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2017 The Ritz-Carlton Hotel Company, L.L.C.
CAIRO
F E B R UA RY 2 0 1 7 VOLUME 34
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Cover Story: A tomato’s tale
From vine to vendor, how a tomato is priced. Cover Design: Nessim N. Hanna
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Inside
Editor’s Note Viewpoint
The Newsroom In Brief The news in a nutshell
Region Notes News from the Middle East
© Copyright Business Monthly 2016. All rights reserved. No part of this magazine may be reproduced without the prior written consent of the editor. The opinions expressed in Business Monthly do not necessarily reflect the views of the American Chamber of Commerce in Egypt.
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In Depth
Paper sector crumpling under high costs A struggling local industry fails to meet spiking demand
Connecting Egyptians with tech jobs Is ICT the ticket to prosperity?
Business Monthly – February 2017
ISSUE 2
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Market Watch
Stock Analysis The warmth of January
Capital Markets A glance at stocks and bonds
Money & Banking Forex and deposits
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Key Indicators The economy at a glance Egypt-U.S. Trade Imports and exports
44 46 47 53 56
Executive Life
Dining Out Think globally, eat locally at Il Piccolo Mondo Travel From Paris with love
The Chamber Events Member News New Members Classifieds Media Lite An irreverent glance at the press
LOV E I S ON THE M ENU... FRO M THE HE ART
SA AY Y IT WITH ROSES ... AND A E G A L F E A ST S T AT AT T H E C A I R O R EG OT T F O R V A L E N T I N E ’ S M A R R I OT TO C H E R I S H . M E M O R I E S TO cross tthe he i n to e a ch other’s ot h e r ’s e yes aacross Gaze ze into each eyes the ke ri ng candle candl e flame f l ame and tease tease the flickering h e intimate i nti mate se be t we en your yo u r fingers f i n g ers in i n tthe rose between m osp h e re of of R istor ante Tuscany Tusc any and atmosphere Ristorante h ef s tempt te m pt you yo u G al l er y, where w h e re our o u r cchefs r ay a Gallery, Saraya h lo vi ng ly created created menus. me n us . with lovingly g e nt l e l ove iiss in i n tthe h e air ai r aalong long w it h gentle s , love Yes, with lo d ies from fro m g u it ar and p ian o. melodies guitar piano. of tthe he e ast Torii flirt f l i r t with wit h tthe he m ys te ries of At Torii mysteries east i n e and and a l enti n e’s tteppanyaki ep pa nya ki ... d for a V Valentine’s dine n ce w it h yyour our d ate aatt Harry’s H ar r y’s P ub. dance with date Pub.
You’ll u’ll aadore dore Valentine’s Val entine’s at at the t he Palace. Pal ace. 16 SARAY EL GEZIRA ST., PO BOX 33 ZAMALEK, CAIRO 11211, EGYPT. T: 00. 202.27.28.3000 CAIROMARRIOTTHOTEL.COM ARABIC.MARRIOTT.COM
Editor’s Note
Corporate Social Responsibility
Director of Publications & Research Khaled F. Sewelam Editor-in-Chief Rachel Scheier
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nyone who checked their Facebook or Twitter feed in the last few days of January undoubtedly noticed the trending hashtag #DeleteUber. The global ride-hailing company is no stranger to PR firestorms. Uber has successfully swept into new markets all over the world in recent years, upsetting local taxi drivers and some governments in the process. But this time, the tech darling has unwittingly been caught in a political firestorm in its own backyard. The backlash was sparked after Uber lowered prices during a boycott of New York taxi drivers protesting U.S. President Donald Trump’s controversial immigration ban. Uber CEO Travis Kalanick insisted the move wasn’t an attempt to profit from the protests, publicly decrying the president’s order and even setting up a $3-billion fund to help affected drivers— but the damage was done. So many angry customers asked to cancel their accounts that Uber had to set up an automated system to handle the volume. Once, companies that knew what was good for them simply stayed out of the political fray—at least publicly. After all, what’s to be gained from a corporation taking a stand that inevitably either infuriates much of its customer base or the government that regulates and taxes it? In the days after President Trump’s Jan. 27 executive order closing U.S. borders to refugees and immigrants from seven predominantly Muslim countries, calls flew back and forth between America’s top CEOs about how to respond to the order, reported The New York Times. Tech executives in particular loudly assailed the ban. Microsoft, Amazon, Expedia and Apple, among others, stressed that Silicon Valley is and always has been dependent on immigrant labor, like most other American industries. The response from older, more traditional sectors was more mixed, with Chevron and Walmart issuing circumspect statements like: “We’re closely monitoring the situation,” while all the big telecoms simply said “No comment.” But there were a number of notable exceptions: Such corporate establishment mainstays as Coca-Cola, Ford and Nike all publicly opposed the president’s order. Even Goldman Sachs, the investment bank from which Trump tapped several of his top aides, has come out against it. What’s clear is that staying neutral isn’t as simple as it used to be. Multinational companies now operate in a globalized reality in which perceptions—good or bad—can spread like wildfire via the internet. Last fall, John Chipman, head of the International Institute for Strategic Studies, floated the notion that today “every company needs a foreign policy.” In the future, businesses may also have to think about having a moral policy, too.
Contributing Editors Kate Durham Tamer Hafez Staff Writer Edmund Bower Senior Art Director Nessim N. Hanna Graphic Designer Emy Emile Advertising & Business Development Director Amany Kassem Advertising Coordinator Nada Auf Photographers Kareem E lSharnoby Said Abdelmessih Production Supervisor Hany Elias Market Watch Analyst Amr Hussein Elalfy Chamber News Contacts Nada Abdalla, Azza Sherif, Susanne Winkler
U.S. address: 1615 H Street, NW • Washington, D.C. 20062 Please forward your comments or suggestions to the Egypt editorial office:
R ACHEL S CHEIER
Business Monthly American Chamber of Commerce in Egypt 33 Soliman Abaza Street, Dokki 12311 • Cairo • Egypt Tel: (20-2) 3338-1050 • Fax: (20-2) 3338-0850 E-mail: publications@amcham.org.eg www.amcham.org.eg/bmonthly CTP and printing: Sahara Printing Company, SAE – Nasr City Free Zone
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Advertorial
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Viewpoint
DISAPPEARING STUFF
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magine that someone went into a coma 30 years ago and woke-up only to discover that some major changes have happened in his/her absence! It would be hard for anyone to explain to that person that you no longer need a paper ticket to travel, that you can take your phone on the street and talk as you go practically anywhere in the world. It would also be challenging to introduce the concept of the internet and research on the Net… and it will be even harder to get into the medical field, DNA has revolutionized police mentality and has made many secrets impossible. Digital has killed the film and the developing and printing industry! I can go on and on about what happened and the pace at which it happened. It used to take centuries to go from human and animal strength to steam, and from steam to electricity and internal combustion; but since the invention of the micro-chip, humanity has been floating on constantly moving clouds. Slowing down is a luxury no one can afford, you blink and somebody, somewhere on the planet earth, has passed ahead of you! The concept of buying durable goods that will survive you has become a fallacy, buy whatever does just the trick you need today and get the new version cheaper in six months. There are still many things that will become obsolete and disappear shortly, we know for sure that paper checks will no longer exist. Their cost and the logistics surrounding their issuance make them impractical, plastic cards and online banking will lead to the demise of this instrument. The post office will never survive the ease and
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security provided by email and courier services, all you get in the mail today are ads, coupons and the eventual holiday card from your grandmother or old companies that still believe in personalized, signed wishes. I still enjoy them but will soon talk about them to the next generations, as a thing from the past. It is interesting to ask young people about the newspaper they choose to read. Very few read newspapers except on planes if there is no WiFi. So much is accessible in an organized selective form and for free that you almost wonder why would somebody need to buy what we can all get for free. The same applies to printed books, our telephone landlines and music. Education and an open mind are the only saviors. They empower individual creativity and allow adaptability and flexibility. As soon as you become rigid, you break or die. The one thing that we are losing that scares me to death is: Privacy. The concept is in real danger. All I described above means that we talk publicly, we think publicly, our movements are observed and controlled by some you know and some you don’t. We also get our information from the same sources and respond accordingly. Basically, the brain drivers, behavior controls and on a lighter note, the body searches we must go through for security purposes, the way we pay our tolls and the surveillance cameras are all conspiring to get rid of the very essential concept of privacy. We don’t know yet what we don’t know, so we’d better get used to full exposure!
A NIS A. A CLIMANDOS President, AmCham Egypt
Eurobond sale nets $4 billion
After initially planning to sell $2-billion worth of Eurobonds, Egypt announced Jan. 24 that, thanks to high demand, it would double the amount of bonds on offer and at lower-than-expected yields. “We had a very strong turnout and we had a very big presence from all accounts,” finance minister Amr Garhy told Bloomberg TV in a Jan. 25 interview, adding that demand was covered “multiple times.” The sale included five-year bonds (with a face value of 6.125 percent), 10-year bonds (at 7.5 percent) and 30-year-bonds (8.5 percent), Garhy said. According to Reuters, the bond values were initially estimated to range from up to 6.625 percent on five-year notes and 8.875 on 30-year bonds—the lower yields, the agency said, indicate a vote of confidence from foreign investors. “It puts us in a sweet spot for the coming period, for which we are planning to be a frequent issuer in the market,” said the minister. Last November, he said Egypt might seek to raise as much as $6 billion via international bond sales in 2017. The first issuance was initially scheduled for late 2016 but was delayed due to market volatility following the election of U.S. President Donald Trump.
Gov’t fixes customs rate for imports
In an attempt to give importers more clarity when planning shipments and setting prices, the government announced Jan. 17 that the customs exchange rate would be fixed rather than floating from day to day. According to a statement from the finance ministry, the rate was set at LE 18.5 per dollar, based on the average exchange rate between Dec.15 and Jan. 15. A new rate will be set in March. Importers, who had requested a clearer exchange-rate policy, were nonetheless reportedly disappointed by government’s set rate. “They are taking the average rate at the banks, and the dollar may weaken during that month. We were expecting the rate to 12
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be at LE 10 per dollar,” said Ahmed Shiha, head of the importers division at the Cairo Chamber of Commerce, talking to Reuters. When the exchange rate was liberalized last November, many importers were left exposed by open dollar-denominated credit lines that were opened when the official value of the pound was set at LE 8.88 they now must be repaid at the muchhigher market rates.
Details of IMF loan revealed
Two months after Egypt received the first $2.75-billion tranche of a threeyear, $12-billion international financing package, the details of a loan agreement with the International Monetary Fund were revealed to the
public on Jan. 18. On the fiscal side, government debt is expected to decline to around 88 percent of GDP in 2018/19, compared to 98 percent in 2015/16. Meanwhile, the current account deficit is expected to narrow to 3 percent of GDP by 2018/19, and the overall deficit to 4.7 percent of GDP, according to a review compiled by Bloomberg. These figures will be achieved via increased revenue (in addition to the new value-added tax, the documents call for a capital-gains tax to be reinstated as of May), as well as cost savings from cutting fuel subsidies, keeping wage bill increases below inflation levels and developing a pension reform plan. The IMF has not recommended cuts to food subsidies, and the program developed with the Egyptian government includes
In Brief
social protection measures such as the expansion of the Takaful and Karama programs to reach 1.7 million households and 7.3 million beneficiaries. In a briefing following the document release, IMF Mission Chief for Egypt Chris Jarvis said he expected to see “significant falls in inflation” by the second half of 2017. The next tranche of the loan is expected in the spring, following an assessment visit by the IMF. “All being well,” he said he expected the funds to be released in late April.
For the second month in a row, annual headline inflation hit an eight-year high in December, reaching 23.27 percent after recording 19.43 percent in November. Core inflation rose even more, hitting 25.86 in December, up from 20.73 percent the previous month. “The monthly increase was mainly driven by higher prices of core food items due to cost push effects in addition to continued supply shocks related to rice and sugar,” wrote the Central Bank in its monthly inflation note. Prices have ballooned since early November, when Egypt allowed the pound to float freely against the dollar, sending the official exchange rate from LE 8.83 per dollar to around LE19 per dollar as of late January. In an attempt to control inflation, the CBE raised interest rates by 300 basis points at the time of the float, but it has since held rates steady. In a Dec. 29 press release explaining its decision not to boost interest rates further, the bank predicted that annual inflation would narrow “after being impacted by transitory cost-push factors stemming from the economic reform measures.”
Cabinet approves bankruptcy law
Without a specific law governing bankruptcy, Egyptian individuals and companies facing financial ruin have long had no choice other than to be evaluated by the courts on a case-by-case basis, often
KAREEM EL SHARNOBY
Cost of living soars
INFLATION HIT AN EIGHT-YEAR HIGH IN DECEMBER FOR THE SECOND MONTH IN A ROW.
facing the specter of imprisonment for unpaid debts. In an attempt to remove this hefty barrier to risk-taking and investment, Egypt’s Cabinet on Jan. 4 approved a draft law that regulates bankruptcy, the country’s first such legislation. According to a Cabinet statement, the law will “deal with cases of faltering companies and merchants to fulfill their obligations.” Further details were not published, but the Cabinet said the law is “within international standards” and “ensures the rights of all parties” including creditors, debtors and employees. Before being enacted the draft law must still pass through several stages, including winning parliamentary approval.
Army to launch pharma firm
As doctors and patients across Egypt grapple with high prices and drug shortages, a new player is set to enter Egypt’s pharmaceutical trade: the military. According to a prime ministerial decree published last month, the National Authority for Military Production—part of a military economic network that runs companies that make everything from refrigerators to bottled water—has been granted a license to set up a drug company, the
Egyptian National Company for Pharmaceutical Products. The decree did not provide details about what types of medicines the firm would be allowed to develop or produce, but it came shortly after a Jan. 12 announcement by the health ministry that the prices of 3,000 drugs would be raised by 15 to 20 percent to help manufacturers cope with increased costs due to the reduced purchasing power of the weakened pound.
