

UNB-E has previously launched several programmes to fund SMEs ,in cooperation with the Micro, small and medium enterprises development agency (MSMEDA). It has also sponsored programmes which aim to raise awareness regarding the basic steps of starting SMEs, including carrying out feasibility studies and managing the projects successfully, as well as offering advice on how to enter the market with new projects and approaching them successfully.

What about the loan portfolio of larger companies? And what are the most prominent sectors that the bank is funding?

That portfolio reached over EGP 6bn and was allocated to fund many projects in several economic sectors, most prominently, chemical materials, construction materials, petroleum, natural gas, and iron and steel.

Additionally, the bank is continuously making an effort to support serious investors who are working in the Egyptian market. It has also been the main source of guarantee letters in favour of companies that handled the excavation operations of the Suez Canal.

What are the new services that the bank is currently offering or plans to offer in the Egyptian market over the upcoming period?

The bank is keen on keeping up with the pace of the developments in the field of financial technology. Within that framework, the bank hopes to offer online banking through a new mobile application. It also provides internet banking through the bank’s website, in addition to a package of banking products such as loans for cars, education, real estate, personal loans, deposits, certificates and bills payment, making sure that these services are suitable for all client segments and that they meet their different needs.

What are the bank’s target growth rates in 2019?

The bank aims to achieve growth rates that reach up to 40% in various activities throughout the year.

What it the role your bank plays in supporting financial inclusion in Egypt?

Since the launch of Central Bank of Egypt’s (CBE) initiative to support financial inclusion, the bank has been taking rapid steps toward supporting the initiative and following the directives of the CBE.

We have signed a cooperation protocol with Dar Al Ma’aref to raise awareness of financial inclusion.

Generally, the bank is keen on generalising financial services of all kinds to support the Egyptian economy and its financial classifications, as well as to serve the Egyptian economy through facilitating banking transactions of all kinds, and paying attention to the low-income segments. This is in addition to teaching clients about financial products for those who are not using them, as well as helping them understand their rights and responsibilities.

The bank plays that role as an implementation of the CBE’s directives to support financial stability in the banking sector, and is strongly moving towards financial inclusion.

What’s more, during the financial inclusion week of every year, the bank expands the range of its operations to include more clients and it becomes more active in the Delta, Upper Egypt, and the Canal area, providing comprehensive consultation services based on financial needs.

How do you currently see the Egyptian economy and how do you foresee its future as well?

The Egyptian economy is based on several rules and controls. We must realise that it is taking steady steps in very difficult conditions. If we look at the situation of the Egyptian economy for over 30 years and what happened during that past period, we will witness a major leap. Undoubtedly, major projects usually have a positive strategic impact on the future and cannot be immediately seen.

At the same time, the state has been aware of the needs of the people. There are increases in incomes even though they cost the state a lot, in addition to many development projects and international relations that open doors for direct and indirect investments, thereby achieving economic development.

We are confident that the state’s attention to production and sustainable development is usually through vitals sectors, such as industry, agriculture and renewable energy, in addition to funding SMEs, as the SMEs sector is a basic pillar for generating jobs and reducing unemployment rates as well as increasing the GPD and encouraging Egyptian exports, as well as limiting imports of alternative goods.

In your opinion, what are the most prominent challenges that create obstacles for the Egyptian economy especially after a large phase of the economic programme was implemented? How can we overcome these challenges?

The challenges facing the Egyptian economy have accumulated over the years. Luckily, the political leadership is determined to find drastic solutions for these issues. Some measures that were taken to challenge the obstacles were reducing the overall deficit in the general budget, and the gradual decrease of the general and local debt.

Although the repercussions are severe, I’m optimistic, given the important developments we are seeing in the Egyptian market, such as completing major projects, which will leave a positive and ongoing impact on the economy. I must refer to the New Administrative Capital; as well as the new road network of nearly 7,000km; the Suez Canal; reclaimed lands; fish farms;, greenhouses; Sinai’s development; infrastructure projects;, elimination of slums, and more.

What are the strengths and weaknesses of the Egyptian economy?

Through the reports of international institutions, we can see that there are strengths in the Egyptian economy. It has achieved a noticeable advancement over the past two years.

This improvement included many fields, such as fighting corruption; improving competitiveness; human development;, supporting innovative abilities; developing information technology and communications; seeking to achieve economic freedom; preserving the rights of investors, as well as maintaining security.

The Egyptian economy still holds many attractive opportunities and we must continue to work harder to build this country.

Without a doubt, the Egyptian economy is able to overcome the obstacles it is facing and we cannot undermine its achievements so far.

It must be clarified that major development projects are the road to building a strong stable economy. These projects will provide food, energy, and residence, as well as create new urban communities instead of only the 6% that is urbanised.

We must all realise that Egypt has all success it takes, including major markets and human resources. The state and the people can only work hard to optimise the use of these resources in order to push the production process and drop economic difficulties.

In your opinion, what do we need to do to push Egypt’s economy to grow?

We are over 100 million people living in this country, and each person has expertise and experience and we are all efficient. We must learn to utilise our competencies well through hard work and doubling our production.

Moreover, borrowing from international financial institutions is normal and prevalent as long as the loans are used toward investment purposes, such as investing in major projects based on studied plans. Also, it is acceptable to borrow to support monetary reserves.

What is the role that banks can play to support the Egyptian economy and help it thrive?

The banks working in the Egyptian market are trusted by international financial bodies and government banks, and these institutions have dealt with one another before. Additionally, all banks are ready and willing to fund national projects based on the liquidity available in these banks, especially if these projects have competitive advantages and rewarding revenues.

Also, it is important to stress the importance of attracting foreign investments with technology and expertise in petrochemical projects, ship manufacturing and maintenance, and petroleum products storing and refining. They are all major projects which require major investments.

Noteworthy, the bank has already launched a campaign to encourage Egyptian remittances, specifically in the Emirates, for free, which greatly contributes toward improving the local economic situation.

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IDB aims to close deferred losses file completely during H1 2019: Chairperson https://dailynewsegypt.com/2019/01/26/idb-aims-to-close-deferred-losses-file-completely-during-h1-2019-chairperson/ https://dailynewsegypt.com/2019/01/26/idb-aims-to-close-deferred-losses-file-completely-during-h1-2019-chairperson/#respond Sat, 26 Jan 2019 21:08:05 +0000 https://www.dailynewsegypt.com/?p=687962 We need cultural reform plan to develop people's awareness that to thrive we need to increase production

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The board of directors of the Industrial Development Bank (IDB) aims to close the deferred losses file completely in the first half (H1) of 2019, according to Maged Fahmy, chairperson of the bank.

In an interview with Daily News Egypt, Fahmy said that the bank, under his chairmanship, dreams of the creation of a new strong and capable bank that can support the economy and serve different sectors.

He explained that the bank obtained the approval of the Central Bank of Egypt (CBE) to open nine new branches this year and aims to open 50 new branches in the coming five years.

He stressed that Egypt needs a cultural reform plan, along with the economic reform plan, to develop people’s awareness that we will not move one step forward without work and increased production.

And to the text of the interview, that transcript for which is below, lightly edited for clarity:

What dream do you wish to achieve for the bank during 2019?

I dream of ending all the problems that the bank suffers from, and to have a distinct role in financing development projects, specifically in the country, besides servicing limited-income groups and delivering the service of the state plan in development.

We believe that the bank is a unit of the banking system, although it aims for profit, but we believe that it has an important national and social role.

We dream that the bank will have an advanced status and position among the banks operating in the Egyptian market, in playing an important role for the national economy, especially for small and medium-sized enterprises (SMEs), as well as for the industrial sector.

When we took over the responsibility of the bank it was our utmost ambition to revive the bank. However, currently, the limits were removed after achieving recent amazing results. We are now dreaming of a novel beginning for a new bank which can support the economy and serve all sectors by providing the latest series. Our team can achieve that.

What steps has the bank management taken to achieve this dream?

In order to attain this dream there are steps and procedures already initiated that we aim to complete this year.

This includes finalising the main problems that the bank suffers from, and closing the opened files to get the bank back on its feet. Moreover, we aim to make the bank strong with a solid financial and administrative position and a strong infrastructure with a wide geographical spread. Later, we will discuss strengthening the capital base and increasing the bank’s capital.

We also aim to get the bank out of the problems it suffers from. We are assisted by the CBE with a supportive loan.

The deferred losses file is one of the most important files that have been hacked. What are the latest updates on that front?

The deferred losses are clear and can easily be solved. This can be done through selling some buildings and real estate belonging to the bank which are not used. As soon as this is done, the file will be closed. This is a mere matter of time.

IDB already has many untapped assets, such as its headquarters on Teseen street in New Cairo, the bank building on Al-Galaa street, and a number of other branches inside and outside Cairo.

The market value of these assets is currently around EGP 1.5bn. If sold, they can realise capital gains of some EGP 1bn.

The bank was planning to sell those assets already during 2018, in order to direct the value of those assets to close the loss file, but the sale was postponed for the current year.

We hope to close this file completely during H1 of 2019.

If this happens and the loss file is closed, we will go to the CBE to discuss how to increase the capital of the bank.

What has been done in the bank’s administrative restructuring?

I assumed responsibility for the bank, and there was a severe imbalance in the administrative structure of the bank.

To overcome this problem, PricewaterhouseCoopers was hired to work on an administrative restructuring of the bank. This has been already completed.

We also opened the door for early retirement options for those who wish to leave. They were granted decent compensations to guarantee a good life in addition to their monthly pensions.

At the same time, a number of employees were attracted from other banks and we hired fresh graduates to implement the development plans. We hired 40 graduates so far and we aim to reach 100 in the coming period.

This comes in tandem with the work of reassessing employees’ salaries to match the market.

The first phase of the administrative restructuring has been achieved. The second phase will be continued in 2019.

What about the plan of geographical spread?

We received the CBE’s approval to open nine new branches in 2019 to cover many areas in Cairo, Upper and Lower Egypt.

We currently have 18 branches in 16 locations. All these branches need to be restructured, developed, and redistributed.

We aim to open 50 branches within five years. We are presently replacing branches as well.

We also recently relocated the bank’s main departments to the new headquarters in downtown Cairo on Kasr Al Ainy street instead of being scattered around Cairo.

What about the technology file?

We were facing a real disaster regarding the bank’s technological infrastructure, both in terms of labour systems and security. We have worked on this file with great effort, and we have come a long way in the process of development and modernisation, so we recently received a prize from the CBE for being the fastest bank in developing its technological infrastructure.

The technology development process included updating all the bank’s servers and transferring them to a safe place. The corpbanking systems have also been updated in cooperation with a European-Jordanian company. And since assuming office, we have bought all the applications and software needed for modern technological products.

We are already planning to launch mobile and internet services in H1 of 2019 to cope with the trend of the banking sector.

What about the bank’s activity and the main economic sectors that the bank will focus on in the new year?

When I assumed responsibility for the bank, the size of the deposit portfolio was only EGP 2.1bn, which is very low. In October 2018, deposits hiked to EGP 14bn.

The loans portfolio was also about EGP 3bn, and now it is up to EGP 7.6bn, growing by over 100% even though we are taking a cautious less risky approach to accomplish this.

The bank’s financial position also rose by 252%, reaching EGP 21.8bn at the end of October 2018 against EGP 16.1bn in October 2017.

Of course, repeating such jumps in the future will not be easy, given the limited size of the bank, which would impede such swift improvements in the short-term.

As for the sectors the bank is focused on, despite the small size and circumstances of the bank, it is the fifth top bank, financing SMEs, and the fourth top bank with regards to mortgage financing toward- limited and medium-income citizens across the banking market.

The bank is also active in retail banking for development purposes, such as the delivery of natural gas to homes, and has so far delivered gas to about 125,000 units.

IDB has also financed the establishment of the commodity exchange, the Rubikki Leather City, and Damietta Furniture City. It is keen to finance any project that serves the development process.

The size of the retail banking for development purposes portfolio has reached EGP 1.250bn in two years, part of which was directed to limited-income groups’ mortgage financing as part of the CBE initiative, and the other was to deliver gas to households.

What about the growth rates that the bank aims to achieve during 2019?

We have succeeded in achieving very good growth rates in 2018, reaching 36% in loans and 40% in deposits. We aim to realise growth of 25% across all sectors in 2019.

Will the bank’s revenues be affected by the adjustment of the method of calculating government treasury bills and bonds tax?

It is not likely to affect revenues, as there are alternatives to investing in debt instruments: injecting more investments into credit, which are the banks’ main activity.

Unlike the market, I personally supported this move, because it will push banks to increase lending, especially as the climate is now very appropriate for this.

We see an increase in the volume of investments in the country, which means more projects that will need funding from banks, in addition to great interest in SMEs and development projects.

It is not smart to sit on our desks and keep putting money in debt instruments for high yield. The smart move is to employ the liquidity in loans, which is also what the Egyptian economy needs.

We must put more money in the market to push growth and development. This is the role of banks and this is the professionals’ league.

Does the country’s economic situation now pose any challenges to banks?

The situation of the Egyptian economy now looks promising. It does not pose any challenges to banks, but on the contrary, it enables banks to grow and expand and achieve more profits.

I always say to the pessimists, who accuse me of being always optimistic, where were we in 2013 and where do we stand now?

Yes, there have been significant increases in prices, and this is a pill we all have to swallow. Yet, there are very positive indicators at the level of state revenues.

The events in the past years call for a lot of optimism, especially at the level of gas discoveries, which contributed to Egypt’s gas sufficiency and exports.

Tourism has also begun to recover, and Egypt is now the second largest investment-attracting country in the region. What is left now is for us to work hard.

We need a cultural reform plan along with the economic reform plan. We need to develop people’s awareness that we will not move one step forward without work, effort, and increased production.

We complain only about increasing prices, without working or even changing the culture of consumption. We want a president who has a magic wand to solve all our problems without effort or action.

If we think at the personal, family and state level, the three aspects will only advance with work.

This was our thinking in the bank, where we were all convinced that the bank will not get out of the problems it suffers from, and will not move one step without the concerted efforts of all its employees.

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Ridding NPLs is dream of Suez Canal Bank chairperson in 2019 https://dailynewsegypt.com/2019/01/26/ridding-npls-is-dream-of-suez-canal-bank-chairperson-in-2019/ https://dailynewsegypt.com/2019/01/26/ridding-npls-is-dream-of-suez-canal-bank-chairperson-in-2019/#respond Sat, 26 Jan 2019 19:00:42 +0000 https://www.dailynewsegypt.com/?p=687924 'We managed to settle EGP 1.5bn of debts in last 18 months': Refaey

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Chairperson and Managing Director of the Suez Canal Bank, Hussein Refaey, dreams of ending non-performing loans (NPLs) in 2019.

He noted that the bank’s new management has managed to settle EGP 1.5bn of debt in the past 18 months.

Refaey informed Daily News Egypt in an interview that the bank also sold 12 assets with a total value of about EGP 300m, which generated an investment profit of EGP 200m, as part of the restructuring of the bank’s direct investment portfolio.

He stressed that there are many challenges and pressures on the banks’ budgets and profits during the coming period.

And to the text of the interview, the transcript for which is below, lightly edited for clarity:

What do you think of 2019 so far?

I think that 2019 will be full of challenges both at the level of the economy or at the level of the banking sector.

However, we hope that this year will see the positive outcomes of the reform programme, which began at the end of 2016 and continued during 2017 and 2018, from the flotation of the pound throughout the rest of the programme.

Although there has been an increase in remittances and an improvement in tourism, we hope that the impact of these reforms will be reflected in foreign direct investment, and that the volume of these investments will reach the level appropriate for Egypt.

The same thing goes for tourism, although it has achieved good successes over the past period, but we hope it would increase in the coming period.

The export file has also improved but not in the form we wish. The sector should benefit from the reforms that have taken place and to see the results of the price paid by the Egyptian people for the reduction of the currency in export.

