Interviews – Daily News Egypt Egypt’s Only Daily Independent Newspaper In English Thu, 23 May 2019 01:41:10 +0000 en-US hourly 1 Kazakhstan offers huge investment opportunities: AIFC Wed, 22 May 2019 15:00:21 +0000 Among the priority goals of the AIFC are the development of the human resource potential of local financial market specialists, the popularisation of international professional certifications, and boosting investment.

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The Astana International Financial Center (AIFC) is a financial hub that serves the countries of Central Asia and the Middle East. Daily News Egypt interviewed Sheikh Bilal Khan, a member of the panel of arbitrators at the AIFC International Arbitration Center and a member of the AIFC Advisory Board on Islamic Finance, to understand the centre’s main areas of activity, investment opportunities, development of the capital market, most promising sectors, and the IPOs programme.

Among the priority goals of the AIFC are the development of the human resource potential of local financial market specialists, the popularisation of international professional certifications, and boosting investment.

What is your advice for Egyptian, Middle Eastern, and African investors?

Regarding the opportunities in AIFC, I can say that this place is open for business. What I mean by that, is as an investor or institution, you can have the comfort or the luxury of AIFC, giving you a gateway to the entire central Asian market, or even the Chinese and Russian markets.

When you are registered in the AIFC, you will not fall under the jurisdiction of local laws in Kazakhstan or Central Asia. In fact, you will be registered and regulated by the English common law system.

AIFC has British courts, and judges here, my self being one of the judges in the international arbitration court here.

Additionally, the centre gives you 50-year tax exemptions, simplifies your visa regulations, offers free office spaces, and the license costs only $200, not $100,000. Even if you get your license today and didn’t open your business immediately.

Unlike Dubai, where you have to be physically on the ground, here you don’t have to be, you can get the licence and still set somewhere in Egypt for example, and this as a branch, and all you need is one local Kazakh to take care of it.

Opportunities and return on investments are huge, there is so much privatisation going on in Kazakhstan, and infrastructure development.

If you are an investor or a financier, you want to be able to take a piece of this cake, before somebody else comes.

From your point of view, what are the most promising sectors in the country?

Kazakhstan has huge opportunities in different sectors. Education and health sectors are also available for business.

However, the major area would be agriculture, and the Arab world needs that a lot, it could provide for an excellent opportunity for importing and exporting of agriculture products.

Also, the financial services sector, if they come here, they would be able to attract a lot of investments, they can even set up an Islamic financial institution or bank here, as there are hardly one or two.

So, if an Egyptian Islamic bank or financial institution, or takaful company opened here, they will get an excellent return, as there is a huge demand.

Could you elaborate on the privatisation and the IPO programme?

There are huge IPOs because Kazakhstan is a natural resource country, every element in the periodic table you can think of, is located here.

The country aspires to be part of the Organisation for Economic Co-operation and Development (OECD). To do so, state-ownership of all assets needs to be reduced to 15%. It cannot be more than that.

Another reason is the fact that the government doesn’t want to rely just on one area, they want to diversify the economy away from the energy and the mining sector, that’s why there is an opportunity for financial services to grow here.

We have an independent stock exchange called the Astana International Exchange (AIX), which has its own listing rule, based on international rules, allowing dual listing, allowing you to list in Dubai and AIX simultaneously.

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Why Egypt dominates squash: juniors’ training plans, says Khalifa Tue, 21 May 2019 12:00:02 +0000 We rely on Ministry of Youth, Sports for funding

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Egyptian squash occupies a significant position in the world at the present time, where the top 10 rankings in early May included five Egyptian players, comprised of four players in the top five ranks, namely Ali Farag, Mohamed Shorbagy, Tarek Moamen, and Karim Abdel Gawad, in addition to Mohamed Aboul Ghar in ninth place.

On the women’s level, the list of top 10 players in the world includes four Egyptian women, among them are the first three players, Renem Al-Waili, Noor Sherbiny, and Nour El Tayeb, along with Nouran Gohar in seventh place.

With this great distinction and clear Egyptian control of the game in the world, Daily News Egypt spoke with Assem Khalifa, head of the Egyptian Squash Federation, about the reasons for the success of the game in Egypt, and the plans of the federation to maintain this excellence, the transcript for which is below, lightly edited for clarity:

What explains the superiority of the Egyptian squash globally during this period?

Squash in the whole world happens to be controlled by some countries, such as sometimes England, Australia, and Pakistan. Egypt is one of the oldest unions established in 1931. There was Egyptian control over intermittent times, such as Abdul Wahid Abdul Aziz, Abdel Fattah Abutaleb, and others. With the current federation, we put a plan based on the continuity of generations, started 10 years ago. We dealt with squash as a product that needs a lifecycle to reach the production stage. The main dependence in this plan is spending on the juniors’ sector, as developing squash champions needs seven years, starting with youngsters who are 10-years-old.

What are the sources of funding?

We rely on plans with the ministry of youth and sports. We present a study to the ministry against results. With these results, we are fully committed to the ministry. This has happened with all ministers who took the post, even the current minister, Ashraf Sobhy.

How much is the squash federation’s budget?

The budget is EGP 4-5m per year. We look at plans which require expenditures. We are working to provide private resources. We do not rely solely on government support. What happens is that we send out our plan for the size of the activity and the expenses involved–not a fixed figure. Sometimes, we continue what we did to maintain our plans with sponsors. We, however, have a fixed sponsor, namely the Commercial International Bank (CIB), which helps with many tournaments and plans at variable numbers. Dealing is done through specific suggestions we present to them in order for them to study and either approve or decline them based on the study. The CIB has been our strategic partner.

What are the preparations for the Women’s World Cup in October?

The organisation of the Women’s World Cup in October in Cairo is funded by the International Federation through its committees which work in cooperation with the Egyptian Federation, because these competitions require a substantial effort and spending which burdens the Egyptian Federation. The establishment of stadiums is beyond our capabilities, which focuses only on the players. In previous times, Al-Ahram has been organising competitions for 15 years. It was of great benefit to the game and pushed it forward. Under the current circumstances, no one can replace it except for the attempts of some businessmen such as Naguib Sawiris in the El-Gouna Championship, Hisham Talaat Moustafa with the Madinaty Championship, or Ahmed El Abd with the Black Ball Competition. These are the developments of what Al-Ahram did. Presentation only focuses on football, and it generates their revenues and plans. Those who organise squash tournaments do not earn much but do it for the love of the game.

How much does it cost to organise a tournament?

The cost of organising a tournament for squash is EGP 6m. Egypt is not a rich country but we are proud to have four major competitions like the United States despite the huge economic differences between the two countries.

Why is squash described as the game of the rich?

The shift from hobby to professionalism is what makes some feel that the game is dominated by the rich since spending has grown. The racket alone costs EGP 3,000 and players need special shoes, a good trainer, and other requirements. The lack of infrastructure for the game also limits where it can be practiced.

Does the federation use foreign trainers?

The federation does not rely on foreign coaches at all. Egypt exports trainers abroad. The salaries for top notch trainers could reach EGP 50,000 per month.

How much time is needed for training?

The good player would spend six hours of training per day. Good players know how to organise their time well.

Is squash a financially profitable game?

Good players earn well, but they have to dedicate their lives to the game. The currency floatation contributed to maximising the value of the awards. One of the reasons why squash is successful is the presence of role models like Aly Farag, Nour Sherbiny, Tarek Moamen, Nour El Tayeb, and Ranim El Walily among others.

Does the federation have a role in the sponsorship contracts?

The federation is not a party to private sponsorship contracts between players and companies, but it is a party to the contract between the player and the club. The federation has a limited role for ranked players and focuses on juniors. We already cared for professional players until they reached their current positions.

What is the difference between the Squash Federation and the other federations?

The administration is prudent and wise to manage squash, based on a strong history. It can be said that the success of the Squash Federation may have not occurred if the administration was focused on other games. Squash has some advantages, as the federation continues to develop plans to stay atop the global ranking.

Are there plans for your sports investment?

So far, there are no plans for sports investment. After the new rules, there are new clubs which we came up with. We have economic ideas which we are studying and we need the right time and climate.

How did Egyptian women excel in squash?

Women know how to adapt their own lives, the federation does not intervene, and treats all equally. This is shown by the fact the both men and women are excelling on global rankings. 

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thyssenkrupp’s to build new fertilizer complex in Egypt for NCIC by 2022: Country CEO Mon, 20 May 2019 10:52:45 +0000 Sales generated by group reach €42.7bn in FY 2017/18

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thyssenkrupp’s global sales reached €42.7bn in fiscal year (FY) 2017/18, according to the Country CEO, Thore Lohmann, who is responsible for the Industrial Solutions business in Egypt.

Daily News Egypt interviewed Lohmann to learn more about the company’s activities and expansion plans, in addition to the firm’s five years plan in Egypt, as well as the details of their last major order for a fertiliser complex in Egypt from El Nasr Company for Intermediate Chemicals (NCIC).

What is the firm’s five-year strategy plan in Egypt?

Egypt is one of our core markets. Therefore, we are marketing our full technology portfolio in the segments of mining, cement and chemicals starting from small engineering and licensing up to full EPC lump sum projects.

Secondly, we are bringing our full service knowledge to the country, providing original spare parts, field services up to operation and maintenance of entire plants.

We have a strong local presence with more than 200 employees, mainly engineers. With fostered stability in the country and the gas discoveries, we see huge opportunities in Egypt. Additionally, there is not only a big consumer market, but also export opportunities to neighbouring countries.

These are the main elements that drive our growth strategy for the next years.

The recently signed project with NCIC is underlining the market potential and at the same time the trust of our customers in thyssenkrupp as a reliable partner in the country.

Daily News Egypt interviewed Lohmann to learn more about the company’s activities and expansion plans, in addition to the firm’s five years plan in Egypt, as well as the details of their last major order for a fertiliser complex in Egypt from El Nasr Company for Intermediate Chemicals (NCIC).

Can you tell us more details about this order?

thyssenkrupp’s plant engineering business has won a major order from the Egyptian chemical and fertiliser manufacturer NCIC (El Nasr Company for Intermediate Chemicals). The order for the engineering, procurement and construction (EPC) of a new fertiliser complex was signed in Cairo in March 2019. thyssenkrupp is realizing the project in a consortium with the Egyptian company PETROJET. The order value for thyssenkrupp is in the mid-three-digit million euro range.

The new fertilizer complex will be built in Ain El Sokhna, around 100 km southeast of Cairo, close to the existing NCIC phosphatic and compound fertiliser complex. It is expected to go into operation in 2022 and produce up to 440,000 tons of ammonia, 380,000 tons of urea and 300,000 tons of calcium ammonium nitrate (CAN) every year. The new plants are part of NCIC’s plans to expand its current product portfolio to include high-quality nitrogen fertiliser for local and export markets. Nitrogen is a key nutrient for plant growth and of critical importance for industrial agriculture.

When will the project be completed?

The project will be completed in roughly three years from now. We started in January, so start of production is expected by early 2022.

How will this project provide job opportunities for the youth in Egypt?

We expect new jobs to be created not only at our organization but also at various local suppliers. Accordingly, there is a huge impact on the employee side in the country. We are carrying out this project with our partner Petrojet, who is also undertaking several jobs during construction. Typically, hundreds of workers are involved in the construction of such a large project.

What is the importance of having this project in Egypt?

The new plants will turn natural gas into ammonia. This intermediate product will be turned into three different types fertilizers. They will be either used by the local farmers or exported to the markets around the world. The added value of turning the natural gas into high-quality fertiliser is huge.

What attracted the firm in Egypt to do such a great project?

Egypt’s ideal conditions are the reasons for this attraction. In addition of abundant gas resources, Egypt has land availability and the country enjoys a strategic location.

Finally, Egypt has a history of industrialization with a large base of skilled workers who can operate such plants. The Egyptian government was the first to start the fertiliser business in the region.  Most of the other neighbouring countries in the Middle East followed this path.

To sum it up, the resources of the country are very good in terms of natural resources as well as human resources, in particular qualified engineers.

What is the value of thyssenkrupp’s investment portfolio in Egypt?

As thyssenkrupp, we are here with two different business areas, one is the Elevator Technology business area, and the second one is Industrial Solutions.

In the elevator technology business area, we work in the metro, airport, and large residential projects. We have roughly 450 employees, thereof almost 400 are field staff (workers on the ground), who are all Egyptians. They are working on the installation and maintenance of elevators, escalators, and passenger boarding bridges.

In the Industrial Solutions business area, we have roughly 200 people on the ground, undertaking engineering, construction, as well as human resources services. We believe that our most valuable asset are our people. We invest in our employees, for example by conducting trainings and granting them the chance to travel abroad.

In your opinion what are the challenges that Egypt faces in the petrochemicals sector?

In the past years, the whole industry was suffering from the shortage of gas. But the situation has improved a lot this year. New discoveries in Egypt are now in production and connected to the gas grid.

The gas resources are fostering Egypt’s position as an energy hub as well as a hub for chemical products.

Do you think that Egypt could be a hub for exporting gas?

Yes, it is possible. But the value chain of what can be built up in the country is much longer than selling the gas. The production of chemical base products is quite important for the promotion of an industrial backbone. Using the gas in the country for manufacturing of goods and exporting them, is creating more benefit for the country and its people. Natural resources can be used to produce all kinds of petrochemicals, including fertilisers, polyethylenes, and all the substances which can be produced out of natural gas.

Therefore, the chemical industry, especially the petrochemical industry, is very important for the country. 

How can you evaluate the reform programme in Egypt?

We see the economic reforms that the government agreed with the IMF as necessary and positive. Particularly the cutting of the subsidies in the oil & gas sector and the free float of the currency brought financial stability back to Egypt. Additionally, the measures in the security sector brought the tourism back and increased the financial situation of the country. This is quite important for the country and for the people, and also good for the country’s economy.

How can you evaluate the economic conditions in Egypt?

I have been here in Egypt for five years. The economic conditions have largely improved since then, and we now have a quite stable business environment.

During that period, did you lay off any of the workers?

During the period from 2011 until now, we have not dismissed any of our workers, and we kept them all. From 2014 onwards, we even hired people. To be exact, we have hired 70 new engineers, and we are still in a growth mode and want to hire more people.

The people are our main asset.

Do you think that the government has to take specific procedures to enhance the investment environment?

The country is focusing on foreign direct investments, and I think that investment in general should be enhanced and supported.

The people, the government, and the companies in Egypt need to reinvest in the country. thyssenkrupp is doing this.

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Thales plans to turn Egypt into regional technical hub to provide company’s services Sun, 19 May 2019 12:00:04 +0000 Thales plans to increase investments in Egypt

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Thales, a global leader in aerospace, defence, security, space and transportation, owns offices in 80 countries and 80,000 employees, out of which 30,000 employees work in research and development (R&D) at the company and about 400 employees in the company’s offices in Egypt.

The company has acquired Gemalto, an international digital security company providing software applications, secure personal devices such as smart cards and tokens, and managed services.

Country Director-Egypt at Thales International, Sherif Barakat, said that the company operates in six main sectors in military and civil services. In civil services the company works in the transportation sector through developing railways, signal technology, and metro development. Additionally, the company owns the most landing and take-off control space technology and comprehensive digital transportation. 

Barakat noted that Thales had a longstanding track record of providing fully integrated solutions for Cairo’s Metro since the implementation of the first line (Line 1) in the late 1980’s. Since then, the group has been awarded several contracts for the manufacturing, supply, building and maintenance of the Automatic Fare Collection system of Lines 1 and 2 of the Greater Cairo metro.

Daily News Egypt interviewed Barakat to discuss the company’s strategy in the Egyptian market, the transcript for which is below, lightly edited for clarity:

How do you see Egypt’s current ICT Strategy?

Egypt’s information and communications technology (ICT) has recently risen in Egypt, with the adoption of President Abdel Fattah Al-Sisi of the national strategy of artificial intelligence (AI), which would turn Egypt into a regional centre for digital technology and AI, especially in light of Egypt’s success in building a giant network of modern infrastructure and roads. In addition, this technological renaissance prepares for the development of urban communities according to smart cities technology.

What is the size of AI in Egypt and in the world?

With the increasing regional trends to rely on digital economy, investment in AI will play an important role in enhancing the regional strategic position and its investments will reach more than $320bn by 2030. With Egypt’s interest in the national strategy of the President Al-Sisi in this field, AI techniques in Egypt in particular may reach more than $40bn.

Do you think that Egypt is eligible for being a regional centre for digital technology and AI?

Egypt has begun to develop its technological infrastructure for years, through modernising its transport networks to include railways, metro, main and interior roads, and airports.

The development processes that Egypt has witnessed during the past five years made it one of the most important countries in the Middle East and Africa region as an investment target for many companies in various fields. The investments of Thales in the last five years exceeded the size of its activities of what it has done over the past 35 years.

What are the fields of cooperation between Egypt and Thales?

There is great cooperation between the Egyptian government and Thales in infrastructure fields, namely depending on the most sophisticated technology in train and railway signals, early warning systems for accidents, and communication networks between trains and metro lines.

Egypt is one of the very few countries in which the company is present in all the activities it operates in. It includes fields of road transport through the development and modernisation of railway systems, metro and space lines through cooperation with Nilesat-the Egyptian Satellite Company- in addition to the development of defence systems, technological insurance, digital identity and navigation.

The company has been in the Egyptian market since 1973, in several areas, most notably transport, which is the development and modernisation of the first and second metro lines, in addition to, the third Imbaba line-Cairo airport, where the company provides monitoring and signal systems, network communication between trains, ticketing technology, money collection, and electronic gates.

Do you plan to increase your business in Egypt?

The company seeks more cooperation with the Egyptian government in the light of the recent economic reform processes and the great economic activity reflected in the form of huge megaprojects in various fields, including giant road networks and new cities such as the New Administrative Capital (NAC), New Alamein, New Mansoura and new airports, according to the latest technologies, which led the company to double its investments in the Egyptian market, over the next few years.

Over and above, Thales is keen on further cooperation with the Egyptian government in its quest for digital transformation, AI and cyber security in light of the promising opportunities that Egypt has in the areas of smart cities, electronic payment, and the modernisation of education.

What is the value of the company’s spending on R&D?

The volume of the company’s spending in the field of technological research during the four years has reached $7bn, increasing its ability to transfer the best technologies in various fields to the promising Egyptian market.

What are recent projects the company committed in Egypt?

The National Authority of Tunnels (NAT) chose Thales to supply a contactless fare collection system as well as an integrated supervision and communication system for various phases of Line 3.  Thales also won a contract from the Egyptian National Railways for the modernisation of the signalling systems on the Cairo-Alexandria corridor, which is the busiest section of the Egyptian Railways network. It was the first contract issued with a company under Egypt’s modernisation plan.

The company also contracted with the Egyptian government to develop and modernise the railway lines of Cairo-Benha which transfer about 25-30 million passengers annually and the Assiut-Nagaa Hammadi, where the company implements the latest technologies in the world in the field of control towers, communications, signals, and electric sliders insurance. We are working hard to accelerate the completion of these projects as soon as possible. We do about 95% of the railways’ development in Egypt.

Additionally, the company also provides, through agreements with the ministry of civil aviation, systems for observation towers and aircraft landing and take-off systems, according to the latest technologies in the world. In addition, Thales provides technology for banks through the online payment and e-commerce technology, as we work with about 80% of Egyptian banks to provide them with secure banking and bank card security systems.

The TransCity™ solution, which uses Web 2.0 technologies secured by Thales, offers the best guarantees for the management of Cairo’s fare collection system. It supervises all data generated across the existing network and will accommodate future network evolutions and extensions.

Arab International Optronics, a joint venture of Thales with the National Service Products Organisation, promotes the local production of optical and optronic equipment. Thales has an established partnership with National Air Navigation Services Company (NANSC), Egypt’s Air Navigation Service Provider, to deliver state-of-the-art Thales products, ranging from air traffic surveillance radars, modern navaids, air traffic control simulators for the Egyptian Aviation Academy, the Air Traffic Management (ATM) system, and the tower system for Cairo International airport.

Thales provides sensors and communications for the four Gowind Corvettes purchased in 2014 by the Egyptian naval forces. In 2015, Egypt purchased 24 Rafale with Thales equipment representing 25% of the total value of the contract, while Thales equipment also represents 20% of the value of the contract for the FREMM multi-mission frigate which was purchased by the Egyptian navy. In the aerospace sector, the group has supplied radars, control centres, and navigation aids for Egypt’s civil aviation authorities since the 1980’s.

