Business monthly - June 2016

w w w. a m c h a m . o r g . e g / b m o n t h l y

JUNE 2016

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REAL ESTATE BOOM OR BUBBLE? THE ART OF BEING SEEN

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iCity,

the city of the future Mountain View cooperate with Saudi Sisban to build a new type of city

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ntroducing new and innovative housing solutions never seen before in a residential complex in Egypt, Mountain View iCity was unveiled by the Ministry of Housing represented by the New Urban Communities Authority (NUCA) and the EgyptianSaudi alliance called Mountain View-Sisban. The complex cost $3.6 billion for residential and commercial purposes, located in New Cairo. The project’s layout offers an urban community that meets requirements of sustainable development in Egypt while meeting global standards and the latest in architectural designs.

Attending the ceremony were HE Dr. Mustafa Madbouly, Minister of Housing, Utilities and Urban Development, HE Dalia Khorshid, Minister of Investment, as well as Mr. Amr Soliman, Founder and Chairman of Mountain View; Ayman Ismail, Chairman of Dar Al Mimar Group (DMG); Ali Al-Sharif, and President of Sisban Holding, several businessmen, celebrities and press from Egypt and the Arab world. “Today we are reaping the benefits of the Egypt Economic Development Conference in Sharm Al-Sheikh,” said Madbouly. “This project reaffirms the confidence investors have in every facet of the Egyptian economy, and especially in the real estate sector, one of the pillars of our national economy.”

The design of iCity was done by DMG, in partnership with Callison RTKL Associates, a major architectural house. The project is built on over 2 square kilometers and will create over 200,000 direct and indirect job opportunities. Among the smart technologies that iCity introduces for the first time in Egypt is the I-Villa concept, which has inspired architectural design and innovative use of space as its hallmarks. With areas ranging from 100 to 500 square meters, I-Villas will be designed like villas but sized like apartments, each with its own entrance, green space and parking.

Ali Al-Sharif, the President of Sisban Holding, said that the Mountain View iCity project would add value to the Egyptian national economy, and that it marks the begin-

ning of a long term partnership with the Egyptian government, not to mention the many opportunities it has to offer to Egyptians whether it’s by creating jobs or by offering innovative housing solutions at reasonable prices. “We are confident that Egypt is a promising market with huge potential for investment,” he said. “Throughout the process of signing contracts, receiving land, obtaining licensing, up to and including launching the project, it was clear to us just how keen the Egyptian government is on encouraging invest- ments and removing any and all possible hurdles, even holding workshops to overcome any obstacles that may arise.” The project also benefits from the recently enacted law allowing foreign investors to own property in Egypt, which is attractive to foreign investors given that they can market their project worldwide.

Amr Soliman, Chairman of Mountain View, added “We celebrate with you today the launch of the Mountain View iCity project, which coincides with the 10th anniversary of Mountain View’s presence in the Egyptian market, during which the company has developed, built and delivered 10 residential communities to more than 10,000 clients.” Mountain View iCity is a great opportunity to assert confidence in the stability of the Egyptian market and its appeal to nation- al and international investors, according to Soliman. “The company helped achieve the objectives of the Egypt Economic Development Conference in Sharm Al-Sheikh by encouraging foreign investors to come to Egypt, and one of the highlights of that effort was to convince Saudi Sisban Holdings to invest in this project.”

He added that Mountain View iCity will be built according to world-class environmental standards, with smart solutions that separate foot traffic from cars via a No Car Zone, in which pedestrians can enjoy an automobilefree space. Space will be put to the best possible use by innovatively employing empty spaces as green areas.

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Issued by HSBC Bank Egypt S.A.E. CRN 16031. Š Copyright. HSBC Bank Egypt S.A.E. (2016). ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of HSBC Bank Egypt S.A.E.

JUNE 2016 VOLUME 33

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ISSUE 6

Cover Stor y

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Going native As print publications struggle to stay alive in the digital age, local content sites have quickly gained a following—and turned a profit—using new ad models.

Cover Design: Nessim N. Hanna

Inside 16

Editor’s Note

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Viewpoint

The Newsroom 20

In Brief The news in a nutshell

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Region Notes News from around the region

© 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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JUNE 2016 VOLUME 33

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Market Watch

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Stock Analysis To sell or not to sell

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Capital Markets A glance at stocks and bonds

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Money & Banking Forex and deposits

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Key Indicators The economy at a glance

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Egypt-U.S. Trade Imports and exports

In Depth 26

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ISSUE 6

Egypt’s last traffic-free highway—the Nile River transport is cheaper, safer—and barely used Egypt’s red hot property market may be cooling Inflated land prices start to drive away real estate investors

Business Monthly – June 2016

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Executive Life 50

Dining Out Style trumps substance at Kazoku

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Ramadan TV Holy escapes

The Chamber

Corporate Clinic

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Doorknock 2016

Giving back A corporate how-to guide for creating social and business value

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Events

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Member News

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Classifieds

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Media Lite An irreverent glance at the press

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Editor’s Note

Director of Publications & Research Khaled F. Sewelam

LOSING GAME

Editor-in-Chief Rachel Scheier

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he sad news we awoke to on May 19 that an EgyptAir flight from Paris to Cairo had disappeared from radar and almost certainly crashed into the Mediterranean Sea was one of those moments that punctured my safety bubble—that optimism we all leave the house with each morning that we’re not going to get run over by a bus or blown up by terrorists. Over the past year, I’ve been on at least a half dozen EgyptAir flights between Cairo and Europe just like MS804, on the same kind of plane, served the same airline meals. I’d fastened my seatbelt vaguely preoccupied about whatever selfish, ordinary problems awaited me when I got off the plane—just like most of the 66 unlucky souls on that flight must have.

When unspeakable things happen to people who look like us, in places we routinely go, they hit a little too close to home. Such events are an uncomfortable reminder not just of our mortality but also that horrible things can happen to any one of us, without warning. It’s one thing to know that, of course; it’s another to glimpse the specific emotional toll of such a tragedy.

I read an essay a couple of weeks ago by the American novelist Jonathan Franzen called “The End of the End of the World” about a trip of a lifetime he took to Antarctica with the idea of “seeing it before it melts.” But the story is not so much about climate change as it is a tribute to the writer’s recently deceased Uncle Walt, who he describes as a “regular guy” from small town Minnesota who was a bomber pilot in the Second World War, a self-taught pianist and an avid golfer who “could strike up a conversation with almost anyone.” A liberal Democrat, Uncle Walt spent most of his life married to a staunch Republican. His legacy is simply that he managed to keep embracing life despite the string of bad luck it dealt him—including the death of his only child in a car accident the year after her college graduation.

We are living in an age in which we have plenty of reasons to be pessimistic. The world’s wealth is increasingly in the hands of minute few, while desperate millions pile into rafts hoping for a shot at a becoming dishwashers or maids in a developed country. A petulant con artist has a real shot at winning the U.S. presidency. And the planet is indeed heating up even faster than the darkest doomsayers predicted a decade ago.

We know that sooner or later, we are all destined to experience profound loss. You can turn away from this dark reality, seek to guard against the precariousness of life by amassing things like money and prestige. Or you can keep improvising, the way Uncle Walt did.

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 Coordinators Tasneem Abo El Ezz Nada Auf Photographers Soha El Gabi Said Abdelmessih Production Supervisor Hany Elias Market Watch Analyst Amr Hussein Elalfy Chamber News Contacts Nada Abdalla, Azza Sherif, Susanne Winkler

R ACHEL S CHEIER U.S. address: 1615 H Street, NW • Washington, D.C. 20062 Please forward your comments or suggestions to the Egypt editorial office:

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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Viewpoint

BABY FACTORY

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he most dangerous threat facing Egypt is the successful baby-making machine that produces a child every 12 seconds, rain or shine! It dwarfs all other problems, be it foreign exchange supply and pricing, water scarcity, energy constraints… you name it.

The population growth far exceeds GDP growth, and it eats up whatever the country produces, grows or borrows.

This month Egypt exceeded 91 million people, making it the most populous country in the Middle East and the third most populous country on the African continent; not counting Egyptians living abroad, estimated at five million, and of course non-registered individuals who just survive on the fringes of society.

Considering that in the early sixties there were 20 something million Egyptians, this very youthful population (75% under 25 years of age) represents daunting challenges.

New family members may be adorable but they need medical care, education, housing and ultimately jobs, and consume subsidized goods and services. It is a vicious circle: increasing numbers excessively burden the education infrastructure, driving down standards, which fuels a lack of awareness and in turn leads to higher fertility rates. There is no question that rapid population growth exacerbates the challenges facing sustainable development, reduces standards of living, creates unemployment and with it a social time bomb.

We must examine how we got here in order to develop the measures needed to curb this difficult trend. Religious factors alone do not account for our burgeoning numbers; religion existed in this region long before growth rates exploded.

Improved medical services have drastically reduced infant mortality rates and increased life expectancy -- that is something

to be proud of. Cheap, new products are making older fathers more active – that can also be good but only when viewed in the very short term.. Solutions have to recognize new factors and be pragmatic. The old carrot and stick approach, coupled with family planning awareness campaigns, seem to be the only effective tools. They were extremely successful back in the eighties.

Limiting the number of children getting free education, and controlling each family’s consumption of subsidized goods is neither an insult to religion nor to our citizens’ human rights. It is acting responsibly in the face of crisis.

Until the proposed programs work, we still have to deal with Egypt’s relentless unemployment, taking into consideration the millions who enter the job force every year. Egypt should focus on employability programs, while designing and incentivizing labor-intensive projects and industries. New projects need to be situated away from the giant metropolises rather than fuel more destructive rural to urban migration.

The business community must realize that increasing their head count, as opposed to simple trade, is not just a civic duty but a self-preservation mechanism that will bear long term fruits and spare the country a new wave of unrest. International institutions and donors operating in Egypt should focus on demanddriven education and training programs, smarter job placement practices, as well as proven and practical population and family planning ideas and technologies.

The Grandfather in me cannot stop worrying about these crucial issues that will limit the quality of life we leave future generations. Do we want them to grow up in a country of 150 million, with an alarming density per square kilometer and one of the highest population growth rates in the world? I don’t.

A NIS A. A CLIMANDOS President, AmCham Egypt

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Cabinet approves draft VAT law

Tourism goals unchanged after EgyptAir crash

Minister of Tourism Yehia Rashed told reporters the country is not scaling down its targets for the tourism industry in the wake of the deadly crash of EgyptAir flight 804 over the Mediterranean last month. In interviews with Bloomberg and Reuters, Rashed says the ministry still anticipates 10 million tourists arrivals in 2017, generating $12 billion in revenue.

Nor does Egypt plan to cut prices, since the country already provides good value for foreign tourists, he said. Rashed classified the crash as an isolated aviation incident that could have happened anywhere and said the government would continue working hard to improve Egypt’s

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image and attract foreign visitors.

Investigations into the cause of the crash are still ongoing, but Egypt’s travel sector is already suffering from a string of disasters, including the October crash of a Russian airliner in the Sinai and the accidental killing by security forces last September of a dozen Mexican tourists.

According to tourism officials, first quarter arrivals were down 40 percent yearon-year, while revenue fell by 66 percent.

Foreign reserves Reach $17.01 billion

Egypt’s foreign cash reserves rose to $17.01 billion at the end of April, up by $450 million from the $16.56 billion recorded at the end of March. After bot-

BUSINESS MONTHLY ARCHIVES

Egypt’s long-discussed value added tax came a step closer to realization in May after the Cabinet approved a draft bill establishing the new tax. Following the decision, announced in a May 16 statement, the bill still needs to be reviewed by the State Council and then passed on to parliament for debate and ratification. A previous version of the bill was expected to go before lawmakers in February. The draft bill has not yet been released publicly, leaving questions about key provisions of the law such as the rate at which the tax will be set, which goods and services will be subject to VAT and the exemption threshold for small businesses. The government is counting on the VAT to boost sales tax revenue by more than 40 percent, and establishing the tax is also a precursor for the transfer of the first tranche of a $3-billion loan from the World Bank. The introduction of a new type of consumption tax has raised fears of increased inflation and a regressive increase in the tax burden on poor citizens, but the finance ministry says the tax will contribute to social justice, with most of the burden falling on the wealthiest 20 percent of the population.

toming out at $16.36 billion in September 2015, reserves have been steadily creeping up. April’s rise was the largest since June 2015, when reserves topped $20 billion following the issuance of $1.5 billion in dollar-denominated bonds. However, they are still far below the $36 billion Egypt held on the eve of the 2011 revolution.

Gov’t ups prices of cheap medicines

In an effort to tackle a shortage in supplies of medications brought on by rising production costs and the ongoing hard currency shortage, the Cabinet on May 16 ordered a 20-percent price hike on drugs that previously sold for less than LE 30.

Egypt has faced drug shortages for months, with pharmaceutical companies complaining that scarce dollars make it difficult to secure imported ingredients, while the devaluation of the pound has increased production costs, making it unsustainable to produce certain drugs at artificially low, government-mandated prices. In exchange for allowing price increases, the state can now terminate the licenses of producers that do not provide needed medications, state-owned AlAhram reports. The price increase was welcomed as a positive step by manufacturers, but consumers are already reporting abuses of the new regulations, including manufacturers and pharmacies selling costly medications in smaller quantities in order to fall below the LE 30 threshold and thereby qualify for a 20percent price hike. This prompted officials to impose a limit on price increases of LE 6 per cartoon rather than per strip or blister pack.

Unemployment falls to 12.7 percent Egypt’s official unemployment rate fell to 12.7 percent in the first quarter of 2016, state statistics agency CAPMAS reported last month. The rate was better than the 12.8 percent from the previous quarter, but is still far above the 11.9 percent target set for the current fiscal year. Youth remain the hardest hit by joblessness.

Unemployment stood at 31.3 percent for Egyptians aged 25-29, while the average rate for youth aged 15-29 was 27.3 percent. Experts and labor activists contend that official unemployment figures, which are based largely on the number of applicants seeking employment through the manpower ministry, minimize the true extent of joblessness in Egypt.

Inflation back above 10 percent After two months in the single digits, Egypt’s annual headline consumer price inflation rose to 10.27 percent in April.

The monthly rate, meanwhile, eased slightly to 1.27 percent, compared to 1.44 percent in March, according to Central Bank figures. The bulk of the

BUSINESS MONTHLY ARCHIVES

In Brief

RUSSIA HAS AGREED TO LOAN EGYPT $25 BILLION TO BUILD A NUCLEAR POWER PLANT.

increase was driven by rising prices for food items including fruits and vegetables, poultry, fish and rice. Retail goods including clothing, household appliances, cars, furniture, gold and personal care products also got more expensive during the month. Core inflation increased by 1.24 percent, bringing the annual rate up to 9.51 percent for April.

According to the CBE, core inflation was also driven by prices for food items and retail goods.

Russia to loan $25 billion for nuclear power plant President Abdel Fattah el-Sisi has approved a $25 billion loan from Russia to build Egypt’s first nuclear power plant.

According to a decree published in the official gazette last month, the loan is to be disbursed over 13 years starting in 2016, with repayment coming over 22 years starting in 2029 at an interest rate of 3 percent, reports Mada Masr. The loan will cover 85 percent of the project’s cost, with Egypt responsible for raising the remaining 15 percent. Although it will be distributed in smaller tranches, the $25billion loan will have an enormous impact on Egypt’s external debt, which stood at $48 billion at the end of 2015.