It is also necessary to focus on the industry file and not only the support of the initiatives of the Central Bank of Egypt (CBE), which I do not think were enough. The ministry of industry should move as well, pen an industrial plan, and support small businesses to become bigger.

The truth is that what is happening in the industry file now are individual cases for investors who start the establishment of factories, but there is no plan to show the roadmap of the industries we actually need as a country.

The industrial plan must be present and address all the governorates of the republic according to the competitive advantage of each governorate.

The state leaves young people to decide on the project of their choice, but if there is a specific map, we can direct young people to enter the projects needed by the state.

Funding is already important and essential for any project. I think that, alone, is not enough to develop the industry.

At the bank level, what is your business plan for the new year?

I assumed the responsibility of the bank about 18 months ago, and since my presidency of the bank we developed a strategy approved by the board of directors in the third quarter (Q3) of 2017, which is the strategy we have been taking so far and continuing this year.

What are the most prominent features of that strategy?

We have already established sectors that were not previously in the bank, such as retail banking, small and medium-sized enterprises (SMEs), and a risk sector for these projects.

We have started late in financing SMEs, so it only accounts for 5% of the total loans in the bank so far. We have a major challenge to reach this ratio of 20% set by the CBE.

To achieve this objective, the bank has signed contracts with the Micro, Small, and Medium Enterprise Development Agency worth EGP 100m to contribute to the development of this sector.

In addition, several cooperation protocols have been signed with the Industrial Development Authority and with the Information Technology Industry Development Agency (ITIDA) in cooperation with the CBE and the Egyptian Banking Institute.

The bank also participated in the initiative of Nile Pioneers, which was launched in cooperation between the CBE and Nile University, in order to contribute to the development of this sector, and to promote entrepreneurship and the development of SMEs in various stages.

The bank’s contribution to this initiative amounted to EGP 5m, which is being pumped over five years, in order to support competent students, especially those with ideas related to digital and technological products.

The bank’s board of directors has also approved the participation of EGP 50m in the Sawari Ventures Fund for investment in emerging projects in the field of information technology, representing the belief of the board of directors of the importance of technology.

What about the geographical expansion plan targeted by the bank?

The bank had a branch network of 36 branches in December 2016 and currently has 41 branches. We aim to open five new branches during the Q1 and Q2 of 2019, including two branches in Alexandria governorate, a branch in Beni Suef governorate, a branch in Qena governorate, and a branch in Giza governorate.

We aim to focus in areas outside Cairo, where we see that the governorate of Beni Suef an example of the promising areas as an industrial area with a high population and it is close to Fayoum governorate and therefore we can serve the citizens of both together. The Qena branch also strengthens the presence of the bank in the heart of Upper Egypt.

We hope that we will reach 50 branches by the end of 2019 and the beginning of 2020.

What about the bank’s contribution to the financing of major projects?

The volume of the syndicated loan portfolio arranged for major projects increased from EGP 1.5bn to EGP 5bn. The bank participated in 11 joint loans in various fields including gas, oil, electricity, real estate development and also in the field of plant development and oils.

The bank participated in a loan of more than EGP 900m in January, which was arranged for one of the bodies operating in the petroleum sector. The bank is considering participating in other loans, but it cannot be disclosed now.

And what are the most prominent files that the bank has been working on since you assumed responsibility?

The bank has come a long way in the inherited issues it has suffered from for many years.

Among those files was the non-performing debt portfolio, which accounted for about 52% of the total loan portfolio in December 2016.

The bank has managed to settle EGP 1.5bn worth of debt in the past 18 months, of which the bank received EGP 1bn of cash and EGP 500m of assets that were transferred to the bank. These assets are also sold for cash.

These efforts have succeeded in reducing the ratio of NPLs to 38% of the total loan portfolio by the end of 2017, then to 30% in September 2018, and may reach less than 25% by the end of 2018. The bank’s figures are currently under review.

Another file is the assets portfolio, which was owned by the bank to meet the debts of stumbling loans. The bank managed to sell 12 assets for EGP 300m, which achieved an investment profit of about EGP 200m.

The bank has also restructured the portfolio of direct investments by exiting long-term investments and investments that do not generate returns commensurate with the volume of investment and associated risks.

The bank has recently exited two investments with a capital gain of EGP 32m.

Moreover, in the past 18 months, the bank has succeeded in ending all tax disputes related to the stamp duty from Q3 of 2006 until the end of 2015. The entire debt has been settled and utilised after applying Law No 174 of 2018 regarding the delay waiver.

What about the employees of the bank, did you include them in the development process as well?

The emphasis has already been placed on the development of the bank’s staff skills. The training budget has been doubled, opportunities for mobility between departments have been granted, while some of them have attracted employees from outside the bank.

The branch management has been divided into six regions, all of which are headed by employees from within the bank. I would like to extend my thanks to all the bank’s employees for their efforts over the past two years, which is reflected in the performance of the bank’s results.

How do you see the future of the Suez Canal Bank in the coming period?

Despite the successes, we have a lot of challenges so that we can restore the bank to the place it was and deserves to be in.

The Suez Canal Bank was the fourth bank in the Egyptian market, before it witnessed a significant decline in its activity. We are trying to return it to its place with a fixed plan.

We have successfully attracted 5,000 new customers to the bank. The bank has also raised the EGP 2.6bn through the yield certificate, of which 50% were sold to new customers. We have also re-launched our new credit card and ATMs, in addition to the launch of thee-portfolio.

We have also submitted a request to the CBE to issue a Sharia-compliant savings certificate that we aim to introduce soon.

What are the target growth rates for 2019?

Expectations are very difficult.

I believe that there are many challenges and pressure on the budgets of banks and their profits in the coming period, especially after the amendment of the calculation of taxes on debt instruments, and the adoption of the law of health insurance, which will add new burdens on banks, in addition to the large investment cost of the presence of banks in the New Administrative Capital and the application of IFRS 9 financial instruments.

The bank has succeeded in achieving the target in 2018, which exceeds 15% in various activities, and despite the challenges we can face in 2019, we hope to reach the same rates of 2018 and exceed them and that will be around 15%.

Finally, what dream do you wish to achieve in 2019?

I dream of ending the file of bad debts and succeed in reducing the rate to less than 15% of the total loan portfolio of the bank, in preparation for ending this file in full.

We have achieved unprecedented success in this file, because it was done in a small period and on a scientific basis, through negotiations with customers, but there are some customers who are still procrastinating, and believe that the solution to the negotiation is the weakness of the bank, but this is not true. We will continue to take judicial proceedings against those clients.

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EBRD hopes to establish ‘foreign investors council’ in 2019 https://dailynewsegypt.com/2019/01/26/ebrd-hopes-to-establish-foreign-investors-council-in-2019/ https://dailynewsegypt.com/2019/01/26/ebrd-hopes-to-establish-foreign-investors-council-in-2019/#respond Sat, 26 Jan 2019 18:40:23 +0000 https://www.dailynewsegypt.com/?p=687920 Egypt can continue being first country of bank’s operations this year, says EBRD’s managing director for SEMED 

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The European Bank for Reconstruction and Development (EBRD) is discussing the establishment of a foreign investors’ council with stakeholders in Egypt, the Country Head for Egypt and Managing Director for the Southern and Eastern Mediterranean (SEMED) at the EBRD, Janet Heckman, announced, adding, “Hopefully we will announce the establishment of the foreign investors council in 2019. This is something we continue to work on and we expect more news on this issue in the next weeks.”

Noteworthy, the foreign investors’ council will be co-chaired by the Egyptian President, Abdel Fattah Al-Sisi and EBRD’s country head.

The planned council would help to ensure that Egypt is attractive to foreign investors, Heckman said, adding, “It also confirms that the thoughts and concerns of foreign investors are heard. During our past experiences, it worked very well in other EBRD’s countries of operation, such as Ukraine and Kazakhstan.”

Moreover, Heckman said that Egypt can continue being first country of banks’ operations in 2019, explaining that Egypt became the single largest recipient of the EBRD’s investment in 2018 with the provision of €1.15bn through 19 projects, covering all sectors of the economy.

Daily News Egypt interviewed Heckman regarding the bank’s outlook for 2019 and assessment of 2018’s operations. The transcript of this interview is below, lightly edited for clarity:

The EBRD recently announced that Egypt topped its countries of operations’ finance in 2018, for how long can Egypt keep this ranking?

As the fundamental reform continues, opportunity for Egypt continues. This year, we expect quite a strong year. Hopefully, we will achieve even more than we did last year. We dedicated a strong team on the ground. There is every reason for Egypt to continue to be on the top.

We are really very proud of Egypt’s being number one country of operations for the EBRD. The SEMED, which I am responsible for too, received the largest amount of global finance in 2018.

In Egypt, we provided roughly €1.2bn, in many projects, and just over €2bn as total finance for our SEMED’ six economies. As you see, most of our activity was based here in Egypt last year.

The nice thing is that the projects were across all sectors of the economy. Almost more than half of our projects were private sector ones. We had a record year in the agribusiness sector as we financed four projects in 2018.

We also finalized a number of projects in the banking sector, including small and medium-sized enterprises (SMEs), and helped banks to meet their loan requests. Plus, we financed projects in the manufacturing and energy sectors.

In addition, we also almost doubled our staff in Egypt. There are 70 people working here, however, when I came here more than two years ago, we were under 35 people.

We also moved some of the regional functions to Egypt, so we have a new regional economist based here, and his name is Bassem Kamar, who is newly hired by the EBRD. He used to work for the International Monetary Fund (IMF).

The EBRD’s Regional Head for SMEs will be based in Cairo too on 11 February 2019, his name is Holger Wiefel. We are quite fortunate to have such a new big team here.

Will 2019 witness senior visits from the EBRD’s heads to Egypt?

In the first week of March, we expect our First Vice President Jürgen Rigterink to visit the country. We will organise a site visit to the Benban complex in Upper Egypt.

The EBRD is a leader in the Benban project. Egypt has really been a success story in this project. It is technically the largest solar plant in Africa, probably the biggest in the world. And I’m glad to announce that the first plant of the 16 plants financed by EBRD is fully constructed and connected to the grid. What is really interesting is the coordination between the Egyptian private sector, international companies, and banks.

We have other activities for this year too, as we expect to organise the ‘Women in Energy’ event in March 2019, to highlight the role of women in Egypt’s energy sector.

During 2019, we will continue promoting our SMEs, especially in providing advice for these kinds of projects.

What is the value of finance that the EBRD will allocate for Egypt in 2019?

At least, we will allocate the same as last year which was €1.2bn. The Egyptian economy continues to grow, and the opportunities continue to be available. We are increasing our investments because Egypt has a very huge population estimated at 100 million people and the government is reform-oriented. The private sector’s dynamic investments are growing in the country too.

In 2019, we hope to finance Egyptian companies looking to expand and invest in other parts in the Middle East and Africa (MEA). We see some opportunities in the area.

When will the EBRD inaugurate its two new offices in Egypt?

We plan to open our third office in Ismailia in the second half of the year, yet our Assiut’s office will be inaugurated either later this year or in the next year. Our new offices will be SMEs-oriented.

What about the cooperation with Egyptian banks in 2018 and the outlook for 2019?

We provided Egyptian banks with over €350m for different facilities’ types. For 2019, it depends on the banks’ needs. However, we accomplish much more in micro credits and SMEs through the banks. We can’t expect a certain figure for the 2019 cooperation portfolio with the banks as we are demand driven.

Egyptian authorities announced their plans to involve the informal sector in the country’s GDP; How do you see this move?

It is important to acquire the informal sector. We are doing our best to assist SMEs in Egypt through our advisory programme to help them receive the know how to prepare financial statements, and how to offer better tenders for projects, so it’s really important to add the informal sector to the GDP.

What about the outlook of the EBRD’s cooperation with Egypt’s Ministry of Transport?

We work very closely with the Ministry of Transport. Last year, we signed an agreement on the facilities of Cairo Metro, and we hope to cooperate in more projects this year.

We understand that Egypt plans to build several dry ports, and we are very happy to support these plans. We are also happy to support container terminals in these ports as they are very important because they improve freight and the ability of Egyptian companies to export.

Millions of commuters will benefit from a €205m loan provided by the EBRD to support the Egyptian National Authority for Tunnels (NAT) with the partial rehabilitation of Cairo Metro, as the major means of public transport in Egypt’s capital, according to the bank’ statement in August 2018.

Are there any updates regarding the establishment of the foreign investors council?

This is something which we continue to work on, and we expect more news on this issue in the next weeks.

Would you please elaborate more on its function?

It helps to ensure that Egypt is attractive to foreign investors. It also confirms that the thoughts and concerns of foreign investors are heard. During our past experiences, it worked very well in other EBRD’s countries of operation, such as Ukraine and Kazakhstan.

For example, the EBRD Country Director in Kazakhstan, Agris Preimanis and the president of the country, Nursultan Nazarbayev are co-heading the country’s Foreign Investors Council twice a year to meet with CEOs of global companies who operate in the country. They come to Kazakhstan and discuss their concerns with the heads of the council and other stakeholders.

Issues like increasing the companies’ investments in the countries are discussed, so the Foreign Investors Council is good for both sides, the foreign companies and the government.

When will Egypt’s Foreign Investors Council be established?

Hopefully, we will announce its establishment in 2019. We are working very closely with all the concerned parties, different stakeholders with copious coordination, so whenever it is ready, we will establish it.

What about your future EGP loans this year?

The Egyptian banks’ loans to the private sector are subsidised, so we can’t compete with the Egyptian banks on this.

How do you see the Green Economy Programme in 2019?

We are very optimistic about the green economy opportunities in Egypt. Every project we finance, we make sure that it has a green element. Last year, 44% of our total lending had a portion of green economy.

Since you mainly cooperate with the private sector in Egypt, what are the challenges that still face companies?

The biggest challenge continues to be the high interest rates, but it is really a matter of time as when inflation drops, interest rates will follow. Egypt needs to focus on the World Bank’s (WB) doing business report’s criteria.

It is good that Egypt improved many places this year in the WB’s doing business report, but Egypt’s goal should be quickly moving to the top 30. There is no reason why Egypt can’t be at a much higher level with implementing its reform programme.

Apart from the aforementioned key problems that still face the private sector, the Egyptian private sector has new benefits from the newly issued regulations and improvements of economy. The most significant move that Egypt did was the currency floatation a couple of years ago.

Would you brief us about the EBRD’s operation in SEMED in 2018 and its outlook for 2019?

In Lebanon, we implemented seven projects with total financing of about €250m. One of the key issues still facing Lebanon is electricity shortage, so we focus on this issue.

We started operation in the West Bank and Gaza in Palestine, where we financed five projects last year with €12.5m. We also encourage vocational education and courses.

Do you have an office in Palestine?

We don’t have an office in Palestine because technically it is not a member of the bank, but we started investing in the country in 2018, and we invested in local banks and the private sector. We also work with the Palestinian Monetary Authority providing them a great deal of technical assistance on several issues regarding reserve management, inclusion of women in the banking sector, and other issues.

We also focus on an impact bond project which funds the delivery of a series of demand-driven and sector-specific professional trainings, as well as on-the-job support to young Palestinians in order to facilitate their transition into sustainable employment.

In Tunisia, we invested about €200m in 2018, with a special focus on waste management and SMEs. In Morocco, we provided €200m last year with a key focus on the agribusiness and manufacturing sectors, all with the private sector.

In Jordan, we provided €350m last year. We focus on supporting sustainable energy, direct and indirect financing of private enterprises, and promoting infrastructure reform, as well as facilitating non-sovereign financing.

The EBRD is providing a $265m loan to Jordan’s National Electric Power Company (NEPCO). The loan will strengthen NEPCO’s balance sheet through the refinancing of existing short-term debt, and will fund vitally needed investments to enhance the capability of the grid to absorb and manage renewable power.

Alongside the loan, the Jordanian government, NEPCO, and the EBRD have agreed on an ambitious programme of reforms that will strengthen NEPCO’s governance and operations. This will be supported by grant-funded technical cooperation assignments.

What are your expansion plans in the region for this year?