Sisi announces plans for Upper Egypt
Speaking at a televised youth conference in Aswan, President Abdel Fattah el-Sisi announced a series of decisions aimed at boosting living standards in Upper Egypt, including the establishment of a High Authority for the Development of Southern Egypt. The body will be responsible for managing LE 5 billion in investments over the next five years aimed at creating jobs, improving services and preserving Egypt’s Nubian heritage. Sisi also announced plans to establish new industrial zones in the South, with 200 small factories to be built in southern governorates over the next six months. The announcement drew a mixed response, with Nubian activists telling
Business Monthly – February 2017
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In Brief
STREET SENSE What could y ou affor d four years ago that yo u can’t now? For one thing, travel abroad. My wife and I used to regularly go to Europe for our annual holiday, and for shorter trips we’d fly to Hurghada or Sharm el-Sheikh. We can’t do that anymore because of the exchange rate and the high price of airline tickets. Nor can we go out for a nice lunch or dinner as frequently as we used to. Instead of going to high-end restaurants, we order fast food. Ahmed Tamim, 35, banker
The one thing I can still afford to buy is food. My family and I are not eating any less. Some places have raised their prices, but the increases are small enough that I still buy from them. The rest of the things we need I get from kind people, who donate their old clothes. We have never spent money on anything but the essentials, and I always shop at the cheapest possible places. Mohamed Abdel Rahman, 29, shoe-shine man My budget is definitely more stretched than it has ever been, despite my clients paying me more. I have never been able to afford anything more than the essentials, like food and clothing, but at least I used to have options. I could decide to eat meat four days a week rather than three, for example. Now I can only afford the basics, and it’s been a month since I bought meat or chicken. Prices have just gone crazy. Fatma Sobhy, 46, maid I’ve cut back on things like jackets, new shoes and other nonessentials. In the past year, I’ve stopped buying those kinds of things completely because they’ve become so expensive. When I’m out with friends, I don’t order food—just a drink and maybe and appetizer if I’m really hungry. I could still afford these things, but I ask myself why I’d pay so much for something I don’t really need. Asmaa Waleed, 25, marketer What is really stretching us—and we don’t know how we can continue to afford—is school fees. My daughter goes to an international school. We have been making do by squeezing our budget in every other area in order to pay her tuition. However, recent increases mean that I’ll be forced to look for a cheaper school for her, because we simply don’t make enough money to cover tuition next year and also afford basics like rice, meat, bread and milk. Maryan Adel, 35, housewife I have been retired for over a decade, so my spending hasn’t really changed. I realize prices have gone up, but I’m still buying the same stuff. I still have a driver, and I had to raise his salary this year. My daily spending is on food and drinks, with an occasional outing at the club with old friends where I can just not order anything. Mohamed Saleh, 71, retired business owner
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SHUTTERSTOCK
Buying new clothes. For the past two years, I have been trying to make my old wardrobe last as long as possible. When I absolutely have to buy shirts for work, I go to cheap shops. In the past, I used to buy decent quality shirts that would last at least a year. Now I just get what I can afford. Sameh Abdel Tawab, 31, civil servant
GOLD MINING FIRMS DON’T LIKE THE GOVERNMENT’S INVESTMENT TERMS.
reporters the decisions do not address Nubian demands, particularly the right to return to lands from which they were displaced due to the construction of the Aswan Dam and the militarization of surrounding areas.
Gold tender draws lackluster response
While Egypt's gold-mining history dates back to the Pharoahs, large tracts of desert land remain un- or underexplored. Prospectors predict Egypt could be sitting on billions worth of the rare metal; Canadian mining executive Mark Campbell called Egypt “a geological Disneyland” in remarks to the Associated Press last year. Despite this untapped potential, companies say the government’s investment terms are driving them away. On Jan. 15, Egypt invited gold miners to bid for exploration licenses under production sharing agreements that grant the state half of any eventual profits. Companies wishing to participate would have to pay thousands of dollars per block for terms and conditions and technical data, as well as put up a $50,000 bond and detail an investment plan. Winning companies would also have to pay out millions of dollars’ worth of bonuses and fork over cash for training
fees as well as royalty fees of 6 percent. Following the announcement of these terms, Egypt’s three major players— Centamin, Aton Resources, and Thani Stratex Resources—told Reuters they would not submit bids. But as of press time, authorities said they had no intention of altering the terms. “For those who find the bid round suitable for them under these terms, they are welcome in Egypt. For those who don't find them suitable, I don’t want to hear anyone’s advice,” said mining authority head Omar Teama.
Reserves at highest level since 2011
Egypt’s net foreign reserves rose to $24.265 billion at the end of December, according to CBE figures. That was up from a level of $23.058 billion at the end of November and the highest since September 2011. Since the float of the Egyptian pound in November, the Central Bank has ceased holding regular dollar auctions for importers. According to Reuters, the reserves also benefitted from “a $2-billion repurchase transaction that the Central Bank secured with global banks,” a transaction with “a consortium of international banks” that will mature in one year. ■
Region Notes Caspian Sea
Black Sea
TURKEY
TUNISIA
MOROCCO
Mediterranean Sea
CYPRUS LEBANON
SYRIA
IRAN
IRAQ
ISRAEL JORDAN LEBANON
ALGERIA LIBYA
SYRIA
KUWAIT PALESTINIAN TERRITORIES
ISRAEL EGYPT JORDAN
Persian Gulf
BAHRAIN QATAR UAE
SAUDI ARABIA
OMAN
Red Sea SUDAN
YEMEN
Arabian Sea
Map intended for illustrative purposes only and may not accurately depict national boundaries or disputed territories.
■ Long-term UAE energy strategy big on green power Officials in the United Arab Emirates signed off last month on a $163-billion energy strategy that aims to cut the country's carbon emissions by 70 percent in the coming decades. In addition to improving energy efficiency, the UAE Energy Plan 2050 wants 44 percent of energy consumption to be met by renewables, 38 percent from natural gas, 12 percent from “clean coal” and 6 percent from nuclear power. At present, more than 90 percent of the country's energy is generated from gas, but the UAE recently invested in several large solar plants, and there are plans to bring a nuclear power station online later this year. “Ensuring the sustainability of energy resources means ensuring the sustainability of the country’s growth,” said Sheikh Mohammed bin Rashid, vice president and ruler of Dubai, according The National. Dubai recently set an even more ambitious target, aiming for 75-percent clean energy by 2050. 16
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SOUTH SUDAN SUDAN
■ Turkey and the UK sign arms deal In her first official visit to Ankara, British Prime Minister Theresa May signed a $125-million defense deal that will see UK-based BAE Systems work together with Turkish Aerospace Industries to develop Turkish fighter jets. During the Jan. 28 visit, May and Turkish President Recep Tayyip Erdogan also vowed to increase trade between the two countries. Erdogan told reporters he hoped to boost trade with Britain to $20 billion per year, up from $15.6 billion at present, and May announced that a working group has been established to lay the groundwork for a post-Brexit trade deal. May faced criticism for the move at home, with the English media taking May to task for moving closer to Turkey at a time when it’s facing increasing scrutiny over human rights; Turkish authorities have imprisoned tens of thousands of people following a failed coup attempt last year.
■ Lebanon opens oil, gas licensing round After a three-year delay, Lebanon finally announced plans to reopen its first oil and gas production licensing round. Five offshore blocks in the eastern Mediterranean will be open for bidding, Lebanon’s energy minister Cesar Abou Khalil told reporters on Jan. 26. Bidding was originally scheduled to take place in 2013 but was delayed due to Lebanon's political crisis. Initial regulations were not signed, and then, with no president for more than two years, the entire process was put on hold until early last month. The 46 companies that were qualified to bid four years ago will remain eligible for the auction, Khalil said, and additional companies will have until the end of March to apply. Bidding will take place in mid-September. According to Reuters, three of the five blocks opened for bidding abut a disputed maritime border with Israel. ■
BUSINESS MONTHLY
COMMODITIES
PAPER SECTOR CRUMPLES UNDER RISING COSTS BY TAMER HAFEZ
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n today’s digital world, it’s become increasingly fashionable to talking about “going paperless.” But stop for a minute and consider what a truly paperless society would look like. No magazines like the one you’re holding right now. No desk calendars, posters or shopping bags or the multitude of branding opportunities they offer. No business cards, sticky notes or textbooks. No toilet paper. Even in the age of electronic invitations and smartphones replacing the morning newspaper, we are still a long way away from becoming a paperless world. We produce some 300 million tons of paper per year globally. The United States, the planet’s number one 18 I
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paper consumer, uses more than twice as much paper as it did 20 years ago, despite the high environmental cost of this old, inefficient technology. Paper represents one of the largest components of landfill, and costs businesses huge amounts of time and money—your average office employees spends an estimated 30-40 percent of his or her day either filing documents or searching for information in filed documents, according to the The Paperless Project, which estimates that organizations still manage 70 to 80 percent of their processes on paper. Egypt was one of the world’s first civilizations to use paper; the very word is etymologically derived from “papyrus,” which the ancients famously used to make scrolls on which they wrote their
hieroglyphics. Today, with upwards of 90-million people and growing, Egypt consumes around 500,000 tons of paper annually. But while the nation’s appetite for paper is stronger than ever, the same cannot be said for Egypt’s paper industry, which is dominated by aging, inefficient state-owned companies that haven’t seen significant upgrades to their equipment or processes in decades. “We’ve never been able to operate at more than 70 percent of our capacity,” says Gamal Mahmoud, chairman of governmentowned Qena Paper Industry Co., the country’s largest paper maker. To fill the gap, Egypt is importing more and more of its paper and paper-based products. Moreover, as the cost of goods from abroad has skyrocketed in the wake
In Depth
of the plummeting pound, imported paper—like most other international goods—has gotten significantly more expensive. As of December, foreignmade standard printer paper cost LE 50,000 per ton versus LE 14,000 per ton or less for the local variety. With firms and consumers across the board squeezed by rising prices, unsurprisingly, this cost differential has spurred a sudden spike in demand for locally made paper and paper-based products. This would seem to be good news for Egypt’s struggling economy, with officials desperately trying to balance the trade deficit by encouraging the consumption of locally made goods rather than imports wherever possible. Unfortunately, the Egyptian paper sector simply isn’t up to the task. On top of their outdated facilities and processes, paper factories have seen their costs shoot up recently. Even locally available materials like the agricultural waste that’s used for pulp and scrap paper for recycled paper products have gotten more expensive. The upshot is that rather than seizing an auspicious moment to expand a local industry, Egypt’s paper factories are bordering on a crisis, say insiders—one that could have farreaching consequences. Egypt’s three big state-owned paper makers—QPIC, Misr Edfu and Rakta Co. (the General Co. for Paper Industry)— make up the vast majority of the local industry. Most of their business is making textbooks, copy books and exam papers and the like for Egypt’s vast public school system. The youngest of the firms is 14year-old QPIC, which is also the largest; the other two have both been in business for more than half a century. Eighty to 90 percent of the paper for public schools comes from these local suppliers, which have stayed in business thanks to exclusive contracts with the Ministry of Education. Publicly-run firms in Egypt are opaque about their financials, but industry insiders say the state-owned enterprises make very low profits from this government business, despite the volume, and rising costs over time have translated into massive losses for the big three. Still, they account for the vast majority of Egypt’s paper industry. According to Amr
Khedr of the Cairo Chamber of Commerce, private paper factories in Egypt together make around 20,000 tons of paper annually, versus the 180,000 tons manufactured by state-owned firms. Still, that is well below the public firms’ combined annual production capacity of around 250,000 tons. Like many of Egypt’s state-owned enterprises, the public paper factories have suffered from a lack of investment and upgrades that would enable them to keep pace with modern developments in the industry. A case in point is Rakta Co., which still makes paper made from rice straw as it’s done since the company’s inception in the late 1950s, an arrangement that was designed back then to benefit nearby rice farmers in the Delta. Not only is Rakta’s product outdated—the rice straw paper is lower quality than the kind made with sugar cane husks, or bagasse, the material used by Egypt’s other two state-owned paper factories—the firm last got new machines and other upgrades back in the 1980s. All this means that Rakta “cannot sell its product at any meaningful profit or quantities,” says Khedr. “The factory needs to be sold or have significant cash put into it to switch to sugar cane husks like the Qena and Edfu factories.” All local paper companies, public and private, make most of their revenue supplying printing houses that produce calendars, catalogues and magazines and selling packaging for products ranging from pharmaceuticals to processed foods and stationery supplies like wrapping paper. As with many other products, Egypt has been forced to import steadily more paper every year to fill the need for high-quality paper that’s not being met by local firms. In the last fiscal year, Egypt imported 320,000 tons of paper, some 40,000 more than the previous year, according to state statistics agency CAPMAS. In the meantime, the large government-run factories that make up the lion’s share of Egypt’s paper have gone from struggling to the brink of disaster. QPIC, the industry giant, which produced almost half of the industry’s locally made paper last year, is on the brink of bankruptcy. “We are in a very bad situation,”
sums up Mahmoud, the firm’s head, who notes that, legally, state-owned companies are supposed to file for bankruptcy if their losses equal more than 50 percent of their capital. “Right now, it’s more than 100 percent,” he says. In addition, Mahmoud adds that the price of bagasse, the locally grown sugar cane husks that’s the primary ingredient in QPIC’s paper, has gone up in recent months. The cost of natural gas, which was $3 per British thermal unit before the government raised fuel prices in tandem with the currency float in early November, is now $5. “It was a double whammy,” says Mahmoud. Finally, as of last September, the factory, which in the past paid no sales tax, must now pay a 13-percent VAT on all its revenues. Casting even more doubt on its continued solvency is the fact that QPIC owes $95 million to the National Bank of Egypt. “We took that debt when the pound was at LE 5 to the dollar, expecting the exchange rate would be LE 8 to the dollar at maturity,” says Mahmoud. “Now the exchange rate is LE 18 to the dollar, and we are still years away from maturity.” QPIC, which employs around 800 people, is already producing well below its capacity of 120,000 tons of paper per year. “We do not have enough raw material, money or machines to produce more,” says the chairman simply. The firm recently raised prices for private customers from LE 9,600 to LE 13,200 per ton of paper. “Despite this increase, we are still incurring a LE 1,400 loss on every ton,” says Mahmoud. “If we increase our prices more, we will lose those clients.” While he declined to give specifics, Mahmoud said that the firm has already registered a drop in orders from private customers—business that’s the firm’s only reliable source of profit. Misr Edfu is not in much better shape. Last year, the company switched from using mazut, a heavy, inefficient fuel oil that remains in use mostly in the former Soviet Union, to cleaner—and then cheaper—natural gas. Unfortunately, “Now, the recent fuel-price hikes are driving the company into the ground,” says Abdel Rahman Ahmed, Misr Edfu’s chairman. The company has in turn hiked its Business Monthly – February 2017
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SOHA EL GAVBI
In Depth
prices for private customers from LE 7,000 per ton to LE 12,600 per ton. Assuming the pound remains at its current value of around LE 18 to the dollar, the company expects its 2016 calendar-year losses to exceed LE 120 million. “The only good news is that we convinced our bank to convert a $50-million loan into an LE 880-million loan with a 10 percent increase in the interest rate,” says Ahmed. Naturally, the price hikes on locally made paper are having a ripple effect on the many businesses that need it. One local publisher, Abdel Rahman el Marakby, said that the cost of paper has been rising noticeably since mid-2015, as local manufacturers of all stripes were forced to turn to the black market for hard currency to buy imported supplies. “We started noticing that the cost of paper was creeping up,” says Marakby, who runs Bebasata, a children’s magazine that went 100-percent digital early last year in the wake of rising printing costs and falling advertising revenue. An increasingly popular solution is recycled paper, which costs half as much. But there are just a handful of recycledpaper companies operating in Egypt,
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mainly small enterprises targeting specialized niches like retail packaging. Tamer Khalil, managing director of the Modern Print Shop, a recycled papermaker, explains that his plant uses scraps from paper factories and used cartons and office paper to make “packages for biscuits, chocolates and several food chains.” Still, like everyone else, recycledpaper firms rely on imported machinery and special chemicals that—at the moment, at least—aren’t made here. The upshot is that the fledgling recycled-paper sector has also been hurt by rising prices. Even scrap paper has gone up by around 150 percent since November, according to Khalil. Modern Print Shop has in turn nearly doubled its prices from LE 3,500 to LE 6,300 per ton. “More increases in costs and prices are coming,” he says. “This is by no means the end.” For now, however, he says his sales remain strong, because his clients simply have to buy packaging for their products. “It’s a robust industry with robust demand,” says Khalil, who nonetheless adds that he’s squeezing his profit margins to the limit in order to avoid raising prices even more.