Egypt and Russia signed an agreement in November that will see Russia’s Rosatom

provide power units and safety systems for a nuclear power station at Dabaa on Egypt’s Mediterranean coast. The area was selected as a potential nuclear site in the 1980s, but development has since stalled. Despite concerns about the potential for power plant accidents, waste disposal and decommissioning costs, Egypt’s government is looking to nuclear power to help close its energy deficit.

S&P cuts Egypt’s credit outlook Global credit rating agency S&P cut Egypt’s outlook from stable to negative on May 13, citing “external and fiscal vulnerabilities.” Egypt’s rating from S&P stands at B-, well below investment grade and on par with Argentina, Greece and Pakistan. In a press release announcing the decision, the agency listed factors including wide fiscal deficits, low income levels and social and institutional fragility.

S&P also noted that declining oil revenue for Egypt’s allies in the Arab Gulf could diminish future financial support from these countries. On May 15, Egypt’s government announced that it expects its credit rating to improve “through applying reform and making progress in the financial and economic reform program.”

Business Monthly – June 2016

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In Brief

STREET SENSE What do you do on the internet?

I usually check social media for important news. If there’s an interesting TV talk show, I watch it on YouTube. In case of a big event such as the recent plane crash, I usually go to websites like Reuters, BBC or CNN. Sometimes I check local news portals like Al-Masry Al-Youm and Shorouk, which now have hourly updates on their websites. If I want to research a product, I use international review websites because I trust that they don’t have a hidden agenda.

Tamer Taher, 29, financial analyst

The internet is my window onto the world. Every morning and before I go to sleep I have a fixed list of local Arab and foreign news outlets that I go through for my daily digest. I don't particularly trust social media or newer news outlets, which don't have trained journalists. I appreciate people who work for rights groups or have a certain cause they are fighting for, but I ignore their articles because I know they have their own agenda.

Tahany Samaan, 47, public relations executive For me the internet is about entertainment and reading new product reviews for cars, mobile phones and apps. I’m fed up with the news since 2011, because no one is credible anymore. For reading, I steer clear of Egyptian portals unless they have some interesting fluff. I visit Egyptian Streets and CairoScene for light articles in which credibility doesn’t matter. But I really wish there was a website with credible reviews of places to go in Cairo. It's ridiculous that I have to go to TripAdvisor to find a nice place to eat in Egypt.

Seif Samy, 23, call center agent Ninety percent of the time I access the internet on my phone.

I mainly look at Facebook and Twitter to find out what my friends are doing. As for the news, I just read the headlines of stories people have shared. If it seems interesting, then I read the article. I also watch video clips of old songs on YouTube, but I never watch talk shows.

Samira Abdel Gawad, 31, maid I read everything I can online on my phone. In every story, no matter who writes it or where it’s published, there are going to be mistakes. So I read lots of stuff, regardless of where it comes from, and then I can make up my mind about what really happened.

Mohamed Ahmed, 35, security guard I usually read about horse and dog breeds online. Those are my hobbies. Also I watch videos about new mobile phones when they come out, even if I’m not looking to buy one. I check social media to see who is doing what, but I rarely participate. Reading the news is very depressing nowadays, while the fluffy articles are too superficial.

Karim Hanna, 57, school teacher

COMPILED BY TAMER HAFEZ

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BUSINESS MONTHLY ARCHIVES

I used to be a keen follower of online news. But after 2011, the credibility of news reporters became questionable— they have their own political agendas. So now, I just use the internet as entertainment; I check what my friends have been up to recently on Facebook and Twitter or watch blackand-white Arabic movies on YouTube to pass the time.

Sahar Tawfik, 26, unemployed

STATE-OWNED MISR FERTILIZERS IS SET TO GET BIGGER.

PMI down again in April

Egypt’s business environment deteriorated for the seventh month in a row in April, according to representatives of the non-oil private sector surveyed for the Purchasing Managers’ Index. The overall index score for the month was 46.9, higher than the 44.5 recorded in March but still indicative of a decline—any score below 50 signals negative sentiment. The depreciation of the Egyptian pound against the dollar was again a key factor cited by businesses, contributing to a sharp increase in input costs that left many raw materials “largely unaffordable.” As a result, input purchases and pre-production inventories fell to the lowest level since the Egypt survey was launched in 2012, while the increase in charges hit a series high. With client demand dampened, output and new work also reportedly fell during the month.

“Egypt’s private sector continues to struggle amidst the FX shortage.

Although further EGP weakness will eventually help lay the foundations for economic recovery, in the short term, uncertainty over the exchange rate could see additional declines in

output, and a further rise in inflationary pressures,” said Jean-Paul Pigat, senior economist at surveysponsor Emirates NBD, in a press statement.

MOPCO fertilizer plant to grow

President Abdul Fattah el-Sisi traveled to Damietta May 22 to inaugurate the $2-billion expansion of Misr Fertilizers Production. The newly opened production line will bring increase urea production capacity to 2 million tonnes per year, with 60 percent of production to be exported, the Daily News Egypt reports. The project has its roots in a 2006 plan under Canadian firm Agrium to build a nitrogen fertilizer factory in the resort city of Ras al-Bar. After facing fierce opposition from a broad coalition of local interest groups, the project was transferred to governmentowned MOPCO in a share-swap with Agrium and relocated a kilometer from the main resort area. In recent months, Egypt has faced difficulties supplying sufficient natural gas to existing fertilizer plants, but officials hope the new MOPCO facility will create jobs and bring in much-needed hard currency. ■

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.

SOUTH SUDAN SUDAN

Atlantic Ocean

■ Tunisia secures $8 billion in IMF, World Bank aid The executive boards of the International Monetary Fund and the World Bank approved two major budgetary support loans for Tunisia last month. On May 17, the World Bank endorsed a five-year program that will see the Bank loan Tunis $5 billion to support economic reforms and stimulate investment. According to the Bank, the plan’s main goals are to bolster macroeconomic stability and private-sector driven job growth, reduce disparities between coastal centers and underdeveloped areas and build transparent and accountable institutions. On May 20, the International Monetary Fund approved a four-year program to extend $2.9 billion worth of financing, also to support Tunisia’s economic reform program. Tunisia’s economy has been slow to recover from its 2011 revolution, with growth dampened by a rise in attacks by Islamist extremists that has damaged the country’s tourist industry. GDP

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growth slowed to just 0.8 percent in 2015, down from 2.3 percent the previous year.

■ Jordan launches studies for Red Sea-Dead Sea canal A landmark project that aims to pump water from the Red Sea into the shrinking Dead Sea came a step closer to reality last month when Jordan signed a deal with the European Investment Bank and the French Development Agency for advice and technical cooperation on Phase I of the project. As part of the deal, the EIB and AFD will carry out three studies examining the financial, environmental and social impact of a four-pipeline conduit connecting the two bodies of water. The project, which requires Jordan to work in collaboration with Israel and the Palestinian Territories, aims to increase the supply of potable water to all three entities via a desalination facility and other water infrastructure and to slow the degradation of the Dead Sea. However, critics claim that transferring

large volumes of water between the Indian Oceandrastic environtwo seas could have mental consequences.

■ Qatar sells $9 billion in bonds In a record-breaking May 25 sale, the tiny Gulf state of Qatar sold $9-billion worth of five-, 10- and 30-year Eurobonds, the largest ever bond issuance in the Middle East. The amount was nearly double the $5 billion expected by analysts and is likely to re-price debt in the entire region, Bloomberg reports. Boosted by generous prices, the debt issuance attracted more than $23 billion in orders; yields on five-year notes were set at 120 basis points above U.S. treasury bonds, 10-year notes at 150 basis points above U.S. t-bonds and 30-year notes at a 210 basis point spread. With revenues hit hard by low oil prices, Qatar’s bond issuance followed a $5-billion debt sale by Abu Dhabi in April and is the most recent in a string of debt sales and privatizations

by Gulf Arab states looking for alternate sources of funding. ■

In Depth

EGYPT’S LAST TRAFFIC-FREE HIGHWAY—THE NILE RIVER TRANSPORT

BY TAMER HAFEZ

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n Vietnam, it costs just 11 cents to ship a case of Coca-Cola via river barge from Ho Chi Minh City to the Mekong River in the South, according to the company’s Middle East and North Africa president, Curt Ferguson, in a recent television interview. “It is the most efficient system in the world,” he said.

Coke uses around 1,000 trucks to ship soda from its Nasser City bottling plant to elsewhere in Egypt and the African continent. “One of these days we would like to use the Nile,” said Ferguson.

He’s not the only one. In recent years, as Egypt faces rising fuel prices and its roads become ever more congested and dangerous, the government has repeated-

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ly paid lip service to the goal of expanding river transportation in Egypt, which is woefully underutilized, with sporadic plans to attract investors to the sector and make use of the Nile to move imported goods throughout the country. At the moment, some 97 percent of commodities are transported by truck. Just 1 percent of cargo is

COURTESY OF QALAA HOLDINGS

In Depth

moved via river, meanwhile—despite the fact that Egypt happens to have one of the world’s earliest natural transportations systems, which is far cheaper and safer than the country’s congested, perilous roadways.

In April, Minister of Supply Khaled Hanafy announced that he was working with the transportation ministry at

“integrating a multi-modal transportation network with our grain and commodities storage facilities across Egypt.”

With the government moving millions of tons of imported grain every year, “This will save us billions,” said Hanafy, who also outlined a plan to transport imported sugar and livestock via the Nile beginning later this year.

Minister of Transportation Said Galal says he wants to more than double the amount of commodities that are shipped via river in Egypt by the end of 2016, ultimately increasing the percentage of goods moved via the Nile to 10 percent.

Experts say it’s an ambitious goal, given that the country’s river transport infrastructure has suffered decades of neglect, with rundown, barely adequate ports. Still, with Egypt strapped for cash and suffering from a chronic natural gas shortage, officials and businesses can’t ignore the dramatic potential of river transport for long-term savings. Moving goods on the Nile is around five times as efficient as trucking, says Ahmed Soltan, a former transportation ministry aide who worked on river and maritime transportation. “A common assessment is that five liters of diesel can transport one ton of goods for 550 kilometers by river, 333 kilometers by rail and 100 kilometers by truck,” he explains. In fiscal 2015/16, Egypt expects to spend some LE 100 billion on fuel subsidies— which have long been acknowledged as wasteful and of little benefit to the millions of poor Egyptians they are supposed to support. The government of President Abdel Fattah el-Sisi pledged in 2014 to phase them out completely within five years, though record low petroleum prices have called into question that promise.

It was ancient Egyptians who first pioneered river transport thousands of years ago. Millennia before modern road construction, Egyptians used the Nile as their highway, building river barges to deliver stone from the far south to build the pyramids and other famous monuments in the river valley. The early Egyptians developed technologies like depth gauges, river-bed charts and river locks and implemented shipping schedules to ensure safe, efficient navigation.

Thousands of years later, stressing industrial development and Egyptian cultural pride, President Gamal Abdel Nasser spawned a “river transportation revolution,” according to Mohamed Kandil, a professor at Nasser Military Academy and a member of the Egyptian Maritime Salon, a think tank. It was during the Nasser era that Egypt created the River Transport Authority to license and inspect river barges and ports and help train workers. The Nasser government bought motorized river barges to move goods and dug the Nubaria canal to connect the western branch of the Nile with Alexandria’s seaport. Kandil says that at its peak, at the end of the 1960s, river transportation accounted for around 25 percent of the nation’s total freight.

“FIVE LITERS OF DIESEL CAN TRANSPORT ONE TON OF GOODS 550 KILOMETERS BY RIVER, 333 KILOMETERS BY RAIL AND 100 KILOMETERS BY TRUCK.” Back then, “the fleet and infrastructure were in good shape and the government covered all capital expenses,” enabling shippers to stay in business despite transit prices being capped by the state. Between 1967 and 1975, when the Suez Canal was closed during the Israeli occupation of the Sinai, the Nile was the only route for moving goods between the Mediterranean and Red Seas. In the 1970s, President Anwar Sadat oversaw the creation of several new spillways and canals connecting the Damietta seaport with the Nile and linking Cairo with Ismailia on the Suez Canal.

Unfortunately, the 1980s changed all that, as privatization and business growth pushed freight onto what were then mostly empty highways, making for faster transit and loading and unloading times. Heavily subsidized fuel made

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COURTESY OF QALAA H OLDINGS

In Depth

road transport artificially cheap. In turn, Egypt’s river transport sector dwindled.

Currently, Qalaa Holdings is Egypt’s only private firm with major investments in river transportation. In 2011, an executive at Qalaa, then called Citadel Capital, spoke of so-called intermodal transportation as the linchpin of the firm’s vision for a transport network stretching the length of the Nile, from Lake Victoria in the heart of Africa, where Qalaa does business in numerous growing markets, to Alexandria. Ahmed El Sharkawy, the managing director of the firm’s transportation and logistics operations, blames fuel subsidies and infrastructure for the fact that “the return on investment for a river transportation company under the current circumstances is low.”

Almost half of the cargo vessels currently licensed to operate on the Nile are owned by the state, amounting to 440 cargo barge, while the private sector owns around 520, according to government figures. “Most of these freights are medium to small and can’t be

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compartmentalized to carry multiple products,” says Kandil. Only a fraction of these vessels are actually operational, say insiders. For those that are, Egypt’s ports are woefully insufficient. There are 48 ports along the 3,160 kilometers of the Egyptian Nile, but most are little more than berths dating from Pharaonic times. Fluctuating water levels are another barrier. When seasonal Nile water levels drop, “bottleneck” sections of the river that are too shallow to allow freight barges to pass freely must be dredged in order to keep vessels from running aground.

Some years ago, the Dutch government funded a system of electronic buoys to aid in navigation on the Nile, but most disappeared or weren’t maintained and stopped working. Last November, officials announced that the government had dusted off long discussed plans to launch a Nile “taxi”—a river transportation service aimed at traffic weary Cairo commuters—in early 2016 by contracting with private companies. In early March, then transport

minister Saad al-Geyoush hosted a splashy inauguration for the Nile taxi/bus service, which was to charge a LE 15 to LE 35 fare. However, the service never actually began offering people rides, for reasons that were not made clear.

With unencumbered market conditions (i.e. no fuel subsidies), “river transport should account for a good share of overall cargo transportation in Egypt,” says Qalaa’s Sharkawy. Indeed, 80 percent of Egypt’s cargo moves between north and south, and more than 95 percent of the population dwells in the crowded Nile Valley. But nobody will invest unless companies have a clear incentive to switch from trucks, says Mohamed Abdel Ghany, an engineer who has researched Egypt’s transportation network on behalf of the Engineers Syndicate.

Qalaa began investing in river transportation in 2007, when the Egyptian government first promised to do away with energy subsidies imminently. The firm predicted then that companies

would be drawn to river transport as fuel prices rose. “Unfortunately, things didn’t evolve the way we expected them to,” says Sharkawy. But analysts agree that it’s only a matter of time before Egypt is forced to cut energy subsidies.

Nile Cargo is a firm owned by Qalaa that operates barges on the river, moving grain, coal and other goods between Alexandria, Damietta and Cairo to Beni Suef, Minya and Aswan. Qalaa’s Nile River Ports, meanwhile, runs four docking facilities in Upper Egypt and Alexandria (the firm owns the latter), where it offers loading, unloading and storage facilities and services along the waterway. Egypt’s only other river freight company, the National Nile Trans Co., is owned by the military. The remaining players are individuals who own and operate one or two barges.