Contributing to enhanced security, Thales has equipped the Electronic Exchange with solutions to secure Cairo and Alexandria’s trading systems.

What kind of cooperation with Egypt exists in the field of space?

Egypt is one of the most advanced countries in the field of space technologies in the Middle East and North Africa region.  Moreover, the company has signed an agreement with the Nilesat- thee Egyptian Satellite Company to develop NileSat-201, associated services, and ground stations to provide direct digital TV services to homes, broadcasting and high-speed data services for users in North Africa and the Middle East, including the GCC region.

Do you plan to have or launch business in Egypt’s megaprojects such as the NAC and its monorail or electric train?

We are looking forward to working in Egypt in all the specialised fields and in new smart cities which have been launched recently by the Egyptian government.

As a new country director- Egypt at Thales International, what are your main priorities regarding Egypt?

I’m keen on transforming Egypt to become a regional hub for the provision of technical support for the company’s services in the region,.

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Safety, trust: 2 main challenges toward autonomous vehicles roll-out Wed, 15 May 2019 08:00:17 +0000 The Future of Autonomous and Urban Mobility project seeks to advance leading-edge thinking and drive adoption of innovative solutions based on autonomous vehicles and their impact on urban mobility.

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Autonomous vehicles (AV) or self-driving cars have the potential to improve road safety, decrease pollution levels, reduce congestion, and transform the design of our cities. The last few years, AV have been the centre of research and studies. However, transitioning to AV involved a disruptive shift that is bound to reshape public and private transportation systems, leaving many players behind if they fail to keep pace with emerging technologies.

The Future of Autonomous and Urban Mobility project seeks to advance leading-edge thinking and drive adoption of innovative solutions based on autonomous vehicles and their impact on urban mobility.

To reach a better understanding about AV, and the main challenges facing the commercial roll-out, Daily News Egypt interviewed Michelle Avary, head of the Autonomous and Urban Mobility for the World Economic Forum’s Centre for the Fourth Industrial Revolution, the transcript for which is below, lightly edited for clarity:

What are the biggest challenges facing the roll-out of AV?

Right now the two main challenges are safety and trust. The technology still needs to mature in order to produce on the promise of safety, or any of the other promises of efficiency and other outcomes, that’s obviously the first one.

The second one which is very closely related is trust. There has been a lot of hype about AV and when it is going to become into reality at scale, and what to expect from it. I believe that we need to be more transparent on what the technology can do, what is it actually going to be like, as well as how much is it really going to cost. We need to start having these discussions so society can decide how they want to adopt these technologies to create the lives they want.

Michelle Avary, head of the Autonomous and Urban Mobility for the World Economic Forum’s Centre for the Fourth Industrial Revolution

How can government regulate the AV industry?

Regulations are essential, and they need to be at the right phase of the technology deployment.

As I mentioned AV technology is in the early days, there are fundamentals that haven’t been completely solved, such as: perception, ability to recognise an object, predict how it is going to behave, and make a decision based on that prediction.

It too early for regulations, however, when you think how you can share safety data, it is good to have the government encourage these activities, as it will be beneficial for both the society and the companies developing the technologies.

When it comes to safety, the questions of accountability rises, who would be accountable for crashes and accidents?

Liability and culpability concerns must be addressed, and there are insurance companies right now which are writing policies for AV.

We are actually taking on a study, looking at the United States, China, Japan, the United Kingdom, and Germany, to find out what has to be changed ahead of commercialisation.

The big question that needs to be solved is how do you assign proportional responsibility, and the automotive industry knows how to do this very well, because they do them now, as they do have various suppliers contributing to the manufacture of the vehicle.

What makes the liability and culpability framework more challenging is the computer code aspect of it, bringing in more consumer protection laws, that historically do not exist around software.

That’s something we in the Centre for the Fourth Industrial Revolution are actively working on helping to define.

What about the ethical dilemmas, such as MIT Media Lab’s design of an experiments about who should a self-driving car prioritise in cases of collisions?

There are a series of mistakes that need to be made before you get to a situation like that, as it is kind of talking about how can we develop telepathy. What you are really asking about, there is a really low tolerance for mistakes by machines, that’s the core of it. We are willing to forgive each other more as humans.

There is a legitimate fear about how do we prosecute a computer code, which ultimately is where the responsible lies. It’s more important to address these questions properly so we can set realistic expectations, other than the trolley question.

When can AV become a commercial reality, what other technologies AV are dependent on such as 5G?

Technically, an AV doesn’t need a wireless connectivity to function, as it has many redundant systems for safety, that do not rely on wireless connectivity.

However, wireless connectivity is very important for a couple of different things, such as the ability to call the car to your location, and downloading maps and other information.

When the 5G really comes in place it is for entertainment, when you are not driving!! So it can happen before 5G.

In terms of infrastructure, you need a good road infrastructure, and assuming all of AV are electrical we will also need charging systems and a grid.

What about data privacy concerns, who will have access to the vehicles trip data etc?

There is a great place for regulators to get involved, and I think each location needs to define what they view is important in data privacy. A lot of the data that the AV will use to operate is not personally identifiable information. It is actually perception and sensory data, and a lot of that data will be used in real-time and discarded.

When it comes to personally identifiable information such as your trips, you have your Uber now which have a lot of information about you. You need to decide if that is ok or is it not, and if it is not you need to work with your government to assure your privacy, it is not only an AV related problem.

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Orascom to direct EGP 2.5bn in investments during the current year Tue, 14 May 2019 08:00:09 +0000 ODH’s sales to foreign customers represents about 10% of total sales achieved during Q1, says CEO

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Orascom Development Holding (ODH) has released its consolidated financial results for the first quarter (Q1) of 2019 recording an EGP 111.332m increase in its consolidated profits during Q1 of 2019, compared to EGP 83.087m during the same quarter of 2018, with an increase of 34%.

The company’s revenues rose to EGP 837.646m during Q1 of 2019, compared to EGP 654.910m during Q1 of 2018.

Gross profit increased to EGP 201.428m during the Q1 of 2019 compared to EGP 179.270m in the Q1of 2018.

Khaled Bichara, CEO of ODH, said that the net real estate sales increased by 166.1% to reach EGP 1.5bn in Q1 of 2019, compared to EGP 397.6m in Q1 of 2018.

Bichara told Daily News Egypt that ODH plans to achieve EGP 6.5bn -EGP 7bn in sales of the company’s projects during the current year, constituted of EGP 430m from El Gouna, EGP 130m from the Makadi Heights project, and EGP 930m from the O West project.

DNE interviewed Bichara to discuss the company’s development and extended plans, the transcript for which is below, lightly edited for clarity:

Khaled Bichara, CEO of ODH

First of All, please tell us the reason behind decreasing the losses and turning to profit.

We have changed the company strategy so that each project is a focus, therefore, we have achieved higher revenues for the third year in row. The company was netted from a loss to profitability recording a net profit of EGP 27.487m during Q1 of 2019, compared to a net loss of EGP 45.955m in Q1 of 2018.

Moreover, we have achieved an increase in sales to record 280% increase compared to the same period last year. The net real estate sales increased by 166.1% to reach EGP 1.5bn in Q1 of 2019 compared to EGP 397.6m in Q1 of 2018.

What is the size of the company’s land bank? Additionally, what is the size of unexploited land bank?

The total land bank of the company is about 43msqm, including the projects of El Gouna, Makadi Heights and O West. The El Gouna project is 36msqm, of which 14msqm have been developed and 22msqm have not yet been developed. Makadi Heights is spread over 3msqm, of which 500,000sqm have been developed and the rest has not yet been developed.

Additionally, the company is co-developing the O West project in collaboration with New Urban Communities Authority on 4msqm.

I think that we have a big land bank and it will take about eight years to complete its development.

When will the company begin the O West implementation?

It is scheduled to begin the project implementation in the current year.

What is the value of achieved sales of O West in the current year?

With regard to sales of the O West project, the company has achieved total contracted sales amounting to EGP 936.3m in Q1. Moreover, the total value of reserved units is worth EGP 1.3bn.

We launched two phases, the first phase mainly included villas and the second phase included a different range of apartments. Capitalising on the huge demand and success, more inventory was added in April 2019 with a total value of EGP 696.4m. To date, ODH managed to sell approximately 85% of the launched inventory.

It is worth mentioning that in 2019, only the land portion of the villas that were sold will be recognised as revenues, yet no positive margins will be reflected due to the upfront marketing and sales expenses that will be paid out this year. Revenues and positive margins will start to kick in starting from the year 2020 and onwards.

What is the company’s expansion plan?

ODH’s expansion plan focuses on east Cairo and the North Coast, and the company is still looking for an area of not less than 3m sqm for development in both regions, whether to be developed by the company itself or in partnership with the state.

Because we care about developing integrated urban communities, we plan to expand in land areas not less than 3msqm to make sure that the project will be an integrated residential project not be less efficient than previous company projects.

What is the value of investments that will be directed in the company’s projects in the current year?

We aims to invest EGP 2.5bn in the company’s projects during the current year, including construction works, which are estimated at approximately EGP 1.2bn.

What is the value of the company’s targeted sales in 2019?

The company targets achieving EGP 6.5bn -EGP 7bn in sales of the company’s projects during the current year, driven by the new offerings in the company’s projects, and the robustness of Egypt’s real estate market constituted from EGP 430m from El Gouna,  EGP 130m from the Makadi Heights project, and EGP 930m from the O West project.

Moreover, I believe that there is a real demand based on population growth, which is a real safety compass for the local real estate market.

Additionally, what is the value of targeted revenues in the current year?

The targeted value of the company’s revenues is estimated at approximately EGP 4bn.

What is your expectations of the real estate price increases after the scheduled increase in fuel prices next month? Additionally, do you think that the price hikes that will follow that decision will lead to market deceleration?

Property price spikes can be calculated only after the percentage of increase in fuel is announced, but even with these increases there will be no slowdown in the performance of companies and their sales during the current year, as there are about 900,000 marriages annually which require the provision of residential units, along with the shortage of commercial and administrative units and projects in the market.

Do you plan to increase the company’s capital?

The company has no intention to increase its capital during the current period because it is too cumbersome for shareholders.

What is the value of increase in hotel revenues in Q1?

Hotel revenues rose by 20.5% to record EGP 357.3m and hotel operating profits increased by 25.1% to register EGP 158.7m in Q1 of 2019

Do you plan to launch business in New Alamein?

The development of the New Alamein City is characterised by the state’s endeavour to operate one of the most important areas throughout the year and not only during the summer season. The accelerated implementation rates of New Alamein project reflects a strong interest in quickly taking advantage of this place and its operation.

How do you see partnership projects, and do you plan to repeat the O West co-developed project?

The partnership system between developers and the state is important in accelerating development rates and providing a renewed return of lands to the state instead of selling them once, in addition the developer can inject his monetary liquidity in the project implementation and not in the instalment of land value.

What is the percentage of the company’s sales to foreigners?

Exporting Egypt’s property does not mean selling units for Egyptian customers working abroad,. Meanwhile, exporting takes place through selling local property to a non-Egyptian customer, but there are challenges, namely, the absence of  mortgage financing and the difficulty in registration units, which are not present in the Egyptian real estate which in turn represents obstacles to implement the state strategy in property export.

The percentage of our sales to foreign customers represents about 10% of the total sales achieved during Q1, which the company seeks to increase to reach 50% as it was in 2010.

Over and above, I appreciate the state’s cooperation with developers to market Egypt and real estate projects abroad.

Most of the company’s revenues in the US dollar range from 75 to 85%, whether through hotel revenues, city management revenues, or real estate revenues, which are all the revenue structures of the company.

Our company participates in the Berlin Tourism Expo (ITB Berlin) and participated in Cityscape Dubai last year, and has a plan to market its projects in Europe in the coming period.

In my point of view, the government has to work on the unit’s registration issue as the foreign client needs a legally registered unit to guarantee his right in this property, especially considering the local mortgage finance system in Egypt. However, the developer has the burden of financing the client through an instalment period over seven or eight years but it does not help the developer in growing his business.


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Saudi alfanar eyes $1.6bn worth renewable energy projects until 2021 Mon, 13 May 2019 07:00:48 +0000 Company intends to launch a wind farm in Egypt with investments of $250m

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Saudi Arabia’s alfanar aims to launch new solar and wind power plants with total capacity of 1.6GW and investments of $1.6bn until 2021, including a $250m worth wind farm in Egypt.

Daily News Egypt interviewed Jamal Wadi, CEO of alfanar Global Development; Ahmed Ibrahim Soliman, division manager at alfanar; and Mahmoud Abdel Fattah, regional manager of the company, to learn about its investment plans in Egypt, the size of the projects it aims to implement, and the challenges the company is facing.

Jamal Wadi, CEO of alfanar

What is the total capacity of the energy projects your company is building?

alfanar signed contracts to implement energy projects with total capacity of 1.4GW, including a 720MW project in Spain, another 600MW project in India, a 50MW solar power plant in Egypt’s Benban, and a 30MW power plant in Britain. alfanar aims to sign new deals for 1.6GW energy projects to bring its projects’ total capacity to 3GW until 2021.

What is your strategy regarding renewable energy projects in Egypt?

Wadi: alfanar has completed the inauguration of its solar power plant in Benban, Aswan, as part of the feed-in tariff programme. It was the company’s first project in the Egyptian market, especially in the renewable energy sector. The company aims to invest the project’s revenues in implementing further projects.

Ibrahim: The company seeks to implement a wind farm with a capacity of 250MW and investments of $250m. We are still negotiating with the Egyptian Electricity Transmission Company (EETC) over the contractual system. The company will begin arranging the required funding for the project after signing the agreement.

What is the contractual system that the company seeks to follow?

Wadi: The company aims to implement its projects under the independent power producer (IPP) system to sell energy directly and pay the EETC for using the national grid. If the legislations and controls are completed, the company will implement its projects under this system, as Saudi Arabia has many similar projects.

How do you evaluate the investment and legislative climate of energy projects in Egypt?

Ibrahim: The new energy legislations issued in Egypt and the government’s strategy to attract long-term investments and produce 20% of the country’s electricity from renewable sources by 2022, have encouraged the company to establish new energy projects in the country.

alfanar aims to expand in establishing renewable energy projects in the coming years after the success and completion of its 50MW solar power plant in Benban.

What challenges did the company face in Egypt?

Abdel Fattah: The most prominent challenge faced by the company in the implementation of energy projects in Benban was the timetable of implementing the project, linking its production to the national grid, and start the commercial operation of the plant, which enabled alfanar to sell its production to the EETC.

alfanar owns a group of companies specialised in the construction works, civil engineering, and manufacturing steel, electric cables, control panels, transformers, and electric pistons.

What is the size of the company’s sales? Do you have any intention to acquire companies?

Wadi: alfanar achieved sales of $1.2bn in 2018 and plans to increase it this year, as the company seeks to expand in the Arab and European markets. alfanar has recently acquired $250m worth companies. The companies include ZIV in Italy, Safa in Turkey, and Contactum of Britain. All these companies operate in electrical equipment field. We will soon acquire a construction company in India.

Do you plan to acquire an Egyptian company?

Wadi: We are already following several small and medium Egyptian companies whose sales range between $100m and $150m per year to match the financial capacity of the company.

It is also possible to acquire a company that works with us at the solar power station in Benban.

He pointed out that the political and economic stability and the high credit rating of Egypt and the legislation and regulations governing investment, encouraged alfanar to invest in Egypt, expand its projects, and plan to implement several stations in the energy sector.

What are the most important features of the company’s investment plan in Egypt?

alfanar is studying investment in the field of energy-from-waste, especially since we have three similar projects in Britain. We are waiting to prove the success of these projects and the technology used to implement them to inaugurate them in Egypt. But, firstly, a suitable legal framework is required to control this field.

He pointed out that the company welcomes cooperation with the alliances eligible for the establishment of new and renewable energy projects in accordance with the procedures and rules followed, excluding the idea of listing the company on the Egyptian Exchange.

What is the difference between renewable energy legislation in Egypt and Saudi Arabia?

Wadi: There is a difference between the legislation and laws governing the investment in Egypt and Saudi Arabia. Egypt preceded Saudi Arabia to put forward a comprehensive plan on a large scale to implement plants to produce electricity from renewable resources.

alfanar also participate in the civil engineering works and civil works of the NEOM project in cooperation with the international companies and alliances involved in its implementation.

The Saudi Crown Prince Mohamed bin Salman announced in October 2017 a plan to establish the NEOM project with investments of $500bn, located northwest of the kingdom on an area of 10,200 sqm.

The project overlooks from north and west on the Red Sea and the Gulf of Aqaba, along 468 km, surrounded by 2,500m high mountains from the east. The project will focus on nine investment areas and will be completed by 2025.

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World Bank’s cooperation with CBE to issue fintech sandbox is conditional: Mohieldin Sun, 05 May 2019 09:30:10 +0000 Municipalities in Egypt should have clear detailed budgets first to be qualified for issuing bonds

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There is nothing that would prevent cooperation between the World Bank and the Central Bank of Egypt (CBE) to issue Egypt’s fintech sandbox within the framework of the bank’s role to support and develop capital markets, Mahmoud Mohieldin, the World Bank Group’s senior vice president for the 2030 Development Agenda, United Nations Relations, and Partnerships, told Daily News Egypt.

However, he said the World Bank’s cooperation is conditional and depends on the presence of three factors. First is the ability of that funding tool to meet the local and international regulatory standards and rules. Second is the application of these standards and rules to maintain financial solvency and the ability to commit to paying dues. Third is their ability to continue financial development.

Mohieldin added that this tool allows people with ideas and emerging projects to launch their products according to conditions and regulations that are less stringent, especially with banks’ reservation to offer funding to innovative products.

He added that for the third time in a row within 18 months, the World Bank reduces its forecast for the growth of the global economy, the last of which was in April. The forecast was lowered by 0.3% to 3.3% in 2019.

Mohieldin attributed the drop in forecast to three main reasons. First is the impact of the measures adopted following the financial crisis of the developed countries and the uncertainty associated with trade disputes. Second is the lack of clarity regarding the monetary policies of central banks. Third is the political unrest and conflicts that have erupted in a number of countries, leaving a negative impact on growth rates.

He suggested that such countries should adopt policies that drive economies in different sectors through investing in human capital, education, health care, technology, and digital transformation. He pointed out that there is a need for directing more investments towards technology localisation and infrastructure development to encourage the private sector to enter these fields, especially that most of the required investments can be made through the local, regional, or foreign private sector.

He added that there should be a better arrangement for international relations regarding trade and investment in the so-called “fair rules of the game” in the trade and investment movement.

As for the Egyptian economy, Mohieldin advised that it is necessary to diversify the sources of finance as the yield levels among most of the financing instruments, such as bonds, became close and are no longer tied only to their yield, but to the characteristics of bonds and the investors’ objectives. Currently, there are around 12 types of bonds globally, including green bonds, blue bonds, and gender bonds.

Mohieldin added that it is necessary to connect bonds and their new innovative types to the local economy and the different sectors of the development of a particular region or important economic sector within the state, such as education, health, environment, and infrastructure, as the issuance process is not the only attractive factor to investors, but it has also become important that these issuances are promising given their history in other countries, which reduces their risks.

Mohieldin also advised that the Arab stock exchanges should adopt the influential investment approach with its nine new standards, which make these exchanges part of the international dialogue that saw the participation of 58 large international institutions with assets worth $350bn as a start, launched two weeks ago.

Regarding the development of Egypt’s ability to attract foreign direct investment (FDI), Mohieldin said that FDI has dropped globally to $1.4tn, however the share of countries has not been affected and they are still able to attract investments.

Mohieldin said that there are three important elements to promote FDI, the most important of which currently is the digital transformation process at the level of many important economic sectors, which requires huge investments. The second element is continuous education and health. The third is linked to demographic distribution in some cities which are more populated than some medium-sized countries, attracting large investments to establish infrastructure, airports, universities, schools, and clubs in these regions, in addition to creating large economies that push growth rates forward.

“There are huge funds in many governorates in Egypt, but they are not utilised for funding development or direct investments. They are only used in real estate and gold speculations, and simple trading operations,” Mohieldin said.

He added that municipalities and governorates in Egypt depend on financial allocations in the state’s general budget, in addition to some of the fees obtained from the utilisation of some real estate, however, there are about 27 sources of funding for municipalities globally, and they still get priority in the proceeds of real estate taxes.

“In Johannesburg, South Africa, blue bonds have been issued to build the city itself,” he said. “When municipalities in Egypt reach this level, they will be able to attract investors,” he added.