With all the current cost pressures, a full-blown paper shortage could be imminent. While there has been talk of privatizing money-losing public-sector firms in certain industries, state-owned paper factories are not among them, mostly because of their crucial role in supplying the public school system with an affordable, reliable source of materials, says Gaber, of the FEI, who stresses that the SOEs are desperately in need of improvements if they are to continue to produce. Gaber believes Egypt needs to promote greenfield investment in the paper sector’s feeder industries, to supply things like raw materials, chemicals and equipment needed to help smaller factories upgrade and expand. But for the moment, looking to the relatively tiny private paper sector to fill the gap if the big public factories go under isn’t a realistic solution. “I believe I make more money per paper sold than the big companies,” says Khalil. “But I am also afraid to increase my capacity only to find that there isn’t enough raw material to make paper.” ■
BUSINESS MONTHLY
ICT
CONNECTING EGYPTIANS WITH TECH JOBS BY TAMER HAFEZ
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tarting in 2003, when Xceed Call Center launched Egypt’s call service industry in Smart Village, a sleek new business park on the outskirts of Cairo, fresh university graduates looking to kickstart a career in tech—or just find a job—manned phones in the country’s fast-growing outsourcing sector. The work ranged from taking fast-food orders to providing emergency tech
support for multinational companies, with call center employees earning anywhere from a few hundred to a few thousand pounds a month—with the more skilled positions paying three times as much as new entrants to the workforce might hope to make in other sectors. Ahmed Saeed, who was among this early crop of young call center agents, saw the opportunity in this growing new sector and parlayed
the experience into opening his own business. Now 39, Saeed is the owner of a service that provides training for call center employees. With a prime location at the locus of three continents and a cheap, plentiful workforce, Egypt saw the potential of this growing industry to boost its economy and provide badly needed jobs for young people—following in the footsteps of India, the global leader in Business Monthly – February 2017
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In Depth
so-called outsourcing. Dozens of call centers opened in Egypt after Xceed paved the way, growing some 30 to 50 percent by 2008, and by 2011, the country was named the fourth-best destination for call centers by A.T. Kearney Global Services Location Index. However, the January 25 revolution—during which the government temporarily cut mobile and internet service—greatly spooked multinational firms that had contracts with local call centers, particularly after the months of instability that followed. According to data from the Ministry of Communications and Information Technology, the number of new job postings in the call center industry dropped from more than 5,000 in fiscal 2008/09 to half that in the years following the uprising. Egypt is now ranked the 16th best location for call centers worldwide, though it’s still number one in the Middle East and North Africa region. In recent months, the government has stepped up its ongoing efforts to transform Egypt into a technology hub, seeking to attract not just call centers but tech-related research and development and manufacturing as well. A proposed investment law meant to overhaul Egypt’s business climate calls for “free tech zones,” to attract ICT firms by promising them tax-free status on everything from machinery to imports. The Ministry of Communications and Information Technology is also pushing a multipronged strategy to lure more of these firms to Egypt by creating specialized tech zones outside of the capital to house call centers, R&D firms and factories that make electronic devices and components. In November, at the Cairo ICT conference, President Abdel Fattah el-Sisi unveiled an approximately LE 100-billion fund to support new and existing tech companies. Not only is outsourcing a rapidly growing industry with lots of potential jobs for young people, according to the government’s rationale—call centers can be established anywhere, offering a way to create employment 22 I
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in remote parts of the country. In Egypt, the vast majority of the population is currently crowded into the Nile Valley. In December 2015, Minister of Communication and Information Technology Yasser el Kady announced that the Information Technology Industry Development Authority, with the help of consultant Ernst & Young, was assessing the economic feasibility of seven zones with gated business parks suited to tech firms. “We will not stop at smart buildings and providing innovation centers,” Kady told the media, pointing out that fully serviced and integrated zones would pave the way for an ICT sector boom in Egypt. To that end, Silicon Waha, a joint venture between ITIDA, the Information Technology Industry Development Authority, and the New Urban Communities Authority, is currently working with Wadi el Nile Developments to build a 41-feddan tech zone in Assiut and a 30-feddan zone in Borg el Arab, with a total investment of around LE 400 million. Speaking to the press last month, Kady said that eight tech companies would be up and running in the two zones by the end of 2017. “We are currently looking at both zones,” says Mohamed Ismail, the regional director for development at Transmission Holdings, a company that builds mobile phones. “Our criteria is logistics and the size of the plots on offer.” Ismail aims to have a prototype 4G-capable smartphone before the end of the year and be manufacturing 6 million phones, tablets and mini-laptops annually by 2020. Silicon Waha has also signed MoUs with Samsung, Huawei and ZTE to manufacture ADSL equipment, routers and modems in the new tech zones. The ministry also has plans to establish other similar tech zones in Sadat City (50 feddans), Beni Sueif (100 feddans), New Aswan (40 feddans), 10 Ramadan City (85 feddans) and Ismailia (100 feddans) at an estimated price tag of LE 24 billion. Mohamed Abdel Wahab, an aide to the Minister
of CIT for tech zones, was quoted last month as saying the government would charge $9 to $10 per square meter. “This is a competitive rate,” he said. Each zone will eventually have a board of directors that oversees operators and enforces regulations. As an added incentive for developers and tech companies to set up shop here, Minister of Investment Dalia Khorshid said that the draft investment law currently before Parliament has proposed that such companies manufacturing goods for export and servicing foreign clients remain exempt from tariffs. “Our aim is to increase the amount of investments in the tech industry to $3 billion and provide an additional half a million more jobs by the end of 2020,” Khorshid said in January, following the Cabinet’s approval of the most recent version of the law.
“OUR AIM IS TO INCREASE THE AMOUNT OF INVESTMENTS IN THE TECH INDUSTRY TO $3 BILLION AND PROVIDE HALF A MILLION MORE JOBS BY THE END OF 2020.” ITIDA is managing the fund the president unveiled in November. It includes LE 50 million in subsidies specifically earmarked for new tech-hardware manufacturers that make devices such as mobile phones and tablets or components like circuit boards or chips. Companies with capital of at least LE 10 million can apply for up to 30 percent of their capital expenditures on equipment to be paid for by the government, provided that 40 percent of their purchasing budgets are earmarked for locally made machines and components. The fund will cover an additional 10 percent of equipment expenditures if a company exports at least 25 percent of its goods. The fund also offers support for existing tech firms
that use local inputs—and even more for those that export at least a percentage of their final goods. It also aims to support employee training, offering even more for enterprises whose work forces are at least one-quarter female. Even though these funds have not officially launched, new investors are already factoring them into their investment decisions. “We are looking at which of these incentives would suit our business model,” says Mohamed Salem, CEO of Sico Technology, a hardware firm that’s building a LE 100-million mobile phone factory in the Assiut tech zone. Ahmed Kandil, the exclusive local dealer for Xtouch, a Chinese electronics brand that makes smartphones and other devices, has long-term plans to partner with an Egyptian factory to build various Xtouch phones and tablets. “We are still only a few months in the market, but we see great potential with these initiatives,” says Kandil. “At this stage, partnerships will work very well with us.” MCIT’s goal is to boost Egypt’s ICT exports to $2.5 billion by the end of fiscal 2017/18, up from $1.8 billion in fiscal 2015/16. Officials are hoping these measures will help create jobs for the millions of youth who need them. Unemployment, a chronic problem, has only gotten worse in recent years, especially among the young and educated, with 42 percent of Egyptian youth between 15 and 24 jobless, according to the International Labor Organization, compared to 12.5 percent of the general population. In the last academic year, some 500,000 tech-trained young people graduated from Egyptian universities, according to the Ministry of Higher Education. Since the rise of tech parks in the early 2000s, the government says it is also trying to integrate more ICT skills into the basic curriculum as well as offering post-graduate courses through the state-owned Information Technology Institute, the Software Engineering Competence Center and the National Telecom Institute. Meanwhile, the ICT ministry has authorized training centers to offer an International Computer Driving License in cooperation with UNESCO.
BUSINESS MONTHLY
In Depth
While Egyptian university students remain fixated on the traditional prestige professions of medicine and engineering, an increasing number of youth are drawn to the tech industry. Tamer Hassan is a senior at Cairo University’s Faculty of Computer Science and Engineering who would happily accept an entry-level job at a call center, even if it meant working night shifts or 12-hour workdays. Over the summer break, he interned answering phones at a call center. “I have established very good relations with my future employer,” he says. “This is why I think my first step is to work at a call center and see where it takes me.” Another student, Hadya Yassin, is studying electronic hardware design. Recently, she’s been learning how to design circuit boards, and she hopes to parlay this into a factory job upon earning her diploma. While some might see working on an electronics assembly-line or answering phones as menial, Yassin proundly points to her elder sister, who took an outsourcing job upon her graduation from university back in 2005 and now has a good job managing one of the country’s largest call centers. “It is always better from a career perspective to work in a new industry,” declares Yassin. Othman Lotfy, a computer science professor at Cairo University, says that students who can speak a foreign language have an edge in landing jobs at Egypt’s call centers, which cater to callers
across Europe as well as in places like Russia and Latin America. In recent years, the ICT ministry has organized job fairs at the university, big employers like IBM and Microsoft search for recruits among the soon-to-graduate. As of 2014, the most recent year statistics are available, Egypt’s ICT sector employs 800,000 to 1 million people, according to officials. Even the Egyptian government now employs call centers, with the Ministry of Electricity outsourcing its customer service operations since 2016. Currently, call centers field calls from customers in southern Cairo, but eventually they will serve all of Cairo and Alexandria. The growing popularity of delivery services in the cities has also created call center jobs. “Those call center positions only require a basic education and good Arabic pronunciation along with the most basic computer skills,” says Lotfy. Said Riad, head of the commercial sector at Wasla Outsourcing, a call center with offices around Cairo, agrees that the ICT sector is indeed growing again but that it will ultimately need more than just infrastructure in order to provide good, viable long-term employment for more Egyptians and deliver equitable growth. Workers need access to affordable public transit to get to work, among other things. “Youngsters are still not so desperate that they’ll be willing to work in the middle of nowhere,” says Riad. ■ Business Monthly – February 2017
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COVER STORY
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A Tomato’s Tale
Who decides how much you pay for your food at the supermarket or the local fruit stand? In 2013, Business Monthly followed a recently harvested crop of tomatoes on its journey from a small Egyptian farm to a Cairo housewife’s shopping bag. This month—with food prices hitting record highs—we’re rerunning the story.
BY TAMER HAFEZ
Business Monthly – February 2017
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A
s the sun sets on Mohamed Awad’s farm in Bader City, casting golden rays over the tomato vines, he chews thoughtfully on a piece of bread and white cheese his wife served him moments ago and hopes for a good night. As hired fieldhands harvest the plump tomatoes, Awad silently calculates the price at which he must sell his crop in order for his family to live comfortably through the winter. Some 36 hours later, his tomatoes will arrive at their final destination, more than 100 kilometers away in a dusty, bustling marketplace in the Sayeda Zeinab district of Cairo, where a young housewife named Safia makes her own mental calculations. With tomatoes more than a pound per kilo more expensive than last week, how many can she afford? With Egypt’s central bank estimating that fresh vegetable prices shot up by 34 percent between January and September, the government in late September
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The farm
PICKED CLEAN: A TOMATO FARM IN ORABI ON THE OUTSKIRTS OF CAIRO SITS EMPTY OF FRUIT AS THE HARVEST SEASON DRAWS TO A CLOSE
Business Monthly – February 2017
accused vendors of profiting from exorbitant markups, threatening to fix prices if they failed to bring them under control. As in many other places, tomatoes are a staple fruit here, appearing in items from streetside falafel sandwiches to LE 100 pasta dishes in five-star Italian restaurants. Like other fresh items, however, consumers complain that their price can fluctuate wildly from week to week—sometimes even hour to hour—depending on where they are sold and even who’s buying them. Grocers argue that they are only doing what’s necessary to make ends meet, that price hikes are simply in response to rising costs. The path that determines that price, like that of many commonly consumed fruits and vegetables in Egypt, follows an entrenched and largely unregulated supply chain that depends heavily on luck and guesswork. Squeezed by tough times, with little support from the government and rising inflation, every one of its links—from the farmer to two layers of traders to the grocer and the housewife on a budget—is struggling to do more with less.
“We are losing. And we are losing badly,” says Awad, a well-built man with a swarthy complexion in a worn galabeya, a third-generation tomato farmer whose 10-acre plantation lies some 40 kilometers west of Cairo. He complains that his profits have barely covered his expenses since the global financial crash of 2008. While consumption is down, he says, government subsidized supplies like seeds and fertilizer are increasingly rare, and when they do materialize, they are often substandard. This year, he resorted to buying supplies on the open market at significantly higher prices. This state of affairs has forced him to choose between planting fewer tomatoes or forking out more for his usual yield. This year, he planted less, ending up with a harvest of around 1,000 crates, each containing 20 to 22 kilograms of tomatoes. A sizeable portion of the crop never even makes it off the farm: bruised, squished or overripe fruit is declared
Cover Story
E. SMALL FARMERS IN EGYPT ARE STRUGGLING TO DEAL WITH RISING SUPPLY COSTS.
“tomato paste” and sold cheap to factories or local restaurants, fed to animals or thrown away. Last year, Awad lost nearly a quarter of his crop to mold, thanks to weak pesticide. Even if the harvest is successful, Awad has a short window of time in which he must sell his tomatoes if he hopes to cover his costs or turn even a modest profit, thanks to the short shelf life of tomatoes. “I know of farmers who have lost almost half their crop,” he says, thanks to shoddy government fertilizer or delays caused by vehicle breakdowns. As a result, small farmers often negotiate financing schemes with traders in which the latter cover farm costs up front. This arrangement benefits farmers by shifting the risk to the trader, who in turn gets to oversee the crop from the planting stage to ensure he gets the highest possible yield. Awad has thus far resisted resorting to such a patronage scheme because he sees it as a betrayal of his family’s farm-owning legacy. But as costs for everything from seeds to fuel have skyrocketed, he may be forced to consider such a deal.