Attracting inves tors also depends on whether Egypt improves its sagging river infrastructure. River locks need to be updated, the ports require more advanced storage and loading equipment and maps and lighting are required, say members of the industry.

“You can’t just put barges on the stream and expect the river transportation will come back,” says Soltan, the former aide at the transport ministry. The first step, he says, would be to clean up the river-bed which has been accumulating garbage for decades. Such waste can cause damage or accidents.

“This is not a massive investment if we compare it to trying to improve trucking,” reasons Abdel Ghany, who points out that river barges can be built here, with locally made parts, while trucks depend on imports. “The big problem is the lack of government vision and strategy when it comes to river transportation,” says Sharkawy.

Currently, no one government body is responsible for regulating river transport; rather the job is split among the ministries of transportation, tourism, water, interior, investment, environment and local municipalities. As a result, prospective investors often find themselves adrift when trying to obtain licenses or resolve problems. “The

COURTESY OF QALAA HOLDINGS

In Depth

Nile has no father,” says Abdallah. In 2012, just before he retired as the head of the RTA, he petitioned local officials in Qena to offer three 10-year-old, unused river docks for sale to private investors. “Until now, the governorate has yet to talk to investors about these ports,” he says.

Ahmed Ibrahim, a spokesman for the Ministry of Transportation, acknowledged at a January press conference that the Nile is mismanaged: “The vagueness is massive,” he admitted. In order to address this, the ministry is creating yet another new body, he says, one devoted to the goal of attracting investment in Egyptian river transport.

In addition, there is Hanafy and Galal’s plan to transport hundreds of thousands of tons of imported commodities across the country via the Nile. From the south, Hanafy says that some 80,000 head of cows and camels will be brought up from Sudan on the Nile via Lake Nasser. “We aim to cut

out land freight where we can,” he says. “Using river transportation for at least part of the journey will definitely lower costs, which will translate into lower prices for the consumer.”

However, few are optimistic about these plans coming to fruition without a more tangible show of political will.

The $8.2 billion expansion of Egypt’s second-most famous waterway, the Suez Canal, merited a national holiday when it was unveiled last August. Still, many experts have questioned whether the expansion made economic sense for Egypt at a time when global shipping is down and the —government is struggling to pay for basic services.

Boosting river transport, on the other hand, most certainly makes long term financial sense. The question is whether Sisi’s government sees it as politically expedient. “The river transportation network will not be fixed unless there is a decision from the president,” says Abdallah. ■

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REAL ESTATE

EGYPT’S RED HOT PROPERTY MARKET MAY BE COOLING

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BY TAMER HAFEZ

t dawn on May 28, hundreds of Egyptians lined up outside the gates at City Stars Capital 2, an office building in Heliopolis. By 9, more than 1,000 people had gathered, forcing police to reroute traffic around the crowd spilling into the streets. They were hoping to reserve a villa in developer Mountain View’s latest New Cairo compound, iCity, which is ultimately set to be an 18,000-unit “integrated urban community” built on 500 acres. The first 2,000 homes went on sale that morning starting at a relatively reasonable LE 700,000 for a 100-square-meter unit. However, by noon, Mountain View had raised prices by LE 1,000 per meter. Phase one sold out on the first day.

Amid a falling currency, anemic tourism and an economy that has yet to bounce back following the turmoil that began in 2011, the Egyptian real estate sector is a lone bright spot. “The real estate sector has become, for the average investor, the only option,” says

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Hossam Mostafa, chairman of the Egyptian Engineering Company, which has significant real estate holdings. In a country of 90 million people—half under the age of 25—and 800,000 annual marriages, demand for housing is high across the board. In recent years, Egypt’s biggest developers—the Talaat Mostafa Group, SODIC and Palm Hills Developments, which tend to cater exclusively to the top end of the market—have reported surges in demand. Every year, Egypt needs around half a million new homes to

In Depth

accommodate new families and handle the existing housing deficit.

To address the problem, the government has mapped plans for no fewer than four new cities to be built as part of its Sustainable Development Strategy Egypt Vision 2030 released in March. “The plan depends almost entirely on how fast buildings can be constructed,” says Fathallah Fawzy, co-founder of the Mena Group Egypt, a real estate development firm. Of course, more homes require the construction of more hospitals, schools and office buildings. Even commercial real estate, which lagged after 2011, has bounced back recently. Majid Al Futtaim, based in the UAE, for example, announced last year that it was boosting its investments in Egypt to more than LE 22 billion, with plans to add to several shopping malls. The government’s 2030 strategy aims to double Egypt’s urbanized land, which will mean building a whopping 7.5 million new homes along with the infrastructure, utilities, and commercial and recreational facilities needed to lure residents from overcrowded cities in the Nile Valley like Cairo, Alexandria and Damietta.

However, the private sector, which is responsible for around 95 percent of real estate investment, focuses on the richest 20 percent of Egyptians. And despite long-standing promises to build more affordable housing, the government has a poor track record—according to a 2014 report by the Egyptian Initiative for Personal Rights, national housing projects like Iskan Mubarak and the Million Units Project, which cost billions in public funds—ended up mostly benefiting those in middle and higher income brackets rather than the poor.

Real estate is a pillar of the Egyptian economy, employing around 5 percent of Egypt’s labor force and contributing to around 100 feeder industries. However, there are signs that Egypt’s economic woes may be gradually catching up to the sector. In fiscal 2011/12, total investment in the industry amounted to LE 39 billion, according to Central Bank figures. In 2014/15, it was down by more than 20 percent to LE 31 billion. Officials have indicated they expect the growth rate to

remain flat in 2016 and 2017.

Industry insiders blame the slowdown on a shortage of affordable land. The government is solely responsible for the task of outfitting virgin property with necessary infrastructure like plumbing, power lines and roads, and currently, say experts, the antiquated system simply isn’t moving fast enough to keep up with housing demand.

The housing ministry’s New Urban Communities Authority decides where infrastructure is built and who buys land for how much, based on criteria that remain opaque. Developers participate in a sealed bid auction, with each submitting their project’s technical and financial specs. “This auctioning system was first used to promote real estate development in 6 October and 10 Ramadan Cities,” says Ahmed Shalaby, managing director and board member of Tatweer Masr.

Since last year, NUCA has been steadily increasing the price of land. An official at the agency who wished to remain anonymous because he was not authorized to speak to the media says NUCA is under pressure to cover its costs and generate profits, which are supposed to fund the cost of building more infrastructure as well as subsidize affordable housing.

According to the source, land prices have increased by an average of 50 percent since the beginning of 2015. As a result, developers have become more choosy about pursuing projects, with some shying away from costlier areas in Cairo’s suburbs in favor of cheaper ones outside the major cities. “We are seeing prime plots in New Cairo or Sheikh Zayed get almost no bidders,” says Maged Sherif, the managing director at SODIC. “Policies and regulations as applied in the current business environment are no longer attractive to developers.”

Industry members suggest that Egypt might adopt a system used by some other countries, where rather than selling the land to developers outright, the government operates under a usufruct model, in which developers effectively sign a longterm lease on plots, or a partnership model in which the government agrees to sell land at a reduced cost in exchange

for a portion of units or profits down the line.

Developers are also calling for a more transparent land pricing system. They have pushed for a national property database, with upper and lower price limits for plots across the country. Earlier this year, an official from the Ministry of Investment was quoted at a real estate conference saying that a central land registry would indeed be ready sometime in 2016. AmCham Egypt Inc.

“WE ARE SEEING PRIME PLOTS IN NEW CAIRO AND SHEIKH ZAYED GET ALMOST NO BIDDERS.” The housing ministry also says it has plenty of viable real estate investment opportunities in the pipeline. New Toshka in Upper Egypt is partially built and is expected to be ready for developers within months, but infrastructure has yet to be laid in the future municipalities of New Alamein City, New Port Said City and the so-called new administrative capital. According to Khaled Abbas, a technical affairs aide to the minister of housing, there are long-term plans to auction off land for some 20 new cities, once the infrastructure is laid.

But those opportunities are unlikely to be borne out if Egypt doesn’t adopt a more “flexible” system of preparing and allocating property for development, says Mamdouh Badr el-Din, chairman of Badreldin for Real Estate and the head of the Real Estate Investment Division at the Federation of the Egyptian Chambers of Commerce. “I am not against building megacities,” he says, but he believes that officials should give developers a bigger say earlier in the process. The lack of private sector input has hampered largescale public development efforts in the past, he says. The satellite megacities 6 October City and New Cairo, which were originally supposed to house a quarter of Cairenes by 2020, have fallen far short of that goal, largely because the

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government provided vast amounts of housing without adequately developing the businesses and services that are key to attracting people to new communities. If the government doesn’t adopt a system that looks to developers to help pay for crucial infrastructure, says Fawzy, of the Mena Group, new projects will stall. “With all due respect to the Ministry of Housing, the private sector has more money.”

The government’s plans for a slew of new megacities are vague at best. In March, the state-owned MENA news agency reported that construction would begin in April on the first phase of the new capital in the desert between Cairo and the Suez Canal. It is set to include a national meeting center, a building for parliament, conference and exhibition halls and office premises for 12 government offices, all to be finished in about three years, according to the China State Construction Engineering Corp., which is reportedly taking on a major role in the project.

Egypt Vision 2030 also outlines a new law that is supposed to ensure coordination among government agencies, as well as legislation that will set a unified set of construction standards. The laws are to be implemented by the housing ministry’s High Council for Planning and Development, which will be given new authority to set land development policies and strategies, including how plots are priced, used and supervised.

Rather than auctioning land to the (presumed) highest bidder, land will be priced according to the nature of the development, which experts say is crucial for encouraging new low-income housing, schools, hospitals, utilities and other relatively low-margin but critical real estate investments. Developers call it a step in right direction, but the devil is in the details.

But even if and when the new measures are enacted, they don’t address the crucial issue of paying for infrastructure. Industry insiders suggest a scenario in which private companies take the responsibility and cost burden of readying plots for development. But Abbas, the housing ministry aide,

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SOHA EL GABI

In Depth

argues that turning over that job to the private sector risks compromising the public interest. “We want to expand development to distant locations which are not so convenient for private developers,” says Abbas. “The only way to ensure balanced development is to do it ourselves.”

In 2007, the government did exactly what developers are suggesting: It allowed private companies to build infrastructure to develop industrial zones. Tatweer Masr’s Shalaby acknowledges that program ended badly. With zero regulation by the government, firms began charging exorbitant prices for plots or deliberately sitting on them to get a higher price. This happened because the state stepped too far back, says Shalaby; even in public-private partnerships, it’s still up to the government to enforce rules ensuring that the process stays above board.

Currently, real estate prices are rising across all housing segments.

According to research firm 8 Gates for Real Estate Marketing, prices could spike by as much as 30 percent this year alone. “Luxury housing already has a very healthy profit margin,” says

Darwish Hassanien, CEO of the Saudi Egyptian Development Company. But with prices set to rise in the middleand low-income markets, the current shortage of affordable housing for socalled middle-income Egyptians is set to get worse. “Fifty-two percent of Cairo residents can afford residential units priced between $26,000 (about LE 230,000) and $35,000 (LE 310,000). However, there are next to no new residential developments by the private sector being offered at these prices,” reported Colliers International, a global commercial real estate firm, in April.

The shortage of affordable land has made it less viable for developers to make money on lower-end developments, says Hassanien. Saudi Egyptian has invested around LE 10 billion for three mixed residential and commercial projects planned to target a market beneath luxury but above middleincome, though final housing prices will be dictated by costs. Wadi Degla Developments “has middle income housing plans until 2025,” says Chairman Maged Helmy. “We are just waiting for the government to give us plots at a suitable price.” ■

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Going native While mainstream publications struggle to monetize online content, young startups like CairoScene are leaving them in the dust, using new business models that take advantage of Egypt’s untapped digital potential.

By Edmund Bower

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Cover Story

FUTURE PERFECT: MO4, CAIROSCENE’S PARENT FIRM, RECENTLY MOVED INTO SWANKY NEW QUARTERS ON THE DIGITAL-FRIENDLY GREEK CAMPUS. THE

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graduate of Royal Holloway University, 27-year-old Dalia Awad speaks flawless English with a slight British accent. Though her parents are Egyptian, she grew up mostly in London, finishing school in 2009 with a degree in politics and international relations—which she thought would put her in a strong position to pursue her dream career as a journalist. Awad soon secured a full-time writer position at the Cairo-based luxury lifestyle magazine Enigma, where she did interviews with famous local actresses and reviews of five-star hotels.

But within two years, political turmoil upended Egypt, and suddenly Awad’s future at the magazine was thrown into question. “The revolution happened and advertisers started pulling out of print left right and center,” remembers Leila Tapozada, a former editor at Core Publications, which then owned and operated four local magazines. Soon, all of them were in jeopardy. “People just stopped paying for ads,” says Tapozada.

“My work wasn’t being seen,” recalls Awad, “and it wasn’t being funded by advertisers.” Fortunately, she was approached by a former colleague at the magazine, Amy Mowafi, who was part of a new online content startup called CairoScene, an irreverent internet portal of local happenings and gossip aimed at an upscale audience. The site would be owned by a new media concern made up of Mowafi and her three brothers, who several years before had launched Tazkarty, an online ticketing service, and Cairo Zoom, a site featuring photos of elite social events around the capital. Making use of Amy’s background in high-end lifestyle magazines, CairoScene quickly grew into online portal with short, buzzy writeups on everything from local fashion designers to recipes

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for Oreo Rice Krispies Pyramids.

Four years later, MO4, as the Mowafis named their company, employs 120 people. At a time when print media in Egypt are struggling to stay alive, CairoScene has in just a few short years managed to become one of the most widely read English-language websites in Egypt. In April, it received around 470,000 hits, according to online analytics site Similarweb.com. It recently relocated from its quarters in a Nileside highrise adjacent to the Saudi embassy to more spacious offices at the GrEEK Campus, the digital start-up hub that opened on the grounds of the former American University in Cairo two years ago. The MO4 headquarters, an open-plan space with polished wooden floors and a glass-walled conference room at the center, will ultimately be

COURTESY OF MO4

Cover Story

OFFICES HAVE THE HALLMARKS OF A 21ST-CENTURY TECH FIRM, WITH A GLASS-WALLED CONFERENCE ROOM AND AN EMPLOYEE WET BAR AFTER 6 P.M.

equipped with what it boasts is the largest music studio in Egypt and an open wet bar for employees after 6 p.m., compliments of Al-Ahram Beverages, a client. It recently launched a sister site, UAE Scene, based in Dubai, with a dozen employees.

With its snarky voice and fluffy subject matter, CairoScene has been a hit among the Egypt’s English-speaking young elite, with a canny mix of local and international content. Interviews of up-and-coming Egyptian celebrities and reviews of trendy bars are peppered with edgy articles such as “How to Score an Instant One Night Stand.”

But being a hip online magazine isn’t the only factor that’s spelled success for CairoScene, which has broken through as a totally new media brand at a time when well-established newspapers and maga-

zines all over the world have struggled to make their websites financially viable.

The United States has two-thirds as many newspapers in circulation as it did in 2000, and total advertising revenue dropped from $50 billion in 2003 to $16 billion in 2015, according to the Newspaper Association of America.