Mohieldin believes that municipalities in Egypt can reach that level when they have a clear detailed budgets for several years that show their revenues and expenses. He pointed out that issuing legislations to control bonds issuance or other funding tools is not enough, but the municipalities must have clear budgets.

Another way to reach that level according to Mohieldin is for municipalities to resort to the ministry of finance to obtain a guarantee for these bonds, which is an undesirable method.

As for the financing needed to establish infrastructure projects, Mohieldin sees it’s necessary to consider the state’s resources, such as the advantage of owning lands and issuing licenses, all of which is sufficient to build a strong financial model through participation with the private sector.

Mohieldin expressed his satisfaction with the leadership and the Egyptian government’s interest in moving eastwards to successful experiences in China, Korea, Japan, and now Vietnam, which led successful experiences and strong stories in the transformation.

He added that Egypt has missed many opportunities due to the long discussions on centralisation and decentralisation, and with time, it was discovered that the centre must be strong, and the rest of the countries must be given sufficient flexibility. Discussions now are about the need to localise investments and technology to make districts and governorates compete among themselves to attract investment.

Regarding concerns over public debt in Egypt, Mohieldin said the government really works on controlling the budget deficit, which is the main reason of borrowing. He insisted the need to increase domestic investment to fill the funding gap in the country.

Mohieldein believes that in order to double the national income for a certain number of years, the growth rate should be between 7-8%, which would require saving according to the usual growth models of 27%, as each point of growth needs four points in terms of investment, therefore, the smaller the domestic savings, the less the country would resort to bridging the gap of foreign savings, whether in the form of debts or foreign direct and indirect investments. Mohieldin stressed that it is important to increase the reliance on local savings for investment and driving growth.

Mohieldin pointed out that there is a very strong market in the Arab countries to attract investments, especially that about 10% of the population get 60% of income, referring to the need to improve the distribution of income to increase the size of financial markets.

On the other hand, Mohieldin praised the improvement in international reports on Egypt, which is due to the relative improvement in economic growth rates following the procedures of the economic reform process and the seriousness in its implementation, adding that these reports also look to the future and take into account certain economic, political, and social aspects. These credit ratings with their forecasts, whether positive or negative, should be placed within an applicable framework. Mohieldin added that these credit ratings are concerned with the ability of the state to pay and meet the required dues, therefore it cannot be taken into consideration as indicators of other matters. He condemned what happens often through the excessive use of those reports and relying on them in many aspects. He added that these reports are created for a certain type of investors who collect their dues after a specific period in international bonds.

He concluded there is confusion about these reports and the World Bank’s Doing Business report, pointing out that it is not an indicator of the investment climate, but an indicator of the investment measures for local SMEs, which cannot be used to measure the FDI climate.

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Etisalat is first operator to announce advanced solution Cloud-AIR from Huawei: CTO Tue, 23 Apr 2019 18:08:31 +0000 Egyptian market is hungry for mobile broadband, says Murshed

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The mobile technology scene has witnessed great developments in the last couple of years and the Egyptian telecommunication market has steadily grown with mobile broadband traffic doubling every two years.

To find out about the industry’s latest news, and Etisalat Misr’s latest plans, Daily News Egypt interviewed the company’s Chief Technology Officer Khalid Murshed.

What is your perspective about the mobile broadband?

In the past few years, we have seen mobile broadband traffic doubling every two years. We expect that this trend will continue for the coming few years. We are very proud that the Egyptian market is hungry for mobile broadband and the Egyptian user is striving for the best service. Etisalat Misr is always aiming to provide the best in class network to cater for the customer expectations. We aimed to be ahead of the curve, and that was what drove us to adopt new technological features and collaborate with the world leading suppliers aiming to guarantee the highest customer satisfaction.              

You mentioned your partners as world leading, we would like to know more about Etisalat suppliers and who are they? And your plans after launching 5G?     

Etisalat has a wide portfolio of partners and suppliers that include the market leaders as Huawei, Ericson, Nokia, ZTE, Cisco, and others. Etisalat counts on its partners to deliver the state of art technologies. We are known to be a technology leading company in providing business solutions and satisfying customer needs. We provide new innovative tailored solutions for different categories and age groups.         

In Egypt, what are the upcoming challenges that we will witness with the existence of new technologies?

Needless to say that we are always working on overcoming all challenges that we face in Egypt such as:

Scarcity of resources in terms of spectrum in Egypt. To clarify, the four operators in Egypt have the spectrum resource of one operator in neighbor countries. This is imposing several challenges while the customers are looking for a distinguished experience.

In addition, to stay ahead of the technology, sites need periodic maintenance. Infrastructure versatility is necessary to address the Egyptian market.

We are always adopting advanced technology in order to resolve business challenges; this is the culture and DNA of Etisalat. We transform every challenge to an opportunity. We were the first operator to announce an advanced solution from Huawei, “Cloud-AIR”, in which we will not need to allocate spectrum to a specific technology. We always come up with solutions to overcome market challenges. Our agility makes a difference.

Based on your expectations from MWC and Huawei booth visit, how do you see Huawei providing a better value to your business in different areas such as 5G, cloud, data centers, future solutions for business clients?

Huawei and Etisalat have been collaborating for many years. Huawei is a reliable partner in providing cutting-edge technologies and a leading supplier to the whole industry because they are always pushing the envelope. They are always challenging the status quo and moving the bar higher than expected. We see new technology from Huawei every quarter and that is in line with our vision, which is providing the state of art technology and best solutions to our customers.        

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Security, confronting terrorism are common challenges facing Egypt, African continent: Ramdan Orny Tue, 23 Apr 2019 17:51:09 +0000 Last January, the African Union (AU) announced that Egypt would head the AU summit’s upcoming round in 2019, following the closing meeting of African leaders. During his participation in the 30th AU summit in the Ethiopian capital Addis Ababa, President Abdel Fattah Al-Sisi praised the efforts exerted by the Guinean President Alpha Condé, head of …

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Last January, the African Union (AU) announced that Egypt would head the AU summit’s upcoming round in 2019, following the closing meeting of African leaders.

During his participation in the 30th AU summit in the Ethiopian capital Addis Ababa, President Abdel Fattah Al-Sisi praised the efforts exerted by the Guinean President Alpha Condé, head of the current round of the AU summit, on the issue of institutional reform.

In his speech before the African leaders, Al-Sisi said that despite Egypt’s agreement that the summit of African leaders has absolute authority, he also believes that the decision-making process should pass through lower levels before being discussed at the summit in order to undergo reviews and improve accuracy, so that problems in implementation do not surface.

Ramdan Orny, an expert on African affairs and editing manager for the African Perspective magazine said that “Egypt’s presidency of the AU in its new session marks the culmination of the efforts of recent years in African work, Egypt’s historic effort also with Africa, and to complement the developmental and political role Egypt played in the continent–it is Egypt’s fourth presidency of the AU. Egypt is building its presidency over five steps to implement the 2063 agenda.”

Daily News Egypt interviewed Orny to discuss the future vision for Egypt’s presidency of the AU, the transcript for which is below, lightly edited for clarity:

What will Egypt focus on as the AU chair?

We should be aware that Egypt’s presidency of the AU is a practical application of the AU’s 2063 agenda, in cooperation with the AU Commission and all African friends. This highlights the many files Egypt will be working on this year, in cooperation with African partners. Perhaps the most important of which is the African free trade file and an attempt to address the structural imbalances in this aspect, as well as the development of the infrastructure in Africa in major continental projects, the structure of peace and security in the African continent, and Egypt will also focus on the anti-terrorism file during its presidency of the AU.

What will benefit Egypt after becoming president of the AU?

The Egyptian vision of Africa looks at the gain in a different way which is the direction of a gain for all. When Egypt deals with African issues, it has different starting points.

The most important challenges facing Egypt during its presidency of the AU is the exploitation of human capacities and cadres, its international relations in achieving the greatest benefit to the African continent, to achieve maximum expansion, and activate the African-Egyptian cooperation. This is the Egyptian message of the idea of ​​the Egyptian benefit from the presidency of the AU.

Egypt’s presidency of the AU comes amid challenges; can you explain these challenges?

There are common challenges facing Egypt and the African continent in general, mainly the security challenge and the challenge of confronting terrorism. Also, the issue of sustainable financing sources and problematic contributions to the structural reform of the AU lies with five countries: Egypt, Angola, Nigeria, South Africa, and Algeria. There is also the 12% of the budget of the AU without a fair distribution to the countries of the AU.

The AU needs sustainable mechanisms to finance its activities with regard to the settlement of political conflicts. Among the issues faced by Egypt is political cooperation in resolving conflicts in the African continent. Although many conflicts have been resolved, there are still conflicts in a number of African countries, such as Burundi, Central Africa and the Congo. Conflicts are an important issue, especially as they cause phenomena that affect Africa in full, such as the issue of asylums and displaced persons.

How does Egypt’s presidency of the AU open the door to decisive action in the war against terrorism?

The Egyptian vision is consistent with the African vision on the issue of terrorism and it is an essential element against the development of the African continent. When we face terrorism in Africa, we face it politically, economically, security-wise, culturally, and religiously.

Egypt began with Africa to activate many tools in the face of this phenomenon, perhaps the most important of which is the adoption of international resolutions of the security council, especially during Egypt’s membership of the security council represented by the African continent, and the phenomenon of terrorism must also include countries which support and sponsor terrorism.

We recognise that there is a gap in the exchange of information between African countries. If Egypt can succeed in this file, this will be a significant gain for the continent, especially as the issue of terrorism has become like the belt surrounding the continent, including the Shabaab al-Mujahideen in Somalia, Boko Haram in Nigeria, and Ansar al-Din in Mali, and they are based in north Morocco, and Daesh are in the north of Libya. If there is cooperation, we will succeed according to my knowledge to exterminate the phenomenon.

What is Egypt’s vision for the development of the African continent and positioning it globally?

Egypt’s vision is to develop the continent and make it a globally-cantered cultural and a civilizational solution to eliminate terrorism which is a gain for all. It protects Egyptian national security and saves Africa from this phenomenon. It is a gain for the continent in supporting the development process, and establishing an African Common Market for Trade, noting that the Free Trade Organization is one of Egypt’s top priorities in the AU, and working on sustainable development and utilising the wealth enjoyed by the continent.
Achieving this will lead to the continent’s development.

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British companies’ interest in transport, renewable energy sectors increasing: BEBA Tue, 23 Apr 2019 11:12:14 +0000 At least couple of British business missions to visit Egypt this year, says BEBA’s Chairperson

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British companies’ interest in Egypt’s transportation and renewable energy sectors is remarkably increasing, especially in megaprojects, Chairperson of the British Egyptian Business Association (BEBA) Khaled Nosseir, said, adding, “The most recent is a British company which is investing in the Benban Solar Park and other big companies which seek to invest in the monorail project that links the New Administrative Capital (NAC) with Cairo.”

There are at least couple of UK business missions that are expected to visit Egypt in 2019, Nosseir noted, asserting that the BEBA still awaits their final confirmation.

Daily News Egypt interviewed Nosseir to explore BEBA’s plans, British companies’ new interests in the Egyptian market, and learn further about BEBA’s recent activities, the transcript of which is below, lightly edited for clarity:

Do you have a plan to increase the BEBA’s members?

Sure, we always try to increase member numbers, to offer novel and positive services. We are keen on enlarging the platform of members to have a wider diversity of members, yet it is not a matter of increasing the members’ numbers as it is a matter of quality. We stand now at almost 800 members. Moreover, we are a platform for the British and Egyptian businesspersons to meet, interact, and have one-to-one business interest. The BEBA board meets on a monthly basis where we organise monthly events. Often there are up to three events per month for the members and for the officials both from the Egyptian and the UK government. Sometimes we include incoming British business missions in our events.

How do British companies assess Egypt’s investment climate?

British companies are perceiving a very favourable business climate in Egypt. The challenges that British companies face here are the same challenges that all other companies are facing in Egypt, so there aren’t specific issues that exclusively face British companies. Like other organisations, we are giving the same recommendations to the government on how to improve business climate and attract investments.

Are there new British companies who want to invest in Egypt?

Of course, many British companies are seeking to enter the Egyptian market. British companies are mostly interested in Egypt’s health care, transport, education and of course the oil and gas sector. There are a lot of British investments in the field of oil and gas, financial services, and the Communication and Information Technology (CIT) sector. We see increasing the interest of British companies to cooperate with Egyptian counterparts and governments in providing technical assistance and knowhow, to share knowledge and experiences both in the healthcare and education fields.

What about British companies’ interest in the country’s megaprojects?

British companies are very interested in Egypt’s megaprojects, especially in transport and renewable energy. For example, the Benban Solar Park and monorail project which links the NAC with Cairo.

What about bilateral missions?

We started a tradition four years ago of organising business missions to the UK, and they were quite successful year-over-year. We will have our business mission by the end of the year. We also welcome incoming sectorial business missions from the UK. We organise bilateral meetings for them with Egyptian counterparts and the concerned governmental entities. The healthcare conference of the 1st April was one example of our efforts to promote new areas of the economy. The conference was well attended and very successful. The panel discussion was very informative for all participants including Egyptian and British companies who were visiting Egypt on business mission from the UK. The event shed light on the government’s plans to restructure the entire health care sector in Egypt and the Universal Health Care Law, and plans of how it will be run. Additionally, at least a couple of UK business missions will visit Egypt and we are awaiting their final confirmation.

What about your upcoming events and the ministers which you will host in 2019?

In 2019, we had the Minister of Finance, Mohamed Moeit, the Minister of Higher Education, Khaled Abdel Ghaffar, as well as officials from the General Authority for Investment and Free Zones (GAFI). We plan to host several ministers and governmental officials until the end of the year. In due time we will announce who will attend and what the programmes are. Furthermore, we will continue our trend in creating innovative ideas and offering topics of interests of the new economy. We help members to develop their contacts, with UK companies and allow them to have direct contact with Egyptian and UK officials. The BEBA’s mission is basically to act as a platform for UK and Egyptian businesses to build bridges between both countries in order to enhance economic activities and partnership, as well as to provide services for its members. We also act as the voice of our members to promote their interests and assist in solving any challenges they face.

What do you think of the Egyptian economy’s performance?

The economic structure changes which took place in Egypt positively reflected on the economy’s stability, which was very important for economic activity. GDP growth is increasing well. We noticed the improvement in the rating of the Egyptian economy by rating agencies. The recent economic developments are all positive and we need to continue and build upon them. The country is facing some problems in its educational system. However, the government is taking serious steps to solve them, yet it takes time for them to be completely resolved because one of the main country’s challenges is the rapid population growth which can both be a blessing or a problem. If you educate the people and train them, then it’s a blessing as it become an asset, but if you don’t, then it’s a problem.

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Vodafone Egypt to inject new investments worth of €250m in Egypt in 2020 Tue, 23 Apr 2019 11:02:22 +0000 Company likely to reveal revenues amount of full FY 2018/19 by mid-June, says Alexandre Froment-Curtil

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Vodafone Egypt seeks to invest about €250m in Egypt over the next year, the company’s CEO Alexandre Froment-Curtil, said, adding that his company has already invested about EGP 45bn over last 20 years in the country.

“Egypt’s 2030 Vision is going digital. There is a worldwide race and rush in the digitalisation, Egypt cannot be left behind,” he noted, pointing out that Vodafone Egypt’s role focuses on enabling the digitalisation of Egypt.

“We are looking at all the possible solutions in infrastructure, investments, and IT solutions to support the country’s digitalisation plans,” he declared.

Daily News Egypt interviewed Froment-Curtil to learn more about the company’s activities and future plans in various aspects including investments, revenues, corporate social responsibility (CSR) projects, as well as a comprehensive view of the Egyptian economy updates and its impact on the communication and information technology communication and information technology (CIT) industry, the transcript for which is below, lightly edited for clarity:

Initially, how do you assess Egypt’s investment climate in general and telecommunications sector in particular?

We are very confident about the macroeconomic dynamics of Egypt including the country’s overall state such as GDP growth, population, and the very strong economic reforms that have been undertaken in the last three or four years. We view those reforms as tough reforms but now there are very positive economic outlooks for the country. The reforms promoted the business confidence in the market. As Vodafone Egypt, we invested about EGP 45bn over the last 20 years in the country, and for our annual investment next year we will invest about €250m in the country- and this is not a small sum-which reveals that we are confident about the overall climate in our sector.

One of Egypt’s business tycoons criticised investments in the CIT sector saying that it is unprofitable, how do you see the sector’s profitability?

As a group, we have been here for the last 20 years, and we’re here to stay.

What about your plans to provide 5G services?

Worldwide, we have been making a lot of first 5G activities, such as in the research and development (R&D) aspect. Recently we launched the first 5G call between two 5G phones in Barcelona. We have a lot of innovations in 5G services in the UK, Italy, so we are really keen on the 5G R&D activities. For Egypt, it is still too early, as it requires both the technology and infrastructure and all of these things aren’t yet on Egypt’s agenda. Fundamentally we have launched 4G since 2016, so we need more time to spread 4G to everybody. Until everybody has 4G in their hands-and I mean the whole population not only in Cairo-we shouldn’t be worrying too much about 5G.

I know that Vodafone requested additional frequencies from National Telecom Regulatory Authority (NTRA) for 4G, what are the updates?

Yes, we already requested, because we see a significant demand. As soon as our customers switch to 4G, they will really get heavily engaged in the internet about knowledge, access to opportunities on that basis, and we need to be able to cope with the massive demand that is happening on the data infrastructure. Additional frequencies will allow us to cope that demand.

When is the NTRA expected to approve your request? 

We can’t expect a date because it’s the NTRA’s decision. We will wait and see.

How much are the revenues of Vodafone in fiscal year (FY) 2018/19 which ends in March?

We will reveal the results of the financial performance by mid-June, yet we can’t announce our plans for the next FY now.

How did the reforms and the Egyptian pound flotation reflect on your activities?

Actually, we were affected by many elements including the value added taxation (VAT), the Egyptian pound devaluation, then we were affected by inflation and people salaries and energy prices–these were big challenges in many different ways but we deal with it, and as long as we believe that these reforms are for the good of the country, we will keep in dealing with it.

So, have you recovered from those challenges?

Not yet, but we are dealing with the situation. We see a positive impact on the country’s economic performance including the GDP positive growth. We also see the enthusiasm of the small and medium-sized enterprises (SMEs) as well as the increase of the entrepreneurship sector.

How do you assess cooperation with Telecom Egypt?

Telecom Egypt is our supplier and they are also our shareholder. Sometimes they are a customer, and in a very specific part of the business, they are competitors. So it is a very challenging relationship because it is multifaceted relationship. I would like to confirm that it is not negative at all. The agreement we have signed recently in February with them is a significant milestone of the quality of our relationship. Earlier in February, Egypt Telecom and Vodafone Egypt signed an agreement in the field of messaging, infrastructure, and distribution of profits in the presence of the Minister of Communications Amr Talaat. Talaat elaborated that the first agreement is about the distribution of profits of Telecom Egypt at Vodafone, which amounts to EGP 5.5bn. The profits will be disbursed by EGP 4.8bn in March 2019 and EGP 700m in June 2020, according to a past statement of the ministry. We have fulfilled our shareholder duties to release evidence to our shareholders and vice versa. Telecom Egypt has shown a great vision in the way they are supplying us with the fixed infrastructure which is a long-term agreement.

How do you see the competition climate with other operating companies in Egypt?

Egypt’s telecommunication industry is very competitive. That is something which is very health. The more competition there is, the more we will innovate new services, promotions, growth opportunities, with very positive industry dynamics.

What about the company’s CSR activities? And what are the plans in this regard in terms of projects numbers and funds?

We launched the Vodafone Egypt Foundation, which is an non-governmental organisation (NGO), 15 years ago. It is the only telecom NGO in the country, and over the years, we have invested more than EGP 450m. Historically, there were many proud times of the foundation. One topic was an illiteracy programme where we taught reading and writing to over 400,000 women, mainly, in Upper Egypt. It had a significant impact. We have other activities with our partners to improve 100 schools in three governorates in Sohag, Fayoum and Luxor. OVER 60,000 children benefited from improving the infrastructure of the schools, and we encourage other NGOs to come up with programmes to improve curriculum activities including the theatre, music, sports, and others. We help the managers of schools to engage with the community. We deeply believe that schools are successful when the whole community helps schools. Education has been the heart of what we do at the Vodafone Egypt Foundation. Additionally, sustaining 100 schools is a big undertaking, you can’t go to a school, paint the wall and leave it. We are sustaining the efforts we have made and the investments we are injecting. So we will focus on that and for future CSR projects, we will wait and see.