We are looking to other countries and we hope that if the political situation in Libya will improve, it will be good work there to support the development of the economy. We are also looking forward to investing in Algeria.

We would like to invest in regional trade’s opportunities between Egypt and other neighbouring countries in North Africa. This region is one of the least integrated regions. We would like to boost the investments and trade opportunities between North Africa and the Sub-Sahara region.

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AfDB, Egypt to prepare new five-year strategy soon https://dailynewsegypt.com/2019/01/26/afdb-egypt-to-prepare-new-five-year-strategy-soon/ https://dailynewsegypt.com/2019/01/26/afdb-egypt-to-prepare-new-five-year-strategy-soon/#respond Sat, 26 Jan 2019 17:08:01 +0000 https://www.dailynewsegypt.com/?p=687900 ‘We financed three operations worth $506m in 2018,’ says AfDB Egypt’s Country Manager

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Malinne Blomberg, Egypt’s country manager at the African Development Bank (AfDB), said that the bank’s current five-year strategy for interventions in Egypt revolved around the government’s, as well as the bank’s, priorities which will end in 2019.

She added that the bank financed three operations in 2018 worth about $506m, noting that the projects were the last tranche of the three-year budget support plan, titled the ‘Economic Governance and Energy Support Programme III’, and the ‘Tanmiawa Tatweer’ regional entrepreneurship platform, as well as the ‘Enhancement of Entrepreneurship Ecosystem’ grants.

“A new strategy will be prepared and will run for another five years starting from 2020. A thorough engagement with the government on the preparation of the new strategy will be launched soon,” Blomberg informed Daily News Egypt in an interview to reveal 2019’s cooperation with Egypt, in light of President Abdel Fattah Al-Sisi’s presidency of the African Union (AU).

And now to DNE’s interview of Blomberg, the transcript for which is below, lightly edited for clarity:

What are the bank’s main priorities in 2019?

The AfDB will continue its widespread support for Egypt’s inclusive and sustainable growth. This includes financing the infrastructure as it is the backbone of the economy, and supporting the various reforms in order to enhance equity and inclusive growth, while harnessing the great potential of the youth, as well as supporting the private sector to maximise its contribution toward the country’s growth and job creation. 

How do you assess the cooperation with Egypt over 2018, and how many projects did the bank finance during the past year?

The AfDB’s cooperation with Egypt has always been strategic and fruitful. In 2018 in particular, the bank financed three operations which are the last tranche of the three-year budget support titled the ‘Economic Governance and Energy Support Programme III’, and the ‘Tanmiawa Tatweer’ entrepreneurship platform, as well as the “Enhancement of Entrepreneurship Ecosystem” grants. All the three projects are worth about $506m.

Noteworthy, the financed operations merged around key government priorities. The priorities target the deepening of economic and social reforms, in addition to boosting investors’ confidence in order to catalyse small and medium enterprises (SMES) and entrepreneurs, as well as to enhance job creation and social stability.

The bank also supported a number of critical studies and advisory services, which triggered important reforms such as the Actuarial Study for social health insurance, which led to the approval of the Health Insurance Law.

Malinne Blomberg, Egypt’s country manager at the African Development Bank (AfDB)

Can you tell us more about the conferences which you will organise in 2019?

The first Africa Investment Forum, hosted by the AfDB in Johannesburg in November 2018, proved its success as it offered a market place for project sponsors in order to showcase their private sector projects and public-private partnerships to identify partners and financiers. The second forum will be even bigger.

The Egyptian participation at this pan-African forum in 2018 was amongst the most prominent, including the forum’s largest private sector transaction, as well as a strong participation from the Egyptian ministries of electricity and renewable energy, and the investment and international cooperation with the purpose of promoting investment in Egypt.

The AfDB also intends to support the 2019 Africa Forum in Sharm El-Sheikh, which we expect to be significant this year, with President Al-Sisi being the chairperson of the AU.

I read that the AFDB mulls investing in an Egyptian public sector project, are there any further details on this project, the amount of investments, or the timing?

The bank has an active pipeline of potential investments in both the public and private sectors.

For 2019, the AfDB will be a close partner during Egypt’s leadership of the AU. In terms of the projects’ pipeline during 2019/20, the bank expects to continue its long-standing support of Egypt’s energy sector, including operations of regional impact and interconnections with neighbouring countries, and water supply and sanitation, particularly in the poorest areas, as well as SME/entrepreneurship development with a focus on social inclusion. This is in addition to jobs’ creation for the youth, the empowerment of women, and the private sector’s development, including improving the business environment, as well as enhancing the infrastructure for a private sector-led growth.

Our continuous dialogue with public and private sector stakeholders may also result in financing additional sectors. The bank’s current five-year strategy for interventions in Egypt revolve around meeting both the government’s and the bank’s priorities in 2019. A new strategy will be prepared and will last for another five years starting from 2020. A thorough engagement with the government on the preparation of the new strategy will be launched soon.

Do you have any joint efforts with Egypt in light of its presidency of the AU?

As a key stakeholder of the AU, the AfDB will closely work with Egyptian authorities throughout its presidency period. We are very keen to share the Egyptian experience which is characterised by being enforced on a large-scale, and includes fast moving reforms in order to provide valuable lessons to many countries.

The bank welcomes the swift implementation of the Investment Guarantee Fund and intends to collaborate with the government and the private sector for its success. This fund was announced by President Al-Sisi in Sharm El-Sheikh in December 2018. The funds aims to foster Egyptian investments in the African continent, and extends African investments in Egypt. Furthermore, it should also enhance Egypt’s regional integration, and hence its potential growth. The bank is also exploring ways to enhance collaboration amongst the youth in Africa, particularly entrepreneurs. The bank’s regional entrepreneurship platform will be critical in this regard.

Regarding the budget support funds, did Egypt recently request additional financial support from the AfDB?

After the completion of the three-year support with a $1.5bn budget provided by the AfDB in 2018, the bank and Egypt are currently discussing how the bank could most optimally continue its support to the country’s reform agenda. The previous support was deemed to be very successful, based on the ownership and results witnessed by the government, therefore we might continue our budget support.

What is the value of the fund to be allocated for green growth, such as a waste project?

The bank has an ongoing industrial waste management project, which was piloted with the ministry of trade and industry, and led to the establishment of a waste-exchange platform with over 160 registered companies, and a number of successful transactions, as well as an increase in entrepreneurship in the industrial waste sector. The bank is currently preparing a project for rural sanitation in Upper Egypt, with funds estimated at about $150m.

The project includes a potential financing for the establishment of a ‘sludge-to-energy’ facility at the Abu Rawash waste water treatment plant, and will enable the treatment plant to use the wastewater to produce its own electricity to reduce operating costs, while also contributing to improving the environment. This is a scale-up of the ongoing AfDB-financed expansion of the treatment plant, the ‘Sustainable Abu-Rawash Wastewater Treatment Project’. This expansion aims to protect the environment and water resources from pollution and reduce health risks. It addresses risks due to the discharge of untreated, and enhances water reuse through improving the quality of existing primary treatment systems, as well as expanding the treatment plant’s capacity from 1.2m cubic metres to 1.6m cubic metres per day. The treated wastewater can be used in agricultural activities, and will accordingly contribute toward the surrounding communities’ improvement of livelihood, and a better income generation, in addition to a significant positive impact on health.

During the course of our continuous dialogue with the state and the private sector, the bank might be requested to fund additional green-growth-related projects.

How do you assess Egypt’s efforts to integrate with African countries, such as hosting the 2018 African Caucus annual meetings, and Africa 2018 in December?

From the AfDB’s perspective, we have seen an increased interest and dynamism over the past year or so from the Egyptian companies’ side which are seeking to expand their operations in Africa. This makes us, as an African bank, very excited. Regional integration is an important aspect of the bank’s strategy.

The AfDB is currently preparing a report on the regional integration of North African countries, which is to be published by mid-February as an integral part of the bank’s flagship North African outlook. The report highlights the progress of the intra-regional trade, the capital flow, and the movement of people. This is true for Egypt, and for the other countries present in the region. Moreover, Egypt’s recent achievements, in terms of electricity interconnection and the upcoming Investment Guarantee Fund, should help foster further integration which allows for better efficiency and productivity, hence potential GDP growth.

What do you think of the free trade agreements (FTAs) with African countries?

The FTAS are a great opportunity to further enhance potential growth through increased efficiency and productivity, in addition to offering a larger market for Egyptian companies.

Do you conduct any feasibility studies on specific projects? Do you carry out any reports on Egypt and Africa?

Feasibility studies are essential in order to accelerate and scale-up the implementation of investment projects. The bank’s-financed pre-feasibility studies would be project-specific. The current preparatory studies funded by the AfDB include: the waste-to-energy facility at the Abu Rawash wastewater treatment plant; an analysis for the establishment of a navigation line between Lake Victoria and the Mediterranean; support for upgrading of informal settlements; as well as the use of renewable energy for pumping irrigation water, and finally a study for the skills needed within the Suez Canal Zone.

As for the reports, the bank has two flagship publications, which are the African Economic Outlook, which was published in January, and The North Africa Regional Economic Outlook, to be published by mid-February. This former includes a note on all African countries, including Egypt, while the latter conducts a regional economic outlook on each of the African regions. The North Africa Regional Economic Outlook includes an overview of the economy of the region, with a special chapter on regional integration.

What are the new projects which the bank plans to finance, with the aim of supporting infrastructural development in Africa?

Over the past three years, the AfDB has delivered nearly $11.8bn worth of infrastructural projects in several fields to include energy; transport; water supply and sanitation; irrigation; industry, as well as mining.

What are the latest investment programmes which support and promote trade between Egypt and the African continent?

Regional integration is crucial for Africa’s economic and social development, and is at the heart of the bank’s five priorities. The AfDB is particularly interested in the establishment of Egypt’s Investment Guarantee Fund which was announced by President Al-Sisi during the Africa Forum in Sharm El-Sheikh in December 2018, as this would complement the bank’s pan-African efforts which aim to increase regional integration, as well as the private sector’s contribution toward the continent’s growth.

Furthermore, the bank has an array of instruments which can support Egyptian entities wishing to extend their lines of business to the rest of Africa. They include loan products (at competitive terms);,  guarantee products such as partial risk guarantees and partial credit guarantees; trade finance lines of credit, funding trade-related transactions; soft commodity finance facilities which supports exports, and import of agricultural commodities and inputs.

Finally, what is your opinion regarding the recent reforms taken by Egypt?

A little bit over two years ago, Egypt was on the verge of a crisis given the macro-economic imbalances. The risk of the crisis is over now. Over the past two years, the government has managed to reduce the fiscal deficit and the debt over the GDP ratio through increasing taxes and reducing expenditures (subsidies reform). At the same time, the impact of fiscal consolidation on the poorest segments of the population is being tackled through targeted transfer programmes.

The move to a floating exchange rate implied a devaluation then a depreciation of the Egyptian pound in 2016 and 2017 which increased the price competitiveness of Egyptian exports. Moreover, the discovery of the Zohr gas field and the reforms in the energy sector are turning Egypt into a gas hub and an exporter as well. Consequently, the current account deficit is on a downward trend, with net international reserves increasing to a present amount to eight months and half of imports.

It is true that inflation remains high which could hamper private consumption, but inflation has also been on a significant downward trajectory. Over time, it could enable monetary policy to be less tight and allow private investments to increase.

Furthermore, the government undertook business-friendly reforms by passing numerous laws. Egypt’s ranking in the ‘World Bank Doing Business’ indicators went up by 8 notches. The real GDP growth is gaining momentum. Most importantly, the government anticipated the risks of reforms on the low-income segments of society and has mitigated these risks, and is currently managing them through critical and well-targeted social programmes and initiatives such as the improvement of the food subsidy system;, the increase in cash transfer programmes; the eradication of unsafe informal settlements;, and increased financing for micro, small and medium enterprises.

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“No one can set profit limit for traders, we expect state incentives to encourage local car assembly”: Chairperson of El Saba Automotive https://dailynewsegypt.com/2019/01/23/no-one-can-set-profit-limit-for-traders-we-expect-state-incentives-to-encourage-local-car-assembly-chairperson-of-el-saba-automotive/ https://dailynewsegypt.com/2019/01/23/no-one-can-set-profit-limit-for-traders-we-expect-state-incentives-to-encourage-local-car-assembly-chairperson-of-el-saba-automotive/#respond Wed, 23 Jan 2019 09:00:45 +0000 https://www.dailynewsegypt.com/?p=687692 ‘We expect incentives from state to encourage local assembly of cars after customs’ cuts’

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At the beginning of 2019, a new campaign has been launched on social media calling on Egyptians to stop buying both new and second-hand vehicles to pressure all dealerships into lowering their prices. The campaign went viral attracting more than 400,000 followers since its beginning on 2 January.

Currently, a new wave of recession would hit the local automotive market in Egypt, not only due to the people’s high interaction with the boycotting campaign, but also due to the lower-than-expected decrease in car prices and the decline of Egyptians’ purchasing power.

Has the ‘Let it Rust’ campaign negatively impacted the car trade?

The market has been stagnant for months and the campaign has nothing to do with the decline in sales. The campaign has no effect on the ground so far, and the decline in sales is due to customers’ expectations of large price declines with the introduction of the last tranche of tariff cuts on European imports. I urge members of the campaign to establish a company and import cars with the prices they offer if they are honest, and we will be the first buyers.

But is there confusion among buyers because of prices?

People have been recently surprised that the prices they see on social networking sites are different from the prices that dealers sell cars for.

This is because of the new procedures in the traffic departments and the absence of a customs clearance certificate revealing the price of the car and the value of taxes and fees imposed upon them.

The reason for the difference in price is that some cars come with a bill that sets the cost of the cheapest models and compares them to the price of the most expensive models to stir controversy and pressure traders to reduce prices.

But there are accusations that traders exaggerate profits?

No one can determine the trader’s profit margin because we are in a free market, and every trader has the right to set their prices. Clients can get a good price when companies compete in a free market.

A trader can sell with 1% profit, or 5%, or even 10% based on their costs. Even if a trader profits EGP 100,000, the state taxes that profits. More importantly, most car traders are honest and transparent and will not evade taxes.

Do we expect car prices to drop again?

There are no signs of new declines in European car prices, which have fallen since the beginning of 2019.

The reduction was in line with expectations before January 2019, which all indicated the same ratio, especially in economic vehicles with a capacity of 1.6 litres, whose prices fell by 3%-7%.

Future buyers waiting for additional declines will not change anything as some expect. The new prices announced by some European brands and dealerships will not change further.

I would recommend that anyone who has made the decision to buy a brand included in the discount to purchase now without hesitation, while those who are still comparing between more than one brand can only wait to see if other cars’ prices will fall.

I expect European car prices to rise gradually if demand increases.

And price cuts do not only rely on tariff reductions, but some agents took advantage of the opportunity to re-price their cars which was disproportionate to the scope of the competition.

Will this affect the prices of used cars?

This will not affect prices of used cars, however it has caused a of stagnation of sorts because of the reluctance of owners to sell due to the foggy outlook of the car market future.

What is the impact of the recent price changes on Asian cars?

Of course, the removal of customs on European cars placed their Asian counterparts in a significant dilema, however I forecast that importers of Asian car companies will demand cuts and benefits so that they can compete with European models.

Will car companies in Egypt be affected by this?

Indeed. The state has to support assembly companies. I anticipate state incentives soon, such as exemptions from some fees or taxes, which are necessary.

Can Egypt manufacture cars in the near future?

We can but it is not easy. For a car to be manufactured in Egypt, about 60% of its components should be local. We can start and follow the footsteps of successful examples, such as Morocco and Renault. The Renault factory produces 400,000 units per year. This is another problem, as in order to manufacture cars in Egypt, production should be over 100,000 units, which would call for huge investments. There were negotiations with Peugeot, but they stalled.

What about the return of Mercedes-Benz to Egypt? Will others follow suit?

The return of Mercedes to Egypt is due to its confidence in investing in Egypt. International companies are not courteous. It would not have taken this decision unless it felt that the obstacles in Egypt were removed.