As evening descends on the red and green tomato fields, a fleet of barefoot, overall-clad teenage pickers spreads out among the vines, placing the tomatoes one by one in wooden crates while taking care not to bruise them or accidentally contaminate the batch with rotten fruit. It’s mid-October— tomato harvest season begins in July— and this will be among the last harvests of the season. Another group of fieldhands stacks and secures the crates. The picking takes place after sundown to minimize spoilage by avoiding transporting the tomatoes in the heat of the day. Awad oversees his workers from the sidelines, anxiously checking his cell phone every few minutes for the arrival of the trader. Around 10 p.m., an old pickup truck with rusting fenders and one working headlight rumbles up to the farm. Trader Said Mohamed gets out, dressed in a work shirt and jeans, unceremoniously greets the farmer and wastes no time in heading over to inspect the crop. Wordlessly, he picks a few tomatoes from the crates and examines
them for a few moments before making Awad an offer. The haggling goes on for several minutes before a price of LE 19 is agreed upon, slightly less than LE 1 per kilo. As Mohamed walks backs to the rickety vehicle to fetch the cash from a briefcase, workers have already begun loading tomato crates onto the truck bed. Neither of the two men comments on the deal, but Awad quickly winds up the transaction and heads for his house wearing a somber expression. It’s well after 1 a.m. by the time Mohamed’s driver, a scrawny fellow in a ragged galabeya, is en route to Oboor Market, the central depot for wholesalers of fruits and vegetables serving all of greater Cairo. Mohamed sold his fleet of trucks a couple of years ago after several of them were hijacked following the 2011 revolution. Now he simply rents vehicles when he needs them, although this arrangement comes with its own set of problems: Truck rentals in Egypt are controlled by what is essentially a cartel that compels traders to hire vehicles in various states of disrepair that are often chauffeured by reckless drivers, not to mention devoid of refrigeration or other standard features of transporting fresh produce elsewhere in the world. During the approximately four hour journey to Oboor Market—on which the truck rattles along at as fast a pace as Mohamed deems safe for the tomatoes—he sits perched atop his investment, keeping an anxious lookout for road blocks ahead (it is long after curfew) or potential bandits. (Competing traders have been known to sabotage trucks by hiring thugs to jump aboard produce trucks from moving vehicles and loosen the ropes securing the cargo.) He frets about whether or not he’ll be able to recoup the farmer’s price. If the truck doesn’t arrive in time or he misjudged the quality of the tomatoes, “I could lose a lot of money,” he says. Frequent accidents and hijackings and the general inefficiency that results from the poor quality of Egypt’s transportation networks have long been recognized as a barrier to domestic trade, Business Monthly – February 2017
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The market
FOOD CHAIN: MOST LOCALLY GROWN PRODUCE TAKES A LITTLE OVER 24 HOURS TO GET FROM THE FIELD TO THE MARKET PLACE.
a problem that has only gotten worse in the recent climate of insecurity that has accompanied political unrest. Back in 2010, Ahmed El Wakil, President of the Federation of Egyptian Chambers of Commerce, suggested establishing a virtual “stock market for fruits and vegetables” that would do away with several inefficient layers of middlemen, enabling retailers to buy directly from farmers without having to move the crops to a central marketplace, which he argued would save time and reduce waste and transportation costs. But the idea never got off the ground. In an apparent effort to address the poor state of domestic transportation, officials recently announced that more power would be granted to local trade authorities to enforce road safety regulations for trucks traveling on highways, while stricter standards would be instituted for drivers, though they did not specify a time frame. 28
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Mohamed allows himself to breathe a small sigh of relief as the truck finally pulls up to the toll-gate style entrance of Oboor Market at dawn. The moment is short-lived. Waiting his turn in the growing queue of trucks piled high with fruits and vegetables, he prepares himself for the cold-eyed verdict of the market, where he will soon learn if he paid too little or too much for his newly purchased tomatoes. He whispers nervously, “I am not very optimistic.” After weighing in and paying the LE 7 per ton entrance fee, Mohamed and his tomatoes join the chaos of the market, which at 140 acres resembles a typical Egyptian produce stand but on a far larger scale, with enormous piles as big as buses of technicolor fruits and vegetables sitting atop wooden stands, some shaded by giant palm fronds. By 6 a.m., people are running along the narrow alleyways that divide the displays, shouting, quarrelling, haggling, loading and unloading. Oboor handles some 80,000 buyers a
day, while around 361 tons of produce change hands in a single hour. It is one of those places that looks fantastically disorganized but in fact operates according to an elaborate, finely-tuned system in which trucks and people constantly move in and out, often inches apart, without ever crashing into one another. The Oboor Market Authority, a quasi-public body that maintains the marketplace facilities, collects entrance and exit fees from traders and rents commercial spaces to banks and small shops. Apart from that, the market is run entirely by the traders themselves. The Ministry of Supply and Domestic Trade in 1994 established the Oboor Market some 15 kilometers outside Cairo to replace the various informal produce markets that were then spread out across the capital in neighborhoods like Shoubra and Ghamra. “In the old markets, we were losing close to 50 percent of crops due to poor storage and smuggling,” says Hussein El Sebaay, the head of the market authority. “In Oboor we are
Cover Story
PRECIOUS CARGO: WORKERS AT OBOOR MARKET MUST RACE TO UNLOAD TOMATOES FROM UNREFRIGERATED TRUCKS BEFORE SPOILAGE SETS IN.
losing between 5 and 6 percent.” The market has more than 2,000 plots dedicated to every imaginable type of produce, from apples to zucchini, plus another 475 plots just for crates and bags. Storage facilities cover 15 acres, including four enormous, walk-in refrigerators, and there is a 16.5-acre parking lot for trucks. There are also five banks (traders don’t like to leave the market carrying cash), a post office, 36 shops selling various items such as phone chargers and scratch cards and 25 cafés as well as a police and a first aid station at the center. Tomatoes are the second biggest crop at Oboor after lemons (though they’re number one in terms of the amount of fruit that’s moved), occupying some 200 plots. After several minutes of skillfully negotiating the narrow alleys between stands, Mohamed’s driver reaches the tomato section close to the heart of the market. Handymen materialize out of nowhere to unload the newly arrived crop, as interested
traders gather to inspect it. After some 15 minutes, the traders agree on an initial assessment of how many kilos of tomatoes in each of Mohamed’s crates remain fresh enough to sell, which worries him further by being some five kilos less than he’d estimated back on the farm, meaning a fair number had gone bad during the journey. Around 9 a.m., everyone falls silent as a stately figure in a black overcoat approaches. The traders gather around him, awaiting his reaction. This man is among the most powerful people in the market. Since the Fatimid era, around the 10th Century, Egypt has maintained a marketplace tradition of appointing a respected head trader. Even today, such a figurehead exists for each crop traded at Oboor. Hany, better known as “Al Moalem” (“The Boss”)—nobody knows his last name—is the tomato don. Unlike most of the fruit dons, he is self-made, rising up through the marketplace ranks on his own after getting his start at the age of
10 from his father, who was a wholesale trader. At 64, he’s been the tomato don for decades—no one could say for sure for how long. He wears pressed trousers and a button-down shirt under his overcoat, which has gold stitching and nearly touches his shoes. With his intimidating gaze, he somehow seems taller than the other traders as he approaches Mohamed’s shipment. After inspecting the product in silence for a couple of minutes, the tomato don calls out, simply: “Twelve,” to the two dozen or so traders encircling him. Thus the minimum bid is set at LE 12 per crate—about LE 7 less than the price paid by Mohamed, who suddenly seems serene. The auction commences, with a handful of traders shouting out bids while shoving one another for a better position nearer to the don. When the price reaches LE 31, the don waves his hand and declares the auction over. Accounting for spoilage on the journey, that’s about LE 2 per kilo. Mohamed, looking satisfied,
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SPOILT FOR CHOICE: THE BEST TOMATOES ARE SELECTED FOR MARKET RESALE, WHILE THE DREGS ARE MADE INTO KETCHUP OR TOMATO PASTE.
collects his cash and disappears. While the don system might seem antiquated, traders argue that it actually prevents market manipulations. “There is no one person who can monopolize a certain kind of fruit or vegetable,” says Nemr Abdou, an Oboor wholesaler. Because of the don’s long years of experience and considerable skill, he is trusted to establish a price based on a crop’s freshness and quality. This prevents traders from colluding to hold prices down, thereby maximizing their own profits. It is also his job to halt the auction when he believes the highest suitable price has been reached, preventing monopoly-seekers from buying out a single product and setting prices too high. The tomato don himself explains that the key to the whole system is his reputation. “I can’t force traders to buy or sell their product,” says the don, a man of few words who has a slight paunch and the tanned, leathery complexion of all veg30
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etable sellers. He argues that this also prevents corruption. “The auction decides everything, and I can’t ask for a commission off the sale, because that would damage my reputation,” he explains. He acknowledges that the supply chain for fruits and vegetables in Egypt is too cost-heavy in the middle, with too many layers of traders taking a profit, meaning the start of the chain (the farmer) and the end (the consumer) both lose as a result. But he is firmly opposed to government price fixing. The Oboor system works simply because it essentially operates on supply and demand, he says. “In here, we don’t care about what has or will happen on the outside,” he says. “That is the job of the traders to calculate their own profit margins.”
The fruit stand
By noon, our tomatoes have been delivered to Khaled Ali, a produce retailer in
his mid-30’s who, with his father, runs a sizeable fruit stand at the El Naserya Market in Cairo’s Sayeda Zienab district. Ali has worked at the family fruit stand since he was a teenager, but this is his first time to run the Oboor Market tomato buy on his own; usually he assists his father, a veteran vendor who’s been in the business for 40 years. Since trucks aren’t allowed in the capital until after 7 p.m., Ali books a spot in one of the mega-fridges for several hours to keep the tomatoes—already somewhat diminished in number—as fresh as possible. By evening, he departs the market along with other produce trucks heading to hotels, restaurant chains, supermarkets and elsewhere. (Unless a retailer has a special arrangement in which they get their produce from a selffinanced farm, for example, the fruits and vegetables consumed in Cairo all come through Oboor Market.) The freshest tomatoes, which command the
Cover Story
CREAM OF THE CROP: THE FRESHEST PRODUCE TENDS TO WIND UP IN UPSCALE AREAS, LEAVING LOWER QUALITY BATCHES FOR POORER NEIGHBORHOODS.
highest price, tend to go to grocers in upscale neighborhoods like Zamalek or Maadi, where customers are able to pay more for them. Fruit that’s aged for a day or so, on the other hand, is usually reserved for poorer districts where residents have less buying power. It is well after dark by the time Ali steers his truckload of tomatoes onto the narrow, bustling streets of Sayeda Zeinab amid the beeping microbuses and arrives at his family’s fruit stand in El Nasreya, an open air market in which meat, fish and produce is sold to the mostly poor and working class local residents. He finds upon unloading that he has lost another kilo or two in each crate during the trip, saying: “It’s not a bad loss, but we have seen better days.” He arranges the tomatoes so the freshest ones are on top and replaces the price card reading LE 3.5 per kilo for last week’s tomatoes with one that reads LE 4. When his father comes by to inspect the new fruit a couple of hours later, he
tells Ali to raise the price by another 75 piastres to allow for likely but unpredictable fluctuations to the wholesale cost of tomatoes in the coming weeks. It’s better for business to set the price slightly higher and keep it constant than to change it every few days, explains Ali. “We could lose a lot of business that way, because people will think we’re crooks.” Thus, the final price of farmer Mohamed Awad’s tomatoes is determined. From LE 1 at the farm, to LE 2 at Oboor, and finally LE 4.75, which Safia, a housewife in a black khmer, must somehow manage to squeeze into her weekly grocery budget. She knows she needs around two kilos of tomatoes to prepare sauces and salads for supper and white cheese and tomato sandwiches for her two young sons and her construction worker husband to eat for lunch for the next 10 days. Almost LE 10 for tomatoes, however, is more than she can afford. Food prices tend to go up in
the Fall, as kids go back to school and the weather turns colder, while summer crops dwindle and winter ones haven’t quite come into season. Ali says many customers have cut back on fresh produce lately, especially as they’ve become noticeably more expensive. In four days or so, he’ll have to throw away whatever hasn’t been sold of Awad’s tomato crop. He declares: “The low demand is putting our profits at risk.” For Safia, meanwhile, the reality is that buying enough tomatoes to feed her family for the next week and a half will have to mean forgoing something else. In the end, she decides instead to purchase a half a kilo less than usual, which will mean serving three meals a week of boiled vegetables without any sauce, a prospect she doesn’t particularly like and knows her family of four won’t either. But she reasons that, like everyone else, “We are getting by.” ■ Business Monthly – February 2017
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31
Stock Analysis
The warmth of January
T
he Egyptian stock market continues to illustrate the January effect, an anomaly in which stock prices tend to rise in the first month of the year. Indeed, the benchmark EGX 30 has averaged positive return of 6.9 percent in January since its inception in 1998—by far the best month of the calendar year. And so far in the new year, the phenomenon appears to be holding. The EGX 30 was up 7.6 percent in the period from Jan. 1 to Jan. 15. Between Dec. 15 and Jan. 15, the EGX 30 was up 17.3 percent at 13,287.8, while the EGX 70 and the EGX 100 were up just 4.7 percent and 8.6 percent at 472.9 and 1,155.4, respectively. Still, advances outnumbered declines by a ratio of 3-to-1. The winners list included both large-cap and small-cap stocks, but an overall theme was that this was a month driven by rumors and company-specific events. For instance, Abu Dhabi Islamic Bank Egypt (ADIB) ended the period up 76 percent at LE 8.94 after initially falling in the wake of the sudden death of its CEO, Nevine Loutfy. The bank, which is a 49.6-percent subsidiary of the UAE-based parent institution, has a par value of LE 10 per share and a book value of LE 7.25 per share. Also, Ezz Steel (ESRS) saw its shares jump 61.5 percent to LE 21.80. Asked about the stock’s abnormal performance, the company cited the overall general uptrend in the market after the float of the pound.
However, the stock may have been reacting to higher iron prices globally in anticipation of rising local prices. Within the non-banking financial sector, EFG Hermes Holding (HRHO) led the pack, with its stock up 41.3 percent at LE 27.9. The MENA region’s largest investment bank continues to grow its business lines, expanding into renewable energy, frontier markets and financial leasing. Meanwhile, Qalaa Holdings (CCAP) saw its stock jump 36.7 percent to LE 1.23 on the news that it might soon be selling its East African railway. Meanwhile, Faisal Islamic Bank of Egypt (FAIT) saw its EGP-denominated shares jump 36.3 percent to LE 18.81 after the bank’s year-end earnings skyrocketed by 283 percent to LE 2.89 billion. Elsewhere, Global Telecom Holding (GTHE) surprised the market with two announcements: a) that it would buy back 10 percent of its shares and b) it plans to cancel its global depository receipts program, perhaps foreshadowing a wider change to the company’s share structure. The stock jumped 25.6 percent to LE 7.71 on the news. Investors are becoming more skeptical about the sustainability of the market’s recent bull run following the liberalization of the Egyptian pound. Indeed, after the IMF released a document detailing discussions with the Egyptian government, including the possibility of levying a capital gains tax on stock trading, the market fell sharply. But at press time, January still looked to be on its way to a positive close.
IN THE SPOTLIGHT
Obour Land for Food Industries The latest IPO in the market, cheesemaker Obour Land for Food Industries (OLFI) floated 80 million shares at LE 9.68 per share, raising LE 774 million. The IPO was oversubscribed by 5.7 times, but most of the oversubscription was in private placement (70 percent of the IPO) which was covered 7.4 times, whereas the public offering (30 percent of the IPO) was covered just 1.9 times. The stock began trading Dec. 15 at the opening price of LE 9.68 a share and fell 8.3 percent, having traded 28.3 million shares. The stock closed down in 15 of its 21 sessions through Jan. 15.
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Business Monthly – February 2017
Market Watch
Capital Markets Egyptian price indices - EGX 30
13287
EGX 30
Egyptian price indices - EGX 70
451
EGX 70
Selected sector performance
Business Monthly – February 2017
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33
Market Watch
Capital Markets Corporate News AMOC seeks Axen’s help to boost production
Qalaa Holding ponders the sale of Rift Valley Railways
Alexandria Mineral Oils Co. (AMOC) is looking to conduct technical studies to increase its production with the assistance of Axens France, with which it expects to sign an agreement within a month, subject to the board of directors approval. Meanwhile, the Egyptian government is considering the sale of an additional 20-percent stake of the firm during the second quarter of 2017. This is part of a program to raise $10 billion in five years by floating stakes in state-owned companies, including an initial public offering of 20 percent of Enppi (Engineering for the Petroleum and Process Industries).