What about Vodafone’ strategy for the next five years?

The way to look at Egypt is that the country has to digitalise swiftly. The country’s 2030 Vision is going digital. There is a worldwide race and rush in the digitalisation, Egypt can’t be left behind. We see that our role is enabling the digitalisation of Egypt is our strategy. We are looking at all the possible solutions in infrastructure, investments, and IT solutions.

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Egypt qualified as economic capital of MENA: ex-petroleum minister Osama Kamal Sun, 21 Apr 2019 09:00:15 +0000 Exploiting our wealth of mineral resources can record $10bn within five years, says Kamal

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Egypt has been preparing itself recently to be a regional centre for energy especially after recent natural gas discoveries, in addition to other efforts being conducted to deal with other petroleum and mineral resources.

In an exclusive interview with Daily News Egypt, former minister of petroleum and mineral resources, Osama Kamal, unveiled several facts about this sector, explaining the potential that Egypt has and what qualifies it to become the economic capital of the Middle East.

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

How do you evaluate the Egyptian economy and investment scene in recent years?

I can say that Egypt has all the potentials that qualify it to be an economic capital for the entire MENA region. My vision is based on that the biggest targeted markets in the world for trading are Europe and Africa which together include 2.5 billion inhabitants. At the same time, Egypt is linked with these two giant markets with vital agreements, such as avoiding double taxation treaties (DTTs) with Europe and Africa. In addition, Egypt plays a key role for the global trading movement thanks to the Suez Canal and its new extension.

Furthermore, Egypt has plenty of the technical qualified labour that is required for any project or investment to be established. Thus, Egypt has a competitive edge among other markets, especially when we know that all the previous potentials which I clarified make the product price of any project in Egypt lower by between $150-200 per tonne of products, compared to other projects established in other countries.

So, Egypt has an attractive investment market?

All these factors are reasons behind the already existing investments in Egypt now, although the presence of several negative issues like bureaucracy, slowness of registration procedures, and problems related to investment conflicts for instance. All these positive aspects are not available in other markets.

Then, how do you see the role played by the ministry of investment in this regard?

It plays an important role, but, let me point out the experience of a country like India which considers real investment attraction is the ‘practicing not the theory,’ and consequently cancelled the ministry of investment on the basis that investment needs a good atmosphere and practical procedures without devoting a portfolio to organise it.

In the same vein, Egypt needs the ministry of investment to ease the mission and stabilise investment policies before investors, and to play a regulatory role in which it introduces all facilities to them, paving the way and preparing the environment to a healthy business investment atmosphere.

But, big steps have been taken by the ministry of investment such as drafting a new Investment Law and opening new investments centres to deal with such troubles?

It is right that there is a new Investment Law and its regulatory frame, in addition to other efforts that are done, but, practicing is not that easy, it must do more to attract more foreign direct investments (FDIs). That is a key issue.

Do you mean that the value of FDIs is the point in this regard?

Exactly. The key factor here is the volume of FDIs that Egypt has attracted since the new law has been in effect. The volume of FDIs is seemingly not enough compared to the efforts that the state is introducing to attract more investments, especially through the president’s visits to meet officials from all over the world, meeting with remarkable businesspersons in this regard. 

Yet, what about Siemens in electricity generating and the new investments in the oil and petroleum field? Are these not considered as FDIs that Egypt has succeeded to recently attract?

In this regard, such investments are not subjected to the ministry of investment. These investments were attracted thanks to direct negotiations hold by President Abdel Fattah Al Sisi.

How do you see the role of the investment ministry in the future?

It certainly has an important role, they can only play a regulatory role. The investment need a suitable atmosphere that focuses on the payoff at the expense of regulations or laws. For instance, the Suez Canal economic zone is a good example.

Another important issue I want to mention, the ministry of investment is not doing business itself, but others do. When Egypt embarks on attracting new investments in the solar energy sector it offers three key incentives in this regard, including allowing the transfer of investor’s profits outside Egypt, giving them the right of recourse to arbitration and getting a sovereign guarantee. But, investors were shocked when the final draft of the contract cancelled all these incentives. Such an action impeded the growth in this field, thus the result was that all these projects attracted only one domestic investor.

Therefore, what should be done?

Investment is related to policy stability, and economy and investment policies and strategies which cannot be changed when officials leave their posts. Investment is a normal response to stability.

Meanwhile, we need to track project and investment returns– not regulations as a solid structure. Obligation to regulations and legislations strictly curbs any effort to depend on the private sector or attract foreign investors to help the state benefit the most from its potentials. So, this situation is constraining the state from generating new job opportunities and, consequently, improve the living standard of all Egyptians.

In addition, we must turn into toward electronic system, cancelling any face to face contact. This is the followed system in all thriving countries all over the world. Countries like India, South Africa, Burundi, Ethiopia, and the UAE are all following this lead. The investor in these countries gets his project required permissions in just three days.

How can we follow these countries’ experiences lead?

Egypt needs to adopt models of successful countries through establishing cities which represent the models of economic and investment successful countries such as the UAE, Singapore, and China to inspire their experiences in Egypt. This will help us to learn the methods and techniques that are followed there, and on the other hand attract new investments in an easy way.

Let’s talk about the mining industry in Egypt, and how this sector is really suffering now.

Unfortunately, the terms that were set to explore gold ore in 2016 didn’t help a lot. This sector and its laws and regulations need to be totally restructured in way that can attract investors in similar countries like Australia, South Africa, and Morocco.

Is that relates to the report that the ministry of petroleum and mineral resources mandated to Mackenzie to draft, putting an integrated vision, and making use of mineral wealth in Egypt?

Yes, Mackenzie has already drafted its report and handed it to the ministry of petroleum. I guess the report assured the application of tax and royalty as the best way to explore gold ore and establish a real gold mining industry.

Is that due to the terms were set for exploring oil?

It is completely true. The mineral resources cannot be organised under a frame of oil and petroleum field, there is an vast difference between the two.

According to your experience, what are the benefits that our economy can reap from exploiting our neglected wealth of mineral resources?

Egypt has a wealth of mineral ores. According to a recent study the outcome of our mineral resources for the national economy ranges between an annual EGP 800m and EGP 900m. But, this average could jump to record $10bn within five years, if this wealth started to be tapped.

What about our reserves of natural gas and its ability to cover our consumption and to be exported?

Egypt has 88tn cubic feet of natural gas reserves after the Zohr field started to work. The volume of our consumption, including the local consumption and what is prepared for export, records about EGP 3tn cubic feet as an outcome. Our reserves in the frame of our consumption now covers our needs for the coming 30 years.

From your perspective, how do the projected constitutional amendments overshadow the economy and investment scene in Egypt?

I expect that Egypt is to experience massive structural changes after the constitutional amendments are in effect, as it paves the way to more stability in the economic, political, and social aspects, causing the stability that the investment atmosphere requires.

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Presidential advisory council unanimously prioritises reforming education: El-Nokrashy Tue, 16 Apr 2019 08:00:17 +0000 Council's recommendations have been introduced in developing education

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Global renewable energy expert Hany El-Nokrashy, the son of Mahmoud Fahmy El-Nokrashy, Egypt’s former prime minister during King Farouk’s reign who was assassinated by the Muslim Brotherhood in 1948. Hany El-Nokrashy inherited a vendetta against the group which made him pray to God that MB fall when they came to power. 

El-Nokrashy has a vision to generate energy in Egypt from heat available in deserts. It is a clean source of energy that can supply Egypt and the world with energy needs, away from coal and its negative environmental impact.

He is also a member of the president’s advisory council of Egypt’s scientists and experts, which includes the most prominent scientists in all disciplines and fields. This council is charged with studying the files of national projects and development in all state sectors.

The advisory council was established in 2014, but it has not made headlines since then. Has it been dismantled?

No, it is still ongoing. We meet periodically but we have no expertise with the media or public relations. It is not a priority for us. We have a specific task: to provide the required advice to the state in all matters related to scientific issues and development projects. We have specific mandates from the president, the most important of which is studying the government’s visions regarding Egypt’s future since the beginning of the council’s formation. This comes after we have identified the most important issues which represent an obstacle or a stumbling block in the development process, and the need to deal with them and solve them.

What are the most important obstacles the council has identified?

All of us in the council unanimously agree on the priority of reforming education, because it is the greatest stumbling block and enfolds our renaissance.

Does this mean that you are involved in education development now?

Of course we are. The president was interested in the recommendations we provided, and he forwarded them to the Minister of Education Tarek Shawky. The minister has a great and positive vision that has already been presented to the members of the advisory council and we recognised the quality and validity of its implementation in Egypt. He already began to implement his new plan for developing education.

And when can we see the results of this plan?

The final results will appear in 20 years. The initial results of educational development will appear in a few years. We are working on a long-term plan, which is what developed countries do in such files.

Regarding the energy sector, do you have any comments on the previous government’s performance?

The main reason was its lack of interest in benefiting from the renewable resources of energy available in Egypt, especially solar energy which God gave us in abundance. Meanwhile, it was purchasing coal, which I objected for many reasons. Coal is expensive to import and its environmental impact and carbon footprint are terrible. We also achieved new gas discoveries, so we should limit the use of coal.

Where are the best locations for establishing solar plants in Egypt?

Aswan is a typical choice for us, for the availability of solar energy there as well as the purity of its atmosphere, which means pure sunlight more than any other place.

How many solar power plants should we have to achieve energy self-sufficiency?

The capacity of a solar power plant should not be less than 20MW to be feasible. I think it is necessary to standardize capacities of power plants between 20-50MW to recover costs in five to six years. I also think we should focus on establishing small stations and link them in sub-networks to provide energy to small villages or cities in the desert. This would enable us to close one or more plants for maintenance in winter when consumption declines by 20%. When the summer begins, these stations can resume work at full capacity. This proposed system supersedes the unified grid and ease the load we suffer during peak hours as we would rely on internal sub-networks.

But experts say the cost of establishing thermal power stations is equal to traditional power stations?

This is true, but considering the subsidy cost paid by the government annually which is large, the total cost would be reflected on the final price of selling electricity, which is currently subsidised. To identify the real price, we have to calculate it without the value of fuel subsidies. That way it will then come in favour of solar power plants compared with the cost of energy from traditional plants, which will be realised in the first period of repaying debts, especially considering that the government or investors do not have enough funds to build new stations, but rather borrow their cost from banks with high interest rates and repayment period up to 20 years. Meanwhile, solar power costs in 20 years will drop by one-third due to saving fuel, compared to traditional stations with same capacity and performance. It also enables us to repay loans, as the cost of electricity from a traditional station will drop from $0.095  (about EGP 1.56) to $0.085 (about EGP 1.39) while the cost of electricity from thermal power stations will be $0.01 (EGP 0.17) which is the lowest price for electricity in the world in the first 20 years of building the stations. It means we will not bear any additional costs, except for wages, spare parts, and maintenance.

Can we manufacture thermal stations in Egypt?

Only 7% of these stations’ components can be made in Egypt, including mirrors and their holders, and we will import other components.

Have these studies been submitted to the president or competent authorities?

The ministry of electricity is concerned with this file, and it is clearly heading toward volatile renewable energy (wind and photovoltaic panels), although it does not give us 24-hour energy continuity and the costs of generation or storage are high due to the reasons I mentioned earlier. They are also going for coal-fired power plants as they are the cheapest option, although, in reality, considering the high cost of the machinery and the negative impact of its pollution effect and health impact, it is by far not the cheapest.

Do we have experience in establishing thermal plants?

The first thermal power plant was built in Maadi in 1912 by an American engineer and was actually operational in 1913, with the aim of raising the Nile water to irrigate the cotton crop as an important crop at the time. However, given the British control of the Egyptian economy at the time, they saw that this station would save Egypt from importing coal from England. They seized the chance of the first world war, broke and closed the station, and dismantled it components and then sold them. But this is easy as Egyptian scientists worldwide are working on this file.

How do you see power projects recently implemented in Egypt?

What has been achieved in the energy file is a very big leap because the years before president Sisi witnessed a negligent failure to build electric stations. It might have been for a lack of resources or the steady market increase and social development due to the increasing population and its electricity requirements. The electricity current was disturbed several times. When president Sisi took office, he changed this painful reality and raced against time to sign agreements with major companies to build several stations– thus reducing the cost of establishing individual stations.

How do you assess the electrical connection projects in surrounding countries and Europe?

Egypt will, of course, benefit from the export of a high-value product, namely electricity instead of exporting gas, which will be of great benefit to us. The most important was the fossil fuel power station developed by the German company to reach a 61% efficiency standard. This is a significant amount in converting the thermal energy stored in gas when it is burned into electrical energy. In order to estimate the worth of this value, it is enough to compare it with the efficiency of conventional power plants globally which operate with oil or coal, ranging between 30-40%, or about the half.

Far from scientific matters, and as the son of the former Egyptian prime minister, how do you view the Brotherhood?

My father hated the British colonialism and was known for this. And this is the reason they assassinated him, unlike the Brotherhood who was established by the colonialists and was used as their tool. When they came to power in Egypt, I knew they would fail because they were not accustomed to public work. I prayed to God that they fall until 30 June incidents saved us from them. This was natural, and their terr acts that followed were expected.

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Egypt has discipline, adheres to economic reforms with no need for another IMF loan: Ghali Mon, 15 Apr 2019 08:00:03 +0000 ‘I am trying to solve the problems and cases raised against me and I hope to return to Egypt,’ says Egypt’s ex-Finance Minister

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Washington, DC- Youssef Boutros Ghali, former Egyptian finance minister, said Egypt is not in need of another loan from the International Monetary Fund (IMF) but the country’s government, though it is not weak, needs competencies and experienced people which is much more important than financial resources.

Ghali elaborated: “The IMF’s procedures are difficult but necessary, and the Egyptians absorbed the shock, but we have to concentrate on other important issues now.”

Daily News Egypt interviewed Ghali to discuss his perspective regarding the assessment of Egypt’s economic reform programme, the transcript for which is below, lightly edited for clarity:

How do you view the IMF programme and to what extent did it succeed?

The IMF programme in Egypt has produced positive results, but at the expense of the poor. It is necessary to deal with the fund from an Egyptian point of view, and the recipe cannot be taken as it is, to ensure that the poor do not suffer. However, the IMF is not tasked with verifying the adherence of the poor, but it is tasked with re-establishing the financial balance of countries that are in trouble. Most governments that are in trouble resort to borrowing from the IMF. The fund recommends some measures for these countries, and they have the right to approve or reject them.

Do you think that Egypt needs a new IMF loan or extend the current one?

Egypt has the ability to discipline itself and adhere to the economic reforms without the need for another loan from the fund. President Al-Sisi has the firmness and ability to do what he wants, and he does not fear reform, but he needs help from the government and his ministers. Egypt is not in need of another loan from the IMF because Egypt’s government is not weak, but it needs competencies and experienced people, which is much more important than the presence of financial resources. The fund’s procedures are difficult but necessary, and we absorbed the shock but we have to concentrate on other important issues now. The IMF expected in its World Economic Outlook (WEO) in April 2019 that the Egyptian economy will grow by 5.5% this year, and by 5.9% in 2020.

How do you see the performance of the administrative body in Egypt?

The administrative body in Egypt are still suffering from some bureaucracy that may affect the smooth inflow of foreign direct investments (FDIs). On the application of the one stop shop recently in Egypt, I think that the country needs some time to implement it, but it is not presently effective, which may have a significant impact on FDIs. The idea is not to create a single window for all competent authorities, but rather to facilitate the procedures for investors through a single authority or agency, and not a single window. And, since many agencies do not want the withdrawal of any authority from them, this is the main cause of the problem of multiple procedures and bureaucracy.

Do you think that there will be an imminent devaluation of the pound?

I do not think there is a future depreciation in the exchange rate, so there is no need to move prices, as I believe it will be stable. I see that our problem in Egypt is not how we lower prices, but how we provide incomes to face the high prices and inflation.

How would the receding global economy affect Egypt’s growth?

The problem facing economists today is that all indicators in all countries which lead world growth are negative, therefore there is nothing to prevent the global economy from deteriorating. Hence, there is fear that global growth rates will continue to decline, which will have a significant impact on the Egyptian economy because it is a member of the global economy and the country’s FDIs will be lower.The IMF’s WEO, which was released early last week, projects a slowdown in growth in 2019 for 70% of the global economy. Global growth softened to 3.6% in 2018, and is projected to decline further to 3.3% in 2019. The downward revision in growth of 0.2 percentage points for 2019 from the January projection is also broad based. It reflects negative revisions for several major economies, including the euro area, Latin America, the United States, the United Kingdom, Canada, and Australia.

What is the solution?

The solution is to activate economic recovery policies at the level of countries and complement each other in different countries. China, for example, has a declining growth rate, thus it has not depended on export development to revive its economy because its export development will reflect on another country, therefore the external sector will pressure the domestic economy, but it has to encourage its domestic consumption. Germany, too, has a surplus in its public budget, and it has to turn it into deficit to encourage consumption which would stimulate other European and developing countries. The current discussion is to follow policies to restore growth rates so as to become homogenous among different countries, which requires coordination between these countries’ decision-makers. These policies’ success depends on the knowledge of the problems and the procedures required to resolve them. Second, is knowing other decision-makers and the convergence of state policies.

What are the promising economic sectors in Egypt?

Tourism sector is one of the Egyptian sectors that has started to recover recently but it is taking some time to reach 2010 levels. I expect the Egyptian real estate market will witness a significant deceleration in the coming period, but the demand will continue because it is a safe haven for investment in light of the deterioration of individual investments in some other sectors. With regard to the new oil discoveries, I think that the energy sector is the most promising in terms of attracting FDIs and applying the mechanism of one stop shop.

How do you see the performance of the Egyptian economic ministerial group?

Some Egyptian ministers are consulting me on a few economic issues. Nevertheless, the ministers in Egypt must work together. The economic group under Mubarak’s era was homogeneous and cohesive. I had an insight into the period of my ministry through moving to take precautions before facing several economic problems in the presence of the political will, rejecting any change, or movement in prices at the time.

How do you deal with the cases filed against you?

I’m working on these problems and I hope to return to the country. By the way, I did not exploit the printers of the ministry of finance in the service of my election propaganda in 2010.

Prosecutors’ investigations said that Ghali took advantage as a finance minister to exploit the printing centre of the ministry of finance to print large quantities of electoral advertising materials for his candidacy for parliament in 2010.

In February, the Cairo Criminal Court sentenced him to 15 years in prison in absentia and required him to return EGP 35.8m to the government. Ghali has not returned home since he fled to Britain in 2011 after mass protests toppled Mubarak’s regime and his cabinet. He was consequently fired from his position over charges of corruption and abuse of power.
The former finance minister requested a reconciliation deal with the government, after which the Illicit Gains Authority (IGA) formed a committee, and estimated his wealth at EGP 300m with unexplained inflation. Ghali rejected the value as incomprehensible for not including salaries of his previous jobs as economic advisor for the cabinet during the period from 1986 to 1998, as well as an advisor for the United Nations office in Cairo for 10 years, where he was paid in dollar. 

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USAID, FEI to announce ‘3R’ project for development of CSR activities Mon, 15 Apr 2019 07:00:08 +0000 Strategy to develop human resources management in 120 companies, says Torky

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The Federation of Egyptian Industries (FEI) along with the Unites States Agency for International Development (USAID) will announce on Monday a new corporate social responsibility (CSR) project called ‘3R’, Senior Advisor at the FEI, El Sayed Torky, said.

“Recruitment, retraining, and retention, is abbreviated to ‘3R’. We have already signed the project’s memorandum of understanding (MoU) in the past few days, and we will announce it today during the fifth conference on CSR and boosting regional partnership for development,” declared Torky.

Daily News Egypt interviewed Torky to learn more about the FEI’s CSR activities, in cooperation with several financial institutions, on the occasion of holding its CSR annual conference on Monday, the transcript of which is below, lightly edited for clarity:

Would you please elaborate on the importance of the 3R project with the USAID?

The ‘3R’ project aims to limit the employment turnover through the development of human resources management in 120 FEI member companies. We will hold several workshops with the companies which we will choose during the fifth conference on CSR and boosting regional partnership for development.

The FEI believes in the importance of CSR, in cooperation with international partners, and the Egyptian government’s plans in terms of the 2030 Vision. We would like our CSR projects and initiatives to be implemented in parallel with the country’s ones. Five Egyptian ministries are supporting our conference as we believe that we should not work separately.

Does the FEI cooperate with the USAID in any other projects?