There have been negotiations at the highest level with these companies and they were often offered incentives, and the hurdles that forced German car companies out of Egypt in 2015 were overcome.

What do we make of Mercedes-Benz’s intention to open a new electric cars’ production line in Egypt?

I think this will be the main activity of Mercedes-Benz in Egypt in the coming period, it will manufacture and export electric cars, which is a great benefit for us.

Is there a great future for electric cars in Egypt?

Electric cars come in two types, one is fully electrified, which is both highly technical and highly priced and needs infrastructure and convincing the customer in terms of savings, and the other uses electricity and gasoline. Convincing clients will be difficult, because the price will be almost double.

The second type of electric cars is the one that uses electricity and gasoline, which is the preferred type, and the price difference will be low.

Has the new Consumer Protection Law implemented its advantages?

The law is good, and I did not object to it, but I had a reservation that I voiced to head of the agency Abdel Rady, on the article allowing the replacement of the commodity after 14 days without giving reasons.

There is also an article in the law which states that a product can be replaced for another with the same condition, which is a contradiction that is difficult to apply in most cases. In the automotive sector, when a client buys a car and drives it for five minutes, it can no longer be returned to its original condition even if nothing was changed. This should be accounted for in the law, even in the licensing.

The situation in foreign countries is different and there is awareness. Customers do not return products unless they believe they do not meet the specifications advertised by the selling company.

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Publishing industry still suffering with hopes for recovery in 2019: head of EPA https://dailynewsegypt.com/2019/01/22/publishing-industry-still-suffering-with-hopes-for-recovery-in-2019-head-of-epa/ https://dailynewsegypt.com/2019/01/22/publishing-industry-still-suffering-with-hopes-for-recovery-in-2019-head-of-epa/#respond Tue, 22 Jan 2019 11:30:43 +0000 https://www.dailynewsegypt.com/?p=687571 EGP 3bn is the volume of the publishing industry in the Egyptian market

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In his interview with Daily News Egypt, Head of Egyptian Publishers Association (EPA), Chairperson of Dar Al Maarf’s board, the oldest publishing house in Egypt, Sa’ed Abdo unveiled the situation of the publishing industry in Egypt and the challenges it is facing.

He clarified how the industry is affected by the floatation of the Egyptian pound, and how 2016 and 2017 were lean years for both the industry and publishers themselves.

Abdo projected that 2019 will be better for the industry as the economic condition is going to stabilise.

The transcript for the interview is below, lightly edited for clarity:

What is your association’s evaluation for the publishing industry volume in Egypt?

It surpasses EGP 3bn. Publishing houses which are registered with the EPA number 1,262 publishers including all kinds of ownership, the private sector representing over 90%. Their numbers notably increased after determining that all publishing houses must register themselves with the EPA as a condition for participating in the Cairo International Book Fair. From January 2018 until now the number of registered publishing houses increased by 40%.

Could you clarify the types of challenges that Egypt’s publishing industry is facing?

The publishing industry, especially the book market, is still facing numerous challenges, which are threatening it, including economic challenges, among others stemming from the market itself.

Do you mean the issue of illegally copied books?

Forged books is the biggest challenge ever that the book market in Egypt is suffering from. It not only violates the Intellectual Property (IP) Law, but also it steals the copyrights of the authors and publishers which absolutely cause significant losses for both of them. Also, it completely threatens book investments in the publishing industry sector. Forged copies caused about 50% in losses for authors and publication houses.

So, it threatens existing investments

Because it negatively affects these investment revenues. In addition, people who commit this crime are also publishing forged copies of foreign publications even those related to the science and academic fields. So it is really a serious problem. Noteworthy, over 500,000 forged copies were seized during 2018.

How will the Cairo International Book Fair make an annual difference for the industry?

This fair is the most important opportunity for the publishing industry in Egypt to be sustained and to promote all kinds of publications, especially since the industry suffered significantly following the floatation of the Egyptian pound and its aftermath. So it is a serious problem for authors and publishers when forged publications are placed on the market for a quarter than its actual price. It has a lethal impact on the industry, harming Egypt’s reputation in foreign markets.

Does it mean that book forgery is hard to beat?

The serious dilemma in this regard is that publication forgery has become a profession for many people. It guarantees easy money, as all they need is to own a printing machine, tracking bestsellers in bookstores, then they can print thousands of forged copies pummelling the original publication’s success in the market. Moreover, printing houses themselves are currently seizing the opportunity and are printing illegal copies of the original publications behind the author’s back, paid in advance.

What is the number of printing presses in the market?

About 500 printing presses, including illegal ones.

We already have an Intellectual Property Act, is it not enough, as a legislation, to curb the spread of book forgery?

Unfortunately, the legislation does not protect the industry from this critical situation, and it completely fails to control it. It penalises those who committed this crime with a fine of up to EGP 5,000, and in event of a reoccurrence the fine is doubled to reach EGP 10,000. In addition, confiscation of the material is seized, which actually happened.

Then what are your association’s efforts to counter this threat?

We have already prepared a new draft that imposes a harsher punishment. The fine reaches EGP 100,000. The fine is determined according to the inflation rate.

Do you think that it is enough to cope with this serious situation?

Of course it is not enough. We need some severe measures to be taken in order to face this challenge, including raising the audience’s awareness of this harmful phenomenon by conducting awareness campaigns to clarify how forged publications are destroying the publishing industry. In addition, authors and publishers themselves should not be overrated in book pricing, as readers will search for cheaper options, especially since the purchasing power of all customers has been cut by half or more. The legislation structure consummates the industry’s protection , but it needs to be strictly applied.

Talking about the publishing industry, what actions should be taken to help it thrive?

Concerned bodies should to offer all facilities to open new libraries, and to allow the establishment of at least one library in every new housing project that is established. In addition, purchasing publications at reasonable prices as it is an important point to sell and promote books and all publications. The industry also needs severe laws to be released as soon as possible. And I wish all publishing industry inputs to be duty-free, as this industry totally depends on imported components, so the price of publications is set at reasonable prices.

And what about publication shipping which is always facing problems?

These procedures also need to be more flexible. We need to ease the measures of shipping publications inside and outside Egypt. Shipping companies in Egypt deal with publications that have not been sold in any book fairs as re-exported shipments, not as returns, which place substantial pressure on all publishers, unlike the same conditions in other countries. These actions are enough to revive the industry.

How was the industry affected by the floatation of the Egyptian pound which was applied in November 2016?

It caused significant hikes in all of the industry’s components. Production costs increased threefold compared to the period before November 2016. Costs and prices increased by 120% during the past two years. New titles decreased by between 30% and 40%, while profits rates declined by about 50%.

Could this effect spill over into 2019?

The situation is currently fairly more stable. There is another challenge that does not help the market to feel that which is the exit of the main five markets which Egypt exports to 2011 including Iraq, Libya, Yemen, and Syria, as the Arab Spring uprisings caused a significant loss. In addition, the floatation of the Sudanese pound affected the presence of Egyptian publications there, as Egyptian publishers occupy 80% of total publishers in Sudan.

After the absence of the main markets as a destination of the Egyptian publications due to Arab Spring uprisings, which countries have replaced them in sequence?

Algeria; Saudi Arabia; the United Arab Emirates; Kuwait; Tunisia; the Sultanate of Oman, and Morocco.

Can the new wave in this industry which relates to e-books and audio books compensate it for its losses?

E-books and audio books are the new wave in maximising the revenues of publishing industry all over the world, and Egypt must exploit that to support the local publishing industry. But, we should be careful to protect our content so as to not be illegally exploited, and all publishing platforms need severe legislations to protect authors’ copyrights.

What is the required cost to produce an audio book?

Not less than EGP 2,000 for each.

But, do you not think it is too expensive? Can the authors make a profits this way?

I do not think so, as they can make their profits through subscription fees that are permitted by the platform which published it.

When can we say that Egypt is involved in the digital publishing era?

Within two years from now, but, the awareness of the importance of this new wave will significantly hasten the entry of e-publishing, including audio books.

Whilst preparing for the Cairo International Book Fair, a significant controversy sparked over sponsoring such an important annual event. Could the 50th edition grab a sponsor?

We already contracted with an advertising agency, for the first time, to sponsor the 50th edition of the Cairo International Book Fair. It will be a partial sponsorship for one year.

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We invest in innovative start-ups carrying strategic value to our company: Head of Ericsson Ventures https://dailynewsegypt.com/2019/01/17/we-invest-in-innovative-start-ups-carrying-strategic-value-to-our-company-head-of-ericsson-ventures/ https://dailynewsegypt.com/2019/01/17/we-invest-in-innovative-start-ups-carrying-strategic-value-to-our-company-head-of-ericsson-ventures/#respond Thu, 17 Jan 2019 10:30:39 +0000 https://www.dailynewsegypt.com/?p=687108 Venture capital investment as the main method of funding start-ups has been on the rise, with venture capital activity in the United States reaching its highest levels in 2018. According to PwC and CB Insights, US venture capital funding registered at around $99.5bn in 2018, marking its second highest recorded total since the peak of …

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Venture capital investment as the main method of funding start-ups has been on the rise, with venture capital activity in the United States reaching its highest levels in 2018.

According to PwC and CB Insights, US venture capital funding registered at around $99.5bn in 2018, marking its second highest recorded total since the peak of the dot-com boom in 2000.

Giant corporates started to enter the venture capital investment scene, and created their own venture investment arms, to get a better understanding of the process, and what makes a start-up more desirable, Daily News Egypt interviewed Head of Ericsson Ventures, Vice President of Ericsson, Albert Kim.
Kim revealed that Ericsson Ventures invests in leading companies to drive innovation in new areas, accelerate their core business, and generate strong returns. The transcript for the interview is below, lightly edited for clarity:

What is Ericsson’s ventures portfolio size, and what is your start-up selection criteria?

We have about 17 active companies at the moment.

When it comes to selection, our process includes several dimensions, the first one is what sector the start-up is active in, and it all comes back to driving strategic value.

At the end of the day Ericsson is a networks company, which keeps us within a certain range of sectors, starting from radio technology, to cloud-computing, edge cloud, Internet of Things (IoT), cyber-security, and then more new areas such as autonomous driving, virtual reality and augmented reality. So, everything comes back to networking.

From a stage perspective, we are pretty agnostic, so we invest in every early-stage company, the closer it is to our core sector, however, the further we go away from the core, we want to invest in a more mature company, with already existing products, and tens of millions in revenues.

Then we do typical investment diligence, with market sizing, to de-risk investment, so it is a typical check list, that’s how we select a start-up, what is important to us is a strong investment syndicate, as we want to be surrounded by other investors who are interested in funding the company.

Does Ericsson Ventures engage in the operations of companies they fund?

Good question, we don’t directly, but in some sense we do, we take a seat in the board of director of those companies, mostly on a non-voting basis, as an observer.

So we engage in board discussions, participate in the strategy, even in management, but we don’t go and directly micro-manage.

However, my team is very active in business development, we can assist with technical discussion, and offer a free business development assistance to the company.

Is the ROI the main focus of Ericsson Ventures, or the benefit to the mother company?

Both are equally important for us, we have a very strict requirement on financial performance, but again the way we drive that performance, is through making sure that the company works strategically well with Ericsson.

Can you elaborate on the amount of investments you usually offer, control percentage?

Usually between $1m and $5m, we invested as much $10m once.

In regard to our control percentage, it is purely based of valuation, so let’s say we invest a $2m in a company worth $100m, we get a 2%.

However we stick to an accounting rule, that when you are below 20% ownership, you don’t need to consolidate financial.

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Finding business use cases is prerequisite for building 5G network: Head of Ericsson Silicon Valley Experience Centre https://dailynewsegypt.com/2019/01/14/finding-business-use-cases-is-prerequisite-for-building-5g-network-head-of-ericsson-silicon-valley-experience-centre/ https://dailynewsegypt.com/2019/01/14/finding-business-use-cases-is-prerequisite-for-building-5g-network-head-of-ericsson-silicon-valley-experience-centre/#respond Mon, 14 Jan 2019 10:30:57 +0000 https://www.dailynewsegypt.com/?p=686709 Since October 2018, Verizon started to offer 5G fixed internet wireless access in US:  Thomas Olsson

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Santa Clara- To feel the vibe of Silicon Valley and find more about 5G opportunities, Daily News Egypt (DNE) visited Silicon Valley’s Ericsson Experience Centre, where visitors can interact with several experts from Ericsson, and witness how technology and ecosystems will drive this transformation by empowering people, businesses, and societies with the solutions and expertise needed to reinvent what is possible.

The place offers an impressive showcase where you can immerse yourself in the latest innovations which will revolutionise our society. Whether you’re interested in networks, IT, or new industries, the centre will inspire you.

Ericsson is one of the leading providers of information and communication technology (ICT) to service providers, with about 40% of the world’s mobile traffic carried through its networks, with a comprehensive portfolio ranging across networks, digital services, managed services, and emerging businesses, powered by 5G and internet of things (IoT) platforms.

DNE interviewed Thomas Olsson, head of the Ericsson Silicon Valley Experience Centre, to determine his thoughts on the adoption of 5G technologies.

Olsson joined Ericsson in 2002 as the head of the Sales Managed Service business unit. He moved to Argentina in 2007, where he was responsible for service delivery and the network’s roll-out across the region in South America. From 2011, he became the head of Global Sales in the Business Unit Support Solutions, based at the HQ in Stockholm, and since 2016 he was named as Vice President and the head of Ericsson’s Experience Centre in Silicon Valley. He is the appointed spokesperson for Ericsson, representing this area, and also speaks at several industrial conferences and seminars.

The transcript for the interview is below, lightly edited for clarity:

How does the Ericsson Experience Centre boost innovation, and improve the tech eco system?

Being a big company, I think we contribute to the dialogue between different eco-system players, and we also educate ourselves through the dialogue with the start-up community as we know the limitations of current technologies, but we don’t know about the opportunities, and the limitations of the next one.

We are trying to be highly active in order to communicate with our partners. We talk about IoT, cloud-computing, artificial intelligence, and what we can bring to the process of industry solutions, as we go forward.

Therefore, I think we are contributing to that process, in addition to our traditional customers, the telecom operators, with half or even more of the traffic at the centre coming from start-ups, eco-systems, and big companies, as they all are trying to figure out what does the 5G technology would mean for them.

DNE interviewed Thomas Olsson, head of the Ericsson Silicon Valley Experience Centre, to determine his thoughts on the adoption of 5G technologies.

What is the biggest challenge facing the adoption of 5G, is it affordability?

To build a 5G network, it doesn’t have a one-use case, in 3G and 4G, the use-case was pretty much the voice connectivity and the mobile broadband, so it was the sim card that you were buying.

For 5G, it is not about the sim card any more, rather it is about the value of information for the industry, and when a machine would be able to communicate with other machines. Those values are part of the initial challenge to define the industry’s use-cases.

The benefit from doing that is that there will suddenly be more business cases, as well as incentives for operators to build a 5G network. I believe that despite the fact that the 5G adoption will be slower at the beginning, but the process will go much faster than it took us to change from 3G to 4G.

However, it is different this time as it is not only about changing from 4G to 5G, rather the new network will be a combination of both. Accordingly, the technology that Ericsson brought to the market will use the same hardware, and we will undergo a software upgrade of what is already there.

How can infrastructure-sharing reduce the cost and accelerate the implementation of the 5G technology?

I think that is actually happening as the possibility to have different use-cases on the same infrastructure will in reality make new use-cases affordable. Take the energy or the mining industry today for example, if you have an oil rig, they can afford to build a dedicated 4G network, but if you have a small workshop or a small garage-company they will not be able to. With 5G, the operator can offer them a shared network as if it was dedicated to them, so the network’s division and reuse will drive the speed of 5G.

When will the 5G revolution take place?

Since October 2018, Verizon has started to offer 5G fixed internet wireless access in the US. In the country, there are 30m households without a cable internet connection as companies do not have an incentive to provide it to these houses, so today these people have poor coverage.