What’s largely driven the success of CairoScene and a handful of other local sites like it is what’s known in the 21st century as native advertising. The term essentially means advertising in disguise, in which “the ad matches the whole feel and function of the content and the media on which it appears,” says Jesper Laursen, CEO of the Denmark-based Native Advertising Institute. In other words, an article headlined “We’re Celebrating Sweden, Want to Know Why?”—which appears on CairoScene’s

homepage with the same format and labeling as a gossipy piece about an impolitic quote from a government minister and a Nubian woman who won an investigative journalism award—is in fact a paid ad for Absolut Vodka. A profile of a local entrepreneur is really publicity for a new restaurant. The site also makes use of ample opportunities to deliver added value to advertising clients on long-term retainers—the Sweden article mentions IKEA in the story’s opening paragraph, for example, while the restaurant owner is described as “sipping a glass of Chivas Regal Extra.”

CairoScene was among the first websites in Egypt to make use of native advertising, which has exploded around the world in the internet age. While so-called advertorial—sponsored copy written to resemble articles reported by actual

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COURTESY OF MO4

Cover Story

FAMILY AFFAIR: (LEFT TO RIGHT): ADAM, AMY, WALEED AND TIMMY MOWAFI ARE THE SIBLINGS BEHIND MO4, ONE OF EGYPT’S HOTTEST DIGITAL STARTUPS.

journalists in the hopes of generating more interest and eyeballs—is not new, but it’s been taken to new levels by online advertisers desperate to find ways to get people’s attention on the web. Mowafi remembers that when CairoScene first launched in 2011, Egyptian companies were desperate to establish an online presence. The message was, “You must have social media, you must have online advertising—you must have banner ads,” which was all they knew, she explains. “I would say, ‘That’s great, have a banner ad, but then I want you to think how much cooler it would be if we do a feature interview with the founder as one of the coolest entrepreneurs in Egypt, or if we run a top 10 list of pools in Cairo and yours is on that list.’”

Mowafi was the managing editor at Enigma, where she wrote a popular monthly column called “Fe-Mail,” which followed her “trials and tribulations of being a good Egyptian girl.” (After a collection of her columns were later published as a book, The Los Angeles Times dubbed her “The Muslim Carrie

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Bradshaw.”) Enigma routinely ran paid advertorial copy that was labeled as such, she says, in keeping with many magazines. Still, as critics of native advertising have pointed out, readers often don’t notice the difference, which is what advertisers are hoping. “The boundaries of what’s sponsored and where it’s just content have kind of blurred,” says Mowafi. She adds: “The powerful thing about online media is that it allows people to have a conversation. It allows other people to talk about you, and there is nothing more powerful for a brand than people talking about you. You can’t go viral in print.”

Creative destruction Mowafi, the daughter of a prominent Egyptian investment banker, describes herself as “born and bred in England,” though she moved to Egypt in 2002 after graduating from college and for a time hosted her own morning talk show here.

Her father and brothers, who formerly ran an off-road motorcycle export business in the U.K., also returned abruptly to Egypt

in 2007 following legal troubles in which they faced thousands of complaints of cheating people out of promised items or delivering sub-standard goods. In 2007, the firm’s co-founder, Tarek Mowafi, Amy’s father, was convicted in absentia and sentenced to nine months in prison.

The three Mowafi brothers began the ticketing site Taskarty in 2008. The firm quickly grew into a digital marketing company with various complementary channels, managing social media campaigns for big clients like Coca Cola Egypt as well as publicizing launch parties and other events on CairoZoom.

However, “People didn’t know where these events happened,” explains Awad, the former CairoScene managing editor, who now works at a site called progrss.

The content portal was originally conceived as an online events calendar to fill the gap and bring more attention to the events being promoted by its sister site, but CairoScene quickly became popular in its own right. “The calendar was performing extremely well,” says Mowafi.

Building on the profits from sponsored

COURTESY OF THE GLOCAL

Cover Story

THINK GLOCALLY: CORE REPUBLIC BROKE INTO ONLINE MEDIA LAST YEAR WITH THE GLOCAL, WHICH TARGETS A WIDER EGYPTIAN READERSHIP.

event posts, Awad, who joined in 2012, helped build CairoScene into a standalone online magazine with its own dedicated local readership. Like Enigma, the site catered to affluent, English-speaking Egyptians, but unlike Enigma, which came out once a month, young, sociallyminded Cairenes could log on to CairoScene every day on their computers or smartphones to read “really fun, cheeky editorial posts,” on the latest happenings around town, Mowafi says.

In the meantime, print magazines were folding right and left, especially after advertising dried up after the revolution.

Upscale publications that depended on ad revenue from fancy hotels and liquor companies saw their lifeblood quickly disappear. “Print was dying,” says Awad.

“Nobody had the money to spend on advertising, which is the whole business model for a luxury magazine.”

“Any company that had that kind of budget, sliced it in half, if not to zero,” says Tapozada, who was still at Core Publications when hard times hit in 2011. “We would have huge companies

that had three-year deals with us, and suddenly they said, ‘Hold up, we have to reevaluate everything.’ All magazines took a huge hit.” After leading the market for a decade, Core Publications folded all four of their print magazines within two years.

In the meantime, says Tapozada, “Digital started rushing in.” Core Publications was reborn as Core Republic, and in 2015, following in the successful footsteps of fizzy online portals like CairoScene, launched The Glocal, a content site aimed at a somewhat wider local audience, publishing content in both Arabic and English.

Tapozada, who is now the editor-in-chief of Glocal, says she thought there was an appetite for a site like CairoScene that wasn’t exclusively aimed at the elite. “I felt like it was such a niche audience; it didn’t feel really Egyptian to me.” The Glocal runs posts on similarly lightweight topics such as “25 Tweets and Posts that Sum up Going Through Finals” and “10 things Egyptians Must Know Before Moving to Dubai.” About half of the posts

are repackaged videos on subjects like cats and celebrities from around the internet. Nonetheless, in the last six months, The Glocal has doubled its monthly hits to 240,000, according to SimilarWeb.com. “We’re still a startup,” says Tapozada, “but we’re definitely doing better than we thought. We keep expanding.”

Scoop Empire launched in 2012 with a more regional focus, (“15 States Where Arab Americans Hate Living,” “7 Tips to Break Your Fast Without Feasting”) while relying on the same native advertising revenue model as CairoScene and The Glocal. Articles such as “Ariika’s Air Puff Is The Only Furniture You Will Ever Need This Summer” are not labeled as ads. Of the three, The Glocal is the only one of these sites that distinguishes paid ads from editorial content, tagging sponsored items with a subtle brand logo. But the central strategy is essentially the same at all three sites: to blur the line between paid and unpaid content in order to help advertisers sell products. “We don’t write ‘Vodafone is great, go buy Vodafone,’”

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SOHA EL GABI

Cover Story

PAPER TRAIL: EGYPTIAN PRINT PUBLICATIONS HAVE STRUGGLED TO STAY AFLOAT IN THE WAKE OF DECLINING ADVERTISING, ESPECIALLY SINCE 2011.

says Tapozada. “We incorporate them in a way that’s entertaining.”

Walking the line Since the late 1990s, when the internet began to transform the media landscape, so-called content sites have been experimenting with new revenue models in their search for the most effective way to make money in a medium that’s by nature open, being accessible to anyone with a modem. They quickly learned that simply transferring the old media formula online didn’t work. “Banner ads have done notoriously badly ever since their inception,” says Mowafi.

Laursen, of the Native Advertising Institute, dates the first native ad back to 1915. An article published that year titled “The Penalty of Leadership” in The Saturday Evening Post, then one of the most widely read magazines of the American middle class, appeared beneath the logo for Cadillac, the luxury car aimed at well-to-do businessmen. As Mowafi points out, print magazines frequently ran paid advertorials loosely disguised as reported content—though in

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legitimate publications, at least they were almost always marked as such.

By 2020, according to Laursen, there will be around five times more online content than just five years earlier. Amid this barrage of websites, it’s becoming harder for firms to reach internet surfers, particular as people have become increasingly adept at tuning out online advertising. Hundreds of millions of people have now installed software on their devices that blocks online ads, says Laursen. “If you have an audience you want to reach that blocks your ads, how can you reach them?” he asks. Even if advertisers manage to get their traditional banner ads in front of people, they’re likely to suffer from what Laursen calls “banner-blindness.” So online advertisers have developed more cunning methods to reach people.

In part, native advertising has taken off in the digital age simply because “it doesn’t make as much sense to advertisers now to allocate big budgets to print,” says Laursen. “It’s easier to have a clear commercial call to action online.” Thanks to hyperlinks, readers are just a click away

from learning more about a product.

Moreover, advertisers can track exactly how much interest (in clicks) an “article” has managed to generate. By 2020, a quarter of ad budgets will go to native advertising, according to the Native Advertising Institute.

Native advertising has thus become a staple of the most prestigious media brands. The New York Times now has its own in-house ad unit specializing in online native advertising— TBrandStudio, which boasts that it “uses The New York Times’ proven recipe for storytelling” to “influence the most influential audiences around the world.”

A landmark piece of native advertising produced by TBrandStudio was a bylined “story” in The Times about female prison inmates that was designed to promote the online streaming service Netflix’ original series “Orange is the New Black,” which takes place in a federal women’s prison. While clearly marked at the top as a “paid post,” with the red Netflix logo the article was ranked among The Times’ most widely read online posts of 2014.

COURTESY OF MO4

Cover Story

WINDS OF CHANGE: NATIVE ADVERTISING IS EXPECTED TO COMPRISE A QUARTER OF ADVERTISING BUDGETS BY 2020.

Publishers have learned the hard way that they risk alienating their readers and compromising their brands by deliberately confusing ads with unpaid content.

“It’s important that adverts are clearly labeled,” says Laursen of the NAI, “I think it’s a no-brainer. The audience is not interested in being cheated.” Sites that routinely run advertisements disguised as content are in danger of losing credibility, he says. In 2015, the U.S. Federal Trade Commission issued new guidelines for native advertisers to make sure that people are not duped into confusing paid advertising with journalism or other kinds of unsponsored online content.

In Egypt, where the internet is a relatively new frontier, no such regulations exist. Ex-CairoScene staff writer Sina Stieding thinks the reason local sites like CairoScene have gotten away with not marking ads is simply that their audience is not sophisticated enough to know the difference. “It’s such a new world for Egyptian advertisers,” says Tapozada.

“Digital is new, and the whole idea of content advertising is even newer.”

MO4 recently put together a multichannel ad campaign for sports clothing brand Quicksilver that included articles ostensibly on kitesurfing along with a video on CairoScene and event photos on CairoZoom. “We did a fantastic video of Egyptian kitesurfers,” says Mowafi, “hanging out on the beach, chilling out, kitesurfing. They’re all dressed in Quicksilver, and there’s no mention of Quicksilver the whole time.” She estimates that just 10 to 20 percent of content on CairoScene is paid for, though product-focused articles and profiles of business owners dominate its homepage.

Native advertising also dictates that publishers be more choosey about its advertisers, since even paid content that promotes controversial brands can create a backlash among readers. In 2013, The Atlantic, a prominent upmarket general interest magazine based in the United States, was forced to issue a formal apology to readers after an uproar over a (clearly marked) native ad it had run from the Church of Scientology.

For now, however, with online native advertising in Egypt still in its infancy, sites like CairoScene have used the concept to their maximum advantage, and there remain huge opportunities for what Awad calls “Arabic lifestyle millennial content.”

Interestingly, few of Egypt’s mainstream publications have managed to develop a profitable online presence—with the major exception of Youm7. With 30 million hits a month, the website is the 12th most popular site in the country with its focus on short, high calorie articles. But the site’s appearance is miles behind the CairoScenes of Egypt; its pages are rife with annoying popups and banner ads, with low quality photos and a cluttered layout.

Still, Youm7’s numbers show the appetite for media content that’s presented in a lighter, more conversational style. “This sort of wit and sense of humor hasn’t hit Arabic fully,” says Awad, “but definitely it’s going to.

There’s a huge opportunity for colloquial Arabic; whoever does that first, and does it well, will really get ahead.” ■

Business Monthly – June 2016

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41

Stock Analysis

To sell or not to sell

“S

ell in May and go away,” goes the old trading adage, but was that good advice this year for investors in the Egyptian stock market? Falling short of the 8,000 mark, a psychological threshold, the benchmark EGX 30 traded as high as 7993.98 on April 27 before plunging 7.8 percent to end the month-long period ended May 15 at 7373. The index finished the period down around 1.2 percent, while the EGX 70 dropped 1.7 percent.

The former is still up for the year (+5.2 percent), while the latter remains down (-2.7 percent). Arabs and Egyptians were net sellers, with declines outnumbering advances by a ratio of 2-to-1.

Still dominated by retail investors, the market has seen stocks priced in the single digits advance. For instance, Ajwa Group for Food Industries (AJWA) soared 38 percent to LE 2.31, El Nasr for Manufacturing Agricultural Crops (ELNA) jumped 29 percent to LE 9.46, and Ismailia Poultry (ISMA) advanced 22 percent to LE 2.13. Interestingly, all three are in the food sector, which is likely to benefit from higher prices in advance of Ramadan. Indeed, year-on-year inflation rates jumped to 10.27 percent in April on higher food prices following the further devaluation of the Egyptian pound.

Other players also benefited from the weak currency.

Shares of Alexandria Containers Handling (ALCN) advanced 14 percent to LE 432.71, thanks to its U.S. dollarlinked revenues. Also, CIB—which has Egypt’s most liquid global depository receipt, traded in London, and which boasts a net foreign asset position—also saw its local shares add some 9 percent to close at LE 43.21. Similarly, Egypt Free Shops (MFSC), another hard-currency earner, gained 10 percent to LE 3.89.

However, not all the companies expected to benefit from a weaker Egyptian pound did well. Oriental Weavers Carpet (ORWE)—one of Egypt’s leading exporters—is under pressure thanks to a recent jump in oil prices, (Brent crude jumped by around 11 percent to $49 last month. which means an increase in the price of polypropylene, a key chemical for Oriental Weavers, whose stock dropped some 14 percent to LE 6.08. Meanwhile, Ezz Steel (ESRS) shares pulled back by 15 percent to LE 7.63 on the news that the Egyptian government was reconsidering a plan to reduce natural gas prices for steel manufacturers by 35 percent.

More than two months after the Egyptian pound devaluation, investors are probably asking themselves: Should have we sold in May? Or should have we stayed the course?

IN THE SPOTLIGHT

Edita Food Industries Since it went public a year ago, Edita Food Industries has been an investor, thanks in part to its global depository receipts traded in London in U.S. dollars. GDRs have become a popular vehicle for local investors looking to get their hands on scarce dollars, enabling them to buy stock in local firms, convert it into GDRs and sell the shares for dollars. The snack giant has seen its market value almost double from LE 6.7 billion at the time of its IPO to LE 13.2 billion as of May 15. Its stock was up 11 percent in the period, settling at LE 36.51. Edita’s GDR was traded at around $16.20, implying an exchange rate of around LE 11.3, some 28 percent above the official rate.