Yes, we have also signed a Workforce Improvement and Skills Enhancement (WISE) partnership. Our partnerships guarantee the projects’ sustainability, and the USAID is entirely funding the ‘3R,’ which will be implemented immediately after the conference.

Which ministries collaborated with the conference?

The conference is held under the patronage of ministries of investment and international cooperation, social solidarity, trade and industry, education and technical education and planning, monitoring and administrative reform.

Did you cooperate with international organisations?

We have started our international cooperation with the International Labour Organisation (ILO), and then we expanded with many other esteemed foundations.

Would you please elaborate on this year’s version of the conference?

What is special about this version is the focus on regional partnerships, including the African participation, which is in line with Egypt’s presidency of the African Union (AU). We feel proud of the conference’s convention since 2014. About 250 persons participated in the 2014 version which was a good number as a start, and then in 2015’s edition the number was almost doubled to about 500 participants, and last year there were 1,700 attendees. Over the past years, the conference was able to achieve great success toward raising awareness about the importance of the CSR concept, including eliminating illiteracy, offering training, and job opportunities, among other issues. Participation in the conference is free of charge for companies and interested youth as we receive the needed support from our international partners which mainly are the ILO, the International Organization for Migration, and the United Nations Population Fund (UNPF).

We aim to increase the businesspersons’ awareness of CSR as effective activities toward development. CSR does not only provide financial assistance to people, but also help employees to be well trained.

We invited all the African ambassadors as well as the International Organisation of Employers in Geneva, Switzerland, to participate in our conference. The regional and international participation will be obvious during the conference sessions. The inaugural session will be quite diversified.  We believe that cooperation between non-governmental organisations (NGOs), the government, and companies is required to enhance knowledge about the importance of CSR. Companies can implement several CSR activities including fighting corruption, stopping environmental pollution during company operations, and training employees. We are happy to discuss our CSR experience with African countries to exchange experiences.

What about your future programmes?

We began with PepsiCo and Alex Bank to build the competency of the youth in order to qualify them for the labour market through their appointment as distributors in villages across Egypt. Our partners will provide the youth with the needed technical training, facilities, and grants in order to be able to manage their businesses.

We agreed with several training organisations to guarantee the youths’ positive response regarding the training sessions. We pay great attention toward Upper Egypt. We signed a MoU with the UNFP to support 5,000 young men on an annual basis through offering them the necessary training to qualify them for the labour market. Additionally, we also started a project with Helwan University on labour market skills and digital manufacturing, in partnership with a FEI member. Furthermore, we will train 400 students and trainers on digital manufacturing, which will revolutionise businesses.

How do you assess the government’s efforts in supporting CSR activities?

The ministry of investment and international cooperation is taking positive steps toward supporting CSR projects. The FEI is quite convinced about the importance of CSR, therefore it established a CSR unit, with the support of the ILO, and then it became self-operational.

Our unit is diversifying its partnerships. We have several partners such as Alex Bank, the Sawiris Foundation for Social Development, the ILO, the UNFP, and others, which reflects the confidence in our projects and initiatives.

Would you please elaborate about your cooperation with the UNFP and Helwan University?

We have a new project with the UNFP to train youth, in cooperation with the youth ministry, as we will train about 1,000 young men this year. Helwan University has very good facilities, but its nearby area lacks various necessities, so we will be coordinating the matter so that we have a positive impact on the disadvantaged areas through CSR projects.

Additionally, we have a project with International Organisation of Migration to limit the numbers of migrants from rural areas into major cities through offering them decent training by partnering with companies.

Do you think that further development of the business climate will help support CSR projects?

Yes, we need the general business climate to support companies and all the stakeholders to increase their CSR activities, as companies are not the only pillar of CSR projects. The government needs to support companies in order for them to perform their roles.

What are your other projects in Upper Egypt?

We will also work in four villages in Sohag, in cooperation with a number of associations, to implement several diversified projects including sanitation, children’s welfare, and eliminating illiteracy.

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Elsewedy Industrial Development’s total land bank reaches around 25m sqm in 2019 Thu, 11 Apr 2019 09:00:35 +0000 Firm to receive an area of 5.4 m sqm in 10th of Ramadan, Sadat City in April

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Elsewedy Industrial Development’s land bank in Egypt increased by 15.4 m sqm in 2019, reaching around 25 m sqm as a total,  which is the largest land portfolio owned by an industrial development company in Egypt, the CEO of Elsewedy Industrial Development, Mohamed Al Kammah, told Daily News Egypt in an interview.

He added that more than 70% of the firm`s lands are sold.

DNE sat down with Al Kammah for an interview to discuss the company’s plans regarding land acquisition. The transcript for which is below, lightly edited for clarity:

How many factories have you established in your industrial zones?

Currently, Elsewedy Industrial Development’s industrial zones have more than 150 contracted factories.

The company has several industrial zones; could you please tell us more about their spaces and the number of factories in each one?

The firm’s-owned industrial development portfolio includes: 10th of Ramadan (PI Parks) which is on an area of 4 m sqm. The second one is Al Oula Park in Sixth of October on an area-of 1 m sqm. The third one is located in the Sadat City on an area of 1.4 m sqm. Then there is Al Alamein on an area of 2.6 m sqm. As for the Suez Canal Industrial Zone, it is established on an area of 10 m sqm (acquired on a usufruct basis).

Concerning the number of factories, I could say that the number of the contracted manufacturers to set up factories in our industrial zones, either with their factories already established or still under construction, amounted to 41 in the Sixth of October industrial zone (Al Oula).

While the contracted manufacturers in 10th of Ramadan recorded 98 manufacturers in PI Parks East, while in the PI Parks West we have 33 manufacturers.

Did the utilities enter all your industrial zones?

No, only 7 m  sqm of our industrial zones’ land have witnessed the entrance of the utilities, while the majority of the rest of the lands are not utilised as we still did not receive them.

Are there any promises from the IDA about the date to receive the rest of the lands?

There are promises to receive in April an area of 5.4 m sqm of which, we will receive 4 m sqm in the 10th of Ramadan, in addition to 1.4 m sqm in Sadat City.

Has the firm withdrawn land from non-serious investors?

Most of our investors are serious and committed to the timeframes and the periods allowed by the Industrial Development Authority (IDA). Yet, the case was different with only two investors thus we have took back the lands from them and re-offered the lands again due to the huge demand and requests.

Could we estimate the space of the withdrawn lands?

We have withdrawn over 20,000 sqm in the 10th of Ramadan, in addition to 18,000 sqm in the Sixth of October.

Who are the most prominent investors in your industrial zones?

The company has attracted a number of international companies such as L’Oreal Paris for cosmetics, Jotun, KAPCI Coatings, Mintra, Iskraemeco, Nissan, Padico International and many others to set up factories at the company’s industrial zones.

Through the firm’s industrial zones, how many direct and indirect jobs did it provide?

Elsewedy Industrial Development provides about 125,000 direct jobs and 250,000 indirect jobs to the local market through its current industrial areas.

Moreover, I want to mention that the firm is expected to provide around 100,000 additional jobs through the industrial zones that are under construction.

What are your new projects?

The company started to expand horizontally by contributing to the establishment of industrial projects in different regions within Egypt. In the city of 10 of Ramadan, we have an integrated industrial city on an area of 4 m sqm. In addition to that, we plan to establish an industrial zone on an area of 1.4 m sqm in Sadat City. Also in Ain Sokhna (Suez Canal Zone), we plan to establish an integrated industrial city on an area of about 10 square kilometres.

What are the firm’s targeted areas?

The industrial development sector targets the developmental axis in Ain Sokhna as well as the Suez Canal and Ismailia.

In the next phase, it aims to study and target the development axis in Upper Egypt between the new cities, in order to provide them with an integrated industrial and residential backbone.

Furthermore, the company aims to develop the logistical infrastructure in all governorates of Egypt, through studying and establishing the logistics and commercial centres at all Egyptian governorates.

In general the firm took its lands as a usufruct (right to benefit) or through licences?

All the company’s lands are free owned except the new project of Ain Sokhna, which is on area of 10 m sqm.

Concerning the new project in Ain Sokhna, what are your targeted industries in this area?

In general, Ain Sokhna targets the heavy and medium industries. Therefore, through this area, we aim to attract more foreign investments.

Did the decision of the pound flotation increase the prices of the utilities entrance?

Yes, the pound flotation doubled the prices in general, but the company bore part of this increase, and raised the prices of its lands by only about 25% after the pound flotation.

What about the prices increase this year?

This year, I think the price increase rate is normal due to the inflation. We increased the prices of the lands this year by about 10% to 15%, compared to 2018.

I want to highlight that this increase rate is normal given the monetary policy that has modified the situation and limited the dealing in parallel markets. The Egyptian pound also expresses the actual purchasing power and a natural result of the current inflation rates. The state is now adjusting the current situation, through providing expansion projects and ensuring a moderate investment climate, which in turn will improve the economic climate in Egypt.

Finally, how do you see the state of the Egyptian market?

The Egyptian market is a promising market and a catalyst for domestic and foreign investment, especially in light of controlling the exchange rate’s volatility and the direction of the rise of the Egyptian pound against the dollar, and in light of the successful policies followed by the monetary policies of the Central Bank of Egypt.

The rise in Egypt’s credit rating is a guarantee of investment inside Egypt and a safe haven for foreign investors to invest in Egypt.

Also, the availability of energy sources, especially electricity and renewable energy, promotes this, as well as the lower energy consumption tariffs than those of neighbouring countries.

Moreover, I want to highlight that the new Investment Law is aligned with the decision of the pound flotation, with both aiding in attracting foreign investments.

On the other hand, I think that the government could attract more foreign investors if the concerned bodies would announce a clear plan for the offering of the lands, in addition to implementing some modifications regarding some points in the new Investment Law, as investors need some clarifications or have suggestions on some points. Moreover, there should be more coordination between the private and the public sectors.

The post Elsewedy Industrial Development’s total land bank reaches around 25m sqm in 2019 appeared first on Daily News Egypt.

IFC invests close to $200m in Egypt, eyes opportunities in infrastructure, manufacturing sectors Mon, 01 Apr 2019 14:03:33 +0000 The International Finance Corporation (IFC), a World Bank Group member, invested close to $200m in the Egyptian market over the last eight months, the IFC Country Manager for Egypt, Libya, and Yemen, Walid Labadi, told Daily News Egypt (DNE). The IFC chose Egypt earlier as a model for its investments in Middle East and Africa. …

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The International Finance Corporation (IFC), a World Bank Group member, invested close to $200m in the Egyptian market over the last eight months, the IFC Country Manager for Egypt, Libya, and Yemen, Walid Labadi, told Daily News Egypt (DNE).

The IFC chose Egypt earlier as a model for its investments in Middle East and Africa. It announced in the beginning of the current fiscal year (FY) 2018/19 that it aims to invest up to $1bn over the FY. DNE interviewed Labadi on the updates of the IFC’s plans in the Egyptian market. 

The interview also focused on the IFC’s efforts in supporting the private sector by facilitating access to finance, improving crucial infrastructure services, and promoting gender diversity in the workforce.

You announced earlier that the IFC would invest $1bn in FY 2019, how far have you achieved from this target?

Egypt is a priority country for the IFC in the region. Over the last several years, we have scaled up our programme in Egypt. I believe we will have another strong year in Egypt, especially in the manufacturing sector. To-date we have already committed close to $200m. We launched several important initiatives on supporting entrepreneurship. Moreover, we are committed to supporting critical infrastructure, especially in the renewables sectors.

What are the targeted sectors in FY 2019?

Egypt is a core country for the IFC. We think Egypt has a promising market with good economic growth rates. Notably, the government has embarked on a brave road on the reform programme, which should help the private sector to have a bigger role in the Egyptian economy. Therefore, we see opportunities in real estate, manufacturing, medical care, pharmaceutical, banking, and infrastructure sectors.

One of the IFC’s target investments in Egypt is the renewable energy sector; can you elaborate about the corporation’s investments in this area?

Our biggest investment in renewable energy is the Benban Solar Park, the largest in the world. We invested in 13 projects there. Some of these power plants are completed, while others are still under-construction.

The project’s labour force is mainly provided from the local community in Aswan.

We are also working with the ministry of electricity on developing solar energy tenders, so they will basically give the opportunity for the private sector to get involved in the solar energy field.

In FY 2018, the IFC invested $1.5bn in Egypt’s private sector in order to help create jobs, improve local infrastructure, and boost economic growth. That figure, which includes funds mobilised from other investors, represents a record for the IFC in Egypt. The investments have been geared towards helping private sector companies grow, expand, and create jobs. This included a landmark investment of $653m in Benban Solar Park, which once completed, will be the largest solar park in the world.

the IFC Country Manager for Egypt, Libya, and Yemen, Walid Labadi

Did you recently receive any requests from banks operating in Egypt to finance SMEs?

The IFC sees great potential in the SMEs market in Egypt. Supporting small businesses is one of our strategic priorities in Egypt, as we believe that small businesses can drive economic growth and job creation in the country.

We invested in several banks including the Commercial International Bank (CIB), Arab African International Bank, Bank of Alexandria, and the National Bank of Kuwait – Egypt, to help them extend loans and credit facilities for small businesses.

Also, we signed an agreement with Banque Misr in order to support women-led businesses within the bank’s SMEs portfolio, as part of the IFC’s wider plan to boost financial inclusion for women entrepreneurs in Egypt. We aim to help more banks to tap into this sector.

Do you consider entering in any private equity platforms for SMEs?

We have investments in Flat6 labs, in partnership with the British government to support fintech start-ups. We also have investment in Algebra Venture that looks primarily on Series B and C investment.

Do you plan to increase financing in local currency in Egypt?

Last year, the IFC has provided its first investment in local currency and we are looking for more opportunities. I think we have to find investments where the IFC can play a particular role without resorting to local banks, for example in areas like education and medical care. The revenues in those areas are typically in local currency, and their risk profile is one that more local banks are less comfortable in getting involved in, so we are looking at opportunities in such sectors. So, we are interested in finding more opportunities like that and we will continue to pursue them.

What about the IFC’s other projects?

This year, we are looking for a strong year especially in the manufacturing sector. Last year, we had an active period in the infrastructure sector with the Benban project, and we are looking forward for more opportunities.

Do you think Egypt’s reform programme is moving in the right track?

I think the reform programme is absolutely moving in the right track. A lot of really good things have been made and still there are a lot of things to do.

For example, it is very difficult to register a mortgaged land because of the land registration’s difficulties in Egypt. I think it is an area where they need to improve, so that land owners can get financing and grow their business.

Egypt has made progress in doing business sector, but they still need to do more particularly in training. The logistics and training in commerce will take some time to move forward. This country has a pivotal place in the global economy which would allow it to be an international trade hub, and we would like to see it achieve its full potential. We all need to do more, not just the government.

What are your expectations for Egypt’s growth in the current FY?

I expect economic growth to reach 5%, or a little bit more than 5%. I think it is a good rate.

We are very optimistic about growth in Egypt, and we continue to see that the private sector should contribute more in the growth.

In your opinion, what are the sectors that will drive this growth?

There are three areas that could really help facilitate growth in Egypt, one is the logistics for goods and services, and we think more investments are needed there and we would like to be part of that.

The second is the ICT sector, as I think the state’s agenda goes to efficiency of payments and creating opportunities for people to pay for goods and services electronically. They also focus on developing smart systems which would allow the economy to function effectively.

The third area is agribusiness because the agenda is also concerned with developing the supply chain.

I think the last fundamental aspect of Egypt’s growth is to become an energy hub. We think there is a lot of potential for Egypt in gas exports.

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Food expert presents philosophy behind Korean cuisine to Egyptians Mon, 01 Apr 2019 09:48:24 +0000 Love is most important ingredient of delicious food, says Lee

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Seung Eun Lee, a South Korean food expert concluded her first visit to Egypt on Friday, during which she met with many Egyptian students who were eager to learn more about Korean cuisine. Daily News Egypt interviewed Lee on Thursday as she sat with several media representatives at the Korean Cultural Centre, the transcript for which is below, lightly edited for clarity:

“Love is the most of important ingredient of delicious food,” she said, adding that Korean cooking taught her how to focus on useful things and how to create a balanced life.

Tell us about your activities during your visit to Egypt?

I am here upon an invitation from the chef of the Korean ambassador to Egypt, Yoon Yeocheol. It was the second invitation as previously I apologised due to other commitments.

I got involved in many food lessons throughout my trip and I did some Egyptian sightseeing at the Giza Pyramids and the Khan El-Khalili. It took me a while to agree to visit Egypt this time because it is the first time for me to travel for many hours, but at the end it was worth coming.

What is your impression of Egypt?

People here are friendly, and the Egyptian food is delicious. I tasted bechamel pasta, liver sandwiches, and they were very tasty, yet I really liked Koshary.

Which type of the Egyptian meal do you aim to learn?

I would like to learn more about the home-cooked meals.

Have you faced any difficulty in finding required ingredients for your recipes in Egypt?

Actually, I checked all the recipes’ ingredients on the first day of my arrival. I didn’t find any difficulty to get the ingredients from markets and Korean restaurants. I was determined to mix between some Egyptian ingredients and Korean ones.

How long would it take to learn Korean cuisine?

I learnt that you should cook the recipe about 50 times to make sure that you can present it appropriately. I have been studying cooking for 10 years, yet I am still learning. It’s an ongoing process.

What do you learn from cooking?

I learnt how to focus on useful things, a balanced life, and that love is the most important ingredient we put in the recipe to make the food delicious.

When I cook for people suffering high blood pressure, I put ingredients to make them feel better. I don’t usually use sugar in my recipes to keep them healthy. We can use honey instead to keep the sweet taste.

What are the specialties of traditional Korean cuisine?

Fermented foods are very popular in the traditional Korean cuisine. Most old homes have pickled foods. Traditional foods were healthier than modern food as they include vegetables, beans, and rice. Depending more on meat isn’t healthy. I learnt palatial food as well as traditional meals.

Is there a big difference between palatial and traditional food?

Palatial food is usually made in huge quantities to be served over large tables. I knew that some people have died owing to the large quantities of food they ate.

Korea aims to globalise its cuisine, how do you see this direction?

We would like more people to know about Korean cuisine. I aim to spread the knowledge of Korean foods even in Korea. Now mothers are working and can’t cook traditional foods which take about three or four hours to be finished, so I would like to transfer my knowledge to all who are interested to learn.

I conduct regional tours of Korean homes to learn from the recipes of old mothers and I will launch a Youtube channel with Japanese and English subtitles which will present Korean food recipes. I am also considering writing a book for the same purpose in the future.

What is the most popular Korean drink?

Barley is a very popular beverage in Korea.

Noteworthy, the Korean Culture Centre, affiliated to the ministries of culture, sports and tourism (MCST) was established in November 2013 in view of Egyptian people’s interpretation of Korean culture, art, and history, in order to improve Korea’s image in the eyes of the Egyptian people, according to the centre’s website.

The centre’s visitors can discover many Korean customs and traditions as well as the history of Korea, and the centre also seeks to provide all the scientific and educational material, as well as holding cultural events, which would help promote the dissemination of Korean culture.

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Rooya Group targets EGP 3bn in sales during current year Wed, 27 Mar 2019 16:29:20 +0000 Company plans to inject EGP 2.5bn in investments in local market, says chairperson

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Rooya Group for real estate investment has achieved EGP 2bn in contractual sales by the end of 2018, and plans to reach EGP 3bn in sales in 2019, according to Chairperson of the company, Hisham Shokry.

Shokry told Daily News Egypt that the company has an ambitious plan to begin the implementation of its commercial and administrative project, Stone Park, which includes a commercial part with investments exceeding EGP 4bn on an area of 200,000 sqm. The other administrative part is Stone Towers with a total investment of EGP 7bn. Daily News Egypt interviewed Shokry, the transcript for which is below, lightly edited for clarity:

What is the value of Rooya’s sales in 2018, and the targeted sales in 2019?

Rooya has achieved EGP 2bn in sales over the past year. The company plans to reach EGP 3bn this year, driven by the launch of new phases of its projects, and the continuation of the market movement.

What is the value of investments the company plans to direct in the current year?

The company plans to inject EGP 2.5bn in investments into our projects this year.

What is the company’s expansion plan?

The company has an ambitious plan. We will begin the implementation of the commercial and administrative project, Stone Park, which includes a commercial part with investments exceeding EGP 4bn on an area of 200,000 sqm. The other administrative part, called Stone Towers, has a total investment of EGP 7bn. The project’s drilling work has been started, and the project will be marketed during the current year.