Today, around 60,000 sites in the US are relatively covered with 5G. There are other sites which are not covered because the business case is not there, but if you have hard use cases, operators would build coverage, even where there is no coverage now.

In order to have a 5G network with no latency everywhere, the number of sites might go up from 60,000 sites to 600,000, or perhaps even a million.

A lot of these sites will be lamp-poles, 100 yards away from each other, that is necessary to eliminate latency. In order to build up this network, it will be a challenge, not in terms of technology, rather from a social aspect, as maybe some communities would not want more of this technology.

But I think the challenge for us as a company right now is exploring the limitation for 5G, we don’t know what impact it will have on the different utilities, and the different use-cases.

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Knowledge hub enters Egypt’s private university scene https://dailynewsegypt.com/2019/01/13/knowledge-hub-enters-egypts-private-university-scene/ https://dailynewsegypt.com/2019/01/13/knowledge-hub-enters-egypts-private-university-scene/#respond Sun, 13 Jan 2019 10:30:37 +0000 https://www.dailynewsegypt.com/?p=686601 Project attracts several universities worldwide, to offer degrees in different specialties: El-Sewedy Education CEO

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With technology taking over the world in current decades, education remains one of Egypt’s main challenges in meeting the industrial market. Lack of good quality education, practical training, and relying on outdated taught theories as educational sources, are the common struggles facing millions of graduates who eventually find themselves unfit for international market requirements.

With the aim of fighting an educational system that brings the world an untrained, poorly educated graduate, El-Sewedy Education, an Egyptian education investment and management company, opens its doors to students starting from the 2019 academic year.

Knowledge Hub is El-Sewedy Education’s multidisciplinary project, consisting of different multinational universities located within the same campus. In their Egyptian campus, the internationally accredited universities offer students the chance of being taught the same curriculum students are taught in their native countries.

Coventry UK is the first university to sign the partnership agreement with the group. The hub offers students an education which meets international standards, through techniques that are being used for the first time in Egypt.

Daily News Egypt interviewed Ihab Salama, CEO of El-Sewedy Education to discuss further El-Sewedy Education’s new project, its goals and its future plans, the transcript for which is below, lightly edited for clarity:

Why did El-Sewedy Group decide to open a new university in Egypt?

The idea came when we started a corporate social resposibility activity four years ago, called El-Sewedy Technical Academy, which basically focused on vocational education. The programme accepts students after grade nine and teaches them a German curriculum which qualifies them to meet market needs.

From this day, we witnessed the impact on the community, and presently we feel that what Egypt really needs currently is the youths’ good quality of education. The country is in a deep need of well-educated generations, and education is no longer about the theoretical part, it has become more of how you connect with the current industry, as well as how you receive your practical training.

What does your university offer students differently?

We offer students a different model which is called the knowledge hub. The idea of that model is to attract several universities from all across the globe, each in their area of strengths, in order to offer their degrees in different specialties.

The campus is also designed in cluster areas in which technical studies’ students from different universities are combined together in one area. So, there’s an area dedicated to engineering school from all universities, while another is allocated to medical studies, and a third for social sciences and arts.

The beauty of these clusters is not only the degree you get from each university, but the inter-disciplinary connection you can create between all these universities.

Moreover, we provide students with a new educational system that is called the flipped classroom type of education, which is being offered for the very first time in Egypt. This system is different from the ordinary teaching system in which the professor stands in the middle of the classroom, dictating to students what to learn, and they have to memorise what they are being told; rather it is more about interaction, collaboration, and integration.

The flipped classroom system focuses on teaching students how to work in groups, encourages them toward critical and analytical thinking, as well as problem solving. Students in that system get their training ahead and use the group work to come up with a solution to the problem they have, which eventually teaches them what they need to learn. We believe this will change the landscape of education in Egypt.

How do you plan to overcome the challenge you have with several other private universities in Egypt?

I do not see any challenge. We do not compete with private universities in Egypt. Our model is completely different than all of theirs, as we are opening a university branch in Egypt which will host in one campus several world accredited universities.

As a start, we are opening a branch for Coventry, a British University in Egypt. As an academic partner, they come with their curriculum, teaching techniques and methodologies, quality assurance and control. So, El-Swedey University does not offer its students a degree, the graduation certificate they get is from Coventry University.

Our students will be registered in Coventry University and the certificate they get holds the same accreditation as students who graduate from Coventry, the UK, which is a total different aspect than private universities.

However, many of private universities’ certificates in Egypt are internationally accredited, what is the difference your university offers regarding that?

All private universities in Egypt grant students local degrees.

These universities offer an accredited curriculum.

The curriculum itself can be accredited worldwide because it is similar to other taught curriculums despite being improved locally. Nonetheless, our students are officially considered Coventry graduates or any of the signed-with universities’ graduates.

Since you are opening a branch from mother universities in Egypt, will the teaching staff be from Egypt or from the mother country?

All the heads of the departments will come from the mother branch and will be supported by professors from the same university as well.

However, a part of our focus as well is not only the students, but also to develop the way of teaching for Egyptian professors. So, we will provide them with training programmes in order for them to match the criteria of the mother universities, and upgrade their teaching methods.

That way we are benefiting the society from both ways: the students and the professors.

When are you planning to open you doors to students?

We are opening our admission next year. September 2019’s academic year will be ready to host students.

Where is your campus located?

It is located at the New Administrative Capital. It is a piece of 50 acre land, and we are only opening the first phase of it by the new academic year, with a five- to seven-year expansion plan.

What are the study fields the university is offering in the first year?

Engineering with all its fields and programmes, all the computing courses and media.

Will there be any exchange programmes between Egypt and the mother universities?

Yes definitely. The students have the right to go for a semester or a year to the mother university and vice versa. They are eventually all registered at the same university, yet different branches.

What is the  tuation fee range of Knowledge Hub?

We have not yet announced that, but the fees will be within the top fee range of private universities in Egypt.

At the end of the day, we are offering a different education model in which there is a partnership with a foreign university and several professors coming from all across the globe to teach your students.

Are you offering scholarships?

Yes. We will offer an athletic scholarship and top students will be released from fees.

Will you offer post-grad studies?

Definitely, but not from the first year. We are also planning to open our doors for masters students.

The campus will also be a hub for entrepreneurship to encourage students to open their own startups and support the innovation of entrepreneurship.

From your point of view, what are the main challenges facing you in the Egyptian market?

To be honest, we have substantial support from the government from all aspects in order to make this a successful experience.

We are mainly facing challenges in schools with the type of education students get. However, we will look into it, as it is our role to bring these students up to the highest level in order to match the type of education we are offering them, which will later on make them meet the criteria the employment market needs.

Another challenge we are facing is to deliver this new education model to both students and parents for them to understand the difference between a private university and a branch campus.

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Municipalities’ contribution to national income is not less than 30%: former governor of Qaliubiya, Menoufiya https://dailynewsegypt.com/2019/01/09/municipalities-contribution-to-national-income-is-not-less-than-30-former-governor-of-qaliubiya-menoufiya/ https://dailynewsegypt.com/2019/01/09/municipalities-contribution-to-national-income-is-not-less-than-30-former-governor-of-qaliubiya-menoufiya/#respond Wed, 09 Jan 2019 09:00:05 +0000 https://www.dailynewsegypt.com/?p=686257 Local community activities in governorates contribute 30% to national income

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As former governor of two large governorates, Qaliubiya and Menoufiya, and someone who contributed in drafting the new local community management bill, Adli Hussein introduced an integrated vision of the forthcoming bill, depicting the monitoring roles it includes.

Hussein also explained in an interview to Daily News Egypt how the absence of elected local community councils since 2011 till now has not only negatively impacted the economic scene in Egypt, but equally the megaprojects which have been established throughout the past four years.

The transcript for the interview is below, lightly edited for clarity:

How much does the constitution support governorates and their local activities?

The 2014 constitution carefully deals with local development. The constitution supports it with decentralisation financially, administratively, and technically in order to enhance the role of community councils in each governorate. Plus, it provides these councils with full autonomy to enable them to play their roles without any restrictions or burdens. In addition, according to the constitution, the decisions and resolutions that are released by these councils are irreversible. But, actually, the new bill sets only three condition to for opposition. They are in the event if those decisions are against the public interest, or are illegal, or if they conflict with other resolutions released by other community councils. Moreover, it ensures that the election is be the method of the governors’ appointment.

From your perspective, why has this bill not been released yet?

The new bill is supposed to be ready after discussing it in both plenary session and local government committee meetings in 2016 and 2017. But, I was surprised when the chairperson of the local government committee in House of Representatives stated that the government is not yet ready to hold local community elections. Indeed, the new bill is stills not on the parliament’s agenda.

To what extent has Egypt been affected by the absence of local councils in all governorates?

These elections are the main means of acquiring the experience of political practice in Egypt. Actually, it supports the democratic composition to the point where its role is more important than the parliament itself, as these entities and its elected members directly stay in touch with citizens, and deal with their troubles and complaints on a daily basis. Furthermore, the new bill adopts interpellation as a measure to interrogate officials who are responsible for any dereliction, including the governor himself. Thus, the formation of local community councils is an important guide for political practice, and the democratic process is in dire need for it. Actually, Egypt has not experienced similar elections since 2011.

But it has been a very long period, so, what is the impact of this situation during this extended time?

In contradiction with the constitution and law, since the dissolution of these councils in the wake of 25th uprising in 2011, all governorates are acting without their local councils, although the constitution and the existing law provide for forming interim councils in case of the dissolution of existing ones. It has not been happened till now, hence this case is a deeply unconstitutional and a legally flawed condition.

What can concerned bodies do to avoid this complicated situation?

Unquestionably, we must promptly form interim councils to avoid this unconstitutional and illegal condition. In addition, these interim councils will support governors to perform their duties. Furthermore, they are responsible for any oversight concerning the governor’s performance.

What about the impact, in particular on the Egyptian economy, especially on the reform programme?

Unfortunately, the absence of these councils has significantly harmed Egypt’s economy. Land allocations, budgeting, imposing local activity fees, approving the establishment of new projects in governorates, and oversight of the governor’s duties are essential roles of these councils. Thus, all governorates have suffered in their absence. In addition, it has a negative impact on sustainable development in governorates which is the key issue of the Sustainable Development Strategy Egypt 2030, definitely affecting the investment environment.

Does it mean that these councils have a major role?

That is right. Members of these councils, depending on their daily connection with people, would have a mission in persuading them with the new economic procedures which include serious ones for citizens’ daily life such as the floatation of the Egyptian pound, phasing out energy resources subsidies, increasing service fees, and other similar procedures. That would have played a significant role in this regard, which, eventually, would help the government to keep operating smoothly. Their role is more important than the role of the media or even the parliament.

As a participant in drafting the new law, what are the monitoring tools that were included?

The oversight tools that are insured by the new bill, included questioning, requests for briefing, and interrogation, which are vital for reproaching negligence to the extent that governors can have confidence withdrawn from them. What’s more, the key issue is that the new bill devotes an entire section for Cairo as the capital city with a special condition on the grounds that is the ruling centre and the headquarter of most ministries and governmental bodies. Moreover it is the most populated and most vital city, in a manner which distinguishes it from other governorates. This is the model which is followed in all developed countries such as France, Brussels, and London. Thereby, this is a good step forward as it secures more powers and competencies.

What about qualifying personnel in these local communities to become competent leaders for local councils?

A new national academy is supposed to be established according to Article 10 of the new bill, for all who work in local communities and all who intend to run for local council elections, in addition to qualifying personnel to assume leadership posts. This would bring an end to depending on assigned employees from ministries or departments to work in local councils.

How will these instruments facilitate the work of these councils?

They will provide the chance for governors and local councils to work more independently; approve new projects and establishments; offer economic incentives for investors; boost small, medium, and micro enterprises, and promote investments in each governorate. In this regard, I would like to mention a successful instrument which attracts investments that I had applied when I was a governor of Qaliubiya, which is Fraternities Agreements. This instrument allows for the cooperation and exchange of experiences between Egyptian local councils and their counterparts in other countries. I wish that the final draft of the new law would allow for these kinds of agreements.

As a former governor, can you estimate local community activities’ contribution to the national income?

Not less than 30%.

And how do local councils support the megaprojects which have been established?

These megaprojects are supposed to open branches in some of the Egyptian governorates which could pave the way for new investments in these governorates, followed by offering new job vacancies. In this regard, the local councils have a role to remove obstacles which restrict these new investments.

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2018 is booming year for tourism in Hurghada throughout last 3 years: Guirguis https://dailynewsegypt.com/2019/01/08/2018-is-booming-year-for-tourism-in-egypt-throughout-last-3-years-guirguis/ https://dailynewsegypt.com/2019/01/08/2018-is-booming-year-for-tourism-in-egypt-throughout-last-3-years-guirguis/#respond Tue, 08 Jan 2019 10:00:36 +0000 https://www.dailynewsegypt.com/?p=686191 Hilton Hurghada Resort launched new renovation plan, scheduled to be completed by 2020

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Despite Egypt being one of the best destinations for tourists worldwide, and known for having the most attractive locations, tourism has declined for a long period, but with the government’s and the private sector’s incentives, Egyptian tourism has witnessed a major boost during 2018.

Marketing the sector was one of the challenges listed on top of the government’s work agenda for the past years. Reviewing the prices strategy, opening new markets, development, as well as improving the security conditions, were the main factors which helped the return of tourism after two years of unstable conditions, following the crash of the Russian airplane in 2015.

Daily News Egypt interviewed the General Manager of Hilton Hurghada Resort, Gilaine Guirguis, one of the leading figures in the tourism sector who has worked in it for almost 37 years. During our interview, she introduced the hotel’s renovation plan, which is to be fully executed during the upcoming few years, and explained how the hotel worked on flourishing tourism with the government’s help during the time of crisis.

Gurguis was the general manager of Hilton Marsa Alam Nubian Resort from 2013 to 2016, and the general manager of the Hilton’s Fayrouz Resort in Sharm El-Sheikh from 2011 to 2013.

The transcript for the interview is below, lightly edited for clarity:

To begin with, will you give us a brief on the current situation of the tourism in Hurghada, compared with the past years?

Tourism has really improved much during the past two years all over Egypt. The foreign tourist is willing to fly to Egypt for a stay, however tourists became more selective than before.

After the 2015 incident, Hurghada’s tourism sector was negatively affected, as the Russian tourists were the main market feeders. Accordingly, both hotels and travel agents started to look for alternative markets in order to recover from this decline, while depending on the domestic tourism.

In 2017, slight changes began to appear on the ground, especially after the flow of the Chinese market to Egypt. Chinese tourists like to visit Egypt in groups for five-nights tours divided between Hurghada and Luxor. This is in addition to the flow of tourists from specific European countries like the UK and Germany to Hurghada, instead of Sharm El-Sheikh due to flight suspensions. Currently, we can see that the occupancy rates and the number of flights are increasing in Hurghada.

The improvement of occupancy rates encourages many hotel owners to invest in building new hotels and extending the total number of guest rooms in Hurghada, which is an indicator prooving that tourism is actually doing well.

What was Hilton Hurghada’s role in promoting tourism?

First, let us note that the Russian tourist was the main one contributing to the Egyptian tourism market until 2016. Accordingly, we started to collaborate with travel agents to explore new markets and search for alternative tourists to visit the country. 

We prepared a strategic sales plan to increase the current flow of tourists from the UK, Germany, and Lebanon in parallel with penetrating new markets such as Belgium, India, China, Armenia, Kazakhstan, and more notably France.

Some of those markets have specific requirements in order to come and stay with us. For example, the Indian market requires an Indian chef to accompany tourists in order to cook their meals and recipes. After we looked into this request, we succeeded to execute the business deal once we dedicated a separate kitchen and obtained the required equipment. Their feedback on the hotel’s action has been significantly positive and satisfying.

How do you describe the occupancy rate in 2016, 2017, and 2018?

In 2017, a noticeable increase of 27.9% has been recorded compared to 2016.