Qalaa Holdings (CCAP) confirmed that it is in preliminary discussions with several prospective local and international investors to sell its stake in Rift Valley Railways (RVR), the national railway of Kenya and Uganda. RVR, in which Qalaa owns a 73.76-percent indirect stake, has been classified as a discontinued operation since the first quarter of 2016. A Nairobi-based newspaper reported that a Kenyan consortium plans to invest $133 million to acquire an 80-percent stake in RVR.
EFIC and Abu Qir studying new fertilizer projects
Banque du Caire, Egypt’s third largest public-sector bank, is scheduled to float shares to the public in April or May. Banque Misr, its parent company, will maintain a 51-percent stake in the bank after the IPO.
Egyptian Financial & Industrial Co. (EFIC) and Abu Qir Fertilizers (ABUK) are currently studying the feasibility of new production lines. The former said its potassium sulfate project is still in the study phase, with its investment not yet determined. Meanwhile, the latter is conducting a feasibility study on a new ammonium nitrate plant. The firm promises to disclose details pending board approval.
Obour Land to grow in 2017 Obour Land for Food Industries (OLFI) set its 2017 plan, targeting double-digit revenue growth of between 25 and 30 percent. Planning on passing on its higher costs to consumers, Obour said it is planning to raise prices by an average of 1518 percent in Q2 to attain a gross margin of 21-23 percent in the first half of the year. Meanwhile, the company plans to commence production at its new milk, juice and cheese production lines in the second quarter. The firm is negotiating to secure credit facilities worth LE 300 million to finance its working capital needs and expand its 201-vehicle fleet by 6070 with a capital expenditure of LE 20 million, financed through leasing.
Banque du Caire to go public this spring
Elsewedy Electric wins bid from EETC Elsewedy Electric’s (SWDY) subsidiary won a bid from the Egyptian Electricity Transmission Company (EETC) for overhead transmission lines on an EPC (engineering, procurement, and construction) basis. The 356-kilometer long 500 KV transmission lines will be built within six months from the signing date, after which the firm is set to announce the contract value.
EFG Hermes expands into solar EFG Hermes Holding (HRHO) is betting on renewable energy. Its platform company, Vortex, agreed to buy a portfolio of solar-power assets in the United Kingdom for £470 million (around $580 million) from Sun Edison’s TerraForm Power. The portfolio includes 24 solar parks with a combined 365 MW of power and an estimated life of around three decades. The price tag includes some £300 million in debt.
International stock price indices Jan.15
Dec.15
value
% change
5,456.85
2.15%
DOW
19,885.73
19,852.24
S&P 500
2,274.64
2,262.03
NASDAQ FTSE 100
NIKKEI 225 34
I
5,574.12 7,337.81
19,287.28
Business Monthly – February 2017
6,999.10
19,273.79
Oct.15
value
% change
5,214.16
6.90%
0.17%
18,138.38
0.56%
2,132.98
4.84% 0.07%
7,013.55
16,856.37
Aug. 15
value
% change
5,262.02
5.93%
9.63%
18,636.05
6.64%
2,190.15
4.62%
14.42%
6,941.19
16,869.56
6.71% 3.86% 5.71%
14.33%
Market Watch
Money & Banking
INTEREST RATES
BANKING & RESERVES (in millions of LE) End of
February
Reserve Money
March
April
May
2016
June
July
August
410,150
430,378
442,281
464,664
478,082
449,591
Domestic Liquidity
1,922,685
1,987,839
2,006,632
2,044,293
2,094,500
2,119,715
2,151,648
2,183,148
Domestic Assets
1,922,685
1,987,839
2,006,632
2,044,293
2,094,500
2,119,715
2,151,648
2,153,148
Int'l Reserves (net, US$ mln) Foreign Assets (net)
16,586
140,230
Dollarization Rate (%)
Discounted Bills (except CBE) Bank Loans (except CBE) Securities (except CBE)
17.03 4,623
799,755
1,121,730
Currency in Circulation
325,132
17,011
1,457,994 18.77 4,749
847,574
1,179,715 331,977
EGYPTIAN POUND EXCHANGE RATES Currency Australian Dollar Bahraini Dinar British Pound Canadian Dollar Chinese Yuan Euro Indian Rupee Japanese Yen (100) Jordanian Dinar Kuwaiti Dinar Lebanese Pound (100) Russian Rouble Saudi Riyal Turkish Lira UAE Dirham US Dollar
Jan.15 14.169 49.743 23.016 14.401 2.738 20.104 0.277 16.500 26.582 61.754 1.248 0.317 5.033 5.069 5.144 18.897
Dec.15, Amount 13.872 48.744 23.438 14.091 2.680 19.680 0.274 16.100 26.026 60.529 1.209 0.302 4.933 5.306 5.038 18.510
2016 change 2.14% 2.05% -1.80% 2.20% 2.16% 2.16% 1.00% 2.48% 2.14% 2.02% 3.23% 4.84% 2.03% -4.47% 2.09% 2.09%
17,521
1,466,460 18.83 4,660
860,783
1,199,345 342,842
17,546
1,491,322 18.61 4,963
920,697
1,254,065 352,896
Oct. 2016 Amount change 6.748 109.98% 23.3773 112.78% 10.842 112.28% 6.735 113.83% 1.319 107.54% 9.780 105.55% 0.133 108.32% 8.530 93.43% 12.476 113.08% 29.275 110.95% 0.579 115.54% 0.141 125.05% 2.365 112.85% 2.874 76.38% 2.416 112.89% 8.876 112.90%
15,536
16,564
1,521,565
1,541,213
18.53
18.52
5,601
937,126
1,283,616 369,321
5,425
938,918
1,298,739 376,908
Aug. 15, 2016 Amount change 6.774 109.15% 23.491 111.75% 11.439 101.20% 6.835 110.68% 1.335 105.17% 9.882 103.43% 0.132 109.33% 8.740 88.79% 12.456 113.41% 29.339 110.48% 0.575 117.04% 0.137 132.08% 2.360 113.29% 2.989 69.60% 2.411 113.30% 8.858 113.35%
498,438
September
19,592
1,557,553 18.33
508,167
19,066
1,575,990 18.00
5,308
951,330
1,349,749 387,699
5,330
964,823
1,345,548 395,218
Jan. 15, 2016 Amount change 5.426 161.11% 20.563 141.90% 11.245 104.67% 5.434 165.00% 1.185 131.09% 8.496 136.63% 0.116 138.33% 6.629 148.91% 10.969 142.35% 25.641 140.84% 0.508 145.67% 0.102 210.30% 2.080 141.96% 2.577 96.69% 2.125 142.06% 7.807 142.06%
Business Monthly – February 2017
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35
Market Watch
Key Indicators
DEMOGRAPHICS Total Population (millions)
2008
79.1
Labor Force (millions)
2009
83.5
24.7
Labor Force / Population (%)
88.0
26.2
33.1
8.7
2011
84.5
25.4
32.8
Unemployment Rate (%)
2010
Q2
2014/15
Q3
Q4
Trade Balance
-10,430.3
-9,385.4
-9,227.6
Imports
-16,200.0
-14,003.1
Receipts
6,008.3
Balance of Goods & Services
End of year
SOURCE:
Q1
32.2
13
13
CENTRAL BANK OF EGYPT
2015/16
Q2
28.5
31.3
13.2
BALANCE OF PAYMENTS (in millions of U.S. $)
96.1
28.4
32.7
12.7
2015
94.7
27.6
32.7
12.0
2014
92.2
27.0
33.0
9
2013
90.2
25.8
33.4
9.4
2012
Q3
Q4
-38,785.4
-9,985.9
-9,561.6
-9,858.5
-8,285.2
-14,429.2
-60,843.6
-14,632.0
-13,960.7
-14,134.0
-13,584.1
4,385.0
5,182.5
22,024.6
5,142.9
4,131.6
3,513.9
3,687.8
-8,654.5
-9,043.8
-8,727.3
-34,057.9
-8,299.1
-9,017.9
9,680.6
Balance of Current Account
-2,857.3
-4,080.7
-3,800.5
-12,182.2
-3,980.0
-5,025.2
-5,549.2
Foreign Direct Investment
960.0
2,947.9
689.9
6,371.0
1,385.5
1,718.5
2,772.9
5,769.7
Exports
1,775.8
Services (net) Payments Transfers
Capital & Financial Account Overall Balance
4,232.5 5,797.2 72.4
-1,427.0
4,617.7
5,201.6
341.6
500.6
4,043.4
4,682.2
4,963.1
4,926.8
6,067.2
10,682.6
-29.1
4,771.0
NON-PETROLEUM TRADE (in millions of U.S. $) Exports (2015-16)
Total
18,704.6
U.S.A.
4,727.5
17,297.1 21,875.7 17,633.6 3,724.9
Other European countries Russian Federation & CIS Arab countries
Asian countries (non Arab)
African countries (non Arab) Australia
Other countries
The CPI (Consumer Price Index) and PPI (Producer Price Index) are based on the results of surveys of expenditure and consumption and relevant baskets of goods and weights. SOURCE:
I
CENTRAL BANK OF EGYPT
Business Monthly – February 2017
1,686.8
4,399.1
4,275.5
543.7
3,456.1
177.9
3,587.9
4,318.8
3,336.0
3,992.7
1,500.5
4,131.4
7,816.9
3,656.7
8,224.8
-251.6
SOURCE:
235.4
5,298.9 -346.7
40,434.5 -8,361.9 4,442.2
-4,189.7 5,944.8 992.9
-827.5
CENTRAL BANK OF EGYPT
Balance (2015-16)
56,310.8
2,587.5
-37,606.2
-1,312.3
6,034.5
17,415.7
-11,381.2
244.3
3,950.6
-3,706.3
1,325.3
4,072.4
5,749.7
10,423.7
508.2
735.4
2,064.4 21.3
1,481.7
INFLATION
4,646.1
Imports (2015-16)
1,275.2
E.U.
36
22,058.2
GDP GROWTH
Gross Domestic Product (GDP) growth rates are based on 2001-02 prices.
SOURCE:
CENTRAL BANK OF EGYPT
-2,747.1 -4,674.0
735.4
1,329.0
-227.2
345.9
-324.6
5,377.2
SOURCE:
-3,895.5
CENTRAL BANK OF EGYPT
TOURISM VISITS
Year 2014-15 2013-14 2012-13 2011-12 2010-11
Tourists 10.24 million 7.97 milion 12.21 millon 10.95 millon 13.7 millon
SOURCE:
Change 28.6% -34.7% 9.2% -8.2% -12.9%
CENTRAL BANK OF EGYPT
Market Watch
Egypt-U.S. Trade EGYPTIAN EXPORTS TO THE U.S. (in millions of U.S. $)
EGYPTIAN IMPORTS FROM THE U.S. (in millions of U.S. $)
U.S.-EGYPT TRADE DEFICIT (in millions of U.S. $)
EGYPTIAN EXPORTS TO THE U.S. DURING NOV. 2016
EGYPTIAN IMPORTS FROM THE U.S. DURING NOV. 2016
SOURCE:
US INTERNATIONAL TRADE COMMISSION (USITC)
Business Monthly – February 2017
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37
Dining Out
THINK GLOBALLY, EAT LOCALLY AT IL PICCOLO MONDO BY EDMUND BOWER
I
f you’ve ever been to Disneyland or Disney World, you probably remember It’s a Small World, a slow-moving boat ride through a dimly-lit world of audio-animatronic dolls in stereotypical traditional dress from cultures around the world. Japanese geishas, Dutch milkmaids and Egyptian stone-cutters frolic “in a spirit of international unity,” singing what is perhaps the most tedious song ever written in an endless loop extolling the virtues of brotherly love and understanding. 38
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Business Monthly – February 2017
The last time I went on this ride I was 7, but that didn’t stop the tune—which may be the most performed and translated piece of music on earth, according to Wikipedia—from lodging in my head for several days recently. The reason went back to my ongoing search for decent Italian food in Cairo. Despite being one of Egypt’s nearest European neighbors, Italy has failed to export many examples of its famously delicious cuisine to our side of the Mediterranean—certainly not ones that resemble anything you might actually
eat in Italy. Il Piccolo Mondo (Small World), on Le Pacha 1901 on Zamalek’s southeastern bank, is one of the few encouraging exceptions to this rule. According to the “legend” explained on the Le Pacha website, the floating stationary structure was built on the shell of an “abandoned and partially-sunken” boat that had been half constructed by a wealthy old Pacha from Upper Egypt who dreamed of retiring in “a floating palace on the Nile.” The boat, which was restored and expanded in the early 1990s, is now
Dining Out
home to nearly a dozen upscale restaurants featuring Lebanese to pub cuisine. Il Piccolo Mondo is on the lower deck, with large windows overlooking the river, the interior is meant to resemble the Piazza San Carlo, the massive central square of Turin—an ambitious goal for a pokey boat-board restaurant. The walls are hung with dark-green shutters reminiscent of a Tuscan villa and acrylic paintings of the rustic Italian countryside. There are greenand-white checked table cloths, and half a dozen imitation street lamps lighting the dining room, which is divided by stone archways covered in fake ivy and love notes scribbled in magic marker by previous diners, a personal touch amid the generic Italian kitsch. Overall, the place calls to mind a hole-in-the-wall joint in the countryside more than an urban piazza, but that’s probably for the best. The second thing I noticed is the size of the menu, which is not at all piccolo. In the authentic tradition of Italian trattorias, there’s a large buffet of antipasti on the far side of the room (LE 74.90 for a large selection of cheeses, salads and such) which you could almost certainly make a complete meal of, though I didn’t try— there’s something Dickensian in queuing up for food, plate in hand. We instead turned to the à la carte menu, an extensive array of pasta, risotti and secondi of a bewildering variety. This is usually not a good sign: It’s a classic restaurant error to try to cater to all tastes, overstretching the kitchen and invariably satisfying no one. My concerns, however, were ill-founded. As primi, we ordered the Spinach Cannelloni (LE 99.90), two nicely cooked pasta packages of spinach with crumbly ricotta covered in melted mozzarella that came hot from the oven in a large oval dish. This was easily generous enough to qualify as a complete meal, which perhaps explains the price. The Risotto Funghi (LE 132.90) was just as generous and even more delicious: creamy arborio rice cooked al dente was flavored with porcini mushrooms and parmesan cheese. My companion and I got about halfway through both dishes before we decided to pace ourselves, given that we had another course on the way and requested our first plates wrapped up to take home.