What is the size of the company’s land bank?

The total volume of the company’s land bank is 9m sqm, of which 6m sqm are under development and the rest of the land bank is planned to be developed during the coming period.

Did you sign contract with the New Urban Communities Authority (NUCA) to co-develop a project in New Cairo?

The contract between our company and the NUCA has not yet been signed. It includes an area of 184 feddan in New Cairo. The company plans to implement an integrated urban project under the partnership system.

As the president of the Real Estate Export Council, how do you see Egypt’s participation in the MIPIM exhibition in France?

The exhibition is held annually and serves as a forum for all international investment funds to be present and to know of the investment opportunities available in each of the participating countries. Egypt’s participation in the MIPIM exhibition was distinctive. Moreover, it is the first time that the Egyptian Ministry of Housing participates in an official pavilion comprising of a number of real estate developers.

Therefore, all developers participated in the Egyptian pavilion focused on marketing Egypt’s property market and also the whole development and investment opportunities, not specific projects. They presented projects of their companies as models for real estate projects implemented in the Egyptian real estate market.

There are many countries that have a stable pavilion for over 10 years in the activities of the MIPIM exhibition, through which they managed to attract international investment funds.

In the MIPIM, there were some private sector projects as well as national projects implemented by the state, the most prominent of which are the Central Business District at the New Administrative Capital (NAC), which includes the towers area, the Capital Park, and the New Garden City projects. As well, the Latin Quarter in the New Alamein City and real estate projects by companies participated in the exhibition were presented.

What are the main topics which have been discussed during recent meetings of the Real Estate Export Council?

All obstacles facing international investment funds in the Egyptian market were presented to the prime minister during his recent meeting with the Real Estate Export Council’s members. The main obstacle is the absence of tax exemptions for real estate investment funds – as is the case in other countries – which is an investment catalyst for the presence of such funds. The Financial Regulatory Authority (FRA) sets the rules for the work of such funds in Egypt, unlike other countries in the world, so each fund sets its work policy with a commitment toward transparency and controlled by the FRA.

Additionally, there are specialised investment funds in financing infrastructure projects with annual funds of about $2.5tn, and Egypt does not receive a share from this fund. These funds are attractive to investors around the world due to their guaranteed revenues. They are managed by professionals who contribute to achieving a comprehensive developmental renaissance for any country in which they are present, and it does not cost the government any financial burdens, which should be considered during the coming period.

How do you see Egypt’s performance in developing infrastructure?

The continuation of the state to act as the sole responsible side for the implementation of infrastructure does not achieve any development. However, there are many systems that enable the implementation of infrastructure projects without adding any financial burdens on the state, such as BOT, PPP, and BOOT. These systems do not only enable the implementation of infrastructure, but attract direct investments which continue in the Egyptian market for at least 10 years, as the investor cannot transfer funds until after 10 years as a minimum investment in infrastructure projects.

Moreover, the state continued to consider land as a commodity to achieve the highest return on investment, which caused a lack of real development based on the good use of land. Therefore, the government must focus on changing that view, and classify land based on an opportunity to develop and integrate an urban community because each plot of land represents an industrial and agricultural opportunity, as well as an opportunity for a better citizen, a stronger country, and a more developed economy.

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Arabia to launch branch of international sports club in Sun Capital next month Wed, 27 Mar 2019 16:25:51 +0000 Company targets achieving EGP 6bn in sales of Sun Capital, Galleria projects this year, says chairperson

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Arabia Holding aims to achieve contractual sales worth EGP 6.25bn of its two projects, Sun Capital in West Cairo and Galleria in New Cairo this year, including EGP 5bn in total sales expected from the Sun Capital and the rest from the Galleria project, according to Tarek Shoukry, the chairperson of the company.

Shoukry said that about 1,200 units were marketed in Sun Capital last year with contractual sales of EGP 3.8bn. The company plans to offer the same number of units this year.

Daily News Egypt interviewed Shoukry to identify the company’s strategy during the current year, the transcript for which is below, lightly edited for clarity:

What is the value of targeted sales of the company’s projects?

The company plans to achieve contractual sales worth EGP 6.250bn of the Sun Capital and Galleria projects this year, including EGP 5bn in total sales expected from the Sun Capital and the rest from the Galleria project.

What is the value of sales in the Sun Capital project?

The Sun Capital is a new city located at the siteof the great Pyramids stretched over 575 feddan in the heart of the world’s greatest civilisations. The Sun Capital is the world’s latest addition of a complete metropolitan city named the New Touristic Capital of Egypt, where life, business, and entertainment are combined.

Additionally, the company has marketed about 1,200 units in the Sun Capital last year, with contractual sales of EGP 3.8bn. The company plans to launch the same number of units this year. We also aim to complete the marketing of the entire project over six years.

What is the value of investments to be directed in the Sun Capital and the Galleria projects this year?

The company plans to invest EGP 1.5bn in the Sun Capital and the Galleria projects this year. The value of the investments whichhave been injected into the Sun Capital project since its inception six months ago is worth EGP 500m.

What is the operational situation of the Sun Capital project?

The company has obtained the first building license about six months ago. Currently, we have obtained 200 licenses for the Sun Capital. Moreover, the company has also applied for 95 new licenses expected to be received by the end of this month. In addition, 120 buildings and 120 villas are currently under construction, and by the end of this year, we plan to complete their construction work. Additionally, the company is seeking to implement an integrated city to be a complete model for customers.

The company pays great attention to the development of the project implementation and increasing the construction rates in all sold residential buildings.

What are recent contracts and MoUs signed to develop the Sun Capital project?

The company is in a process of contracting with a large international sports club to become part of the project which would be a great addition to the Egyptian market and the Sun Capital project and we will announce the details in April.

Moreover, we have announced an international competition for the design of the Fairmont Hotel, which is scheduled to be in the project. We have been surprised by the great interest of the most important international design offices as we received 14 offers by global consultant offices in design.

The company has assigned a jury committee which includes professors from the Faculty of Engineering to evaluate the relative standard of the technical level of the offices, prices and the previous work of each office, which is done with the participation of Fairmont International, as we contracted with the latter to provide technical support throughoutall the phases–from the start of the selection of the office responsible for the design of the project.

The next step involves announcing the winner within a month to design the hotel, which takes approximately 6 months. Three designs will be launched including interior design, facade design, and landscaping, in order to begin the hotel development by early next year.

What are the updates regarding the Galleria project?

The implementation rate in second phase of the Galleria project is high, which is ahead of the schedule by about 15 months, where the implementation rate of the phase reached 95%, and the implementation rate in the fourth and sixth phases reaches 58%. Moreover, it is expected that the second phase will be fully implemented by the end of this year.

What is the value of investments which will be injected in the Galleria project in 2019?

The company plans to direct investments ranging between EGP 250m and EGP 300m in the project during the current year, targeting EGP1.25bn in value of contractual sales of the remaining part of the project during 2019.

What is the update regarding the Bungalows North Coast project?

The licenses of the hotel part in the project are being finalised, which includes a 300-room hotel run by the Mövenpick brand.

What is the size of the company’s land bank?

The company’s land bank reaches 4.5m sqm, and we are not currently planning to increase it because we are focusing on achieving significant implementation rates of the Sun Capital project. However, investing in Upper Egypt will be put on the company’s expansion plan later.

Does the company plan to list its shares in Egyptian Exchange (EGX)?

The company is planning to list a portion of its shares on the EGX at a rate of not more than 25%, but the timing of the offering is the main determinant based on two factors. First is the implementation of large rates of the Sun Capital project as one of the elements of the company’s assessment, and the second is evaluating the preparation of the market for our company’s initial public offering (IPO). I think we will prepare the company’s IPO file during the current year and wait for the appropriate time.

What is the company’s plan to export property?

Exporting property is one of the most important issues that the state is currently focusing on and is exertingall required efforts to succeed in reaching foreign clients and investment funds. Therefore, the expansion of this is based on three axes: the law of residency in return for property purchase, in addition to solving some of obstacles facing exports, such as solving the problem of property registration, and third granting tax incentives to foreign investment funds.

Furthermore, our company plans to participate in external exhibitions in Saudi Arabia, Kuwait and the UAE to market the Sun Capital project.

How do you see the real estate market in the current year? Additionally, what areyour expectations toward the price hikes in the sector?

This year, the market is witnessing the largest test in terms of rates and execution volume as well as compliance within deadlines for delivery. Strong companies with a clear plan, experience and strong financial solvency are able to meet their commitments toward customers and speed up execution rates, as non-serious companies cannot implement many phases of their projects. The current year is filtering out serious and non-serious developerswithin thetoughmarketcompetition.

The real estate sector directly contributes 18% to the GDP and 24% directly and indirectly, which reveals the importance of this sector.

Regarding prices spikes, I expect a price increases ranging between 10 to 15% in the real estate market during the current year, considering the increase in fuel prices, which will be in the middle of this year, where the contribution of fuel in implementation cost reached about 3% and 5%.

How do you see the urban development in west Cairo and the completion between east and west Cairo?

The size of the development and implementation rates in the west Cairo area achieves some balance with the size of development in east Cairo. Greater Cairo is divided into two regions. Moreover, since the inauguration of the Sun Capital project, it contributed toward enriching the west Cairo area, where unit prices increased by about 20%.

As a head of Real Estate Development Chamber at the Federation of Egyptian Industries, the chamber has participated in pushing the draft law of the real estate developers federation. When will the law be issued?

A formula for the draft law has been reached which is optimal. The formula includes initiating a federation for developers to manage the affairs of the private real estate sector and through which the classification of developers will be conducted.

Several meetings have been held with several parties to discuss issues related to the launch of the law and enforcing it. The executive regulations of the law will discuss the details of the federation, which are expected to be issued quickly, upon the directives of the President Abdel Fattah Al-Sisi.

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Castle Development launches 2nd phase of Castle Landmark with EGP 1bn expected sales Wed, 27 Mar 2019 16:07:11 +0000 Castle Development plans to launch the second phase of Castle Landmark, the company’s flagship project situated at the New Administrative Capital (NAC) this month, with a total investment of EGP 550m, according to Ahmed Mansour, CEO of Castle Development. This month has also seen the company launches its new 7,600 sqm commercial project, East Side, …

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Castle Development plans to launch the second phase of Castle Landmark, the company’s flagship project situated at the New Administrative Capital (NAC) this month, with a total investment of EGP 550m, according to Ahmed Mansour, CEO of Castle Development.

This month has also seen the company launches its new 7,600 sqm commercial project, East Side, located at the New Administrative Capital’s MU23 zone, with EGP 800m in investment.

Daily News Egypt interviewed Mansour to learn more about the company’s expansion plan, and the updates regarding its current projects, the transcript for which is below, lightly edited for clarity:

When will the company launch the second phase of Castle Landmark in the NAC?

We are launching the second phase of Castle Landmark this month with an investment of EGP 550m. Expected for delivery by 2022, this phase will cover 70,000 sqm, and is expected to offer 378 units with sizes ranging between 120 sqm and 285 sqm, and prices starting from EGP 14,300 per sqm.

When will the company complete the marketing phase?

Marketing for phase I of Castle Landmark is now complete, and we are planning to start construction of phase II throughout the second quarter of this year. Let me add that the second phase will see a slight increase in prices, EGP 14,500 per sqm instead of EGP 13,500; this is only a result of the increasing operation costs we continue to face as developers.

When will the company begin the project construction works?

Construction will take place during the second quarter of 2019.

Tell us more about the company’s second project in the NAC.

A mixed-use development, East Side offers medical, retail, and administrative spaces covering 7,600 sqm. With a built-up area of 20,000 sqm, the development sees EGP 800m in investment and will be delivered by 2021. It is situated within the H1 Block at the MU23 zone, East Side is easily accessible through a wide network of roads; it overlooks El Amal Axis which connects Ben Zayed North Road and Suez Road. The project is developed between clusters of residential compounds residing in the area’s R2 and R3 zones, which are projected to host 300,000 residents, and within less than one kilometer from the Capital’s Central Business District and the towers zone developed by CSCEC.

What is the volume of the company’s investments throughout 2019?

The company plans to invest EGP1bn this year across its projects.

And what is the value of targeted sales for 2019?

We target EGP 2.2bn in sales by the end of this year.

What is the company’s expansion plan?

We are planning to launch another commercial project on an area of 5,500 sqm, also at the New Administrative Capital, with an initial investment of EGP 800m. Moreover, we are in negotiations to acquire two plots of land, the first of which is located in Ain Sokhna on an area of 10 feddan, while the second is a residential project outside of Cairo.

 How do you see partnerships as a system?

Partnerships mainly combine the expertise of the developers involved in order to ensure better, faster, and more influential implementation of projects. Therefore, we are always ready to collaborate with other prominent developers and repeat the success we had with El Makassa, our partners in the development of Castle Landmark.

Do you plan to list your company in the Egyptian Exchange (EGX)?

The company’s initial public offering (IPO) is not currently included in our short-term plan, but we will study the decision closely and be ready within the next three years.

Do you think that the government competes with developers in New Mansoura and New Alamein?

As a developer, I do not regard the government’s decision to enter the market as a competition; this is a sizeable market with high demand and can accommodate all the products being offered. However, I see that the government is playing an instrumental, indirect role in adjusting prices for the target customer.

In your opinion, do you think that the market is currently facing a recession?

The local real estate market is quite sturdy with real demand from all segments, on account of the growing population. What we’re currently witnessing is not a recession but an adjustment, a temporary situation where the market is adapting to recent changes in order to meet customers’ purchasing power and eliminate confusion. 

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Marakez invests EGP 6bn in District 5 project Wed, 27 Mar 2019 12:00:17 +0000 Operating Mall of Tanta in August with EGP 1bn investments

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Marakez, one of Fawaz AlHokair Group companies, plans to operate a commercial centre ‘Mall of Tanta’ which will be located in Tanta in Gharbeya in August, with a total investments of about EGP 1bn, according to Ahmed Badrawi, the CEO of Marakez.

Badrawi said that the company plans to expand its business in several governorates especially in Delta and Upper Egypt.

Daily News Egypt interviewed Badrawi to learn of the company’s expansion plans and the updates regarding its current commercial projects, the transcript for which is below, lightly edited for clarity:

When will the company operate the Mall of Tanta?

We plan to operate our commercial centre ‘Mall of Tanta’ in August with a total investment of about EGP 1bn in Tanta, Gharbeya. The project has been developed within only 18 months.

The mall spans over a built-up area of 45,000 sqm, and a rental area of 37,000 sqm. The company is approaching completing the mall’s marketing, which includes many brands.

Why is the company interested in launching businesses in governorates?

Launching businesses in governorates came after several market studies conducted by our company, which confirmed the existence of purchasing power in the Delta region, especially Tanta city, and the size of demand is strong, which experience has already confirmed.

Additionally, the company plans to expand in the governorates namely in the Delta and Upper Egypt during the coming period and to attract distinct investment opportunities into those cities, which have a strong demand and purchasing power without the necessary services to meet this demand. The volume of development that is currently being implemented in Egypt in various governorates includes great investment opportunities in diverse areas in the Egyptian real estate market.

What are the current projects that the company is implementing in Cairo?

The company is implementing the District 5 project in Katameya, a residential-administrative-commercial centre located on an area of 100 feddan, with investments exceeding EGP 6bn. The mall has a rental area of 80,000 sqm, and a residential part which includes 3,000 housing units.

We plan to deliver the residential part of the project within two years. Additionally, we are negotiating to attract multiple brands in the project’s commercial part, with the estimated completion of the entire project within six years.

What is the construction situation of Aeon Towers?

The foundation works were carried out in the company’s residential Aeon Towers project in the Sixth of October City. The project comprises of three residential towers with 400 apartments of various sizes, in addition to Aeon Courtyard buildings, which is scheduled to be delivered in the current year, six months ahead of schedule.

Aeon Towers are the first of its kind in Sixth of October City and the new cities at 72 metres high. The launch of these projects comes within the framework of the company’s strategy, which is specialised in commercial centres, to build a commercial mall, along with each residential project to maximise the benefit for residents and unit purchasers.

What are the updates regarding the Mall of Arabia project?

Mall of Arabia was launched in 2010 in over an area of 150,000 sqm of gross leasable area (GLA), with over 500 shops and 16 anchors. I believe in the distinction of the second phase of the project, and the high level of implementation and services, as well as trademarks and brands which exist in it, in order to meet the continued requirements and customer needs, and to achieve integration within the Mall of Arabia.

How do you see the competition in the real estate market?

The customer has a strong awareness of his needs and financial capabilities, which helps him to choose from the various projects offered in the market, so the client is the final judge to choose between all real estate products on offer.

Furthermore, I see that the government is implementing a diverse package of new urban communities throughout the republic with the primary objective of doubling the urban area, absorbing new technological developments, and integrating employment opportunities and housing into one city. This means a great deal of investment opportunities for local and foreign developers.

How do you see the state’s strategy in exporting property?

The government pays great interest to exporting Egyptian real estate, which began with the enactment of a law to grant residence in return for the purchase of a property. In addition, the government participates and cooperates with developers in a number of important real estate and investment exhibitions, the most recent of which was the MIPIM exhibition in France, an important international investment gathering.

I expect that these crucial steps are being taken currently by the ministry of housing and will lead to achieving a distinguished sales volume abroad during the coming period.

Moreover, the presence of the government with real estate companies represents a confidence factor and a guarantee for the companies, which contributed to the success of the experiment. The purpose of participation is marketing the laws and facilities offered by Egypt for foreigners who want to buy property in Egypt and not just individual sales by companies.

In your opinion, how can deceleration be avoided if it occurs in Egypt’s real estate sales?

Diversity is a strong opportunity for developers to reach a larger base of customers, both locally and internationally. This diversity may be in the units’ sizes, prices, payment systems, and project areas, which are determined according to the market studies that are carried out to implement a project commensurate with the customer’s needs and purchasing powers.

The stability of customers’ purchasing powers drives companies to be more innovative in the implementation of units as well as in offering different payment plans. For example, our company provides different payment methods commensurate with our customers.

The hard competition between developers enriches the real estate market and benefits developers themselves as each developer has to come up with innovative new products inside their projects, either in implementation or in marketing, which ultimately serves the client’s interests.

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Palm Hills targets 25% investment increase in 2019 Wed, 27 Mar 2019 11:15:43 +0000 Company plans to begin implementation of Badya in 2Q19

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Palm Hills Developments has directed EGP 2bn in investment to the company’s projects during 2018, and it targets increasing its investments by 25% in the current year, according to Mohamed Sultan, CEO of the company.

Daily News Egypt interviewed Sultan to identify the company’s strategy during the current year, the transcript for which is below, lightly edited for clarity:

What is the value of achieved sales in 2018 and the targeted sales in 2019?

The company has achieved EGP 12.5bn in sales last year and plans to record EGP 14bn in sales in 2019, driven by the launch of new phases of existing projects, in the forefront the Badya project, which is being implemented in partnership with New Urban Communities Authority (NUCA).

What is the value of the company’s investments in 2018?

The company has directed EGP 2bn in investment in the company’s projects during 2018 and targets increasing its investments by 25% in the current year. The new investments represent construction contracts.

Can you tell us more about the Badya project in West Cairo?

The Badya project is a residential city located in West Cairo, 6th of October City, on an area of 3,000 feddan. It is based on creativity and providing a unique life for its customers. The company also seeks to launch a sustainable city that takes into consideration the technological developments that the citizen currently needs. This is in line with the state’s Vision 2030.

When will the company begin the Badya project implementation?

Obtaining construction permits are currently underway. It is scheduled to implement the project in the second quarter (Q2) of this year.

When will the company deliver the first phase of Badya?

The company plans to deliver the first phase of the project by 2022.

What is the volume of achieved sales of the Badya project?

The company has achieved EGP 5bn in sales of the project, which includes about 3,000 residential units. The company also meets on a monthly basis with its pricing committee to discuss prices of offered units in the project in order to determine prices according to the continuous market changes.

What is the value of the Badya’s investments?

Badya is being developed over 12 years with a total investment of EGP 320bn and targeted revenues of EGP 470-480bn. The project also provides 250,000 jobs and 30% of the project’s electricity is provided by solar energy.

Badya is co-developed by Palm Hills and NUCA, in return for an in-kind share of 420,000 sqm units, of which 50,000 sqm are commercial, and a cash equivalent of about 26% of revenues for 12 years.

How many fully finished units the company owns?

The company has a stock of fully finished units for delivery to its customers with a total of about 500 units. It is a new and unique approach to the company, as we market fully finished units for immediate delivery.