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Business Monthly – June 2016

Market Watch

Capital Markets Egyptian price indices - EGX 30

7373

EGX 30

Egyptian price indices - EGX 70

368

EGX 70

Selected sector performance

Business Monthly – June 2016

I

43

Market Watch

Capital Markets Corporate News Mansour-Maghraby sells 4 percent of Crédit Agricole Egypt for LE 257 million Renaissance Capital concluded an LE 257 million accelerated book build of Crédit Agricole Egypt (CIEB) shares on the Egyptian Exchange on behalf of Mansour-Maghraby Investment & Development (MMID). The firm sold 11 million shares at LE 23 each, amounting to some 4 percent of the company's capital, though it continues to be a significant shareholder. Renaissance Capital says the issue was oversubscribed with substantial participation from foreign investors from Europe, Africa and the United States. MMID controlled around 7.9 percent of the bank’s shares prior to the sale, and unnamed sources said the buyers were mostly from foreign and domestic investment funds.

Natixis to force Dubai Group sale of EFG Hermes and Bank Muscat Natixis, the French lender, is in talks to identify buyers for the Dubai Group’s banking assets backing a $1.1-billion loan as it seeks to recover funds from the deal. Natixis is working with U.S.-based Moelis & Co., a boutique investment bank, to find a buyer for the Dubai firm’s almost 12-percent stakes in both EFG Hermes Holding (HRHO) and Bank Muscat (BKMB), worth a combined value of around $400 million.

Ezz Steel awaits 50-percent gas supply to restart operations in Ain Sokhna Ezz Steel (ESRS) announced that it was forced to shut down its new plant in Ain Sokhna as a result of a natural gas shortage after reopening the facility in December. The Egyptian government had promised to supply the company with adequate gas through 2016. The Egyptian Natural Gas Holding Company was still selling natural gas to steel manufacturers at $7 per million British thermal unit, despite a March

announcement from the Trade Ministry that the state would cut natural gas prices to $4.5 per mmbtu. The firm says that if EGAS supplies 50 to 60 percent of the fuel it needs, Ezz Steel can keep its plants open.

Juhayna announces progress on joint venture projects Juhayna Food Industries (JUFO) plans to complete the second phase of its new farm within two years at a total cost of LE 300 million. The local dairy and juice giant had recently announced it had added 1,600 milking cows to reach first phase’s maximum capacity of 4,000 milking cows, using 25 percent of the total farm’s capacity and producing 45,000 tons of raw milk annually. Meanwhile, Juhayna plans to begin operations at its new Argo factory by August, in cooperation with Denmark’s Arla Foods. According to management, Argo will house cheese production pending the construction of a new specialized facility. As per the partnership agreement with Arla, Juhayna will only act as a distributor of Arla products. The partners seek to boost the capital of the joint venture from LE 200 million to LE 500 million, with target sales of LE 1.2 billion by 2020.

Sheeni to cut production capacity by 25 percent The General Co. for Ceramic & Porcelain Products (PRCL), or Sheeni, said it will reduce its production capacity by 25 percent due to weaker export markets and higher energy costs. In the nine-month period ending March 31, Sheeni saw its export sales cut by more than a half (down 52 percent) to LE 8.4 million due to the closing of significant export markets, especially in Libya and elsewhere in the Middle East. Meanwhile, the company’s budget for the new fiscal year did not include any capital expenditures related to its expansion project in Beni Suef due to the rise in estimated investment costs from LE 250 million to LE 400 million.

International stock price indices May 15

April 15

Feb.15

Dec.15

value

% change

value

% change

value

% change

DOW

17,535.32

17,897.46

-2.02%

15,973.84

9.78%

17,524.91

0.06%

NASDAQ

4,717.68

4,938.22

-4.47%

4,337.00

8.78%

4,995.36

-5.56%

S&P 500

2,046.61

2,080.73

-1.64%

1,864.78

9.75%

2,043.41

0.16%

FTSE 100

6,138.50

6,343.75

-3.24%

5,824.28

5.40%

6,017.79

2.01%

NIKKEI 225

16,412.21

16,848.03

-2.59%

16,022.58

2.43%

18,565.90

-11.60%

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Business Monthly – June 2016

Market Watch

Money & Banking INTEREST RATES

BANKING & RESERVES (in millions of LE) 2015

2016

July

August

September

October

November

December

January

February

Reserve Money

413,623

399,916

424,431

425,386

431,665

420,638

418,881

410,150

Int'l Reserves (net, US$ mln)

18,096

16,335

16,415

16,423

16,445

16,478

16,534

16,586

1,799,490

1,819,119

1,850,305

1,868,174

1,876,828

1,905,464

1,909,422

1,922,685

129,653

1,312,284

1,329,020

1,348,830

1,361,759

1,384,872

1,391,490

140,230

1,799,490

1,819,118

1,850,305

1,868,174

1,876,828

1,905,464

1,909,506

1,922,685

18.30

17.99

17.84

17.99

17.49

17.28

17.29

17.03

End of

Domestic Liquidity Foreign Assets (net) Domestic Assets Dollarization Rate (%) Discounted Bills (except CBE)

4,405

4,296

4,334

4,295

4,419

4,844

4,602

4,623

721,869

732,618

767,295

778,098

780,417

786,655

793,064

799,755

Securities (except CBE)

1,015,348

1,030,509

1,036,014

1,051,821

1,067,142

1,105,680

1,112,928

1,121,730

Currency in Circulation

328,175

322,381

331,684

326,756

323,893

324,569

326,179

325,132

Bank Loans (except CBE)

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

May 15 6.490 23.336 12.813 6.868 1.358 10.028 0.132 8.114 12.454 29.319 0.576 0.137 2.361 2.984 2.411 8.858

April 15, 2016 Amount change 6.799 -4.54% 23.332 0.02% 12.536 2.21% 6.896 -0.40% 1.366 -0.60% 9.977 0.51% 0.133 -0.33% 8.103 0.14% 12.458 -0.03% 29.305 0.05% 0.584 -1.37% 0.134 2.15% 2.361 0.01% 3.102 -3.82% 2.411 0.01% 8.857 0.01%

Feb.15, 2016 Amount change 5.561 16.71% 20.5623 13.49% 11.1602 14.81% 5.649 21.59% 1.195 13.62% 8.700 15.27% 0.114 16.25% 6.847 18.50% 10.980 13.42% 26.062 12.50% 0.508 13.39% 0.102 33.63% 2.081 13.46% 2.630 13.45% 2.125 13.44% 7.807 13.45%

Dec.15, Amount 5.621 20.396 11.827 5.676 1.209 8.562 0.116 6.445 10.954 25.673 0.508 0.112 2.077 2.621 2.122 7.797

2015 change 15.46% 14.42% 8.34% 21.00% 12.36% 17.12% 13.91% 25.90% 13.70% 14.20% 13.39% 22.31% 13.65% 13.85% 13.60% 13.60%

May 15, 2015 Amount change 6.163 5.31% 20.036 16.47% 11.988 6.88% 6.360 7.99% 1.245 9.11% 8.658 15.83% 0.119 11.16% 6.382 27.14% 10.699 16.40% 25.228 16.22% 0.496 16.13% 0.152 -10.14% 2.028 16.43% 2.908 2.61% 2.071 16.43% 7.606 16.45%

Business Monthly – June 2016

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45

Market Watch

Key Indicators DEMOGRAPHICS 2007

2008

2009

2010

2011

2012

2013

2014

Total Population (millions)

77.5

79.1

83.5

84.5

88.0

90.2

92.2

94.7

Labor Force (millions)

23.9

24.7

25.4

26.2

25.8

27.0

27.6

28.4

Labor Force / Population (%)

32.5

32.8

33.1

33.4

33.0

32.7

32.7

31.3

8.9

8.7

9.4

9

12.0

12.7

13.2

13

Unemployment Rate (%)

SOURCE:

CENTRAL BANK OF EGYPT

BALANCE OF PAYMENTS (in millions of U.S. $) 2013/14

2015/16

2014/15

End of year

Q1

Q2

Q3

Q4

End of year

Q1

Q2

-33,702.7

-9,742.1

-10,430.3

-9,385.4

-9,227.6

-38,785.4

-9,985.9

-9,561.6

Trade Balance Exports

26,119.0

6,469.2

5,769.7

4,617.7

5,201.6

22,058.2

4,646.1

4,399.1

Imports

-59,821.7

-16,211.3

-16,200.0

-14,003.1

-14,429.2

-60,843.6

-14,632.0

-13,960.7

978.5

2,109.8

1,775.8

341.6

500.6

4,727.5

1,686.8

543.7

17,631.4

6,448.8

6,008.3

4,385.0

5,182.5

22,024.6

5,142.9

4,131.6

Services (net) Receipts Payments

16,652.9

4,339.0

4,232.5

4,043.4

4,682.2

17,297.1

3,456.1

3,587.9

Balance of Goods & Services

-32,724.2

-7,632.3

-8,654.5

-9,043.8

-8,727.3

-34,057.9

-8,299.1

-9,017.9

Transfers

30,367.9

6,188.6

5,797.2

4,963.1

4,926.8

21,875.7

4,318.8

3,992.7

Balance of Current Account

-2,356.3

-1,443.7

-2,857.3

-4,080.7

-3,800.5

-12,182.2

-3,980.0

-5,025.2

Capital & Financial Account

4,934.5

811.4

72.4

6,067.2

10,682.6

17,633.6

1,500.5

7,816.9

Foreign Direct Investment

4,119.3

1,773.2

960.0

2,947.9

689.9

6,371.0

1,385.5

1,718.5

Overall Balance

-1,478.6

410.0

-1,427.0

-29.1

4,771.0

3,724.9

3,656.7

-251.6

SOURCE:

CENTRAL BANK OF EGYPT

NON-PETROLEUM TRADE (in millions of U.S. $) Exports (Q2 2015-16) Total

Imports (Q2 2015-16)

Balance ( Q2 2015-16)

4,399.1

13,960.7

294.3

737.8

-443.5

1,469.8

4,299.6

-2,829.8

Other European countries

284.0

931.5

-647.5

Russian Federation & CIS

52.9

755.4

-702.5

1,349.9

2,825.2

-1,475.3

Asian countries (non Arab)

369.0

2,946.8

-2,577.8

African countries (non Arab)

135.8

214.9

-79.1

4.5

52.9

-48.4

438.9

1,196.6

-757.7

U.S.A. E.U.

Arab countries

Australia Other countries

-9,561.6

SOURCE:

INFLATION

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:

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CENTRAL BANK OF EGYPT

Business Monthly – June 2016

GDP GROWTH

Gross Domestic Product (GDP) growth rates are based on 2001-02 prices.

SOURCE:

CENTRAL BANK OF EGYPT

CENTRAL BANK OF EGYPT

TOURISM VISITS

Year 2013-14 2012-13 2011-12 2010-11 2009-10

Tourists 7.97 million 11.96 milion 10.95 millon 11.93 millon 13.7 millon SOURCE:

Change -34.7% 9.2% -8.2% -12.9% 11.4%

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 MARCH 2016

EGYPTIAN IMPORTS FROM THE U.S. DURING MARCH 2016

SOURCE:

US INTERNATIONAL TRADE COMMISSION (USITC)

Business Monthly – June 2016

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Social innovation

GIVING BACK A corporate how-to guide for creating social and business value Published by the World Economic Forum Analysis by Rachel Scheier

A

global coffee brand trains local developing world farmers to grow and supply the firm with sustainably grown beans. An insurance company markets specially tailored policies to the poor. A major credit card firm partners with officials and a local telecom to launch a mobile money platform offering financial services to low-income citizens.

All of these are examples of corporate social innovation, or social entrepreneurship, which have become buzzwords in recent years. In the 21st century, traditional charity and aid programs that aim have fallen out of fashion, considered by many to be wasteful failures. Private sector companies, meanwhile, are learning that they can no longer afford to be seen as dinosaurs who only care about their bottom lines. With concepts like corporate social responsibility, firms are borrowing a page from nonprofits as they explore ways apart from traditional philanthropy whereby projects can enhance profits and help them sleep better at night.

Recently, the World Economic Forum released “Social Innovation: A Guide to Achieving Corporate and Societal Value,” billed as a how-to manual for companies it’s rich with examples of firms that have successfully launched projects that tick both boxes. “Reducing inequality and accelerating real, meaningful and widespread inclusive growth are the most urgent challenges of our age,” states the WEF in the report’s preface. It defines such efforts as “innovative, practical, sustainable, market-based approaches that benefit society, with special focus on the vulnerable.” The paper’s findings are drawn from a series of workshops and interviews with more than 35 executives from leading corporations, who seek to outline the why, the what and finally the how of social innovation strategies and business models.

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Business Monthly – June 2016

“Social innovation means being more strategic, more ambitious and more collaborative in how access and opportunity can be provided for billions of low-income people to participate in the global economy.” Companies have long engaged in philanthropic activities in order to engender good public relations and “exercise their citizenship in society.” The key difference in the definition of social innovation is “the pursuit of societal challenges in ways that create tangible business benefits.” These benefits can be vast on a number of levels, from image boosting to increased profits as well as enhancing long-term competitiveness, enabling access to new markets and supply chains, and helping firms attract and retain top talent. Last year’s Edelman Trust Barometer indicated that trust in business is at its lowest level since 2008. Companies that “enhance their net positive contributions to society are more likely to earn the trust of stakeholders and secure their license to operate in society.” As Nestlé’s chairman of the board Peter Brabeck-Letmathe tells the authors: “It is society that gives us the right to be active, our license to operate.

A business leader has to think about how to solve the societal challenges of today, because if we don’t solve them, we will not have a business.”

Moreover, companies are increasingly looking to the billions of untapped consumers in the developing world, as growth slows in developed markets. While the “relatively low purchasing power” of these consumers presents a challenge in terms of achieving profit margins, smarter players are taking the long view, getting an early foothold in these vast, emerging marketplaces. Successful examples of social innovation initiatives that have ultimately opened the door to substantial growth and profits for companies include the efforts of needle manufacturer BD (Becton and Dickinson and Co.), which in the 1990s and 2000s, in the wake of the global AIDS epidemic, invested more than $1 billion in

Social innovation

redesigning its needles to prioritize safety. The “safety-engineered devices became the single largest source of growth for BD over the last 25 years. Today, these devices generate over $2.6 billion annually in global turnover—a successful strategy that, in many countries, preceded legislation requiring health facilities to use them.” In 2003, Bajaj Allianz, a joint venture between Allianz AG and Bajaj Finserve in India, started offering insurance for everything from death to agricultural losses to a new customer segment: households with incomes between $1.25 and $4 per day.

Today, Allianz has created a new business unit, Emerging Consumers, devoted to the growing microinsurance market.

Other firms have successfully spurred social innovation at the beginning of the supply chain. Nespresso, Nestlé’s successful premium coffee drink brand, needs a guaranteed and continued supply of high-quality coffee beans. So the firm created a program that supported local farms by providing training, financing and technical assistance, among other things, to “ensure its continued supply of high-quality coffee, while preserving the environment and enhancing farmer welfare.”

Increasing levels of diversity in the workforce represents another chance for social innovation. After all, “a more diverse workforce both increases the size of the recruiting pool and can introduce new capabilities into an organization.” The German multinational software firm SAP saw an opportunity in the growing demand for IT skills and decided that there was “a significant and traditionally untapped talent pool composed of individuals with Autism Spectrum Disorder.” While autistic adults have a “unique skill set that delivers business value,” they have an average unemployment rate of 80 percent due to their lack of “communications” and “team player” skills.