This was a good thing, as the next plates were even bigger. My friend’s Filetto Gorgonzola (LE 196.90) arrived more rare than medium-rare, as she’d ordered it, but we weren’t terribly bothered by this easily fixable error, being used to steaks in Cairo served perennially overcooked, and we ate it as it was. A thick slab of beef, it was a good, tender cut, and we shared it happily. The gorgonzola sauce was closer to a cheddar and white-cheese sauce than anything remotely blue, although considering how much was poured over the steak, that was probably a good thing— anything stronger would have rendered the meat inedible. The side vegetables, unfortunately, were just that. The sauteed potatoes weren’t bad: fluffy in the middle with seasoned, crispy skin, but they were covered in stalks of rosemary so big one might choke you. But the other veggies— baby corn, carrots and Jerusalem artichokes—were old, dehydrated and offcolor. After one forkful, we decided to leave them where they were and treat them as a garnish. The Pesce Valentina (LE 199.90) was another large plate of protein smothered in sauce, served with the same questionable sides. It consisted of handfuls of white fish wrapped in pink, cooked salmon blanketed in an herb-heavy vegetable gravy that was tasty but overpowered the subtle flavor of the poor seafood swimming in it. Complementing the flaky pesce were small prawns arranged around the plate, which provided a mildly tangy, sweet
counterpoint. Needless to say, we managed less than half of our mains before having them added to our growing mountain of take-away boxes. Still, to the surprise of our waiter, we requested the dessert menu, which included the standard international array of cheesecake and apple tart. We went with the crème brûlée (LE 39.90) and two spoons. The sugar on top was perfectly caramelized but slightly too thick to achieve that satisfying cracking-throughthe-ice sensation of breaking into this sweet with your spoon. The custard underneath was serviceable but slightly bland and overcooked; it could have used more vanilla. After a few bites, we gave up and failed to finish this last course as well, though we declined to add it to our burgeoning doggy bag. We paid the bill and finished off our drinks at a leisurely pace. It wasn’t until we were in a taxi far away from Zamalek that we realized we had forgotten our mound of leftovers. It was disappointing not to have steak and mushroom risotto to look forward to for lunch the next day, but we consoled ourselves by agreeing that we’d be back. In the end, the food ranged from decent to really quite good, and the Nile view makes it an especially great spot to take visiting out-of-towners. I’m looking forward to the next foreign friend who turns up in Egypt and provides me with an excuse to return Il Piccolo Mondo. It is a small world, after all. ■ Business Monthly – February 2017 I
39
Travel
FROM PARIS WITH LOVE BY EDMUND BOWER
I
n the 1957 musical “Silk Stockings,” a humorless communist Russian operative is sent to Paris to retrieve four of her Soviet compatriots who’ve been seduced by the city’s pleasures. But she, too, ends up getting distracted and falls in love with an American movie producer, played by Fred Astaire, who wins the heart of the formerly cold-hearted Communist agent by singing to her on a balcony overlooking the Arc de Triomphe. The City of Love is famous the world over for its cobblestone streets, smoky cafés and pokey book shops; its world class art and food. In Japan, the French capital is so fetishized that psychiatrists have identified a Paris syndrome—Pari shokoguna—the disappointment veering on depression experienced by some Japanese tourists when the real Paris fails to live up to their romanticized expectations. The Japanese embassy in France
40
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Business Monthly – February 2017
actually runs a 24-hour helpline offering counseling to their countrymen suffering from this condition. Still, Tokyo remains a major source of visitors to the French capital, one of the most visited cities in the world, even after last year’s terrorist attacks badly dented tourism. What better occasion to visit the romance capital of the world than Feb.14, when the city rolls out the red carpet for couples from all over the world with a menagerie of performances, exhibitions and culinary delights. Some years, lucky Valentine’s Day visitors get to see Paris at its most beautiful— veiled with a blanket of snow. Between them, Air France and EgyptAir offer daily direct flights between Cairo and Paris Charles de Gaulle. For as little as LE 5,000 roundtrip, passengers can make the fourand-a-half-hour crossing on a new Air France Boeing 787 Dreamliner. First-time visitors on a Valentine’s
Day Paris mini-break may have to prioritize. Seeing all the city’s major sites alone could take weeks, never mind the crucial allotment for things like strolling hand-in-hand along The Seine and stealing a kiss from your sweetheart in the shadow of Notre Dame. The historic Louvre on the Right Bank, the world’s largest museum, housed in a 12th-century fortress, opens at 9 a.m. every day except Tuesday. Budget at least a few hours to explore the museum’s eight sections and see iconic works like the Venus de Milo and Leonardo da Vinci’s Mona Lisa. Tickets are €15. If you don’t like crowds, Paris has about 130 other museums to choose from. Non art lovers might head for Le Grand Musée du Parfum, newly opened in a 19th-century mansion (73 Rue du Faubourg Saint-Honoré), the world’s first dedicated perfume museum. Guests paying the €14.50 admissions price can smell their way through an interactive tour on the history and
Travel
science of fragrance, from Kyphi, a compound used by ancient Egyptians to invoke the gods, to the less pleasant smells of the Industrial Revolution. For a change of pace, get lost in the romantic Montmartre district, the famous stomping grounds of many famous 20th-century writers and artists—Vincent Van Gogh, Pablo Picasso and Salvador Dali all spent time here. Like Greenwich Village in New York and Soho in London, contemporary Montmartre is now mostly populated by tourist traps selling keychains and overpriced crepes and bo-bo (so-called bourgeois bohemians) sipping café au lait and pushing €1,000 strollers. It’s still worth it to climb your way to the top of the eponymous hill at the center of the neighborhood, because you’ll eventually reach the Sacré-Cœur Basilica, the turn-of-the-century landmark Catholic church. Open 6 a.m. to 10:30 p.m. every day, it’s free and offers impressive views. Another must for couples is a trip up the Eiffel Tower, the architectural wonder that is the most visited paid tourist attraction in the world. Originally built as a temporary entrance to the 1889 World’s Fair, the tower was nearly torn down in 1909 after many Parisians complained that it was an eyesore. It survived, and at 324 meters, it’s France’s tallest structure.
The observation decks boast panoramic views of the City of Light from 9:30 a.m. to 11 p.m.—adults pay €17.00. For those looking for a special way to savor the view, there is also the option of dinner. Michelin-starred Le Jules Verne, accessible by private lift, offers a special Valentine’s Day prix fixe menu at €390 per person—or €560 with wine pairing—featuring such dishes as duck foie gras and black truffle macaroni gratin. This being Paris, there’s more than one way to see the city over a plate of food. Dinner cruises on the Seine offer diners a relaxing tour of the sights on the banks, from the Statue of Liberty replica to the west to the Ile de la Cité in the east. Bateaux Parisiens (Port de la Bourdonnais) is a two-hour river tour that embarks from the Eiffel Tower at 8:30 p.m. The Valentine’s Day menu is a six-course feast, including cheese, champagne and a selection of wines, all for €150 to €215 per person, depending on where you sit. Paris offers plenty of gastronomical options for more economic-minded holidaymakers, too. Those looking for the traditional French bistro experience might consider A la Biche au Bois (45 Avenue Ledru Rollin) a stone’s throw from Gare de Lyon, the city’s turn-of-the20th-century train station. It’s one of a dwindling number of neighborhood
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eateries that still serve classics like coq au vin and ouefs durs mayonnaise at less than €30 per person for a four-course meal. Open for lunch and dinner, reservations are a must. There’s a similar range of accommodation options, but for a blowout weekend, there are few hotels that rival Le Bristol (112 rue du Faubourg Saint Honoré), a short walk from the Elysée Palace. A favorite of former President Nicolas Sarkozy, this is a traditional five-star hotel: The doors open with actual keys and the decor is pastel florals and Regency furniture. Double rooms start at €850 a night. Le Bristol’s three-Michelin star restaurant, Epicure, has several times been named the world’s best hotel restaurant. The Saint James Paris (43 Avenue Bugeaud), is less central, but more than compensates by offering a countryside château experience in the upmarket 16th arrondissement. In contrast to its Second Republic-era neoclassical facade is the hotel’s almost-manic interior design, which features zebra heads on the walls and a large black-and-white striped imperial staircase. Doubles start at €350 a night, and the caviar starter at the restaurant will set you back a mere €65. An even cheaper option that still makes for a special weekend is Hôtel Atmosphères (31 Rue des Écoles), where doubles start at €150. Just a 10-minute walk from the river, Notre Dame cathedral and the Panthéon, the hotel is perfect for sightseers. Demonstrating that Paris has something for everyone, Atmosphères is all about modernity, with 56 uniquely decorated rooms with themes like By Night, in stark red and black, and Macaron, which is pink and fluffy like a French cookie. Wherever you plan to stay, get in the mood for your French getaway— whether it’s this year or in a decade— with a movie marathon of some of Hollywood’s many celebrations of The City of Love, from “Everyone Says I Love You” to “Last Tango in Paris.” As Fred Astaire sings to Cyd Charisse in “Silk Stockings”: “Paris loves lovers.” ■ 42
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Chamber news BOARD OF GOVERNORS
PRESIDENT Anis A. Aclimandos, Transcentury Associates
EXECUTIVE VICE PRESIDENTS David Chi, Apache Egypt Companies Ahmed Abou Ali, Hassouna and Abou Ali Law Offices
MEMBERS OF THE BOARD Aladdin El-Afifi, ASEC Company for Mining (ASCOM) Hashem El Dandarawy, Team 4 Security Omar Mohanna, Suez Cement Group of Companies Zeinab Hashim, Abu Dhabi Islamic Bank (ADIB)
VICE PRESIDENT, MEMBERSHIP Amr Allam, Misr Sons Development – Hassan Allam Sons
PAST PRESIDENT M. Gamal Moharam, MGM Financial & Banking Consultants
VICE PRESIDENT, PROGRAMS Tarek Tawfik, International Company for Agricultural Production & Processing
ADVISOR TO THE BOARD Hisham A. Fahmy
VICE PRESIDENT, LEGAL AFFAIRS Said Hanafi, Orascom Hotels & Development
COMMITTEE LEADERS
CHIEF EXECUTIVE OFFICER Sylvia Menassa
(July 2016 to June 2017)
Insurance Chair: Alaa El-Zoheiry, Arab Misr Insurance Group (gig) Co-Chair: Elena Butarova, MetLife Alico (Pharaonic American Life Insurance Co.)
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TREASURER Sherif El Kilany, Allied for Accounting and Auditing- Ernst & Young
Investment Chair: Hazem Badran, CI Capital Holding Co. Co-Chair: Sherif El Kholy, ACTIS
Agriculture and Food Security Chair: Abdel Hamid Badawi Demerdash, Magrabi Agriculture Company Co-Chairs: Hatem El Ezzawy, PICO Agriculture Seif ElDin Saad ElSadek, Agrocorp For Agriculture Investment
Energy Chair: Khaled Abu Bakr, TAQA Arabia Co-Chairs: Ali Bakr, ExxonMobil Egypt Ayman Khattab, General Electric International Operation Emad Ghaly, Siemens Ian LePetit, Total Egypt
Banking and Finance Chair: Nadir Shaikh, Citibank Co-Chairs: Ahmed Issa, Commercial International Bank (CIB) Zeinab Hashim, Abu Dhabi Islamic Bank - Egypt
Entrepreneurship and Innovation Chair: Alaa Hashim, Egyptian Center for Economic Studies (ECES) Co-Chair: Dina Sherif, Ahead of the Curve
Capital Market Chair: Karim Awad, EFG-Hermes Holdings Co-Chair: Sharif El Akhdar, Beltone Private Equity
Corporate Sustainability and Responsibility (CSR) Chair: Mohamed El Kalla, Cairo for Investment & Development Co-Chair: Shereen Shaheen, Pepsi-Cola Egypt
International Cooperation Chair: Sherif Kamel, The American University in Cairo (AUC) Co-Chairs: Rafeh Saleh, CID Consulting Sherif El-Tokali, UNDP
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Marketing Chair: Dalia Wahba, CID Consulting Co-Chairs: Karim El Tawil, Orange Tamer El-Araby, Nielsen Egypt Real Estate Chair: Mohamed Abdallah, Coldwell Banker Affiliates of Middle East & Greater Africa Co-Chairs: Abdalla El-Nockrashy, Majid Al Futtaim Properties-Egypt Magued Sherif, SODIC
Health & Pharmaceuticals Chair: M. Maged El Menshawy, Manapharma Co-Chairs: Mohamed Roushdy, Amoun Pharmaceutical Co. Ramy Koussa, MSD Egypt Tamer Said, GE Healthcare Human Resources Chair: Somaya El Sherbini, Microsoft Egypt Co-Chair: Maisa Galal, General Motors Egypt
Customs and Taxation Chair: Hassan M. Hegazi, Master Trading Co-Chair: Hossam Nasr, Allied for Accounting and Auditing- Ernst & Young
Industry and Trade Co-Chairs: Ashraf Bakry, Unilever Mashreq Karim Kamel, Proctor & Gamble Egypt, Ltd. Mostafa El Halwagy, The Egyptian Company for International Touristic Projects (Americana) Omar El Derini, FAOM Consult/Red Wing
Education Chair: Tarek Khalil, Nile University Co-Chair: Shahinaz Ahmed, Amideast Egypt
Information and Communications Technology Chair: Amr Talaat, IBM Co-Chairs: Ayman ElGohary, Cisco Systems International Reem Asaad, Raya Holding
Legal Affairs Chair: Hani Sarie-Eldin, The Middle East Center for Law & Development Co-Chairs: Girgis Sarwat Abd El Shahid, Shahid Law Firm J. Michael Lacey, Dentons
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Transport and Logistics Chair: Marwan El Sammak, Worms Alexandria Cargo Services Co-Chairs: Ahmed Elfangary, DHL Express Osama Fawzy Hegab, Triangle Trading & Engineering Tarek Fahmy, Mediterranean Shipping Company Willfried Wienholt, Siemens
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Travel and Tourism Co-Chairs: Cees Ursem, Air France KLM Karim El Minabawy, Emeco Travel Nelly El Kateb, Astra Travel Radek Cais, The Nile Ritz-Carlton, Cairo Women in Business Chair: Dina El-Mofty, INJAZ Co-Chair: Yasmine Mowafy, Beltone Financial
American Chamber of Commerce in Egypt – Tel: (20-2) 3338-1050 – Fax: (20-2) 3338-1060 For more information about AmCham services and news, please visit www.amcham.org.eg or our US mirror site www.amcham-egypt.org
Events TRADE AND INDUSTRY
Looking south
O
ver the past seven years, Qalaa Holdings has invested billions of dollars in East Africa, focusing on energy, transportation and logistics. “We are now speaking a common language,” said Hisham el Khazindar, the firm’s co-founder and managing director and one of five panelists who spoke at a Jan. 22 AmCham luncheon titled “Business in Africa: The Untapped Potential.” The event coincided with a delegation of African business leaders chosen by the Institut Choiseul, a French think tank. The lunch, held at the Four Seasons Cairo at Nile Plaza, was also hosted in cooperation with the Federation of Egyptian Industries. “I have a lot of déjà vu whenever I visit one of these countries,” said Qalaa Holdings Managing Director Karim Sadek. “The positive déjà vu, albeit 15 to 20 years behind Egypt, is the impressive growth in a young, consumer-oriented middle class that is well educated, wellversed with the latest in technology and consumer trends.” Noting that many sub-Saharan governments are strapped for cash, Sadek is selectively optimistic: “I continue to bet on consumerism and the private sector on the continent and shy away from projects tied to treasury and government.” Carole Kariuki, CEO of Kenya Private Sector Alliance, an industry body similar to the FEI, said that African states have to build trade and investment in one another to
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stimulate growth. Currently, intra-Africa trade accounts for just 10-12 percent of the continent’s total trade volume, while trade with the European Union is between 40 and 60 percent. “America and the UK are turning inward. This is the time for Africa to also look inwards, not as countries, but as a continent,” said Kariuk. “Do we allow foreigners to continue to exploit us, or do we exploit our own resources for our benefit?” Infrastructure and energy are among the biggest growth sectors in Sub-Saharan Africa, noted Wael Hamdy, vice president-power at Elsewedy Electric, who recalled how his firm had established factories in Ethiopia, Ghana, Zambia and Nigeria, among others. “To our surprise, they started suffering from low sales because, as it turned out, you can’t sell to neighboring countries,” said Hamdy. “This is the business mentality.” For infrastructure and energy investments, the biggest challenge is financing, he added. “Short-term financing is there, but it’s really expensive. However, medium- and long-term financing is almost non-existent.” IBM Egypt General Manager Amr Talaat spoke about the potential the ICT sector offers for cooperation with sub-Saharan African countries. “ICT has been a major driver in economies across Africa,” he said. “A lot of African countries haven’t invested a lot in legacy technology and so are open to nascent technologies,” such as
mobile money transactions, which have taken off at a much faster rate in parts of Sub-Saharan Africa than they have in Egypt. The biggest IT challenge for the continent, Talaat added, inadequate internet access. Only 28 percent of Africans have online access, compared to a global average of 56 percent. Continent-wide, mobile penetration stands at 73 percent versus the global average of 85 percent. Packaged and frozen food is another untapped opportunity. “Gambia is an excellent example of achieving food security by cooperating with another African country,” said Tarek Tawfik, head of the FEI’s Food Industries Chamber. He noted that The Gambia has some 1,000 acres dedicated almost entirely to potato and onion cultivation. Until 10 years ago, he said, it was importing these crops. “We convinced political powers over there to break the local monopoly and allow us to automate the cultivation and storage processes,” said Tawfik. “We did it, and now they have 100-percent self-sufficiency in both crops.”