In regards to 2018 results, we haven’t announced our Q4 year-end earnings numbers yet, they are to be released in the near-term, yet occupancy rate, and total revenues have improved, compared to 2017. Moreover, Hilton Hurghada recorded great satisfaction and problem resolution scores.

Are you planning on increasing the prices during the upcoming period?

As long as we are in a high demand, reviewing the pricing strategy is essential. For instance, we are witnessing high demand during January and February, so I decided to increase the prices, and no negative feedback was witnessed.

Did the Al-Haram district incident affect the hotel’s occupancy rates during the Christmas celebrations?

We did not receive any cancellations, and I also think that the attack did not leave any impact on tourism anywhere in Egypt.

During the evening of the day of the attack, we prepared a sheet and we expected that we will start taking cancellation requests, but thankfully, no one submitted any cancellation or even any guest left the hotel.

We were so worried especially that the timing of the attack coincided with the New Year’s and Christmas celebrations, so it was definitely a high season.

How did your hotel work on its marketing strategy during the decline of tourism?

Our marketing strategy depends on two factors, the outbound marketing, which focuses on the ways to reach clients. Our dedicated sales team plans regular sales calls and visits to tour operators in Egypt and abroad. Those trips mainly aim to strengthen the business collaboration between the hotel and tour operators, and usually help in exploring new ideas and alternatives to support the business, so that we are capable of choosing the right promotions at the right time, and to the right people. We also were keen to be present in all the international travel forums and exhibitions. As for our second strategy, the inbound marketing, our focus is to boost digital marketing, and work on updating the website, keywords, content, images, online travel agencies (OTAs), as well as our social media presence.

What was a major achievement that Hilton Hurghada implemented in 2018?

Hilton was established 25 years ago, so the hotel needed some upscaling to cope with the guests’ expectations, especially that Hilton is one of the few hotel chains in Hurghada. As for my work agenda, it was important to prepare something which will meet all our new clients’ expectations.

First, we started with renovating the rooms, as they were built several years ago, and it was important to reconstruct new interiors in order to cope with modern designs.

The rooms’ renovations are planned to be finished in phases, putting into consideration that we have to avoid the guests’ interruption during their stay. This is the reason why we work in winter when the occupancy rate is lower than in summer, so that we are able to close and renovate those rooms. During the summer, hotels are fully booked, and it is not easy to lose our guests.

We already finished 80 out of 400 rooms. This phase took almost six months from January to July 2018. The rooms are now decorated with a new interior style, making them more delightful and colourful. The rooms are completely renovated including their colours, ceramics, as well as the furniture.

We are now preparing to start working on another 80 rooms during 2019, and will continue until we are finished with all the 400 rooms.

The new phase is expected to start this January, and will end by the beginning of the summer. We are planning to finish 280 front-line rooms by 2020.

Restaurants are also part of the renovation, as we are looking forward to expanding the size of the restaurants to accommodate the numbers of guests. We are expected to work on this after finalising the rooms’ refurbishment. Occupancy is mostly over 80%, so we do not want the guest to feel that the restaurant is overcrowded, and that is why we had to renew it.

Moreover, we also have another 121 rooms located in the second line of the promenade,

as they were designed in an older stage than the front-line rooms, and we will still have another four to five years for their complete renovation, and we are working on a refurbishing plan for a period of one year.

What were Hilton Hurghada’s challenges during 2018?

First, we had a big challenge in improving the food taste and quality, which made us replace the chef two times, until we succeeded in reaching the best results which we were looking for. We also conducted training courses for our chefs.

We also changed the animation team three times. In addition, we constructed the Aqua Park, which was really one of the best ideas. Most importantly, we succeeded to start our renovation plan.

What are your main goals for 2019?

We are looking to start the second phase of the room’s renovation and increase corporate business. We increased our business with big corporates such as petroleum services companies.

We also launched a plan in order to arrange weddings by the beach, something that we already started, with the first wedding held two months ago. We are coordinating with various wedding planners in Hurghada to reach out to Hurghada’s residents, letting them choose Hilton as the venue for their wedding celebrations.

Recently, people are more frequently visiting places like Sahl Hashish, Gouna, and Dahab as they are becoming mainstream destinations, do you think this has influenced tourism in Hurghada?

No. Our clients are different, and each destination has its specific market and visitors. The hotels here are different, which combine both shopping and relaxation. Clients choose places according to their needs.

How did you work on improving the employment rates?

Due to the tourism’s decline during the past three years, many employees left Hurghada to look for other jobs. Therefore, we worked on training fresh graduates in order to select the best ones. The induction-training plan takes place for 15 days before joining the hotel’s operation.

We are now very concerned with language abilities more than before, and we do not accept slang language anymore. We also targeted breadwinner females, as we train them on cooking and baking pastries, and provide them with the chance to work with us.

We already trained 10 females who send us baked desserts, and anyone who wants to learn or work, we are open to teaching them.

We also do some community work by sending some equipment and materials to charity organisations so they can use them to train children and young people who are interested in working in the tourism sector.

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Egypt is among largest Arab markets, insurance diffusion remains low: El Khatib https://dailynewsegypt.com/2018/12/31/egypt-is-among-largest-arab-markets-insurance-diffusion-remains-low-el-khatib/ https://dailynewsegypt.com/2018/12/31/egypt-is-among-largest-arab-markets-insurance-diffusion-remains-low-el-khatib/#respond Mon, 31 Dec 2018 11:00:48 +0000 https://www.dailynewsegypt.com/?p=685606 Company’s assets increase by 19% for last 3 years, after distributing $10m of dividends in 2017

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Egypt is a huge country with nearly a population of 100 million; however, its insurance market cannot be considered mature enough, even though it has witnessed some changes in recent years. According to the Financial Regulatory Authority’s (FRA) latest report, the non-life insurance (property) companies in Egypt achieved premiums worth EGP 12.4bn during the first 11 months of 2018 (11M18), up from EGP 11bn during the same period last year, a 12% growth. Life insurance companies operating in Egypt achieved premiums worth EGP 28.2bn in 11M18, compared to EGP 21bn in 11M17, an increase of 34%.

Osama El Khatib, vice chairperson and managing director of AIG Egypt Insurance Company, informed Daily News Egypt that the depth and penetration of insurance in Egypt is one-quarter of Tunisia and one-fifth of Morocco, proceeded by Qatar, Saudi Arabia, and the UAE respectively. This shows the challenges faced by insurance companies and the absence of awareness about the benefits of insurance and its significance to protect all segments of the society, as well as commercial, industrial, and financial sectors.

AIG is a global property-casualty and general insurance organisation serving more than 70 million clients around the world.  With one of the industry’s most extensive ranges of products and services, deep claims expertise and excellent financial strength, AIG enables its commercial and personal insurance clients alike to manage virtually any risk with confidence.

Daily News Egypt interviewed El Khatib to discover his views on the local insurance market and AIG Egypt’s latest plans, the transcript for which is below, lightly edited for clarity:

How do you see the Egyptian insurance market in view of the current challenges?

Egypt is among the largest Arab markets, but the depth of insurance (total underwritten premium to total local production) is very low. The insurance penetration and average per capita expenditure on insurance (total underwritten premium /population) is very modest. The depth and penetration of insurance in Egypt is actually one-quarter of Tunisia and one-fifth of Morocco proceeded by Qatar, Saudi Arabia, and the UAE respectively. This shows the challenges faced by insurance companies and the absence of awareness about the benefits of insurance and its significance to protect all segments of the society, as well as commercial, industrial, and financial sectors. I’m sure that the path adopted by the FRA and the Insurance Federation of Egypt (IFE), in coordination with the government, is the best to protect all social classes, especially low-income people, and to benefit the whole economy in general. The role of insurance companies in helping to protect the Egyptian economy is very important, as their task is to study market requirements; find the products they need; spread awareness; find the suitable channels for distribution, and payment of claims. Since the depth and intensity of insurance in Egypt is low, there are great opportunities for insurance companies for growth for the benefit of all.

Osama El Khatib, vice chairperson and managing director of AIG Egypt Insurance Company

What are the main challenges faced by foreign companies in their expansion in Egypt?

Any investor, whether foreign or Egyptian, conducts studies before any investment is made, either for the first time or expansion. In addition to the feasibility study, investors carry another important step which is a risk study– that may prevent them from achieving their objectives. Hence, they can analyse and compare between countries or regions to identify whether the investment is reasonable or not, and what is the investment failure rate if exposed to each risk or all risks. The 10-levelled analysis is usually based on political; economic; legal; tax; operational; safety, and security risks. In Egypt, the youth represent 52% of the population. The local production is growing, reaching 4.5%. If the government invests in substantial infrastructure and energy projects, inflation will decline, production of oil and gas will increase, and Egypt will become an exporter of both instead of being an importer. This is the current situation in Egypt. It is a significant improvement in all of the mentioned fields. Security, improving economic situation, and establishing a strong legislative environment are what encourage foreign investors to come to Egypt and expand which was reflected in the growth of foreign direct investments (FDI) and classifying Egypt’s credit rating by Standard & Poor’s at B with stable outlook.

How do you see the Sharm El-Sheikh Rendezvous Insurance Conference’s impact on the insurance sector and in attracting new FDI to the Egyptian market?

The Sharm El-Sheikh Rendezvous is one of the regularly organised rendezvous by the IFE. These rendezvous are very important as they bring together regulators, insurance companies, and investors from Egypt and the Arab region.

The federation seeks to coordinate with all related parties for the benefit of the Egyptian community and economy and to attract foreign investment. Such rendezvous reveal a clear insight of the future and the chance for investors to get answers to their concerns, observations, and ideas, and link investors, legislators, and executors together.

What is your company’s expansion plan in the Egyptian market?

There are different types of expansions, either geographically, issuing new products, opening new distribution channels, etc. I would like to maintain confidentiality of our expansion plans until it gets approved by the board of directors.

What is the company’s position in the market after the announcement of auto and personal property withdrawal?

I would like to note that we did not stop issuing auto coverage, but we restrict and reduced it for strategic purposes. Some people thought that we ceased the issuance of auto insurance which is not correct. We still have auto insurance for a selective customer base. Our share in the Egyptian market is 3% of the general insurance sector premiums for the year ended June 2018. Note that we have a very limited portfolio in the auto insurance business. If the total auto premium is separated from the total, then our share in the market is much larger.

The reality is the intended withdrawal from the market, laying off company employees, and closing some branches, whereas nothing is true about our withdrawal from the market. AIG has a historical presence in Egypt and remains committed to the Egyptian insurance market. AIG is focused on ensuring meeting the customers’ and partners’ needs. AIG is one of the leading companies in Egypt known for innovative products and high levels of service. All of this is only possible with the dedication and professionalism of the AIG Egypt team. Like any other company, AIG Egypt is constantly reviewing its infrastructure to ensure the company is established in a way that is efficient and relevant for the customers and the Egyptian insurance market. We are pleased to work closely with our esteemed insurance regulator, the FRA. Furthermore, AIG Egypt prides itself on ensuring compliance with local regulation and participating in the development of the insurance market of Egypt. The company is committed to investment and brining international standards to its operation in Egypt. We are well on track to complete the restructuring actions taken to secure the operation’s sustainability and long-term future. In addition, AIG Egypt’s strategy is set and its three-year business plan is already in motion to take AIG Egypt’s operations to the well-deserved international level.

What is the parent company’s strategy in the Middle East?

I represent AIG Egypt only and answer only questions related to my company.

What about AIG Egypt’s 2017 financial position/balance sheet (performance)?

AIG has a strong financial position and adequate assets to cover its labilities towards the policyholders and the shareholders. The company’s assets increased in average by 19% for the last three years even after distributing dividends of $10m to shareholders in 2017.

The pledged investments to the regulator are higher than the policyholder rights by 234% (at net basis) and higher at gross level (as required by the regulator) by 45%. All investments are either in cash and cash equivalent or governmental securities (i.e. very conservative with minimal risk), and 77% of the receivables are from clients that have been with us for less than three months. The above shows the strength of the financial position of the company.

What are the company’s new products?

We have been honoured to be tasked by the FRA to prepare a product covering cyber security risks. This product has already been processed and delivered to the authority and reviewed by them. We have already received their approval last week. I want to thank the FRA for giving us the chance to contribute in providing them and the market with such an important product, as part of the authority’s efforts to protect companies, especially the financial, banking, and asset management companies from risks that they may be exposed to.

Digital nations are confronting an increase in cyber security threats in both public and private sectors causing widespread disruption. Egypt is a nation on its way to digitalisation and this risk is to be mitigated. Companies that suffer data breaches will sustain heavy losses due to theft or loss of data, data destruction, legal expenses (advice and defence) in addition to revenue losses from network or computer outages, including cost of restoring lost data, cyber extortion expenses among other risks. AIG offers coverage in the event management, network interruption, and cyber extortion risks.

We also intend to enter the field of micro and small, and travel insurance products along with the principal core that characterises AIG which are property and accident insurance and reinsurance. For the time being, we will also be in track with the regulators.

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Egypt among top 20 fastest-growing markets, if we want to grow, we need to invest in this country: Twitter’s Middle East, North Africa managing director https://dailynewsegypt.com/2018/12/25/egypt-among-top-20-fastest-growing-markets-if-we-want-to-grow-we-need-to-invest-in-this-country-twitters-middle-east-north-africa-managing-director/ https://dailynewsegypt.com/2018/12/25/egypt-among-top-20-fastest-growing-markets-if-we-want-to-grow-we-need-to-invest-in-this-country-twitters-middle-east-north-africa-managing-director/#respond Tue, 25 Dec 2018 09:00:23 +0000 https://www.dailynewsegypt.com/?p=685006 We value increasing ad revenues, but not at expense of platform users’ safety, health of conversation, says Ampen

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Twitter can be described as one of the top online news and social networking platforms on which users post and interact with messages known as “tweets”.  California-based Twitter Inc has more than 25 offices around the world.

Created in 2006 by Jack Dorsey, Noah Glass, Biz Stone, and Evan Williams, Twitter managed to rapidly gain worldwide popularity. In 2012, over 100 million users posted 340 million tweets a day, and the service handled an average of 1.6bn search queries per day.

In 2013, it was one of the ten most-visited websites and has been described as ‘the SMS of the Internet’. As of 2016, Twitter had more than 319 million monthly active users.

The social media platform has been the centre of debates and news covering politics of the United States and elsewhere, especially during the 2016 US presidential election, Brett Kavanaugh’s Supreme Court nomination, and 2018’s US Midterms.

Twitter proved to be the largest source of breaking news on the day of the 2016 election, with 40m election-related tweets sent by 10 pm.

Daily News Egypt interviewed Twitter’s Middle East and North Africa Managing Director, Benjamen Ampen, to find out about the company’s latest financial results and future plans, the transcript for which is below, lightly edited for clarity:

How did your business perform in the third quarter (Q3) of 2018, what did you do differently?

We managed to increase our advertising revenue by 29% year-over-year (y-o-y). We actually did not do things differently. These trends of revenue growth have been going on for several quarters, and this is the result of different efforts that we have been doing on our products. When you think about it, we wanted to make sure that we kept improving the value for advertisers, through better engagement and ad-relevance.

As a social media platform, we fully took advantage of the original investment for advertisers in terms of value – engagement and reach – and price.

It has never been clear what Twitter specifically brought to businesses, but we now know that Twitter has the most valuable and receptive audience. It is a message that we have been perceiving, and now the market is responsive to it.

Do you think that the current growth rate is sustainable?

For the remainder of the year and the year after, we are very optimistic about our ability to maintain our priorities and value for advertisers. Making sure advertisers will reach their audiences when they are most receptive is one of our priorities, so they can get better returns and engagement. We also make sure to build trust with our customers. In Twitter, we want to keep our leadership in terms of quality, transparency, and accountability.

Increasing ad revenue growth without affecting the quality of user experience is a challenge, how do you plan to keep this balance?