What is the size of the company’s land bank?

The company’s land bank reached 40.6m sqm, which covers its investment needs and is enough for our expansion plans during the coming period, which does not mean that we may not study any investment opportunity proving its uniqueness and seriousness, within the framework of the continuation of the company’s role in investment and development. Moreover, the company is constantly studying investment opportunities in various parts of the country.

Besides, the company has a portfolio of large and diverse projects, including Palm Hills New Cairo on an area of 500 feddan, the Crown project in the eastern expansions of the 6th of October City on an area of 190 feddan, and the Capital Gardens project next to the New Administrative Capital.

What is the value of the company’s units’ securitization?

The company has completed the securitization of units worth EGP 760m, which reduces the financial burden and provides liquidity for the company of the units delivered.

Your company was one of the first companies to co-develop projects with the government. How do you see partnership projects with the government?

Partnership between the government and developers is important because it benefits the two parties. It maximises the value of land investment, and ensures renewable financial revenues for the state without obtaining the value of the land only once. In addition to that, there is the advantage provided to developers through directing the value of land purchase toward project implementation– meaning project development at a faster rate.

What is the company’s strategy in exporting property?

The company is fully convinced of the importance of exporting all types of real estate, whether residential, administrative, or commercial, which is required in the current stage due to several factors, most notably the competitive advantage of the Egyptian property in terms of quality, excellence, and low prices compared to other markets in the region. The customer abroad can buy a unique unit worth less than in his country, in addition to the size of the comprehensive urban development currently being undertaken by the state and the launch of many new urban communities throughout the country increased investments and multiple projects.

Furthermore, the current political, security, and economic stability in Egypt, as well as the economic reform plan, help to make Egypt a magnet for foreign clients and investors, as well as inaugurating an urban renaissance that will make Egypt one of the top competing markets in the world.

Palm Hills Development has recently participated in the WAFIX real estate exhibition in Jeddah, Saudi Arabia, and the MIPIM in France, where the company sought to present its projects as distinctive models of urban development in Egypt.

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

Egypt’s real estate market is strong due to its dependence on real demand by all community segments. As well, it is the market that proved its ability to meet challenges and fluctuations. What’s more, the property is still a safe haven for investment and a basic requirement for citizens as we have more than 800,000 marriages annually. In addition, we have the existence of a fixed annual gap between supply and demand for different residential segments.

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First Group to launch new project in Ain Sokhna with EGP 6bn expected sales in Q4 2019 Wed, 27 Mar 2019 10:45:21 +0000 Company presents 4th phase of KENZ compound with EGP 650m targeted sales, says chairperson

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First Group for Real Estate Investment will launch its new tourism residential project in Ain Sokhna with EGP 6bn in targeted sales during the fourth quarter (Q4) of 2019, according to the company’s Chairperson Bashir Mostafa.

Daily News Egypt interviewed Mostafa to find out the company’s plan for the coming year, the transcript for which is below, lightly edited for clarity:

What are the updates regarding the KENZ compound?

We began delivering the third phase of the project in the 6th of October City. Moreover, we started marketing the fourth and final phase of the project during this month. The fourth phase includes 18 residential buildings with total targeted sales of EGP 650m, and is scheduled to be delivered early 2021.

The project is built on 30 feddan area and includes the Kaya Plaza Mall and a social club, as well as 1,350 units with spaces ranging between 90-250 sqm.

What is the value of targeted sales of the Kaya Plaza Mall in the Kenz compound?

The company has begun marketing the Kaya Plaza project with targeted sales of EGP 800m, which is the commercial part of the Kenz compound project.

Likewise, it is planned to be delivered by 2021, and includes administrative units and medical clinics, in addition to commercial units which will only be rented and self-managed. The mall is located on an area of 12,000 sqm with 2 basement floors which are used as a parking lot for the project.

The company is developing a new commercial, medical administrative project in the 6th of October City. Can you tell us more details about the project?

The Kazan Plaza Mall is being developing in the 6th of October City in front of Mall of Arabia, and the company has directed EGP 300m into the project’s investment.

The project includes commercial and administrative units, and it comprises of clinic units as well. It contains four buildings encompassing commercial shops, administrative offices, and medical units, with spaces ranging between 50-600 sqm.

First Group will sell the administrative and medical units, and rent the commercial units. Furthermore, we aim to achieve sales of EGP 450m from the first two floors, and the company will own the project’s ground floor.

The project will be maintained and managed by a company affiliated to First Group, in order to guarantee the quality of the mall’s services. Two administrative and medical buildings were integrated into the project and were marketed, with the remaining two to be integrated by the coming year.

What’s more, we have marketed 50% of the administrative and medical part of the project, as the company plans to market the remaining part of the mall at higher prices because of the distinction of the remaining part. We project to deliver the mall within the middle of next year, as the implementation process is being developed according to the schedule.

What is the value of investments the company will direct toward the company’s projects in 2019?

It is planned to inject investments of EGP 800m from self-financing representing 25%, while bank facilities account for about 30% and the booking proceeds with about 45%. We have transactions with the banks of BLOM Bank, Ahli United Bank, Al Baraka Bank Egypt, and Arab African International Bank, and the company does not plan to list its shares in the Egyptian Exchange (EGX) during the current period.

What is the value of targeted sales in 2019?

The company aims to achieve contractual sales of EGP 950m by the end of this year.

What is the company’s expansion plan?

First Group plans to launch a new project at Galala Plateau in Ain Sokhna in Q4 of this year with sales of EGP 6bn. The project is tourist-residential, and we agreed with a global consulting office to develop the project’s master plan, in which the first phase to be launched in Q4 of the current year. The first phase represents 20% of the project with targeted sales of EGP 1bn, and it is planned to be marketed within one year of its launch. Additionally, we will begin the project’s construction in the beginning of 2020, and it will be developed within five years.

Furthermore, we plan to launch another project in the North Coast on an area of 95 feddan in Fouka Bay, and about 25% of the project is allocated for service apartments. It will be delivered semi-finished as residential units. The project is owned by the company.

The launch of the two projects comes within the framework of the company’s plan to diversify its portfolio of customers and its investment portfolio between residential, tourist, commercial, and administrative buildings. In addition, we are confident of the outstanding performance of Egypt’s real estate market during the current period and we are certain of continued real demand.

The company considers the implementation of an administrative project in the New Administrative Capital (NAC) in the coming period. The company will apply for land with an area of ​​about 12,000 sqm soon, after completing the project’s market studies within the framework of the company’s plan to diversify its land bank in diverse areas.

How do you see investment opportunities in the NAC?

I think that investing and developing projects in the NAC is a good opportunity for developers. Additionally, the NAC project receives national and government attention to implement a model city which is the main gate toward reducing population congestion in the Cairo governorate and achieving the state’s goal of doubling urban areas. Therefore, accelerating development rates and establishing the infrastructure will encourage and attract local and foreign investors to become part of the project.

How do you see partnership projects in promoting the real estate market?

Partnership is important in the implementation of multiple projects in a record time because the developer can direct the value of the land in the implementation process, which provides liquidity for the developer and enables the state to accelerate development rates. In addition, it ensures renewed financial returns from land rather than direct selling. Moreover, the positive change in the process of selling land to real estate developers, in terms of the big size of offered lands and multiplicity of offerings systems, ease launching new businesses in novel urban communities.

Do you plan to launch new businesses in Upper Egypt?

Investing in Upper Egypt requires a good market study of the region, the target customer, and the nature of desired units there, and the experiences of some investors in Upper Egypt were promising.

How do you see the real estate developers’ federation draft law?

The market is in urgent need for a classification of real estate developers according to the previous business record, financial solvency, and land bank, as well as the company’s commitment to the dates of implementation and delivery, in addition to their previous budgets and other factors which places each developer in their proper categories.

The state shall grant developers land according to their category so that they can develop the space commensurate with their financial and technical capabilities.

Several meetings were held between the ministry of housing and real estate developers in order to discuss the draft law to launch a federation for real estate developers, where participants sought to balance the rights of the state, developers, and customers, and know the needs of each federation’s party. The discussions revolved around several issues, namely the classification of developers in the federation would deposit down-payments and instalments, and developers would take the money from this account according to his implementation plan, which ensures the preservation of customer funds.

If the discussions are completed, the next step is that the draft law will be submitted to the parliament for discussion. This discussion will be attended by real estate developers in order to maintain consistency between the rights of the state and developers. The executive regulation shall include the details of the law.

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Tatweer Misr Targets EGP 6bn in Sales Across its Projects in 2019 Wed, 27 Mar 2019 10:15:08 +0000 Company achieved EGP 2.5bn in sales at Bloomfields, says Dr. Shalaby, CEO and Managing Director

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A 5-year, three-pronged strategy adopted by Tatweer Misr focusing on the development of its current projects, expanding its investment in the local market, and seeking to invest outside of Egypt as well as attracting foreign investments to Egypt, according to Dr. Ahmed Shalaby, CEO and Managing Director of Tatweer Misr.

Shalaby said that the company aims to achieve EGP 6bn in sales  in its projects in the current year, compared to EGP 6.7bn last year.

Daily News Egypt interviewed Shalaby to learn about the company’s strategy for the current year, the transcript for which is below, lightly edited for clarity:

What is the company’s strategy in the coming period?

A strategy has to be a long term one, and we set ours to be implemented on the period of Five Years. It mainly entails Focusing on the Development of our current three projects and securing the delivery of the first phases of both Fouka  Bay & IL Monte Galala , Expanding in the local market through studying the investment opportunities in West Cairo and the North Coast, as well as diversifying our product portfolio , and establishing a solid international presence through real estate export and attracting foreign investors to invest in  our projects. In order to achieve success, the aforementioned objectives require a close study of the market as well as careful observation of changes, projections, and challenges. At the moment, we are studying different investment opportunities. The fact is that we are always keen on choosing to  invest in areas that has a strong value proposition ,for us the choice is not necessarily the best location but more importantly what value can we add to this area or demographic.  So, while we intend to grow our portfolio, we spend a lot of time on both research and planning processes to be clear about our next steps.

What is the size of the company’s targeted sales in 2019 compared to 2018?

The company aims to achieve 6bn EGP in sales throughout 2019, which is less than the 6.7bn EGP that was achieved last year. If we take a closer look at the picture, we will be able to understand that this is only a natural and logical target since most of the units in our project “Fouka Bay” were nearly sold out during the course of last year. Of course, if you managed to close a deal for a new project this year, the target will change accordingly.

What is the value of investments the company plans to inject in 2019?

We plan to invest 3bn EGP this year; 2bn EGP will be invested in IL Monte Galala in El Sokhna, and the rest will be directed towards Fouka Bay project in the North Coast.

What is the percentage of sales to foreigners?

Egyptians living abroad, and foreigners constitute 22% of total sales, with the latter representing 5%. As developers who work towards the export ofthe units in  our projects , this is actually quite encouraging for us; Tatweer Misr has, as a part of its objective to increase its international reach and sales, partnered with Liverpool LFC and participated in exhibitions in Dubai, Abu Dhabi and England. Our strategy has always been built with the intention of exporting our projects, this is strongly reflected in our master-plans and while we have historically relied on the Egyptian market, which we will maintain, we also want to expand our reach into new markets  thereby increasing international brand recognition and in turn boosting international sales.

What products does Tatweer Misr intend to showcase during the Cityscape exhibition?

Throughout this year’s edition of Cityscape, we are planning to showcase serviced apartments, chalets, and villas in IL Monte Galala and apartments, duplexes and villas in Bloomfields. Moreover, we will reveal Fouka Bay’s remaining serviced apartments complex, situated west of the project.

What’s the company’s delivery plan?

Fouka Bay delivery has already started and we are planning to start operation  this summerWith 167 units, we expect phase one owners and guests to enjoy their summer vacation at their fully finished, water-front homes. Our focus for the time being is to prepare for their unmatched experience during their stay. Moreover, delivery of IL Monte Galala’s first phase, comprised of 400 units, is expected by the first quarter of 2020. At that time there will be a number of amenities in place and others in the development phase. As time progresses, we will be integrating new ideas and concepts into our master-plan to remain in tune with times and needs of our guests and customers.

Did you acquire ministerial approval for BLOOMFIELDS?

Yes, ministerial approvals for Bloomfields have been obtained and licenses are soon to be acquired.

Speaking of BLOOMFIELDS, and in line with our strategy for the project to be the first college town in Egypt,  Tatweer Misr, has recently signed an MOU with the New Jersey Institute of Technology (NJIT), and the Ocean County College (OCC) to establish Egypt’s first American International Branch Campus (IBC) at BLOOMFIELDS college campus in Mostakbal City. This comes as part of a lineup of agreements with internationally acclaimed universities and schools, spreading across the 90-acre educational district within the project.

What is the volume of investments in the educational part at BLOOMFIELDS?

The educational district, which will cover 90 acres of land, will see 5bn EGP in investment. BLOOMFIELDS foresees the establishment of Egypt’s first entrepreneurial university as well as the first GEN-operated ‘Hub for Innovation & Entrepreneurship,in the MENA region “GEN@Bloomfields”, providing first-class education focusing on innovation, entrepreneurship and SME development. The project should be ready to receive the first student by September 2022.

What are the updates regarding the residential part of the project?

BLOOMFIELDS offers a total of around 10,000 units, 1213 of which have been sold with a total value of 2.5bn EGP. These units include luxurious villas, lofts, apartments, duplexes, twin-houses and townhouses aesthetically designed to embrace cascading green terraces, floating pools, and interactive roofs, as well as breakthrough flying residences. Homes at BLOOMFIELDS offer a variety of sizes ranging between 80 m2 – 350 m2.

What is the company’s expansion plan?

With a land bank of 5,000,000 m2, Tatweer Misr is currently focusing on its 3 projects (IL Monte Galala, Fouka Bay & BLOOMFIELDS) and is looking for the right opportunity to present its unique value proposition to other areas. Expansion of Sheikh Zayed in West Cairo and the North Coast, are among our priorities for investment in the short term, while New Alamein, New Mansoura and Upper Egypt are part of its long-term investment plan.

Do you plan to list the company in Egyptian Exchange (EGX)?

Real estate developers cannot proceed with an IPO before three years of their first delivery. Listing the company is in our long-term plan, so once the full requirements are fulfilled, we will study the market and decide on the best time to apply.

How do you see Egypt’s real estate market? Additionally, what is your expectation toward real estate price hikes?

Population growth is one of the main drivers behind the strength of the sector, which contributes with 7 % to the total GDP; we are around 100 Million, increasing annually by 2.5 million every year. And as per Egypt’s Central Agency for Public Mobilization and Statistics (CAPMAS), we have around 950 thousand marriages every year, which increases the demand on the housing sector. Accordingly, we can affirm that the demand in the market is real whether for housing or for investment. Real Estate represents 60% of the Egyptian household savings and Egyptians are and will always find real estate investment as the safe haven option.

Although the market is currently witnessing a slowdown in sales, it is only a normal reaction to the massive changes it experienced over the past few years. I believe this slowdown could be viewed as an opportunity to test developers’ innovative capacity in all aspects of the industry; one that could result in stabilization and adjustment of prices in order to meet customers’ purchasing power. I expect price increases of between 10 and 15% during 2019, this increase will be  only the outcome of the increasing of operation costs and building materials when energy subsidy is removed.

What do you think is the best solution to avoid this market slowdown and stabilize purchasing power?

The problem most developers face is that the Egyptian market currently poses restrictions on mortgage finance because banks only commit to already established projects, and therefore, availing finance for residential projects rests on developers in the market, who invest in the project from the start then sell their units on installments, which consumes resources, time, and effort that can be directed towards planning more projects. The market is in need for a more constructive mortgage finance system which can prove effective throughout the planning phase and help accelerate the construction process.

Moreover, I see that we need to develop a database to determine supply and demand trends across Egypt; it will work as an indicator that could play a vital role in the decision-making process, and allow developers to choose the locations that fit their marketing plans and are in need for their value proposition.

As leading developers in the Egyptian real estate market, how do you see the draft law of the real estate developers’ federation?

I believe that initiating a federation for real estate developers is a significant step towards having a more efficient and systematic real estate market. The federation is expected to ensure fluent and accurate communication among industry players, in cooperation with concerned ministries. I’m pleased that the public and private sectors have reached a joint agreement with the aim of moving the industry forward.

How was your participation in the MIPIM exhibition in France?

Egypt’s participation in the MIPIM exhibition has seen the government and eight other developers share the same pavilion. With the promotion of Egyptian real estate as a promising, safe investment at the heart of our collective mission to attract visitors, I believe that all developers were able to deliver a clear view of the market’s state and volume.

Egypt’s participation in such a manner does not only reflect the weight of our market, but also support our double objectives of real estate export and attracting foreign direct investment to the country and the sector. I do believe that these days present a prime opportunity for developers to look to exporting real estate. Given the overall business environment, it makes good business sense that Egyptian real estate companies focus on exporting real estate to potential buyers outside their borders. Potential overseas buyers have vastly different motivations for buying overseas properties or more specifically in our case properties in Egypt, prime among them being a greater focus on capital appreciation in addition to value of purchase.  Within todays financial climate, the cost of prime property in Egypt is seen as a potential opportunity within a limited time frame and hence an incredible opportunity for those companies that wish to market their products abroad.

The post Tatweer Misr Targets EGP 6bn in Sales Across its Projects in 2019 appeared first on Daily News Egypt.

Al Ahly Sabbour eyes investments in New Alamein, NAC Wed, 27 Mar 2019 09:15:28 +0000 Company aims to record EGP 10bn in total sales of GAIA project, says CEO

The post Al Ahly Sabbour eyes investments in New Alamein, NAC appeared first on Daily News Egypt.

Al Ahly Sabbour Developments will aim to achieve sales of EGP 6bn through the company’s projects during the current year, compared to EGP 5.5bn in 2018, according to its CEO, Ahmed Sabbour.

Sabbour added that the company plans to pump EGP 3bn worth of investments in the construction works of its projects in 2019.

Daily News Egypt interviewed Sabbour to learn more about the company’s strategy and its expansions in the Egyptian real estate market, the transcript for which is below, lightly edited for clarity:

What is the value of achieved sales in 2018? Additionally, what is the value of the targeted sales in the current year?

Al Ahly Sabbour Developments aims at achieving EGP 6bn with the company’s current projects for this year, compared to EGP 5.5bn in 2018.

What is the size of investments that will be directed toward projects’ construction works?

The company plans to pump EGP 3bn worth of investments in construction works of its projects in 2019, compared to EGP 1.5bn in 2018.

What are the updates regarding ‘Amwaj’ in the North Coast?

The company has completed 60% of the project’s fourth phase which spans over 60 acres and consists of 800 units, with EGP 450m in investments. The company has marketed 85% of this phase, and plans to deliver 225 units in the summer of 2019. Moreover, we plan to deliver 240 service apartments during the current year.

What are the targeted sales of the fourth phase of the project?

We aim at registering EGP 700m in sales.

When will the company operate the Rivette Mall in Amwaj?

Rivette Mall will be fully operational by next summer. The mall’s first phase was already completed and operating since last summer, which represents 60% of the project and includes 40 shops. The opening of the second phase will be by next summer.

What is the volume of the mall’s investments?

The total investment of the project is EGP 120m on a land area of 62,000 sqm. The mall is characterised by its location and distinctive design implemented by the English Mixity design office.

Are there any expansions in the project?

Yes, there are. We have added an area of 15 acres in a 25% partnership for the land’s owner. Moreover, we plan to direct EGP 250m for the expansion’s construction work with targeted sales of EGP 600m. Obtaining the project’s licenses is underway.

Over and above, the company has contracted to develop a100-acres project through a partnership system in the North Coast. Likewise, obtaining building permits is underway.

Tell us more about the updates on GAIA in the North Coast.

We plan to begin GAIA’s construction works before next summer, with total construction costs of EGP 5bn. Additionally, the company has completed the project’s designs and is waiting for building licences.

The project spans over 285 acres to accommodate 2,500 families. It includes various residential units such as separate villas, duplexes, and chalets.

What is the value of the achieved sales of GAIA?

We have achieved sales worth EGP1.3bn last year. Furthermore, we target EGP 10bn in total sales of the project. The company plans to market it within five years and direct EGP 100m in the construction of the first phase during 2019.

What is the projects’ source of funding?

Financing of the company’s projects depends on self-financing, marketing revenues, and bank loans, which are no more than 15% of the funding.

What is the company’s expansion plan?