Still other businesses have supported social innovation by financing startups. In 2013, Telefónica Open Future, a division of the Spanish multinational telecom Telefónica, partnered with the British government to support the growth of socially innovative startup ventures through seed funding, coaching and mentoring.

Among the startups it fostered are Roadio, which created mobile technology to improve the way people learn to drive, and WeFarm, a peer-to-peer platform that offers vital information on farming practices to more than 43,000 farmers in Latin America, where Telefónica has significant business operations.

“To benefit the most from its impact investments, a company should invest in startups that are strongly aligned with the company’s business strategy or operating in adjacent markets.” Since the early 1990s, Morgan Stanley’s Asia Private Equity business has made investments in various fast-growing businesses in the AsiaPacific region, including some focused on inclusive finance.

CreditEase, a peer-to-peer lending pioneer, has introduced credit products to the “vastly underbanked” Chinese middle class and rural classes. The investment paid off for Morgan Stanley. Last December, CreditEase’s online P2P lending unit, Yirendai, successfully listed shares on the New York Stock Exchange.

The report outlines five steps to building socially innovative businesses:

1. Businesses must first identify opportunities with potential to contribute to a company’s strategic objectives. Mastercard, for example, has prioritized global financial inclusion. “With 85 percent of the world’s retail transactions undertaken in cash...providing access to formal financial services presents an enormous opportunity for business growth.” Here in Egypt, MasterCard worked with Etisalat and the Central Bank to develop a mobile banking platform offering bill payments, money transfers, e-commerce and loan facilities. The solution has aimed to promote financial inclusion by offering national identification cards with digital signatures to more than 60 million Egyptians.

2. Companies must design ways to convert ideas into feasible concepts, prototypes or business models. In 2013, Philips noticed that its Africa sales teams were generating numerous inclusive innovation ideas aimed at marginalized communities— including LED lights with solar panels and medical devices for low-resource settings—yet none of them were coming to fruition.

Thus the Philips Africa Innovation Hub was created in 2014 in Nairobi, a unique venture positioned inside the sales organization to be as close to customers and market insights as possible to ensure that ideas were incubated through a highly structured, stage-gated process.

3. Companies must be willing to learn through experimentation and field testing. Marks & Spencer showed “the value of rapid experimentation to identify the winners and kill the losers” with its 2014 Global Community Program. M&S initiated multiple pilots in Kenya along with its suppliers to reduce absenteeism among employees by identifying common reasons why workers stayed home, such as inadequate sanitation and security in the informal settlements where they lived. Assessments before and after the pilots showed that a three-day leadership course on work and community settlements “showed better results: reduced absenteeism, increased productivity and leadership abilities and improvements in sanitation and security through stronger involvement by communities.” However, a health intervention initiative “showed weaker results and required ongoing support from third parties, thus making it too costly for the supplier to finance it on its own.”

4. Iniatives must be scaleable. —An example of a socially innovative effort that a firm was ultimately able to scale is Cisco’s Networking Academy, which teaches students IT and careerbuilding skills, helping to fill a skills gap while building capacity for its future workforce. Today, graduates of the program are an important source of talent for Cisco’s businesses as well as for the company’s customers and partners. Networking Academy was able to grow rapidly, sharing content with a worldwide network of academies, instructors and students. “Cisco’s experience demonstrates how to build for growth from the start.”

5. Cisco also relied heavily on successful partnerships in order to grow fast. “The company works with governments, educational institutions and community-based organizations around the world that are responsible for finding classroom space and teachers, attracting students and purchasing laboratory supplies.” ■

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STYLE TRUMPS SUBSTANCE AT KAZOKU

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BY EDMUND BOWER

ince the 1980s, sushi bars have proliferated in the United States. The freshness and delicacy of Far Eastern cuisine seemed exotic to Americans— who up until then had thought of rich French sauces as the definition of fine dining. But sushi chefs in North America still had to adapt dishes to appeal to local tastes. Bluefin tuna was often replaced by avocado and crab, and the California roll was born. Even

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such un-Japanese substances as cream cheese eventually became a hallmark of American sushi, in U.S.-friendly concoctions like the Philadelphia roll, a creation based more on the classic New York bagel with smoked salmon and cream cheese than on anything in Japanese cuisine.

Cairo has witnessed its own sushi craze in recent years, drawing heavily on the Western-friendly version, which involves breeds of fish that aren’t available off Egypt’s coastlines. Instead, Japanese

restaurants in the Egyptian capital tend to feature California rolls stuffed with imported ingredients like Peruvian avocados and Norwegian salmon.

Luckily, Kazoku is not so much about fresh ingredients or authentic dishes as it is about something it calls “the art of dining.”

The concept has been a hit among its upscale clientele; the eatery has quickly gained popularity since opening last December. Even its address is suburban swanky—New Cairo’s exclusive Swan Lake compound.

COURTESY OF KAZOKU

Dining Out

COURTESY OF KAZOKU

Dining Out

Owner Ayman Baky is a former nightclub proprietor who was co-owner of Tamarai, a trendy spot in the Fairmont Nile City Complex until it closed in 2013.

Kazoku, which purports to offer “contemporary Japanese cuisine,” feels like a modern cocktail lounge that happens to serve food. Guests are advised to dress in “smart elegant” attire, the better to the adorn artfully arranged sofas and cushions, where the low buzz of bossa nova blends with the clink of ice cubes and multilingual chit-chat. The back wall contains an open kitchen as well as Kazoku’s main attraction, the lengthy bar, where hipster bartenders in waistcoats confidently shake imported brands of liquor into LE 100 cocktails.

Kazoku is the Japanese word for family.

Still, the establishment has a unique reservation policy: You can book for either “early dinner” 7 p.m. to 10 p.m. or “late dinner” from 10 p.m. to 1 a.m., but as we were politely informed, customers are not permitted to overstay their allocated slots.

The time limit policy would be an alienating at a hot dog stand, but at an upmarket restaurant, it was just weird. It also appears unnecessary. On a recent weeknight, the restaurant was maybe half-full. Thankfully, in practice, we had no difficulty booking a table for 8 p.m. and despite arriving almost an hour late due to traffic, the staff was welcoming.

Our table had a sofa on one side and two chairs on the other, with such springy padding they could have been ejector

seats. We started with the shrimp tempura (LE 70) and the spicy tuna tacos (LE 85).

The first perfectly cooked shrimp, their crispy batter and dressed with a chili that tingled in the mouth, was far better than the cold mix of raw tuna drowned in Mexican salsa served in three tiny, supermarket-style crunchy taco shells. The inclusion of Tex-Mex on the list of Japanese starters was different but not exactly surprising given the recent fusion trend in Cairo’s restaurant scene. Kazoku’s sister ship, Sachi, in Heliopolis, is a quasiItalian-Japanese affair.

We moved on to the beef tenderloin steak (LE 160). Despite being a shade over rare, it arrived attractively presented under a colorful medley of chili peppers and other vegetables, all served in a light miso sauce. The meat was a little on the tough side, although at 300 grams, it was certainly the best deal on the menu.

Unfortunately, the grilled rice that accompanied it turned out to be dry rice balls, lightly burnt on two sides, which tasted like they had been microwaved to order.

For our second main, we opted for the house special, the imported Chilean Sea Bass, (imported is actually part of the name) a 200-gram filet of fish that goes for LE 350. Chilean Sea Bass, incidentally, is a marketing title cooked up by a fisherman in the late 1970s to make the Patagonian toothfish more palatable to the American market.

For Egyptians, “imported” is typically assumed to be synonymous with higher

quality, but it’s worth noting that an authentic Japanese chef would likely blanche at the idea of shipping a fish in from overseas for the specialty of the day.

Imported seafood is usually frozen or chemically preserved—in other words, not fresh. To his credit, the chef did well with the South American fish. My little toothfish wasn’t overcooked, and its soft but firm flesh was served in a delicately sweet miso paste. Again, however, the kitchen stumbled on the side dish: roasted potatos that tasted like they had been sitting in the fridge for a couple of days.

The “signature” sushi rolls we sampled included the truffle scallops roll (LE 140), with tuna, tobiko and truffle mayonnaise, and the foie gras roll (LE 130), with dates, shiitaki mushrooms and almonds. This is among the most expensive sushi available in the capital. The plates resembled works of art, served on narrow slate platters and garnished with chives and asparagus heads. The well-paired flavors held together but fancy ingredients like foie gras and truffle oil seemed show-offy and out of place, especially when paired with cream cheese and mayonnaise.

The desserts were the highlight of the meal. The menu offers a selection of two, four or six tasters served in bento boxes, at LE 20 per taster. Our bento box for two contained a rich chocolate fondant and a matcha (green tea) brûlée. The joy of cracking through the top of a good crème brûlée and spooning out the cold custard beneath can cancel out a lot of wrongs.

The chocolate fondant was equally comforting—rich, dark sponge cake that turned to molten chocolate on impact with my tongue.

With its attentive service and chic vibe, Kazoku is well on its way to becoming the city’s latest place to be seen for Cairo socialites. Foodies might be less enthusiastic; but that’s not what the crowd at Kazoku is there for. ■

Kazoku Swan Lake Compound First Settlement, New Cairo 2469-0331 Open daily from 2 p.m to 1 a.m.

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HOLY ESCAPES

BY TAMER HAFEZ

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amadan can be a make or break time for Arab television stars. As of late last month, 110 series were scheduled to compete for our eyeballs during this year’s 174 hours of prime-time holy month viewing. As usual, evening blockbusters that air at 8 p.m. will be re-shown several times throughout the following day, so you need not be forced to make a decision between your Ramadan social calendar and your broadcast needs. Also as usual, complex social issues dominate the lineup. Sans spoilers, here are the highlights of what’s airing on the small screen this month.

DRAMA “SEKOUT HORR” (“FREE FALL”) NELLY KARIM, AHMED WAFIK Perhaps the most anticipated series this Ramadan after Karim’s back-to-back smash hits in recent years on the edgy subjects of drug addiction and women’s prisons. This year, our heroine is committed to a mental hospital after allegedly murdering her husband and sister. Maintaining her innocence, she sets out to unmask her family’s real killer. The production highlights the abysmal conditions inside Egypt’s psychiatric care facilities.

“FOUK MOSTAWA AL DHOBOHAT” (“ABOVE SUSPICION”) YOUSRA, SHERINE REDA In this psychological thriller, a classic soap opera storyline is trotted out as sweet, innocent Rahma (Yousra) suffers from multiple personality disorder. By day, she delivers lectures on maintaining a healthy work-life balance, but after Rahma’s psychopathic self commits a serious crime, she has to contend with both the law and a local crime boss.

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“AFRAH EL KOBBA” (“JOYS OF THE DOME”) MONA ZAKI, SAYED RAGAB This dramatic series is based on a 1981 novel by Naguib Mahfouz. A struggling theater troupe receives a mysterious script that tells the life story of each actor—including their darkest secrets. They initially refuse to perform the play, but money problems finally drive them to exploit their own painful and sordid histories before their audience and one another.

“AL TABBAL” (“THE DRUMMER”) AMIR KARARA, ROGINA A skilled drummer (Karara) who performs in a shady nightclub struggles to earn a living and the respect of society while he pursues his dream of being a musician.

“LAYALY EL HELMYA” (SEASON 6) (“EL HELMYA NIGHTS”) ILHAM SHAHIN, SAFIA EL EMARY, HISHAM SELIM Since the first episode aired in 1987, “Layaly el Helmya” has told the story of two Egyptian families beginning in the 1940s with the

SOHA EL GABI

three lead actors (Shahin, Emary and Selim) appearing in every episode. The return of the sporadic epic series surprised many, since the last season of the show aired in 1995, and by then the three main characters Zahra, Nazek and Adel were already well into middle age. The new season tackles societal changes that took hold after Egypt’s 2011 revolution, and how the trio has coped with the deaths of loved ones and other life changes.

“AL KHOROUG” (“THE EXIT”) THAFER EL ABDEEN, SHERIF SALAMA A veteran cop (Abdeen) decides to retire after cracking a murder case involving a high-ranking government official who kills his wife and is subsequently executed. But when the retired lawman gets a call from the official’s wife, he begins to suspect a conspiracy involving the man who took his place (Salama).

ACTION

COMEDY

CESAR YOUSSEF EL-SHERIF, KHALED ZAKY El-Sherif plays Cesar, the leader of a group of religious extremists, who has superhuman strength and stamina. After the group carried out a series of attacks on civilians, the police manage to ambush the criminals and capture Cesar, only to exploit his powers for their own selfish purposes, highlighting corruption among the authorities.

“MAAMOUN AND CO.” ADEL IMAM, LEBLEBA, MOSTAFA FAHMY, SHERINE Starring a handful of Egypt’s most well-known and beloved comedic actors, Maamoun and Co. is sure to be a hit this Ramadan. The plot revolves around a stingy family man (Imam) whose miserly ways end up alienating his wife (Lebleba) and four kids. When his family members find out he’s a billionaire, they set out to find where Maamoun is hiding his money.

“SABAA ARWAH” (“SEVEN LIVES”) KHALID EL NABAWY, IAD NASSAR, RANIA YOUSSEF The series takes place after a police officer (El Nabawy) and a passenger are involved in a car accident. Waking up in the hospital, the cop is told that the person in the car with him died several years before. While everyone, including himself questions his sanity, the officer sets out to find the truth, unearthing dirty cops and organized crime along the way.

“MOZAKERAT ZAWGA MAFROUSA” (“DIARY OF A FRUSTRATED WIFE”) (SEASON 2) DALIA EL BEHERY, SAMIR GHANEM El Behery reprises her role as a newspaper reporter married to a colleague with opposing political views. Season two of the show continues with the same comic tension at work and home that results from the couple’s disagreements, which are now complicated by the arrival of their first child.

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HEYA WA DA VINCI” (“DA VINCI AND HER”) LAILA OLWY, KHALED EL SAWY This dark comedy is set in a poor Cairo neighborhood, where a serious female lawyer (Olwy) tries to prove her worth only to have her life turned upside down when she meets da Vinci (El Sawy).

SUSPENSE “RAS EL GHOUL” (“THE HEAD OF THE BEAST”) MAHMOUD ABDEL AZIZ, FAROUK EL FESHAWY A retired conartist (Abdel Aziz) is arrested and falsely charged with being a terrorist.

Managing to escape, he must use all his wits to find out who framed him, while at the same time eluding bounty hunters.

“GRAND HOTEL” AMR YOUSSEF Based on the Egyptian novel of the same name, this series is set in a luxury hotel patronized by high-profile businessmen and other elite guests. After a maid is found murdered, her brother, a manager at the hotel, is compelled to investigate without offending the establishment’s influential guests.

“AL MIZAN” (“THE BALANCE”) GHADA ADEL, AHMED FAHMY, BASEL KHAYAT A behind-the-scenes look at a high-profile murder case that is being tried in the court of public opinion.

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“WANOUS” YEHIA EL FAKHARANY, NABIL EL HALAFAWY A successful Egyptian businessman (Halafawy), who wants to get out of a contract he signed with a demon called Wanous (Fakharany), is given a choice: Live comfortably with his wife and children until his death, at which time Wanous will claim his soul, or roam the streets as a lonely homeless beggar but keep his soul.