Ethiopia, one of the continent’s fastest-growing economies, opened its door to investment through a commodities exchange that was opened nine years ago, said Ermias Eshetu, CEO of the Ethiopian Commodities Exchange. “Now we have 1,000 traders and $1.3 billion worth of commodities are traded every day,” mainly coffee beans and sesame seeds. Eshetu looks to America’s 120-year-old Chicago Mercantile Exchange as a model. “There are lessons to be learned from the Chicago exchange, how they connected to industry and their outreach,” said Eshetu. Qalaa Holdings’ Khazindar said doing business with Africa on the ground requires friendly politics, including dialogue with the leaders of African countries, and an open mind. Business leaders across the continent should realize that they have much to learn from each other. “Ethiopia has a commodities exchange, Egypt doesn’t have one now. Kenya is a pioneer in mobile money payments, Egypt is still trying to break into it,” said Khazindar. “We can’t be arrogant. We all have to learn from each other.”
HUMAN RESOURCES
Compensation challenges “What happened recently, on Nov. 3 with the Central Bank of Egypt floating the Egyptian Pound, resulted in an upward adjustment of several regulated prices, in addition to the direct effect of cutting subsidies on petroleum products. This resulted in an increase in the prices of inland transportation and several core food items, such as meat, poultry, milk, cheese, and oil,” said Emad Nasr, human resources director, Lecico Egypt at a Jan. 12 meeting of the AmCham Human Resources Committee titled “2017 Compensation Challenges.” Nasr was joined by Karim Youssef, human resources head, Commercial International Bank; and Nermine Fawzy, Executive Director – Global Talent & Operations, ITWorx. The reduced spending power of the pound has become a serious consideration for companies looking to retain their top talent. When designing their compensation packages, companies have to take six major factors into account: The package must be legal, cost/benefit effective, motivating, equitable, secure and adequate. A well-designed compensation package helps to attract, motivate and retain talent in the organization, said Nasr. Having a variable compensation program to retain employees is very important,
added Fawzy, noting that compensation in general recognizes and rewards an employee’s contribution to the company’s productivity, profitability and quality. Having a variable compensation program helps recognize those employees who have helped to make the biggest contribution to the business success. Youssef noted that it is also important to include the employees when managers are conducting the company’s performance appraisal. This helps the employees to identify their areas of growth either in their current position or in the preparation for their future roles. Performance evaluations are motivational for employees’ personal learning, growth and development.
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Member News NESTLÉ Global packaged foods brand Nestlé S.A. has acquired Caravan Marketing Co., an Egyptian firm that makes Bonjorno instant coffee, competing with Nestlé.s Nescafe. Yasser Mabrouk, chairman and CEO of Nestlé Egypt, said the deal combines Nestlé.s strong marketing and innovation capabilities with Caravan.s local distribution and retail strength. Over the last five years, Nestlé has invested almost LE 1 billion in local manufacturing and distribution facilities and training.
SCHNEIDER ELECTRIC As of January, Sherif Abdel Fattah has been appointed an executive board member of Schneider Electric Egypt. Abdel Fattah, who will also continue to serve as deputy CEO for government affairs and renewable energy, has been with the company since 1991. Before that he worked for the state-owned Electrical Power System Engineering Co. Recently, Sherif closed a deal to build a €75 million, 40-megawatt power plant in South Sinai.
CAIRO MARRIOTT In an effort to work toward the United Nations Sustainable Development Goals for 2030, the Cairo Marriott Hotel & Omar Khayyam Casino held a dinner to raise global hunger awareness Jan. 12 as part of the World Economic Forum.s Global Dinners for Sustainable Food program held in 10 locations around the world. Guests were invited to donate to World Food Programme.s regional operations.
GB-AUTO GB-Auto, the local dealer for Chinese Geely Automobiles, has opened its eighth service center on the Cairo-Qalyubia Agriculture Road. The new 4,860square-meter center has a showroom to showcase the latest Geely models as well as offering maintenance, repairs and bodywork and original spare parts for up to 60 cars at a time.
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New Members Academic/Educational/Research & Development (R&D) Modern Arab Company for Printing, Publishing (Selah El Telmiz Books)
Tel.: (20-2) 2467-7371 Fax: (20-2) 2467-7188 Website: www.selaheltelmeez.com
Scatec Solar Solutions Egypt Morten Langsholdt Country Manager, Egypt/VP Project Development
Mohammed Hamdy Board Member
Address: 8, 9 Street 47 Abbassia Industrial Zone.
Power
Membership Type Associate Resident
Constructions/Engineering LEEDS (Leaders in Energy, Electromechanical Development & Services Mohamed Fares Chairman & CEO Address: Sixth Touristic Village – Versailles Resort 1 – Building 4 – Unit No. 4002, 6th of October, Giza. Membership Type Associate Resident Tel.: (20-2) 2598-2510 Fax: (20-2) 2598-2509/ 11 Website: www.leedscorp.com
Financial Sector
Address: Nile City Towers – 2005 C, North Tower, 27th Floor, Corniche El Nil, Ramelt Beaulac, Cairo. Tel.: (20-2) 2461-9643/4 Fax: (20-2) 2461-9645 Website: www.scatecsolar.com
Membership Type Associate Resident
Philips Lighting Egypt Tamer Aboulghar VP CEO Africa Market Address: City Stars, Star Capital 8, 11th floor, Nasr City, Cairo. Tel: (20-2) 2480-1450 Fax: (20-2) 2480-1458 Website: www.lighting.philips.com.eg
Membership Type General
Real Estate
Mastercard Middle East Africa Inc.
Ebny Real Estate Investment Co.
Tamer Kashef Vice President, Country Manager Egypt
Abdallah Kamel Ahmed CEO
Address: 2005 Courniche El Nile, Nile City Towers, North Tower, 16th floor. Tel.: (20-2) 2461-7200 Fax: (20-2) 2461-7220 Website: www.mastercard.com
Address: 38 El-Tayaran Street, Nasr City, Cairo. 44 O. El Khalifa El Mamoun, Heliopolis, Cairo. Tel.: (20-2) 2403-8573 Fax: (20-2) 2403-8569 Website: www.ebny.net
Membership Type General
Membership Type Associate Resident
For any change to contact information, please contact the Membership Services Department at the Chamber’s office Tel: (20-2) 3338-1050, ext. 0016 – Fax: (20-2) 3338-1060 E-mail: membership@amcham.org.eg
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New Members Affiliate Members Academic/Educational/Research & Development (R&D)
Hassan El Sada
Category: General Sector: Service Providers
Chief Executive Officer- Modern Arab Company for Printing, Publishing
Mohamed Gabr
Category: Affiliate Sector: Legal Services
Mostafa Hamdy
Managing Director, Y&R
Executive Director - Ernst & Young Egypt
Partner & Head of Dispute Resolution Department, Nour & Selim in Association with Al Tamimi & Co.
Amr Bayoumi
Mohamed ElKady
Executive Director, Assurance-Quality & Risk Management - Ernst & Young Egypt
Fact Freight General Manager, Seaharvest
Category: Affiliate Sector: Petroleum
Construction/Engineering
Shaheer Albert .F Youssef
Category: General Sector: Chemicals
Deputy General Manager - Polaris International Industrial Parks
Tamer Wasfi
Accounting
Ahmed Awad
Bassel Shoirah
Board Member, Technotrade
Category: Affiliate Sector: Financial Sector
Financial Sector
Head of Credit & Marketing Department, Egypt Factors, SAE
Executive Director - Pharos Holding for Financial Investments
Samar Ibrahim
Human Resources
Communication Director, Ahl-Masr Foundation for Development
Category: Affiliate Sector: Non-Governmental Organizations (NGOs)
Consultant, Facilitator & Coach - Leadership Training & Consultancy (LTC)
Vitor Nogueira
Category: Affiliate Sector: Real Estate
Khalid Ellaicy
Category: Affiliate Sector: Investment
Ahmed Heider
Zeinab Sherif
Information Technology Mohamed El Rashidi
Vice President-Kemet Corporation
Petroleum
Osama Halim
Egypt and Libya Area Manager- Halliburton
Power
Mohamed Amer
Finance Manager - Scatec Solar Solutions Egypt
Ahmed Riad
Head of Finance NEA- Philips Lighting Egypt
Mohamed Abo El-Azayem
General Manager- Philips Lighting Egypt
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New Replacements in Member Companies
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Managing Director- West Region, Shopping Mall, Majid Al Futtaim Properties-Egypt Group CFO, Orascom Telecom Media and Technology Holding "OTMT"
Richard Dictus
UN Resident Coordinator, UNDP Resident Representative, United Nations Development Programme UNDP-Egypt Country Office
Essam Abd El Hafiez
Managing Director, Pharos Holding for Financial Investments
Category: Public & Diplomatic Sector: Diplomatic Missions
Category: Affiliate Sector: Financial Sector
New Members Changes Change in Member’s Title: Mohamed A. Fayed
Chief Executive Officer (CEO) & Managing Director (MD), Bank Audi, SAE
Hatem Sadek
Chairman, Bank Audi, SAE
Khaled Anwar Beshir
General Manager, Head of Operations, Bank Audi, SAE
Ayman Mokhtar
Executive Board Member & Senior General Manager, Head of Corporate Banking, Banque Du Caire
Heidi El Nahas
Head of Corporate Communications, Banque Du Caire
Mohamad Talaat
Managing Partner, Helmy, Hamza & Partners (Baker & McKenzie)
Taher S. Helmy
Partner, Helmy, Hamza & Partners (Baker & McKenzie)
Nermine Fawzy
Executive Director- Global Talent & Operations, ITWorx
Moataz Selmy
Managing Director, Syngenta Agro
Ghada Hussein El Bialy
CEO, Treasury, Foreign Division and International Financial Services, National Bank of Egypt
Change in Company Information: Bank Audi, SAE
Address: Pyramids Heights Office Complex, Building C5, 3rd Floor, Km 22 Cairo-Alexandria Desert Road
Beta Egypt for Urban Development
Address: 43 El Nozha Street, beside Total Gas Station
Environmental Solutions
Address: Villa 75; Area Z; South Academy Elshaymaa Street
Global Projects Services (GPS)
Telephone: (20-2) 3820-4010/13/3820-4119 Fax: (20-2) 38204015 Address: Point 168/3, third Industrial Zone, infront of Style Team Factory.
General Motors Egypt, SAE Sector: Automotive
MetLife, Life Insurance Company Address: Building No. 75, Road 90 Telephone: (20-2) 2810-4560 Fax: 28104566
Shalakany Law Office
Address: 12 Marashly Street, Zamalek.
Shatat for Investment
Address: Shatat Group Building Summit No. 3, Block (E), Mostafa Kamel Axis, First Settlement Services
Syngenta
Telephone: (20-2) 2269-2344 Fax: (20-2) 22692355
Change in Company Name:
H.A. Construction (H.A.C.), formerly (Misr Sons Development)
Change in Member Company: Nevine Kashmiri
Assistant Chairman & CEO- Corporate Banking - The United Bank
Change in Membership Category: Ahmed Shaheen
General Manager, Egypt Factors, SAE
Omar Ezz El-Arab
Director, Abraaj Investment Management, Ltd.