It is a very important point. We prioritise the platform users’ experience and the health of the conversation. When you look on Twitter, you need to think about what we are advertising on it—unlike other platforms—we only take content that already exists in public, and use our products to amplify it. As it is very selective, we are really far from ad saturation.

At the end of the day, what matters is the relevance of these ads, if we manage to present ads that are really relevant to users, we will know because they will engage them, unlike other social media platforms.

To summarise, first, we keep in mind the health of the platform, to ensure peoples’ safety, followed by content relevance. Second, we are working on our products to ensure that they add value to our users. Third, we keep a very close eye on how we think about advertising on Twitter, because advertising should not be a nuisance.

Data privacy was one of 2018’s controversies; as a platform how do you protect your users’ data? 

This controversy about data is linked to the health of the platform. Twitter is very unique because it is public, so when you think about the tweets on the platform, they are public and searchable. The majority of Twitter users choose to engage in public conversation, so any data we have is not private. It is very important to highlight that we do not provide any personal data, only the ones that are already public.

How can Twitter balance protecting freedom of speech and combat hate speech?

Improving the health of our platform is our main objective. We are fundamentally rethinking how the platform works, so that together we can increase the collective health, civility, and openness of the conversation on Twitter.

What are the latest developments about Twitter’s new verification standards? When can we expect it?

Verification was meant to authenticate identity and voice, but it was misinterpreted as an endorsement or an indicator of importance. We recognised that we have created this confusion and are working to resolve it. We have suspended all general verifications and we will report back soon.

For Arabic Twitter, can you tell us about the original Arabic programmes that were produced on Twitter?

Globally, when we are talking about our numbers, we mention higher engagement. We have a 9% y-o-y user growth, which is a good indicator. I am mentioning this because with local presence – like our regional office – we are making sure that we contribute to that.

In the Middle East and North Africa (MENA) region, we recognise the appetite for high quality and premium content. Taking into consideration that most of the region is actually talking in Arabic on the platform, we make sure that we provide programmes that add value to the users.

We introduced three Arabic language programmes that were produced by our partners. Twitter is not producing this content, we work with the best content producers out there.

In Ramadan, for example, we introduced a programme called #HawanahZein, which is an evening Arabic show that focused on what was happening in the Arab world on Twitter during the holy month. The show attracted an average of half a million viewers per episode.

During the FIFA World Cup, we introduced #YallaGoal, an evening Arabic show, which focused on football-related news on Twitter during the tournament. The show had an average of 400,000 viewers per episode. All in all, the show attracted a total of 10m video views, which included both the live episode and highlighted clips. In Egypt, this show had different people presenting the talk show, one of them was Hany Hathout, the famous Egyptian sports presenter, to make it more relevant to the region and Egypt. As Egypt is one of the most important markets when it comes to football, this show was filmed in Cairo.

Most recently, Sayidaty, a women fashion magazine, launched #FrontRow, an evening Arabic fashion series, that coincided with the Big Four Spring 2019 fashion weeks in New York, London, Milan, and Paris. The show generated an average of over 260,000 viewers per episode. All in all, the show generated a total of more than 6m video views, which included both the live episode and highlighted clips. This is the first live fashion news series to ever take place on Twitter—globally.

*Editor’s Note: live streams of fashion runway shows have taken place on Twitter but there have never been any fashion news series until this show was launched.

How much was MENA’s share of Twitter revenues?

We do not break down our revenues by country or region. However, we can say that Egypt is one of the top 20 fastest-growing markets globally. For the region, although I cannot share the exact number of revenues, I can tell you that we are at an all-time high.

How do you plan to increase Twitter’s penetration in Egypt?

When we think about Egypt, we know it is the biggest country in the region. Consequently if we want to grow on the long-term, we need to invest in this country, and that is something we have been doing through several initiatives. Earlier this year, we had a team working on Egypt’s presidential election, ensuring that the poll results were streamed to increase engagement. In all the world, not only Egypt, elections are usually a big driver of user growth.

During the FIFA World Cup, we had a content publishing team dedicated to the Egyptian national team, as we understand how important football is in Egypt, so we saw it as an opportunity for us. We made sure that the full squad were on Twitter. It was not only about Mohamed Salah, as the other players are important as well to the Egyptians. We had video highlights on the platform about what the Egyptian team was doing during the tournament, in partnership with Presentation Sports.

In the next year, there will be more programmes as well, bringing new users on the platform. On the advertising side, we have been working a lot with different organisations that can have an impact, such as the World Youth Forum in Sharm El-Sheikh.

When it comes to ‘Twitter moments’, do you plan to introduce country-specific moments?

Twitter is about what is happening in the world, more than something specific in a certain country. In Egypt’s case, ‘moments’ are curated for Egypt, however, some regional moments are also included, and the chronology of publishing moments varies based on whom the publisher is following.

You have recently conducted a study, have you shared it with marketers?

The study confirmed what we have already known, that Twitter users are more valuable, as people on Twitter usually aim to discover and engage with new content.

In Egypt, the study confirmed that Twitter is the best place to see ‘what’s happening’, to follow developments in real-time and to ‘see every side’.

In this study, Twitter wanted to better understand why its users are turning to the platform to see what is happening, and what makes their user experience unique. Watching news in real-time, as it happens, and being closely immersed in the action is one of the main strengths of Twitter, with 72% of users turning to Twitter for news (85% amongst daily users).

In terms of user experience, the findings revealed that people who want quality news turn to Twitter. Users in Egypt like to use the platform because news spreads faster on it (71%), they can follow developments in real-time (69%) and can ‘see every side’ of a story (72%). They are also heavily reliant on Twitter for news, when something is not discussed on Twitter, they question its significance (61%).

What are the latest product changes that you have made?

We keep on pushing a lot on videos, because today more than half of our revenues come from videos, so we keep on investing in it. We have also added the ability to stream audio only. What is interesting that we have seen that a lot of people used our streaming options for audio only.

Twitter has managed to remove a tonne of fake accounts during your latest campaign against the issue, will we see more removals?

As we discussed today, health is our main priority in Twitter, and removing spams is an essential step towards achieving this goal. This is not just a campaign, it is something that we will continue doing, and recently we introduced more measures to handle spams and data manipulation.

We have reduced the visibility of suspicious accounts, to ensure that it is not possible to artificially boost an account, and we have created an update to enforce the fact that every account must validate itself by using an e-mail and a phone number.

In terms of numbers, as of May 2018, we have identified more than 9m potential spammy automated accounts per week, up from 6.4m accounts per week earlier.

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There will be no float of shares before mid-January 2019: Minister of Public Enterprise Sector https://dailynewsegypt.com/2018/12/24/there-will-be-no-float-of-shares-before-mid-january-2019-minister-of-public-enterprise-sector/ https://dailynewsegypt.com/2018/12/24/there-will-be-no-float-of-shares-before-mid-january-2019-minister-of-public-enterprise-sector/#respond Mon, 24 Dec 2018 06:00:47 +0000 https://www.dailynewsegypt.com/?p=684870 I have agreed with minister of planning to put some of ministry’s assets in Egypt’s sovereign wealth fund, through two sub-funds dedicated for hotel management, real estate development

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With the beginning of the new year and after six months in office, the Minister of the Public Enterprise Sector, Hesham Tawfik, said that the government initial public offering (IPO) programme that starts with the Eastern Company for tobacco manufacturing will not be initiated before the end of the holidays in January, since most of the clients are foreigners. During an interview with Daily News Egypt, Tawfik explained that the company will not be floated before the price reaches EGP 18.7 per share, adding that it will be difficult to set a deadline for the programme anyway following the delay that occurred in the

wake of the emerging market (EM) crisis. He also discussed an agreement with the health minister concerning the repricing of the medication by some companies in order to enable them to attain profits and restructure their companies.

Furthermore, he clarified the ministry’s vision and its goals in the coming year, such as reorganisation losing companies, settling the debts of the companies, and developing the different sectors of yarn, textiles, steel, fertilisers and others. The transcript for the interview is below, lightly edited for clarity.

The ministry of public enterprise has prepared a new business strategy. What are the most important features of this plan and what has been achieved so far?

We have 121 subsidiaries of eight holding companies. The business results for the fiscal year (F Y) 2016/17 indicated that there are 73 companies that profited EGP 15bn and 48 companies that lost EGP 7.5bn, which means that total losses reached EGP 7. 5bn. These 48 have been losing for years. The shareholders’ equity reached a negative of EGP 39bn. We penned a development plan for 26 companies in the first phase, which realised losses of EGP 6.7bn,accounting for 90% of the total losses of the 48 companies. We studied the strengths and weaknesses of these companies, and reached a conclusion for the restructuring of them. In addition to the 26 companies, we have others that profited but still need restructuring, investment, and vision to increase their efficiency and profits. We are talking about 40 companies out of 121 companies that we will focus on in the first phase.

We have already started the operational procedures to restructure these companies, based on consultants’ reports and recommendations in order to identify the steps to be taken. In general, we know what needs to be done, but there has to be a specialist consultant to individually examine the case of each company and determine what should be done and then float them to reach a full structure.

Are these consultants Egyptian or foreign?

We are dealing with a mix of local and international consultants, but the bulk of them are local. In the spinning and weaving sector, a US consultant has prepared a study of 11 volumes for the development of the sector.

What about the financing— the ministry has surveyed unexploited lands. How will they be utilised?

Financing will be through the exploitation of unneeded assets owned by companies. For example, there are a number of cotton ginning factories that are under developed and have been operational since 1894, but they are using more energy and outputting poor production, in addition to the lands.We have 25 ginning plants that are not needed, especially if we consider the new machines that will be imported. These will save energy and give better production. The number of plants will be cut to 11, then we will utilise the land of the other 14, which will return over EGP 25bn.

As for the land, we surveyed over 200 untapped assets. We are taking all the necessary step to sell these lands at a high value after changing their designated use. Most of these lands are assigned for industrial use and will be turned into residential areas. Funding will come mostly from the land sale. The public enterprise sector, is very rich in assets. There has

Minister of the Public Enterprise Sector, Hesham Tawfik been negligence in the past. We have currently put an end to it, and we are presently embarking on a radical development plan.

How will the land be sold?

The land will be sold through auctions carried out through companies under the supervision of the ministry. However, this will only happen after the completion of the most important step which is switching land use. We have set up a unit in the ministry that works particularly on this file, and they have called on real estate evaluators to quickly finish the assessment and to put up the lands in auctions as soon as possible.

When is the first auction expected?

The auctions will begin before the second quarter (Q2) of 2019. We will need about one and a half years to sell all the land plots. Most of these land will be sold, but part of them will be used on partnership systems, meaning that the ministry will bring in developers and contribute lands for the developer to carry out the development.

Following the sale of assets and land, what mechanism will be used for financing?

There are two levels of finance. The first level is that the same companies that sell some of their own assets will themselves use the sale proceeds to develop their subsidiaries. There will be no role

for the ministry here. The second level is that the sale proceeds will be used to develop the assets of another holding company. Hence the holding company that will sell its assets can reinvest through the development process by increasing its capital.

The ministry has exerted great efforts in the debt settlement file.What has been accomplished in this file and to what extent will the companies benefit from the settlements that will be made?

The total debts of the troubled companies to sovereigns bodies are about EGP 35bn. These are owed to several bodies, such as the ministries of petroleum, electricity, the National Investment Bank(NIB), the Egyptian Tax Authority and Social Insurance Authority.

There are agreements for settlement with three parties worth EGP 23bn, owed to the ministry of electricity, the

ministry of petroleum, and the NIB. We are targeting to sign protocols with the remaining amount over the next three months. Payment will be made in accordance to these protocols through a land swap mostly, and in some cases in cash. It has been agreed that the payment of any new commitments will be in cash. After paying these debts, companies will be able to recover their activity in a way that allows them to pay their debts and improve their financial structures.

The IPO’s file is one of the ministry’s most important files, and is at the top of the government’s concerns. But the conditions of EM and the stock market prevented it from taking off.When will the programme start, and when will the Eastern Company for tobacco manufacturing be offered or, more accurately, what are the price limits at which the offer is made?

We are now in a holiday season and

since the bulk of the potential investors of the Eastern Company are foreign, I cannot address them before the middle of January.There will be no float of shares in 2018. The price limits at which Eastern Tobacco will be introduced are EGP 18.7 per share.The current price is a little over EGP 17 per share, approaching the limit. When the share price hits EGP 18. 7 it should remain stable for some time. Then, the NIB will welcome the float.

The decision of the Cabinet states that the shares of the company offered for sale shall be sold according to the average price per share in the month preceding the contract with the NIB. EFG-Hermes has been hired in October, but the IPO was delayed. What will you do?

The contract will not change, and we are committed to the prime minister’s decision and to the average price in the month preceding the contract at EGP 18.7 per share. The IPO will not take place before share price reaches this value.

And what about the planned government IPO porgramme in general. Are there any changes in the list of companies being offered or the timetable for the IPO?

We have to wait to complete the first phase, which did not start yet, then decide. We do not yet know when the first stage companies will be offered. Therefore, a certain period of time cannot be set, it will be determined according to the stock market situation and EMs. It may take longer, hence a need might arise to reschedule the IPO. With regard to the companies listed, after the first phase, a list will be made for the second phase, which will include 10 companies. At that time we can review the list. So far, there is no change in the plan, or more precisely, when we finish the first stage, we can determine whether there will be a change or not in later stages.

With the ministry of finance needing funds at the moment, especially with its external commitments and delaying the disbursement of the International Monetary Fund (IMF) tranche for December? Will the government bring forward the IPO programme ?

The money that will be raised from the offering of companies is only a drop in the ocean. The purpose of the sale is not financial as much as it aims to raise the efficiency of companies by increasing the contribution of the private sector, as well as attracting equity financing for the companies and will also help expand the Egyptian stock market’s capitalisation. The secondary objective is to support the state treasury.

How will the raised funds be used?

The main target is to allocate the money to holding companies. For instance, Eastern Company is a subsidiary of the Chemical Industries Holding Company, which is indebted to other subsidiaries and will need money to repay these debts. There is another dimension, namely, that these funds go to the ministry of finance, if the holding companies that own the shares do not need the raised funds.

Privatisation has a such a bad reputation in Egypt. Is the ministry worried about the resale of companies to the private sector?

Privatisation is the right word for companies exiting the public sector and entering into the private sector. But I want to explain something important, this bad reputation resulted from the fact that many companies privatised in the early nineties have had problems and these problems stemmed from being sold to a strategic investor—that is, the seller did not follow the necessary procedures to obtain the highest price, or proper procedures to maintain the company’s activity. Many strategic investors who bought public sector companies had the right to take assets, liquidate the company, and sell the assets.

Now the situation is different, the new programme is basically a public offering on the stock exchange. The exception will be the presence of strategic investors, which did not happen until now. If that happens, though, it will be done with restrictions to ensure that the investor continues running the company. This is the difference between old-time privatisation and today’s.

How will you address fears of workers with the return of privatization?

We are in talks with all concerned parties, and we involve them in the stages of the appropriate decision making process of the companies, to ensure the interests of the state, while maintaining the workers’ rights. We also reviewed the ideas of union leaders on the reform and development of companies. The ministry issued instructions to the holding companies to abide by what has been agreed on and impose Law No 96 for 2018 related to granting bonuses for employees of the holding companies

and their subsidiaries. The bonuses of holding companies’ employees exceed, under this law, the minimum set for government employees. This was welcomed by union leaders.

What are the steps taken to address the returning companies to the ministry’s ownership?

There are two special cases in this file so we have started with them, the Nile Cotton Ginning Company and Omar Effendi. With regard to the Nile Cotton Ginning Company, we focused on solving this situation because it belongs to 5,200 investors that have been ignored by the government since 2011. We talked with them and reached solutions to implement the return verdict and enabled them to free their funds and compensate the government. In this case, we will return the shares to their ownership and the company will belong to them. They will hence be free to sell the assets and the lands since the company stopped production. But the most important thing in this agreement was the basis of selling the land. It was agreed to evaluate the lands now using the residential use evaluation and the industrial use evaluation then use the price difference to compensate the government. That way, the verdict will be enforced, and helped investors to free the company and its assets.