BASED ON REAL LIFE “AL MOGHANY” (“THE SINGER”) Mohamed Mounir, Rania Farid Shawky This biopic series follows the storied life of legendary singer Mohamed Mounir— played by himself. It follows the star from his humble Nubian origins to the top of the Arab music charts. “The King,” as he is known to fans, wrote all new songs for the series.

“AL KHANKA” (“THE MENTAL HOSPITAL”) GHADA ABDEL RAZIK, MAGED EL MASRY The series is based on the true story of a P.E. teacher in an international school who was sexually assaulted by one of her students. As the outgoing female educator fights for justice, she must also contend with a society that labeled her the perpetrator rather than the victim. ■

Chamber news BOARD OF GOVERNORS

PRESIDENT Anis A. Aclimandos, Transcentury Associates

EXECUTIVE VICE PRESIDENTS Curt Ferguson, Coca-Cola Egypt – Atlantic Industries Ahmed Abou Ali, Hassouna and Abou Ali Law Offices VICE PRESIDENT, MEMBERSHIP Amr Allam, Misr Sons Development – Hassan Allam Sons VICE PRESIDENT, PROGRAMS Tarek Tawfik, International Company for Agricultural Production & Processing VICE PRESIDENT, LEGAL AFFAIRS Said Hanafi, Orascom Hotels & Development

MEMBERS OF THE BOARD Aladdin El-Afifi, ASEC Company for Mining (ASCOM) Hashem El Dandarawy, Team 4 Security Nevine Loutfy, Abu Dhabi Islamic Bank Egypt Omar Mohanna, Suez Cement Group of Companies PAST PRESIDENT M. Gamal Moharam, MGM Financial & Banking Consultants

COMMITTEE LEADERS

(July 2015 to June 2016)

Insurance Chair: Alaa El-Zoheiry, Arab Misr Insurance Group | gig

ADVISOR TO THE BOARD Hisham A. Fahmy CHIEF EXECUTIVE OFFICER Tamer El Naggar

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TREASURER Sherif El Kilany, Allied for Accounting and Auditing- Ernst & Young

Investment Chair: Hazem Badran, CI Capital Holding Co. Co-Chairs: Ahmed Ozalp, Akanar Partners Sherif El Kholy, ACTIS

Agriculture and Food Security Chair: Abdel Hamid Badawi Demerdash, Magrabi Agriculture Company Co-Chairs: Seif ElDin Saad ElSadek, Agrocorp for Agriculture Investment Hatem El Ezzawy, PICO Agriculture

Energy Chair: Khaled Abu Bakr, TAQA Arabia Co-Chairs: Ali Bakr, ExxonMobil Egypt, SAE Osama ElSaid, Masa Electro

Banking and Finance Chair: Nadir Shaikh, Citibank, NA Egypt Co-Chairs: Zeinab Hashim, Abu Dhabi Islamic Bank – Egypt Ahmed Issa, Commercial International Bank (CIB)

Entrepreneurship and Innovation Chair: Alaa Hashim, Egyptian Center for Economic Studies (ECES)

Capital Market Chair: Karim Awad, EFG-Hermes Holdings, SAE Co-Chair: Sharif El Akhdar, BPE Partners

International Cooperation Co-Chairs: Rafeh Saleh, CID Consulting

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Legal Affairs Chair: Hani Sarie-Eldin, The Middle East Center for Law & Development Co-Chairs: Emma El Meligi, Pepsi-Cola Egypt Girgis Sarwat Abd El Shahid, Shahid Law Firm Marketing Chair: Dalia Wahba, CID Consulting Co-Chairs: Mai Aly, 4PR Group Tamer El-Araby, Nielsen Egypt, Ltd.

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Real Estate Chair: Mohamed Abdallah, Coldwell Banker Affiliates of Middle East & Greater Africa Co-Chair: Abdalla El-Nockrashy, Majid Al Futtaim Properties-Egypt

Health & Pharmaceuticals Chair: M. Maged El Menshawy, Manapharma Co-Chairs: Mohamed Roushdy, Amoun Pharmaceutical Co., SAE Amjad Laimoun, AbbVie Tamer Said, GE Healthcare

Corporate Sustainability and Responsibility (CSR) Chair: Mohamed El Kalla, Cairo for Investment & Development Co-Chair: Shereen Shaheen, Pepsi-Cola Egypt

Human Resources Chair: Somaya El Sherbini, Microsoft Egypt, LLC Co-Chair: Maisa Galal, General Motors Egypt, SAE

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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

Customs and Taxation Chair: Hassan M. Hegazi, Master Trading, SAE Co-Chair: Hossam Nasr, Allied for Accounting and Auditing- Ernst & Young

Industry and Trade Co-Chairs: Mostafa El Halwagy, The Egyptian Company for International Touristic Projects (Americana) Omar El Derini, FAOM Consult/ Red Wing Ashraf Bakry, Unilever Mashreq

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Travel and Tourism Chair: Karim El Minabawy, Emeco Travel Co-Chairs: Roland Bunge, Carlson Wagonlit Travel Nelly El Kateb, Astra Travel

Education Chair: Sherif Kamel, The American University in Cairo Co-Chairs: Shahinaz Ahmed, Amideast Egypt Maggie Nassif, Binational Fulbright Commission in Egypt

Information and Communications Technology Chair: Amr Talaat, IBM Co-Chairs: Ayman ElGohary, Cisco Systems International Reem Asaad: Raya Holding

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

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onveying key economic advancements and the overall business climate in Egypt to stakeholders was the primary goal of AmCham Egypt’s Doorknock mission to Washington D.C. during the week of April 17-22.

This visit came against the backdrop of the U.S. presidential campaign and just two weeks after Senator Lindsey Graham (R-South Carolina) led a congressional delegation to Egypt and called for a “Marshall Plan” to support Egypt. Graham’s visit was followed by that of the Speaker of the U.S. House of Representatives, Paul Ryan (R-Wisconsin), who called for continued support to Egypt. Both visits paved the way for constructive discussions around objective ways in which the U.S. could continue to assist in Egypt’s development.

This year’s 40-member Doorknock delegation aspired to make the case that Egy pt is continuing its economic reforms despite many challenges that still exist and clear up some misconceptions regarding Egypt’s transition. The delegates called for ways to further strengthen the bilateral relationship during the remainder of 2016 and “reboot” it as a new administration takes office next year.

Over the course of five days, delegates took part in 93 meetings with members of the U.S. Congress, White House officials, think tanks, media and leaders from the U.S. business community. Among them were 57 meetings with members of Congress (House and Senate) and nine meetings with the executive branch including meetings with senior officials at the Department of State, Department of Commerce, Department of the Treasury, Department of Agriculture, National Security

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Council, Office of the United States Trade Representative, Agency for International Development, the Egyptian American Enterprise Fund and the Export-Import Bank of the United States.

The delegation also met with senior representatives at many of Washington’s prominent think tanks and international financial institutions including the World Bank, the International Monetary Fund, the International Finance Corporation, the Woodrow Wilson Center, the Albright Stonebridge Group, the Carnegie Endowment for International Peace, the Washington Institute for Near East Policy, the Atlantic Council, the Center for American Progress, the Council on Foreign Relations, the National Foreign Trade Council, Freedom House and the Center for New American Security.

This year’s delegation included representatives of several major multinational corporations, Doorknock veterans and a number of young businessmen and women. The diversity of the delegation made their arguments in support of Egypt’s progress even more powerful. The eagerness of the younger voices among the delegation and their willingness to engage in open discussion with stakeholders in Washington was highly remarkable.

AmCham continues to be perceived as an independent and credible voice among policymakers in Washington. To that end, this year’s mission put forth a number of messages, including: Despite the challenges of the past few years, the private sector has experienced a consistent level of growth, and the economy mirrors the resilience of the Egyptian people. Egypt remains one of the most diversified economies in the region.

Meeting with State Department Officials

Ziad Haider of the state department, Ambassador David Thorne and Ambassador Anne Patterson

Meeting with Congressman Ami Bera (D-CA)

Meeting with the office of Congresswoman Chellie Pingree (D-ME)

Meeting with the Department of Agriculture officials

Meeting with officials at the Export Import Bank of the United States (Ex-Im Bank)

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Meeting with New York Times Columnist Thomas Friedman

AmCham Egypt’s Doorknock Delegation

Meeting with Congressman Louie Gohmert (R-TX)

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Egypt is revisiting its laws and making necessary legislative reforms to create the proper enabling business environment, with new and improved tax laws, investment regulations, labor and social insurance laws in progress.

Egypt’s government has embarked on a series of subsidy reforms aimed at reducing the budget deficit and adopted policies that promote job creation and attracting foreign investment.

Egypt has successfully taken measures to encourage private investment in renewable energy, such as the introduction of a feed-in tariff. Some pipeline projects aim at increasing electricity production by 150 percent.

Egypt has demonstrated its commitment to the political road map by holding parliamentary elections as scheduled last December.

The delegation reiterated the private sector’s commitment to support the government of Egypt’s efforts in developing policies to confront its immediate challenges, a process that requires the strong support of Egypt’s friends and allies, particularly the United States.

U.S. company representatives among the delegation—including ExxonMobil, Apache Corp., Procter & Gamble, Coca-Cola, Pepsico and Microsoft, among others—shared their experience operating in Egypt, particularly during its transition over the past three years, and expressed their ongoing commitment to supporting the nation’s development.

Overall, the delegation sensed that while there still are some groups critical of Egypt, alluding to some human rights issues, their collective opinions by no means constitute the majority. On the contrary, AmCham members were pleasantly surprised to witness an increased level of appreciation for the role that Egypt plays as a beacon of stability in the region. That was reiterated in Congress, where the national security importance of the partnership is well comprehended.

Specific bilateral trade and investment issues were the focus of discussions during meetings with officials at several federal agencies, including the Department of Commerce and the USTR. There was a call for larger economic reform measures to be adopted and for Egypt’s government to heighten its level of engagement with its U.S. counterparts. U.S. officials updated delegation members on the outcomes of the latest Trade and Investment Framework Agreement (TIFA) discussions which took place in January. Delegates also discussed the possibility of reducing the Israeli materials quota in the Qualified Industrial Zones (QIZ) agreement, which allows Egyptian products duty-free access into the United States. In response to that, USTR officials had no objection and recommended that this issue be raised on between Egypt and Israel. Several members also emphasized the need for expanding the QIZ beyond the textiles.

The delegation engaged in constructive dialogue with think tanks on political and economic reform measures. During meetings with the administration, the delegation called for continued support to Egypt despite some difficulties experienced recently by civil society. The need for an increased level of communication in order to address areas of misunderstanding was emphasized during several meetings.

Members also called for the mobilization of international development agencies to support Egypt as well as the extension of economic support programs.

Middle East Institute (MEI) Panel featuring members of the Doorknock Delegation

U.S. Chamber Breakfast Event featuring H.E. Amr El Garhy, Egypt’s Minister of Finance

Meeting with Congressman Keith Ellison (D-MN)

Meeting with Congressman Mark Meadows (R-NC)

Meeting with representatives of the ‘1776’ Entrepreneurship Support Network

Meeting with Congressman Joe Pitts (R-PA)

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Policymakers specifically commended Egypt’s proactive steps tackling the budget deficit, which include the partial removal of energy subsidies, tax changes and other macroeconomic reforms. Several decision-makers with knowledge of Egypt—and whom we consider to be friends—inquired about the vision behind the reforms. Delegates highlighted the current government’s priorities of job creation and ensuring stability and security. Egypt needs to share its vision more widely, ensuring the alignment of all government bodies.

Some of the key issues raised in meetings included Egypt’s foreign currency shortage and its effect on investments and ways in which the government is dealing with this issue.

Concerns related to the repatriation of profits were also raised.

The visit included a special Doorknock breakfast on April 18 hosted by the U.S. Chamber of Commerce and featuring Egypt's Minister of Finance Amr El Garhy, who shared the outcomes of his meetings with the IMF, including proposed assistance with the implementation of the value added tax (VAT). Garhy outlined some of the reasons for the recent currency devaluation, including the need to redirect foreign currency to the banking system and limit what he referred to as “unproductive” imports in order to protect local industries, pointing to the spinning and weaving industry for example.

Garhy described some of the financial reform measures adopted by the government to reduce the budget deficit and limit expenditure. Highlighting some sources of government revenue, the minister noted that that in fiscal 2016/17, tax revenues are expected to reach LE 433 billion (14.9 percent of GDP), compared to LE 422 billion in fiscal 2015/16.

Revenues from sales taxes are estimated to increase from LE 118.4 billion in fiscal 2014/15 to LE 159.8 billion (5.6 percent of GDP) this year.

Egypt’s Ambassador to the United States Yasser Reda hosted a special dinner in honor of the AmCham delegation on April 20. His hospitality and generosity was much appreciated.

On April 22, a special panel on “The Changing Role of Egypt’s Private Sector” was hosted by the Middle East Institute (MEI) featuring three delegation members as panelists: Tarek Tawfik, vice chairman of the Federation of Egyptian Industries; Dina Sherif, director of the AUC Center for Entrepreneurship; and Said Hanafi, chief of staff and general counsel, for Orascom Hotels and Development. Sherif discussed the growing private sector role in Egypt’s development; many companies have stepped up their efforts to fill developmental gaps by building sustainable business models.

Hanafi shared examples of successful projects including Orascom’s in social housing. Tawfik stressed Egypt’s huge economic potential as the largest consumer market in the region with 90 million inhabitants and shared several examples that illustrated how “Egypt’s youth are transforming its economy.”