Sherif El Kholy Partner, ACTIS
Mohamed Mahran
Managing Director, Allianz Insurance Co. – Egypt
Sameh F. Gabra
General Manager Health Tech, Philips
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Current Benefits
Only With Your AmCham Membership 2017 Card
Airlines
Egyptair Up to 30% Discount on IATA rates. Up to 12% Discount over Egyptair’s special fares June 30, 2017
Banks
Barclays Bank Egypt, SAE Barclays Premier Banking offers you world-class products at preferential interest rates, dedicated team to meet your needs, Exclusive Concierge Services CRITERIA: Criteria 1: Liabilities Relationship (Opening Current or Saving accounts)Require an initial deposit balance of EGP 500,000 & above. Criteria 2: Liabilities & Loans Relationship- Require an initial deposit balance of EGP 300,000 and an outstanding loan balance of EGP 200,000. Criteria 3: Liabilities & Credit Card Relationship Require an initial deposit balance of EGP 300,000 and a Credit Card limit of EGP 100,000. Criteria 4: Liabilities & Business Relationshiphttp://www.barclays.com.eg/premier/overview/index.html December 31, 2017
Courier Services
Aramex International Egypt Aramex International Egypt is pleased to offer to AmCham members a free Shop & Ship membership, all AmCham members are exempted from the $45 membership fee. In addition to a 30% discount on all Personal Domestic Services. December 31, 2017
Human Resources
Think for Professional & Personal Development THINK is pleased to offer AmCham members an exclusive 15% off on participating in our unique PLAY BIG! women leadership program as well as a very special bonus offer! Limited places are available. Contact us now on (20-10) 0885-8593 or info@think.com.eg to book in the next program run! For more details, please Visit www.think.com.eg December 31, 2017
Publishing
The Middle East Readers Information Center (MERIC) 25% Discount on The Middle East Observer Annual Subscription Rate June 30, 2017
Optical
Magrabi Group 15% discount on medical frames, sunglasses and lenses available at all Magrabi Optical stores in Egypt. December 31, 2017
AmCham Egypt members can now enjoy the benefits offered by AmCham Lebanon, AmCham Morocco, AmCham Tunisia and AmCham Abu Dhabi as AmCham MENA Council members. For details, please visit http://www.amchammena.org/index.asp?p=1 If you have any inquiry regarding any of these benefits, please contact Ms. Azza Sherif, Membership Department, AmCham Egypt. Mobile: 010 996 96125 Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for all of the above AmCham benefits
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Hotels & Restaurants
Cairo Marriott Hotel 15% discount on Food and Beverages at all Cairo Marriott outlets (This offer does not require having a room at the hotel) In addition to a special accommodation rate of: • $115 per single room per night (B&B at Omar’s Cafe) • $130 per double room per night (B&B at Omar’s Cafe) • 25% discount on laundry during your stay December 31, 2017 Conrad Cairo Hotel 15% discount on Food and Beverages on the below restaurants at Conrad Cairo. - Oak Grill - Kamala, Asian bar and dining restaurant December 31, 2017 Dusit Thani Lakeview Cairo Hotel 20% discount to AmCham members on Food & Beverages in all restaurants. July 9, 2017 Hilton International Co. 20% discount on Food & Beverages items at any of the hotel's outlets Special room rates for Egyptians: LE 720 single and LE 830 double Special room rates for foreigners: USD 120 single and USD 130 double June 30, 2017 Kempinski Nile Hotel 20% discount on Food and Beverages on all restaurants at all Kempinski Nile Hotel during breakfast, lunch and dinner time (This offer does not require having a room at the hotel) • $125 per single Medina Deluxe room per night, $145 Nile Superior room per night based on bed and breakfast • $145 per double Medina Deluxe room per night, $165 Nile Superior room per night based on bed and breakfast December 31, 2017 The Nile Ritz-Carlton, Cairo 30% discount on food and beverages (excluding alcoholic beverages) in all of The Nile Ritz-Carlton restaurants up to a maximum number of 4 guests. The offer does not apply to banquets or large organized events. 50% discount on City Resort membership for AmCham families. Up to a maximum of 99 memberships – first come first served. 30% savings on spa treatments excluding products for AmCham members and up to one guest with the member in attendance. December 31, 2017 Safir International Hotel Management Egypt 20% discount to AmCham members on accommodation published rates, and on food & beverages in all restaurants; Palm’s Coffee Shop, Asia Boutique Restaurant, Gazerit Al Dahab (Oriental Restaurant), Blue Pool Café, Corporate Café, excluding alcoholic beverages and service charge and taxes. 20% discount on the Health Club and SPA. December 31, 2017
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Announcements Jobs AMCHAM RECRUITMENT CENTER Code
Vacancies
Company Name
105562 105702 105822 105856 105754 105815
Key Account Manager HSE Manager Business Development Manager Branch Manager Project Manager Bidding Manager
Paradise Capital Holding for Financial Investments S.A.E Mobiserve CID Consulting CONTRACK FM S.A.E SUMMIT Advanced Computer Technology - ACT
For more information about these jobs and others, visit: www.amcham.org.eg/recruitment – e-mail: recruitment@amcham.org.eg, Tel: (20-2) 333 88 220 Ext. 1513 - 1514 Fax: (20-2) 333 73 779
Top Tenders
TOP TENDERS
FROM
TAS
Client
Description
Deadline
SupRequest of offers from first class contractors for the completion of the sanitary General Authority for New Urban Societies, New drainage water treatment plant of 15,000 M3 discharge capacity in Luxor. Pre bid Tiba City Development Agency, The Cashier meeting set for 2/6/2017. Construction of the training & accommodation building at Manar Misr Misr Petroleum Co., Cashier Petroleum Building. Ref. 3/sh/2017.
Beneficiary Sectors
Bid bond Specs fees
Sectors
February 20، 2017
500,000 LE LE 4,000
Electromechanical Works Local Administration Authorities
March 5، 2017
1,000,000 LE LE 3,000
Construction Projects Petroleum - Oil, Gas & Petrochemicals
Generating Sectors
www.amcham.org.eg/TAS
For further information, contact the Business Information Center at AmCham Egypt Tel: (20-2) 3338-1050 – Direct: (20-2) 3761-9641 • Fax: (20-2) 3338-9896 • E-mail: info@amcham.org.eg Website: www.amcham.org.eg • US Website: www.amcham-egypt.org
U.S. Exhibitions
Listings are now available on our website:www.amcham.org.eg Exhibitions related to the following sectors are scheduled for the upcoming months. Sector
Show Name
Website
Embassy Contact Person
TEL.
February Healthcare
Arab Health
www.arabhealthonline.com
Rania Mekhail
2797-3487
Food / Agribusiness
International Production & Processing Expo
www.ippexpo.com
Cherine Maher
2797-2688
Energy
DistribuTECH
www.distributech.com
Mai Abdelhalim
2797-2146
Mai Abdelhalim
2797-2146
May Energy-Oil
Offshore Technology Conference
www.otcnet.org
Environment- Water
WasteExpo 2017
www.wasteexpo.com
Hany Wassef
2797-3422
Restaurants/F&B
NRA Show 2017
www.show.restaurant.org
Rania Mekhail
2797-3487
For more information about these exhibitions, please contact: The Commercial Service at the U.S. Embassy Tel: (20-2) 2797-2330/ 40 - E-mail: office.cairo@trade.gov *Please refer to the Commercial Service at the U.S. Embassy for any updates on the exhibitions.
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Business Monthly – February 2017
Classifieds Benefits ARAB MISR INSURANCE GROUP | GIG Arab Misr Insurance Group | gig, has the pleasure to provide AmCham members a 25% discount on Travel Care Insurance Rates. Below is the required documents from members, to be sent to the contact person email: * Passport copy * Valid membership card * Duration of travel * Phone number and the nearest branch
***Discounts will be granted for AmCham members upon presenting their AmCham 2017 membership card*** For more information, please contact: Nadine Yousri Phone: (20-2) 2451-7620/22/44 Ext. 324 E-mail: yossry.n@gig.com.eg; miscellaneous@gig.com.eg Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits This offer is valid until December 31, 2017
MARRIOTT HURGHADA Marriott Hurghada is pleased to offer AmCham members a 15% discount on total bill, including alcoholic beverages, in addition to the below privileges. - Welcome Drink upon arrival. - Free entrance to the health club and Gym excluding Massage. - Free wireless internet in all public areas. - Early check-in & late check-out subject to hotel availability. - Upgrade to next room category subject to hotel availability.
***Discounts will be granted for AmCham members upon presenting their AmCham 2017 membership card*** For more information, please contact: Reservation Department at Hurghada Marriott Red Sea Resort Phone: (20-65) 3446-950 E-mail: reservation.hurghada@marriott.com Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits This offer is valid until December 30, 2017
zzzz AND RESORTS, EGYPT FOUR SEASONS HOTELS All AmCham members are entitled to a 15% discount in all the restaurants (food and non-alcoholic beverages only) as well as spas at all Four Seasons Hotels in Egypt. Special NEW benefit: 30% discount on spa membership Terms and conditions: 1. The discount is not applicable on alcoholic beverages, banquet facilities, outside catering or guest rooms and suites and special occasions. 2. Benefits are neither transferable nor redeemable.
***Discounts will be granted for AmCham members upon presenting their AmCham 2017 membership card*** For more information, please contact: Cairo (Nile Plaza): (20-2) 2791-6923 Cairo (First Residence): (20-2) 3567 2121 Alexandria (San Stefano): (20-3) 581 8000 ext. 1049 Sharm El Sheikh Resort: (20-69) 360-3555 Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits This offer is valid until December 31, 2017
NATIONAL TRADING COMPANY (APPLIANCE) Appliance is pleased to offer its unique solutions and services to AmCham Member companies as: - Up to 10% discount on Laptops, Mobile and their accessories at Appliance retail branches "Mall of Arabia, City Stars, Cairo Festival City Mall, City Center Alexandria, City Light Alexandria and El Gouna branch". - 20% discount on Digital Signage solution. - 10% discount on GPS services. - 10% discount on security systems. You can check our website for more info.: www.appliance-eg.com, www.appliance-eg.com/b2b
***Discounts will be granted for AmCham members upon presenting their AmCham 2017 membership card*** For more information, please contact: Muhammad Hamdi • Phone Number: (20-2) 2670-6627/ 2670-6320 Mobile: (20-12) 2030-0071 • Email: m.hamdi@appliance-eg.com Mostafa El Gharaz Mobile: (20-12) 0333-9992 • Email: mostafa.elghraz@pins-egy.com Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits This offer is valid until December 31, 2017
The BUSINESS MONTHLY Classifieds section is open exclusively to AmCham member companies. Text ads are £E 150 for up to 30 words, £E 5 per additional word. Abbreviations, phone numbers and e-mail addresses count as one word. Display ads are £E 100 per cm in height, per column (max. 20cm in combined total height). Discounts are offered for regular advertisers and repeat bookings. Insertion orders, payment and ad content must be received by the 15th of the month preceding publication. All classified ads subject to editorial approval. For more information, or to place a classified ad, contact Amany Kassem at (20-2) 3338-9890, fax (20-2) 3338-0850, e-mail: akassem@amcham.org.eg
Business Monthly – February 2017 I
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Advertorial NAHDET MISR GROUP
AL’IMAGE PHARMACY
Nahdet Misr Group has launched several of its latest books and publications at the Cairo International Book Fair, which ends Feb. 10. The new books include fiction and poetry as well as manuals on self-help, spirituality and parenting. New titles include “Shoubra Misr” by Medhat el Adl, “As I Tell You So” by Isaad Younis, “Word” by Mostafa Hosney, and “Why am I a Terrorist? Why are you a Heretic?” by Mohamed Dawoud. Books sold at the fair will be 20 to 70 percent off. The publisher also planned to launch its latest digital education application at the book fair.
AL’IMAGE Pharmacy has opened a new store on 26 July Street in Zamalek, its 16th branch in Egypt. To mark the occasion, AL’IMAGE is working with The Rotary Club of Cairo to offer Hepatitis C and anemia tests free at all branches within the first 95 days after the opening of the new branch. According to Mohamed Gamal, the pharmacy’s marketing and business development manager, the Egyptian chain plans to increase the number of stores to 21 by the end of the year.
BARON HOTELS AND RESORTS
LENOVO
Baron Palace Sahl Hasheesh recently hosted the Österreichs Nächstes Topmodel contest, which saw 17 models from around the world compete for the title of Top Model. ÖNTM is the largest modeling contest in Austria and Germany and was established before as “Austria’s Next Top Model,” a spinoff of Tyra Bank’s original, “America’s Next Top Model.” The hotel has a façade that overlooks 600 meters of silky white beaches, 16 restaurants and bars in addition to swimming pools, a diving center and a wellness spa.
Lenovo Egypt has launched its flagship smartphone, the revolutionary Moto Z, with a 5.5-inch quad HD screen and fingerprint scanner. It is 5.2mm thin and weighs just 136gm.” The quad core processor has two 1.8-GHz cores and two 1.6-GHz cores, as well as an Adreno 530 dedicated graphics processor and 4GB of RAM. The rear camera is a 13MP camera with optical image stabilization and dual-LED flash. The frontfacing camera is a 5MP shooter with a large pixel size of 1.4um for high quality low-light images. Internal storage is comes in 32GB or 64GB with the option to increase it via microSD card.
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Business Monthly – February 2017
Advertorial THE NILE RITZ-CARLTON
AVON
The Nile Ritz-Carlton Cairo has opened Bar’Oro, aka The Golden Bar, overlooking the Nile and The Cairo Tower. The latest facility offers signature cocktails, exclusive wines, fine cigars and snacks. During Bar’Oro’s Golden Hour, which runs from 7 p.m. to 8 p.m. Saturdays through Wednesdays, your second drink is on the house. It is open every day from 6 p.m. until 1 a.m. It’s located right next door to the Egyptian Museum and is within walking distance of downtown Cairo. The hotel has four restaurants, three bars and two lounges. Its rooms overlook Tahrir Square and the Nile.
Avon, a global leader in direct-sales cosmetics, recently participated in Cairo Fashion Week. As the official makeup partner, Avon provided a comprehensive array of its products to the Cairo Fashion Week makeup artists working with the event’s models. As an extra benefit, the makeup artists received a selection of Avon premium cosmetics as gifts.
EMIRATES
SKECHERS
Emirates has introduced new products to its first- and business-class cabins. For a good night’s sleep onboard the aircraft, Emirates is offering moisturizing loungewear to first-class travelers on long-haul flights. In partnership with Matrix, the suits use Hydra Active Microcapsule Technology designed to keep skin hydrated during the flight. It’s also offering a range of spa products from VOYA, including body wash and moisturizer. Travelers can choose from rosemary, mint, lavender, lime or mandarin fragrances. Emirates was named World’s Best Airline at the Skytrax World Airline Awards in 2016.
Skechers, the $3-billion global shoe brand, has opened its latest outlet in Mohandeseen and reopened its renovated megastore at City Stars mall in 6 October City. These two stores are in addition to Skechers outlets at Cairo Festival City mall, Mall of Arabia and Alexandria City Centre. The footwear brand has been operating in Egypt since 2010, offering a product portfolio with 3,000 styles of shoes for men, women and children. Skechers makes two kinds of shoes— lifestyle and performance footwear—and through licensing agreements, it also offers branded apparel, bags, socks and more.
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Media Lite
A Glance At The Press "What’s the world coming to? The other day, I ask a guy for a bribe, and he asked if he could pay in installments!"
Al-Masry Al-Youm, Jan. 25 Media Lite is a satirical review of items published in the local and international press. All opinions and allegations made in them belong solely to the original publications and no attempt has been made to ascertain their veracity.
MAKING ENDS MEAT
At a time when the price of everything from sugar to electricity is skyrocketing comes a glimmer of good news. Egypt is still the cheapest place in the world to buy a Big Mac, reports The Economist. The newspaper invented the Big Mac Index in 1986 to make international purchasing power more digestible, but today “burgernomics” is included in textbooks and studied by academics, thanks to its supersized popularity. This year, thanks to the steep devaluation of the pound, Egypt’s burger lovers can get their fix for a bargain $1.46 (LE 27.43), less than in Ukraine ($1.54), Malaysia ($1.79) or Mexico ($2.23). In its home country of the United States, however, the Big Mac is a fat $5.06, and if you have a hankering for Micky D’s while in Switzerland, expect to fork over $6.35. The Economist, Jan. 14
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DIRECT MARKETING
In recent years, visitors to Egyptian tourist attractions like the pyramids and Khan el-Khalili have come to accept the annoying reality of being accosted by desperate vendors. But someone has finally come up with a product that tourists can actually use—a bright red t-shirt that reads, in Arabic: “I don’t need a donkey cart, I don’t need a felucca, I don’t need a taxi.” A photo of a smiling, vaguely British or Germanlooking grandpa sporting the shirt went viral last month on social media. Egyptians—who are well accustomed to being harassed by aggressive salesmen—were generally tickled by the concept. But some local TV talk show hosts voiced a more sober take, remarking that the obnoxious tactics of hawkers are scaring off the few tourists still visiting. Social media, Jan. 4
ALWAYS A BRIDESMAID
At 60, an Alexandria woman decided to abandon her search for a husband once and for all. But giving up the wedding she was simply not willing to do. So Ms. Saoud booked a hall, purchased a puffy white gown embroidered with sequins and had her makeup done to the nines. All that was missing was the groom. Saoud roamed the streets until she managed to find a young man who agreed to play her betrothed for a couple of hours, but her dreams of faux matrimonial bliss were shattered when the “groom” got cold feet and failed to show up. Which is how a video of the would-be elderly bride forlornly walking the streets of the city in a wedding gown began circulating online. Thankfully, this pathetic story took a brighter turn when a sympathetic local man volunteered his services, and the “wedding” took place after all. “Do we have to deny her the right to dream?” he asked. Al Arabiya, Jan. 2
THE PERFECT CIRCLE
OF EVERY THING THERE IS