The company plans to expand in New Alamein city through a partnership system. The implementation of projects through a partnership system became a direction and a requirement for the company recently–with some exceptions–based on our experience and reputation. Moreover, partnerships can enable us to focus on more than one project at the same time and ensure renewed and high returns for both parties.

The company owns the biggest project in El Mostakbal City. Please tell us about the project’s updates.

Al Ahly has launched the City of Odyssia with over 600 acres in El Mostakbal City, East of Cairo, and is being developed over 10 years in partnership with El Mostakbal for Urban Development company, with construction costs worth EGP 25bn. The company partnered with Hill International, Sabbour Consulting, Gensler Architects, and Jones Lang LaSalle (JLL). Hill International will be managing the design and construction of the project, while Gensler was tasked with providing innovative master planning and urban design services for the new city. JLL has been charged with providing consultancy services for the development and lease of the Central Business District.

The project comprises of seven residential compounds. The first is Alaire which will accommodate 1,700 families, with total sales of EGP 4.25bn, of which EGP 2.3bn has been achieved. The project’s construction costs reached EGP 2.5bn, and the company has begun the implementation phase.

The RIDGE is the second project within the City of Odyssia, with a total investment of EGP 2.5bn. It is the second residential compound following Alaire. The project is being built on an area of 220 acres (1m sqm), including 1,400 units ranging from villas, townhouses, and twin houses, with an approximate built-up area of 400,000 sqm, including two clubhouses for its residents. The project is being marketed on three phases, and the first phase’s sales have reached EGP 1bn.

When will the company deliver the first compound within the City of Odyssia?

The first delivery will be in 2023.

Will the company launch the third residential compound inside the City of Odyssia?

We will launch and announce the third project inside the City of Odyssia during the Cityscape-Egypt exhibition.

What are your other projects in El Mostakbal City?

The company owns the Green Square project in El Mostakbal City consisting of over 80 acres with a low built-up area. The project includes 1,027 units with targeted sales of EGP 1.8bn. We will deliver the whole project by the end of 2020.

Furthermore, we own L’Avenir in El Mostakbal City, a 100 acres project consisting 2,300 units with construction costs of EGP 1.8bn, and we have marketed 90% of the project with expected total sales of EGP 3.2bn. It is planned to be delivered in 2021.

What is more, we have marketed over 50% of Aria, spanned on 108 acres in El Mostakbal City, and it includes 2,200 units, with implementation costs of EGP 2.25bn and targeted sales of EGP 3.8bn.

Do you plan to launch real estate projects in the New Administrative Capital (NAC)?

The company did not penetrate the NAC as a developer yet, however, the Sabbour Consulting office is designing and supervising the implementation of five land plots obtained by big developers, as well as one of the six universities being implemented in the NAC. However, the company is waiting for the next offering in the Capital for a partnership interest on an area of not less than 200 acres.

What is the size of the company’s land bank?

Al Ahly’s land bank reaches 5m sqm and we are seeking to raise it to 6m sqm until mid-2020 through launching new projects in New Alamein, the NAC, the North Coast, Sixth of October, and Upper Egypt.

In your opinion, how did the liberalisation of the Egyptian pound exchange rate affect the construction cost?

The floatation of the pound has increased construction costs by 42%.

What is your expectation regarding price hikes in the real estate market in 2019?

I expect an increase of 20% in unit prices for the current year.

The post Al Ahly Sabbour eyes investments in New Alamein, NAC appeared first on Daily News Egypt.

US-Saudi-UAE consortium negotiates with ACUD to develop 500 feddan entertainment area in NAC Wed, 27 Mar 2019 08:17:51 +0000 Company launches lands in partnership system with 100-feddan size, says spokesperson

The post US-Saudi-UAE consortium negotiates with ACUD to develop 500 feddan entertainment area in NAC appeared first on Daily News Egypt.

The Administrative Capital for Urban Development (ACUD) is negotiating with a number of Egyptian, Arab and foreign developers to obtain plots of land in the New Administrative Capital (NAC), whether through buying land or partnership, according to the ACUD’s spokesperson Khaled El Hosseini.

El Hosseini told Daily News Egypt that the ACUD has recently received more than 10 new offers from different foreign developers to launch new projects in the New Administrative Capital (NAC), and we interviewed him to find out more, the transcript for which is below, lightly edited for clarity:

How many new applications have been submitted by developers to obtain lands in the NAC?

The ACUD is negotiating with a number of Egyptian, Arab, and foreign developers to obtain plot of lands in the NAC, whether through buying land or under a partnership system. We have recently received more than 10 new offers from different foreign developers to launch projects in the new capital.

In mid-March, the company has received an application from a consortium of American, Saudi and Emirati companies applying to obtain a 500-feddan plot of land to develop a commercial mall and an entertainment area in the NAC.

Did the ACUD take a decision regarding their request?

The company is still examining the position of the consortium and its financial solvency in order to decide. Besides, many negotiations are still ongoing during the study phase.

Will you plan to launch projects in a partnership system?

The company is seriously studying entering in partnerships with companies and developers on an area of not less than 100 feddan, as it would be beneficial to both parties. For one thing, the ACUD ensures the receipt of renewable profits over the duration of the project and the developer will acquire the land without paying for it.

What would be the ACUD’s share in the event of co-developing projects?

In case of having a partnership between the ACUD and any other company, the share of our company will not be less than 40% or 50% depending on the nature and status of each project.

How many developers did pay 20% of their land’s value so far?

Approximately 70 developers paid 20% of the value of obtained land in the new capital.

How many ministerial approvals have been issued for projects inside the NAC?

Up to date, 30 ministerial approvals were issued. The remaining approvals will be issued soon.

How much are the size of sold out lands?

More than 17,000 feddan have been sold, representing over 70% of the size of the project’s first phase. In addition, there is the sale of lands to establish 64 private and international schools for all education stages.

Moreover, the company has sold more than 70% of the MU32 mixed-use area, and also opened sales in the other mixed-use area MU21, and their selling rates are going well.

After the withdrawal of Chinese CFLD Company from developing 15,000 feddan in the NAC, did this affect the implementation rate?

The decision to withdraw from the contract with China’s CFLD to develop 15,000 feddan in the new capital was not only due to disagreement over the partnership shares, but the ACUD board wanted to reject the contract with the Chinese company as there are other large Egyptian companies who have the same expertise and efficiency to implement and develop the lands that the Chinese company wanted to develop.

Additionally, if the Chinese company got the land, it would weaken the competition of Egyptian companies because it would offer units in the project at lower prices than Egyptian real estate developers because this company has enormous potentials to develop large areas, which would harm the business of Egyptian companies operating in the new capital in general. Moreover, the Chinese company would have transferred its revenues outside Egypt and it would not represent any addition to the Egyptian economy.

Overall, the withdrawal has no effect on the development of the NAC’s first phase because the land that the company planned to develop was part of the second phase of the project.

What are the updates regarding the negotiations with the Korean company to develop the land instead of CFLD?

The negotiations have stopped.

Do you have any direct contracts with Chinese CSCEC?

The ACUD has already sold 1,050 feddan of the central business district to the ministry of housing, utilities, and urban development, of which 200 feddan on the bank of the Green River have been allocated by the ministry for the establishment of a skyscrapers area.

Regarding the building of the tallest iconic tower in Africa, implemented by the Chinese company CSCEC, it reached a height of about 385 metres. The ACUD had sold the land to the ministry of housing in the central business district at EGP 10,000 per sqm.

What are your expectations concerning future prices of unsold land plots?

The pricing committee is currently meeting to determine the price of the lands that have not yet been sold. However, I believe that the land prices in the NAC will significantly increase, especially after the transfer of ministries, embassies, and government agencies.

Market experts predict more withdrawals will occur by junior developers in the coming period. Do you think so?

Our company is looking into the solvency of companies before contracting and the ACUD insists on implementing the terms of the full withdrawal to deter any developer that is not serious. Likewise, there is no mistake in implementing projects, according to our periodical reports on the executive situation of each developer in the new capital.

Up till now, no fines have been imposed on developers as they are abiding by standards and implementation schedules. The company is very strict regarding developers’ failure to meet their commitments through withdrawing the land in case of complete failure or delay in completing the project according to the implementation timeframe.

Do you see that Egypt’s real estate market witnesses a deceleration in sales?

This period of each year is witnessing a relative calm in sales and then it increases again. The ACUD also provides facilities for developers to help them develop and complete their projects. For example, the company offers three months as a grace period for companies in case of a delay in carrying out construction works, in addition to allowing some companies an additional year for instalment payments.

What is the situation of infrastructure development?

The ACUD has managed to develop 90% of water infrastructure in the first phase of the NAC. What’s more, the company plans to fully complete the infrastructure of the first phase before 2020. The ACUD has made great progress with regard to infrastructure works and utilities in the NAC’s first phase. The infrastructure cost reached about EGP 140bn up to date, of which EGP 30bn was for developing smart infrastructure. There are two water plants to supply the residents of the new city’s first phase, the first already exists with a capacity of 125,000 cubic metres of water per day, in addition to a water pumping station that is being established with the same capacity. Additionally, the development of sanitation services, which is divided into three phases, is in progress as per schedule. Moreover, a power plant is being implemented by Siemens with a capacity of 4,800MW, while another three lower-voltage plants are under development.

The company is currently operating in seven districts out of a total of eight, and by the end of 2020, the rest of the lands of the NAC’s first phase will be sold.

Over and above, the rates of delivery of sewage and electricity projects in the new capital are going well, as the average rate of infrastructure completion exceeds 50%.

Who are the international operators the ACUD has contracted with to develop the project’s infrastructure?

The ACUD has signed a contract with the EDF Group, the French company for the construction of electricity for homes in the capital, and a smart money collection system. In addition, last month, the company has contracted with the US company Honeywell to develop security systems in the NAC. According to the contract, Honeywell will install public surveillance cameras, posts, control systems, and other devices, with expectations to be operational early 2020.

Furthermore, we are studying cooperation with MasterCard to make the NAC the first cashless city in the country, as part of the country’s plans to support financial inclusion.

Do you plan to obtain bank loans?

We do not have to because the ACUD does not have any financial challenges in funding the NAC’s infrastructure. In addition, the company’s budget for financing the infrastructure of new capital project is proceeding as planned.

Also, the company implements infrastructure works out of proceeds from selling lands to developers and the new capital does not need the funds of the state budget because the instructions of President Abdel Fattah Al-Sisi were clear regarding not burdening the state budget with the new project.

The post US-Saudi-UAE consortium negotiates with ACUD to develop 500 feddan entertainment area in NAC appeared first on Daily News Egypt.

Unilever Mashreq invests over EGP 500m in Egypt since end-2016 Sat, 23 Mar 2019 15:54:55 +0000 Company exports to more than 30 countries across world, says marketing director

The post Unilever Mashreq invests over EGP 500m in Egypt since end-2016 appeared first on Daily News Egypt.

Unilever Mashreq has invested over EGP 500m in Egypt since 2016, said the company’s Marketing Director and executive board member, Sherine Abdel Moneim, during an interview with Daily News Egypt.

She explained that the investments were used to increase production capacity and inaugurate a new factory and production lines. 

Abdel Moneim highlighted that Unilever’s focus is to double its export rates in order to get foreign currency into the country, in addition to opening new markets for Egyptian products, as well as improving the Egyptian product.

She tackled in the interview the company’s export rates, and how the Egyptian pound flotation affected consumption patterns, among other topics, the transcript for which is below, lightly edited for clarity:

How many factories does the firm have in Egypt?

We have five factories in Egypt, one of them is for hair care products. The second is for the products of Oral hygiene, while the third one is for soaps, shower gels, and body washes, in addition to a plant for the home care products (washing powder products), as well as a plant for food products, and the last factory is for Lipton tea.

Are there any expansion plans for Unilever Mashreq in Egypt?

At the moment, there are no definite plans to open new factories, but we are very interested to increase our production capacity.

What is the company’s total export rate?

It depends on the type of the product. For example, the personal and home care plants export about 50% of their production, while for the washing powders, we export 100% of our production. The tea and food exports are less than that of the personal and home products. I believe we are like a hub for manufacturing these products in the Middle East.

To how many countries does the firm export? What about the firm’s market share in Egypt?

We export to over 30 countries across the world, including Europe, the GCC, Africa, and Canada, which means that Egyptian products could compete in the markets which require high international standards.

Concerning the domestic market, almost 90% of our products are number one in the Egyptian market.

Do you think that the consumption pattern has changed after the pound flotation?

Yes, it has differed very much. The consumer needed to adapt to the new economic situation and to the price hikes in water, electricity, and more. However, consumers were shocked at first, and subsequently this increase in prices significantly influenced their consumption, thus they used to put priorities.

According to our study, we found that the transportation in addition to utilities, as well as food and drinks, took the largest portions of the Egyptian family’s budget.

Consequently, citizens began to think of a solution to face this increase, so some consumers began to buy the rest of their needs from cheaper outlets, and others searcher for cheaper alternative products, but after six months from the flotation, we started to see an improvement and people began to adapt to the new situation. We also started to witness a growth in the market similar to what it was before the flotation, especially in the second half of 2018.

How can you evaluate the Egyptian economic situation after the flotation?

No doubt that the Egyptian economy witnessed a very difficult period, but thanks to the government’s economic reform programme and the new legislations which aimed to attract investors into Egypt, we can say that these efforts led to positive indicators, such as a drop in the unemployment rate. The unemployment rate was 8.9% in February, according to the Central Agency for Public Mobilization and Statistics (CAPMAS).

Also, among the positive indicators is controlling the inflation and the increase in foreign exchange reserves, in addition to increasing the value of the Egyptian pound.

Notably, Egypt’s urban inflation reached 14.4% in February.

Meanwhile, we also met a lot of business leaders and investors in the business communities who always expressed their desire to invest in Egypt, saying that Egypt is a promising market.

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Nissan willing to support Egypt’s automotive policy, make Egypt an export base in region: Senior VP, Chairperson for AMI region Thu, 21 Mar 2019 08:00:18 +0000 NMEG to increase production to 28,000 in 2019, aims to reach more than 20% market share

The post Nissan willing to support Egypt’s automotive policy, make Egypt an export base in region: Senior VP, Chairperson for AMI region appeared first on Daily News Egypt.

Nissan is targeting to double its presence in the Africa, Middle East and India region (AMI), in their mid-term plan. In order to do so, the company will work on three different axes, Peyman Kargar, Nissan’s senior vice president and chairperson for the AMI region, told Daily News Egypt in an interview, during his visit to the country.

Kargar explained that the first axis would be in the countries where they already have a strong presence, where they aim to increase their growth in such countries, including the Gulf, South Africa, and Egypt.

Kargar stated, “The second axis is the transformation of Nissan’s business in the countries where we have a limited presence such as India. In these countries, Nissan invested heavily, and we will continue to do so, yet we are not getting enough benefits.”

“The third axis is the countries where Nissan has no presence such as Pakistan, where we announced Nissan’s entry there with our Datsun brand two months ago. Algeria is also an example where we plan to produce and sell Nissan cars there,” Kargar elaborated. 

Nissan Motor Co Ltd, usually shortened to Nissan, is a Japanese based multinational automobile manufacturer. The company sells its cars under the Nissan, Infiniti, and Datsun brands. In fiscal year 2017, the company sold 5.77m cars, achieving a global market share of 6.2%, and generating a revenue of 11.9tn yen ($106.877bn).

According to Kargar, Egypt is a strategic country for Nissan in the region, as they are the only original equipment manufacturer (OEM) directly present in the country, and the company’s investments exceeded the $200m mark, additionally they managed to develop all the value chain of the automotive industry here, with Egyptian talents across all departments including research and development (R&D), sales, marketing, etc.

“We started from a 3.8% market share, and now Nissan Motors Egypt (NMEG) has around a 15% market share, which reflects a strong growth, but our targets are still more than this. Also, we have localised the production of parts and equipment of various cars, Nissan Sunny for example has more than 51% Egyptian parts,” he explained.

Kargar explained, “We have a strong momentum today. Our objective is to become a market leader, and the number one brand, consequently, we now have to develop more Egyptian talents, increase our product capacity, and improve our supplier base, that was the main focus of our discussion with the Egyptian government.”

Daily News Egypt interviewed Kargar, to find out the details of the company’s meeting with the Egyptian government, and their plans for Egypt, and the rest of the AMI region. The transcript for which is below, lightly edited for clarity:

Did the Egyptian government offer any incentives for Nissan?

During our meetings with Egypt’s Prime Minister, Mostafa Madbouly, and the Minister of Trade and Industry, Amr Nassar, the discussion was mainly on our plans in Egypt, and our commitment to the country.

In addition, we also discussed Nissan’s willingness to support the government’s automotive policy, how to accelerate the development of our supply base, and the ways of transforming Egypt to an export base in the region.

We are pleased to have the full support of the Egyptian government to Nissan’s plan, and its readiness to provide incentives in order to protect the local production. The objective is not to give incentives just to Nissan, but to put in place an ecosystem that would boost local production, and make it more competitive.

In order to reach our goal and become Egypt’s top automotive player, and to increase our manufacturing facilities, we need an extremely high level of quality and competitiveness, which means how far you can go in terms of spending money in the country and the quantity of production.

Without any incentives, your car would be more expensive than any custom duty-free imported cars from abroad.

How does Nissan plan to expand in the local market?

Today, we stand at around a 15% market share, as one of the top three in Egypt. In order to become the number one, we need to have above a 20% market share, which is what we are targeting.

Additionally, we have to increase our industrial capacity in the country. Within the next few months, we are going to implement our plans to increase production in 2019 to produce 28,000 cars a year, up from 22,000 now in 2018.

Consequently, we are going to need more human capital. Accordingly, we will recruit more than 350 employees in our organisation, in addition to the ones who will be hired by our suppliers.

At the moment, I cannot disclose the exact amount of investment we are planning to inject.

In your opinion, what does Egypt need to become a regional automotive hub?

First of all, you need committed OEMs, you will not have suppliers without OEMs, and you would not be able to compete with other countries.

Second, you need to develop a very strong supplier base, which is a prerequisite to becoming an export hub. Currently, Egypt has good suppliers, but not enough of them, and Nissan is ready to develop the country’s supplier base.

This comes because when you have efficient suppliers, you can utilise them not only here in Egypt, but also to produce parts for other sites you have across different countries.

To achieve that, as a country, you need to have a strong policy which protects local production. What some businesses are currently doing, which is only importing cars, is easy.

Afterwards, OEMs need to make their manufacturing facilities competitive and characterised by high quality. On this front, Nissan is well positioned to do so, because we are leaders in terms of quality, innovation, and competitiveness.

Does Nissan plan to introduce any electric vehicles to the Egyptian market?

Nissan is a global electric vehicle (EV) leader. In parallel to our pure EVs, we are currently developing an exclusive technology which is called e-POWER system. The system is a hybrid solution that gives the customer the full feeling of an EV solution. Even if the required infrastructure in not available in the country, the customer will still be able to use it, as it combines a 100% electric motor drive with a gasoline engine which charges the battery.

In Egypt’s case, we will bring the best of Nissan, including what we call ‘Nissan Intelligent Mobility’ which focuses on electrification and connectivity. The plan is to consider both solutions, yet we still did not decide which model to bring, and we are currently working on that.

However, the deployment in the country will depend on the government’s policy to boost EVs, as they require a suitable infrastructure. In the hybrid solutions case, the technology is a little bit more expensive, thus it also needs a policy.

What about the Gulf countries, can you elaborate on the company’s expansion plans?

At Nissan, we have two different organisations for the region, one for Saudi Arabia, and the other one for the rest of Gulf Cooperation Council (GCC) countries.

In the GCC, we have excellent performance in some countries, such as the UAE, where we have a 20% market share, and very good presence in Qatar and Kuwait. Currently, we are number two in the GCC countries, and we hope to become number one.

In Saudi Arabia, the market is very tough, as it has dropped by almost 50% in terms of sales’ volume, in comparison with 2014. We have decided to stay in the country through ‘Nissan Saudi Arabia’, which is a joint venture formed with the auto maker’s partner Khaled Juffali Company, and we have an ambitious plan to double our 7% market share.

Do you plan to introduce economy models in the country?

At the moment, we are developing and deploying the three brands that we own, Infiniti, Nissan, and Datsun in the region. We are currently studying the ways we can expand the Datsun brand, which comes with a very new competitive platform in India now, currently producing various line-up of models.

Today, we are selling Datsun mainly in India and South Africa. Yet, there are no reasons, with the upcoming line-up, that we will not consider other countries within the AMI region.

The decision has not been taken yet, but Egypt and North Africa are one of the areas which we are considering in the near term.

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