For Omar Effendi, the company is in our possession and under our management, yet it has been crippled in losses for 10 years. The company has debts to local and foreign bodies, which have increased. The management was able to reschedule the loans and lower the interest paid. A few days ago, we witnessed the signing of an agreement to settle the dispute between the company and the International Finance Corporation concerning the indebtedness owed to the corporation, as well as its share in the company’s capital worth $35m. This was a huge burden on the Holding Company for Construction and Development that managed the company. If no real estate development takes place for the company, it will be very difficult to revive it. After finishing these two cases, we will deal with the remaining cases.

The ministry adopts a different approach to losing and low-profit companies? Will we witness new mergers and liquidation in the coming period?

Merger is exception, not a general solution, and we only resort to them when the company’s case calls for it. For example, we have three public transport companies under the Holding Company of Maritime and Land Transport. For the world, these are just lines merged in one company. Foreign trade companies should also be merged to save expenses. When there is an incentive for a merger, we will do so.This does not mean turning a corner towards profitability, as it will

need more plans to restructure companies. As for the liquidation, only one company, the National Company of Cement, was liquidated. This was the last solution when there were no other alternatives. We resorted to this decision after making sure that it is useless to inject any investment or undertake any development to reduce losses.

El Nasr Automotive Manufacturing Company is also one of the important files at the ministry’s table, especially with the dream of manufacturing an Egyptian car.There have been talks for a global partnership. Have you received offers yet?

We seek and strive to have a global partner like the situation in Morocco.We are talking with the ministries of industry and investment to reach a global partner and target export mainly.We sat with one of the world’s biggest companies last week to talk about possible partnership. We have not yet received any actual offers. But there is a need to turn Egypt into a base for manufacturing and export. Instead of concentrating on automotive assembly, we want to add local value to manufacturing. This will only happen by directing production to foreign markets. Hence, our goal is to attract an investor who does not want to manufacture only for the domestic market, but also wants to target external markets. El Nasr can be the base that will be used by the partner investors for manufacturing and exports. There are calls for Egypt to manufacture cars and it is possible that El Nasr may play this role. Hence, it is our goal to choose the right partner. El Nasr is a gem that will be retained for a partner capable of producing 50,000-60,000 cars per year. Despite the company’s annual losses marking EGP 12m, when I visited the site, I expressed my admiration for them, and the maintenance of equipment in the best form.

What are the criteria for choosing a foreign partner?

We will choose the foreign partner on a technical basis. And the deal would be a partnership contract, based on the sharing of profits and not a contribution rate. For example, the goal is currently to produce100,000 cars, but if production is only 3,000-5,000, we will then terminate the partnership and impose a fine as stipulated in the contract.

What about the merger of El Nasr with the Engineering Automoative Manufacturing Company (EAMCO)?

The merger may be determined by the global partner we are looking for. The merger is an exception to the rule and only when there is an incentive. If we agree with an investor to produce 60,000 cars, then we may discuss a merger as the capacity of El Nasr alone cannot achieve that goal.

There is always a confusion between the role of the sovereign wealth fund and the role of the ministry. Can you summarise the difference?

There is no conflict between the role of the fund and the role of the ministry. Egypt’s Sovereign Wealth Fund aims to invest the unexploited assets as well as developing the exploited ones. For example, a company that has a land can

contribute it for a project and Egypt’s Sovereign Fund can finance this project, or it can also buy the entire land. The role of the fund is preserving the rights of future generations in the public assets. It will be specialised in investing and developing unutilised assets. There may be cooperation between the ministry and the fund to exploit the assets of any company. I have already agreed with the minister of planning to put some of the ministry’s assets in this fund, through two sub-funds as a start. These sub-funds will be dedicated for hotel management and real estate development.

What is the ministry’s plan for the pharmaceutical companies and the problem of medication pricing?

We have a big problem in these companies, as they are losing. There were 570 pharmaceutical products losing in the public enterprise sector. We agreed with the minister of health to reconsider the pricing of medications. The types of medicines produced by these companies are not produced by the private sector and we produce them at very low prices of EGP 1-10.

When production stalls, the private sector imports the medicine at five or seven folds the price. So, we offered to provide them at reasonable prices in order to make some profits and continue production. The ministry of health started to fix the prices. We managed to achieve profits that en- abled us to invest in the development of these companies. There is a plan for exporting to Africa and Arab countries. Here, it should be noted that pharmaceutical companies’ restructuring

plans are worth EGP 750m and will all be funded from untapped assets.

Where is the development textile sector currently standing?

Only nine of 23 textile companies in the sector lost EGP 2.7bn, which is the biggest loss in the ministry’s companies. Holding companies have conducted a detailed study with a global consultant,which identified the needs of the 23 companies in terms of machinery and ginning equipment. Therefore, we decided to start with some companies which represent 60% of the factories we have, and to complete that in the coming one and a half years. We will renew all the machinery and begin producing for profit. This includes the Mahalla Textile Company, Misr Fine Spinning and Weaving, Kafr Al-Dawwar, Misr Helwan Spinning and Weaving, and Damietta for Spinning and Weaving. A plan has also been put in place to integrate com- panies into 10 instead of 23. There will be three major industrial complexes that will be the foundation for the industry starting from spinning to garments in Mahalla, Kafr Al-Dawwar, and Helwan. And we have already started to work out a plan for the entire industry with unprecedented investment figures over the next three years, in order to modernise the entire industry. Some factories will have equipment from the best sup- pliers of machinery in the world, at an estimated cost of up to EGP 25bn.

What about the development of the Egyptian Iron and Steel Company?

An international consultant made some recommendations to assess the condition of the furnaces and determine the actual development required, which we have done. We started operations at a maximum capacity of 420, 000 tonnes and will stop in January for the consultant to re-evaluate the situation.

We hope that there will not be major damage so that we can begin the tender procedures. We will not make direct offers, but will do so through a tender, even though some companies, including Russian ones, are offering to be involved in the development process.

Can the Egyptian Iron and Steel Company face the same fate of the National Company of Cement?

We are keen to develop the Egyptian Iron and Steel Company. We have been operating the furnaces at full capacity for four months now, based on the consultant’s recommendation to evaluate their condition and prepare an integrated plan to develop the company. The position of the development project will be evaluated in February to ascertain the technical and financial feasibility. This plant was built in the 1950s. Until 2008, the company was profiting, even if poorly, due to the old age of machinery. Yet, since then, the company starting incurring losses, due to the variables of prices of energy and row materials. In 2014, the company hired an international consultant to study the development potential.

The tender was floated in 2017 but was suspended to renew the study. On 17 August 2018, we received the new results that indicated that the condition will be very different from 2014, so we cancelled the tender.

What about the development of employees and management systems?

In addition to investment in machinery and equipment, we are focusing on investment in human resources. We aim to automate business within companies through the system of planning and management of resources (ERP).This is a system that can be used to significantly raise efficiency. The private sector adopted this system 30 years ago. We aim to apply it in 70 of 120 companies, which are the companies whose sizes will enable us to spend that much on development. The other companies are small, so it will not be feasible to introduce this system into them. A tender for the consultancy job will be opened on Sunday. Then, we will begin preparing the specifications and prospectus to begin implementing the project in Q2 of 2019.

We also established central marketing and sales departments in holding companies.With the exception of a few companies with marketing units, many are still unable to market their products, which reduces their ability to attract marketing staff.

What about the ministry’s mandate to the housing companies affiliated to the Holding Company for Construction and Development to submit an action plan for the development of 50% of their land portfolios?

Companies are going at a good pace in this file. The companies submitted their development plans and they are currently being reviewed. Heliopolis Company for Housing and Development will not report to us but to the board of directors, being part of the IPO programme. It will then be a joint company. We will be only shareholders with 30-40% of the company.

There was a proposal from the Egyptian Capital Market Association to re-examine the stamp duty and capital gains.Where is this standing now?

Stamp and capital gains taxes are under discussion with the ministry of finance and we expect to reach a final decision soon. The ministry of finance is responsible for this file, but I act as a mediator because I have an industrial experience.

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Egypt informal settlement-free by 2019, quelling it fully by 2030: executive director of ISDF Khaled Seddiq https://dailynewsegypt.com/2018/12/23/egypt-informal-settlement-free-by-2019-quelling-it-fully-by-2030-executive-director-of-isdf-khaled-seddiq/ https://dailynewsegypt.com/2018/12/23/egypt-informal-settlement-free-by-2019-quelling-it-fully-by-2030-executive-director-of-isdf-khaled-seddiq/#respond Sun, 23 Dec 2018 10:00:47 +0000 https://www.dailynewsegypt.com/?p=684766 President Al-Sisi cited decree to consider NUCA’s budget surplus as new source of funding our projects

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In his election programme, President Abdel Fattah Al-Sisi, in first and second term, has undertaken the task to eradicate one of the most significant and critic problems in Egypt which are informal settlements.

Beyond any doubt, this undertaking is close to becoming a rality, especially, since the Informal Settlements Development Fund (ISDF) has announced that Egypt will be slum-free by 2019.

In an interview with Daily News Egypt the Executive Director of ISDF Khaled Seddiq unveiled the amount of funds that were allocated to reach this goal, in addition to how Egypt will be reshaped by 2030 in this respect, the transcript for which is below, lightly edited for clarity:

Is it true that Egypt will overcome one of its most significant obstacles which is the informal settlements issue?

That is correct, Egypt will be slum-free by the beginning of 2019, according to the schedule which was set by the ISDF, in cooperation with all concerned bodies.

However, some people and concerned persons debate this fact, considering it as an impossible goal. What do you say?

It is not impossible any more, and all these allegations are not true, especially that we developed quite a number of informal settlements all over Egypt.

So, how will you reach this achievement?

We have already finalised 102,000 housing units, in addition to other 93,000 units which are under-construction. Furthermore, we will inaugurate a number of housing units in four concessions in Port Said, Beheira, the Red Sea, and Sinai governorates, in addition to the third phase of Al-Asmarat housing project that will be inaugurated during 2019.

And what about Cairo in particular?

Cairo needs about 40,000 housing units to be built to eliminate all types of informal settlements, especially unsafe settlements, and these units will be completely established by 2019. The Al-Asmarat zone includes in its three phases 18,500 units. In addition to the ‘Ma’an’ housing project which offers 4,500 units, and Al Mahrosa housing project which includes 4,900 units. Moreover, the Ahalina housing project offers 1,200 units; 6,800 housing units which are built in the ministry of military production’s housing project, beside the Khairallah housing project that offers 2,520 units. In addition to 1,000 housing units that we will build for the people of Maspero Triangle zone inside the zone itself.  All these efforts are enhancing our plan to make Cairo slum-free by 2019.

That’s for unsafe settlements, but what about for un-planned ones?

Egypt contains 32 cities over 417,000 acres,160,000 from this space are unplanned areas which shape 40% of Egypt. These areas lack infrastructure like roads, sewerage systems, and all kinds of utilities. It requires £350bn to develop it completely by 2030.

One of your goals is to improve the Maspero Triangle zone, can you elaborate?

Although the project of improving the zone was set to begin by 2019, we decided to buy some time, thus, we have begun during 2018. We have already torn down all buildings in the area. In addition, constructing firms have begun their work, and are implementing the area’s development project.

What is the expected time frame to completely improve the area?

Within three years, so by 2021, the residential area will be completely established. 1,000 families will be resettled there over an area of 6.5 acres.

But the residential area was set to be on 11 acres, why has is decreased?

Because, we decided to increase the heights of the apartment buildings, thus, we horizontally decreased the area.

And what about the rest of the area, and the projected investments there?

It is not a matter concerning the ISDF authority. It is a matter related to the owners of land spaces inside the area and the bodies that will offer those facilities to implement their projects.

But you must certainly have a vision in this regard according to the construction proposal?

It will include entertainment facilities, services, commercial activities, and some hotels. Investments in the area will reap profits from these activities. Additionally,, the residential towers will not exceed 30 floors which the investors will build there.

What is the budget that is allocated to improve this zone?

About EGP 1bn, in addition to contributions from investors.

Who are the incumbent owners there?

Six big owners, including two Saudi companies; Maspero company which owns the building of Radio and TV Union; a holding company followed the business sector; an Armenian Church; an owner of a space of land inside the area called Diob, in addition to some small holders.

But there is also a Kuwaiti company, correct?

Yes, but, unfortunately, the Kuwaiti company, which owns about 42,000 metres, and another owner called Jan Eid, who owned a space of land inside the area, have not yet introduced any of documents which proves their ownership. Therefore, according to the building code, we have set out to take all procedures towards expropriation, and these spaces of lands will become state property subject to the New Urban Communities Authority (NUCA).

What about the project of transferring informal local markets outside Cairo which has been set since 2015?

This project has been cancelled, as if we transferred these markets outside Cairo, inhabitants would not have coped with this situation, and it would have been a hard situation for them. Moreover, transferring them will maximise the phenomena of informal markets, as citizens will create an informal market to meet their demands.

What about the new project?

The new project aims to establish a formal and organised new market as a replacement for every informal one in its closest zone to meet all the demands of customers and buyers alike. For instance, we established the new Tunsi market, as a replacement for the old one, about 500m from its previous location.

What is the number of informal markets all over Egypt?

There are 1,103 informal markets all over the state; 134 markets in Cairo; 84 in Alexandria; 83 in Giza, 55 in Sharqiyah; 69 in Menya; 82 in Sohag, and we classified them into three types: annual markets, weekly markets, and daily markets.

What are the effort that the ISDF has introduced to improve them?

Thirteen new markets have been established, 24 markets are under construction, and 26 informal markets are under consideration.

What is the source funding all these efforts improving both informal settlements and markets?

From the general state budget, but President Abdel Fattah Al-Sisi issued a decree to consider the NUCA’s budget surplus as a new source of financing our projects. That decree come into effect as of the fiscal year (FY) 2016/17.

Is the private sector sharing in this regard?

The Tahya Misr Fund is contributing with £1bn, while National Bank of Egypt NBE, and number of businesspersons are contributing with £ 600m, and the Ma’an Foundation is contributing with £ 275m. But we do not accept any kind of pledges.

What is the budget that was set to eliminate all kinds of informal settlements?

Over £ 20bn. It hits EGP 15bn in FY 2018/19. During a period of six years, from the beginning of the ISDF work in 2008 until 2014, the total expenditures to improve slums had reached EGP 652m, then, from 2014 to 2018 expenditures in this regard exceeded EGP 12bn, besides a share of EGP 2bn has been spent by citizens as an effort to improve their areas. In FY 2015/16 the budget recorded EGB 1.5bn, while it was doubled to reach EGP 3.5bn in FY 2016/17. In last four years the expenditures volume on improving informal settlements hit twenty times what had been spent before 2014.

What is the key factor that drives the ISDF to deal with this critical issue?

The attention payed by President Al Sisi to this sector, and his instruction to all concerned bodies to offer all facilities in this regard is the key role that will help Egypt to become slum-free by 2019. Dealing with this issue in previous times happened by accident, I mean when a disaster occurred the concerned bodies would move to act without a strategic plan in the short and long run. Currently, on the contrary, we have an integrated plan and we are close to achieving a complete overhaul in the informal settlements issue.

Does this sector need a ministry to be dedicated to deal with it?

There is no need to dedicate a ministry for this sector. This issue needs more interest to be paid to it and a will to go ahead. And, when all these factors were available, in addition to the required fund, we were able to make a significant headway.

According to Egypt’s vision 2030, what is the projected situation of slums in the country?

By 2030, Egypt will be completely slum-free, and all unplanned areas will have improved, in addition to all informal markets. In 2030, Egypt will be reshaped.

For private sector, what do you have to tell them?

I call on all businesspersons to invest in improving districts and cities. In this regard, the ISDF launches an initiative through the Daily News Egypt offering them designs, eliminating fees, in addition to getting licenses from concerned authorities to stimulate them to become member in improving our country.

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