After 93 meetings during the Doorknock week, the delegation left Washington with a sense that despite a few misconceptions, the bilateral relationship remains robust. They noted the need for an increased level of dialogue between both governments in order to fully capitalize on the depth and strategic importance—of that relationship. ■

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Meeting with Congressman Richard Hanna (R-NY)

Meeting with Senator Angus King (I-ME)

Meeting with Congressman Jim Clyburn (D-SC)

MISSION MEMBERS Mr. Anis A. Aclimandos, AmCham President; and President, Transcentury Associates Mr. Omar Mohanna, AmCham Member of the Board and Past President; Chairman Egypt-U.S. Business Council; and Chairman, Suez Cement Group of Companies Mr. Curt Ferguson, AmCham Executive Vice President; and President Middle East & North Africa Business Unit, The Coca-Cola Company Mr. Ahmed Abou Ali, AmCham Executive Vice President; and Partner, Hassouna & Abou Ali Law Offices Mr. Tarek Tawfik, AmCham Vice President, Programs; and Vice Chairman & Managing Director, International Company for Agricultural Production & Processing Mr. Said Hanafi, AmCham Vice President, Legal Affairs; and Chief of Staff and General Counsel, Orascom Hotels & Development Mr. Sherif El Kilany, AmCham Treasurer; and Managing Partner, Allied for Accounting and AuditingErnst & Young Mr. Aladdin El-Afifi, AmCham Member of the Board; and Managing Director, Qalaa Holdings / Board Member, ASEC Company for Mining (ASCOM)

Meeting with Senator John McCain (R-AZ)

Ms. Nevine Loutfy, AmCham Member of the Board; and Acting Chairman, CEO and Managing Director, Abu Dhabi Islamic Bank Mr. Hisham Fahmy, CEO, AmCham Egypt Inc.; and Advisor to the Board, AmCham Egypt Mr. Tamer El Naggar, Chief Executive Officer, AmCham Dr. Adel Danish, Chairman & CEO, Smart Villages Co. Dr. Ahmed El-Sharkawy, CEO, RAMW for Tourism & Hotels Mr. Ahmed El Sheikh, SVP and General Manager, PepsiCo, Egypt and Jordan Commercial Unit Mr. Ahmed Issa, AmCham Co-Chair, Banking and Finance Committee; and Deputy CEO Consumer Banking, Commercial International Bank (CIB) Mr. Alaa Hashim, AmCham Chair, Entrepreneurship and Innovation Committee; and Board Member, Egyptian Center for Economic Studies (ECES) Mr. Alex Shalaby, Past President Ms. Dalia Wahba, AmCham Chair, Marketing Committee; and Chairman, CID Consulting Ms. Dina Sherif, Co-Founder, Ahead of the Curve Mr. F. Scott Gallo, Strategic Security and Operations Director, Coca-Cola Egypt – Atlantic Industries Gen. Guy Bourn, Vice President, Defense Systems, ATK Washington Operations Mr. Hatem El Ezzawy, AmCham Co-Chair, Agriculture and Food Security Committee; and Managing Director, PICO Group Mr. Hatem Kheir, General Manager, Kheir Group

Meeting with Senator Richard Burr (R-NC)

Mr. Hesham El Amroussy, Chairman & Managing Director, ExxonMobil Egypt, SAE Mr. J. Michael Lacey, Managing Partner, DENTONS Mr. Karim Kamel, Country Manager-Near East, Procter & Gamble Egypt, Ltd. Ms. Kathryn Casson, Director Public Affairs & Communications, Middle East & North Africa, The CocaCola Company Mr. Mohamed Abdalla, AmCham Chair, Real Estate; and Chairman, Coldwell Banker Affiliates of Middle East & Greater Africa Dr. Mohamed Reda, Executive Vice President, Allied Security and Defense Systems Mr. Patrick Brennan, Commercial Advisor, Apache Egypt Companies Mr. Seif ElDin ElSadek, AmCham Co-Chair, Agriculture and Food Security Committee; and CEO, Agrocorp For Agriculture Investment Mr. Sharif A. El Akhdar, AmCham Co-Chair, Capital Market Committee; and Partner, BPE Partners Dr. Sherif Kamel, AmCham Chair, Education Committee; and Vice President for Information Management, The American University in Cairo Ms. Somaya El Sherbini, AmCham Chair, HR Committee; and Middle East & Africa Talent Acquisition Lead, Microsoft Mr. Tarek Mohanna, Associate, White & Case LLP Ms. Yasmine Mowafy, AmCham Co-Chair, Women in Business Committee; and Director, Investment Banking, Beltone Financial

Meeting with Ambassador Yasser Reda, Egypt’s Ambassador to the United States

Ms. Sylvia Menassa, Chief Operating Officer, AmCham

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Events PRE-ANNUAL GENERAL MEETING

Building trust

Minister of International Cooperation Sahar Nasr believes that Egypt still has a long way to go to achieve its economic, social and political goals. “However, we are on the right track,” she said during AmCham’s pre-annual general meeting held at the Four Seasons Cairo at Nile Plaza on March 8. “This government has a comprehensive social and economic reform program which saw input and consultation from all stakeholders,” said Nasr. “We have an excellent economic committee. We understand the language of domestic and international investors. We have common ground.”

The government program that was discussed in parliament earlier this year aims to achieve sustainable and inclusive economic growth. “Of course we can debate the different tools and policies used to achieve this aim,” said Nasr, who emphasized that the aim of the government is to create jobs and improve the standard of living of Egyptians. “This will be achieved by improving the business environment,” said Nasr.

“That is a challenge. After any revolution, it’s tough times, as people have high expectations, believing that things happen overnight.”

The first pillar of this plan is to improve the business environment by fighting corruption and excessive bureaucracy, which will always hamper development, said Nasr. The second pillar is enabling adequate infrastructure for the private sector.

The third is solving the current mismatch between companies’ needs and the workforce, so that firms can find skilled workers and the youth can find jobs after graduating from university.

“Finding the right caliber youth is a problem I am facing now as a minister as well as during my previous jobs,” said Nasr.

She also stressed the importance of making the economy inclusive. “We are reaching out to lagging regions such as Upper Egypt, Sinai and Alamein as well,” she said, referencing areas of the country with high rates of poverty. The final pillar of the plan is to promote the growth of SMEs and microenterprises and integrate them into public megaprojects. “The megaprojects the government is promoting rely on creating business clusters, and we need SME and microenterprises to create jobs to fight poverty,” said Nasr, who pointed out that megaprojects will help small businesses when it comes to marketing their products, which will allow them to grow, encourage them to innovate and create more jobs.

The Ministry of International Cooperation is focused on supporting those who most need help when it comes to building skills, infrastructure, education and health care, according to Nasr. Since her appointment, the ministry has finalized four partnership agreements with international organizations. The first is with the World Bank Group, which has promised to loan Egypt $8 billion, some of which will be allocated to the private

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sector. The second agreement is with the European Bank for Reconstruction and Development, which has designated Egypt a “country in operation,” which gives it a voice in the EBRD’s operations. The third is an agreement with the Islamic Development Bank. Nasr also finalized a deal with the African Development Bank for $3 billion to support reforms and national projects. “We are discussing with the EU our partnership agreement between 2017 and 2020,” she said.

The international cooperation ministry’s other task is to manage the money the government is taking from foreign institutions and countries. “Our financing gap is around $30 billion in the coming three years,” said Nasr, who hopes that as the economy picks up, this figure will go down. “Private investors are a priority for us. But there are sectors like health care and education, where the government can’t wait until the private sector enters,” she said. In these areas, the government aims to lead reforms without crowding out the private sector. “This is the last thing we want. So we are diversifying the places we borrow from,” she said. As for Egypt’s ultimate goal: “We are trying to achieve sustainability, development, growth and build institutions that take reforms forward without international help.”

Companies need to be encouraged to partner with the government. According to Nasr, ministry bids now follow United Nations transparency standards, enabling any private sector player to file bids for projects online, where all the information is easily accessible. She also said that civil society groups must work with the government to ensure that projects that state-led projects are on time. “We need civil society to reach out to us,” said Nasr.

HR DAY

The importance of culture

Understanding how to motivate today’s employees and create a culture of cooperation and teamwork is vital to the success of any organization, said Amr Talaat, IBM’s country manager.

Talaat was the keynote speaker at AmCham’s third annual Human Resources Day on May 16. With the theme “HR: Leading Winning Cultures,” the event was sponsored by the HR Committee, which is chaired by Somaya El Sherbini and cochaired by Maisa Galal. An array of human resources managers from well-established companies shared their advice on how to create such a culture in an organization.

The first session, “The Role of Human Resources in Changing Corporate Cultures,” featured Hesham El Bakry, managing director of LTC (Leadership Training & Consultancy), described a system of values and behaviors that can promote a positive cultural transformation in firms, as well as examples of adaptive leadership models, and value-driven and vision-guided decision-making. He referenced the Barrett Consciousness Model, a seven-level model for describing the evolutionary development of human consciousness. Haitham Taher of Metlife Insurance

shared survey results regarding the role of employee benefits in enhancing the value of employee packages. The third session, “Employees Relation Aspects Affecting Talent Management,” featured Emad Nasr of Lecico, who talked about labor strikes in the post-revolution era and the double-edged role that labor unions can play in handling employee concerns. Mohamed Talaat, co-managing partner at the law firm Helmy, Hamza & Partners, stressed the role of the national labor law in creating “winning cultures.”

Session four, “HR Talk” was an open discussion featuring Khaled Habib, HR director at Universal. Hesham El Gammal, managing director at Quest, also AmCham Human Resources Committee’sreferenced Chinese proverbs on the importance of maintaining a highly engaged and open workplace culture.

According to Talaat, of IBM, the key to creating a strong culture within a company is communicating the organization’s values to all employees from senior managers on down and linking performance appraisals to how well the values of the desired culture are evident for each employee.

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Events INVESTMENT

AmCham Egypt Inc. hosts Egypt’s supply minister Despite its challenges, Egypt still has great investment opportunities given its growing population and huge market potential, Khaled Hanafy, Egypt’s Minister of Supply and Internal Trade, told senior representatives from more than 40 U.S. companies on May 6. Hanafy was speaking in Washington, D.C. at an event co-hosted by the U.S.-Egypt Business Council and AmCham Egypt Inc., attended by dignitarie s including Ashraf El Araby, Egypt’s minister of planning; Yasser Reda, Egypt’s ambassador to the United States; Dan Glickman, a former U.S. secretary of agriculture; Jim Jones, a former national security advisor; and Norm Coleman, a former senator from Minnesota.

After highlighting the Suez Canal development zone as an attractive logistical and industrial center, Hanafy highlighted projects by U.S. companies including Visa and Microsoft and also commended Coca-Cola and Pepsico for their commitments to Egypt. A project that has directly impacted the supply ministry, he noted, is U.S.-based Blumberg Grain’s new command and control center, which is the central nervous system of a fast-expanding network of grain storage facilities that are projected to save Egypt nearly $2 billion in five years.

Hanafy also spoke about how a new bread subsidy system has helped alleviate pressure on the government budget, allowing for other commodities to reach their targeted recipients while saving money for other social support programs.

The minister also highlighted the importance of the new logistics center at the Damietta port as a hub for local and international commodity exchange.

The event was followed by a special meeting for Hanafy and El Araby with Tom Donohue, the president and CEO of the U.S. Chamber of Commerce.

ENTREPRENEURSHIP AND INNOVATION

The NILEX grows up Small and medium-sized enterprises are said to be the engine of growth for developing economies, but without the right capital, that engine is bound to stall. To highlight opportunities for small businesses, AmCham’s Entrepreneurship and Innovation Committee hosted a May 12 panel discussion on “How to IPO Your Small or Medium-Sized Business on the NILEX,” featuring Mohamed Omran, chairman of the Egyptian Stock Exchange; Aly El Tahri, a co-founder and managing partner at Catalyst Partners; Ahmed Bahaa, chief executive officer of MB Engineering; and Ahmed Marwan, chairman of Sigma Capital.

The session was moderated by Hani Sarie El Din, the founder and a managing partner at Sarie-Eldin & Partners.

The NILEX, which is the stock market’s small-cap trading index, helps address the difficulties these businesses often have accessing enough capital to sustain and attract foreign and domestic investments and grow their operations. It also aids in encouraging entrepreneurship by providing an exit strategy for venture capital funds.

Bahaa spoke about his company, MB Engineering, which successfully went public on the NILEX, while El Tahry and Marwan addressed how investor perceptions of the exchange are gradually changing. Marwan pointed to the MB

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Engineering IPO as an indication of this, noting that it drew large investments from Upper Egypt and the Delta and is a sign of growing confidence in the NILEX. Still, it faces challenges that have slowed the bourse’s momentum. Among the factors listed by Omran are that advisory and financial bodies are not very involved in guiding SMEs during the pre-listing phase. Investors are also not very aware of the many benefits of investing in the NILEX, which include the ability to phase out of an investment while retaining rights of protection. Sarie El Din added that the recent creation of a parliamentary subcommittee could help enhance the legislative framework for SMEs and create a better climate of operation on the NILEX.

New Members Agriculture

Information Technology

Blumberg Grain Egypt, LLC

Global Vision

Address: 255 Alhambra Circle Suite 1100, Coral Gables, FL 33134.

Tel.: (001) 305-569-9500 Fax: (001) 305-569-0800 Membership Type Website: www.blumberggrain.com

Address: 2B Maadi Star Towers, Cornich El Maadi, Floor 17, Maadi.

Tel.: (202) 2527-4733 Fax: (202) 2527-4733 Membership Type Website: www.gv-eg.com

Philip F. Blumberg Chairman & CEO

Hossam Saleh Founder & Chairperson

General

Consultancy

Uber Egypt LLC

Dcode Economic and Financial Consulting (DcodeEFC)

Anthony Khoury General Manager

Mohamed Farid Saleh Chairman & CEO

Address: Block 166, Al Shouyfat Street, Bouri Square, 6th District. 1st Area, New Cairo Tel.: (202) 2616-4383/4 Membership Type Fax: (202) 2616-4385 Associate Resident Website: www.dcodeefc.com

Address: Office 132, First Floor, Greek Building 11, Youssef El Guindy Street, Bab El Louk, Downtown.

Tel.: (2012) 1111-8819 Website: www.uber.com

AXA Insurance

Hassan El Shabrawishi CEO

Mohamed Badran CEO

Address: Cairo Festival City, Building A2, First Floor, 5th Settlement, New Cairo.

Tel.: (202) 2322-0491/7 Membership Type Fax: (202) 2322-0498 General Website: www.beytiegypt.com

Address: Nile City Towers- North Tower, 18th Floor, Cornich El Nile, Ramlet Beaulac.

Tel.: (202) 2461-3600 Fax: (202) 2461-9939 Membership Type Website: www.axa-egypt.com

Associate Resident

Non-Governmental Organizations

Hospitality/Tourism/Travel Cairo Group (Rixos Hotels Egypt)

Ahl-Masr Foundation for Development

Address: 3 Abo El Feda Street, Floor 10, Zamalek.

Tel.: (20-2) 2737-6080/81/82 Fax: (202) 2737-6085

Address: 78 South Academy G, 5th Settlement, New Cairo.

Tel.: (202) 2618-4051 Fax: (202) 2618-4051 Website: www.ahl-masr.org

Heba Helal El-Swedy Founder and Chairperson

Nasser Sayed Abdelatif Chairman & Founder

Membership Type Associate Resident

Human Resources

ENGIE E&P Egypt B.V.

Address: 14 C, Ahmed Kamel Street, off El Laselki Street, New Maadi.

Tel.: (202) 2517-0641/2/3/6/7 Fax: (202) 2517-0648 Membership Type Website: www.jobmastergroup.com

Address: 9 G Ahmed Kamel Street, Laselki, New Maadi.

Tel.: (202) 2517-1518/19 Fax: (202) 2517-1520 Website: www.engie.com

Hisham El Badawy Chief Executive Officer

Johannes Finborud Managing Director & Country Delegate

Associate Resident

Business Monthly – June 2016

Membership Type Not-for-Profit

Petroleum

Jobmastergroup

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Membership Type General

Insurance

Food & Beverages International Company for Agro Industrial Projects “Beyti”

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Associate Resident

Membership Type Associate Resident

New Members Petroleum

Service providers

Global Projects Services (GPS)

Momentum Egypt

Address: 7 El Gazaer Street, off Aswan Square, Mohandessin.

Tel.: (202) 3302-1988/89 Fax: (202) 3303-9681 Website: www.gpshold.com

Address: 12 El Esraa Street, off Lebanon Street, Mohandessin.

Tel.: (202) 3304-9315 Fax: (202) 3304-9315 Membership Type Website: www.momentumww.com

Ihab Hashem Ibrahim Managing Director

Lina Fateen Deputy Managing Director

Membership Type Associate Resident

General

Affiliate Members Building Materials

Wael Shaher Abdulhak Public Affairs & Communication Director - Middle East Glass Manufacturing Co.

Chemicals

Amr Gamal Public & Government Affairs Manager - Dow Chemical IMEA, GmbH

Financial Sector

Information Technology

Amany Zaki Professional Services Manager - Teradata Egypt Sherif Ismail Business Development Manager - Cisco Systems International

Insurance

Hossam Draz Deputy Chief Distribution Officer - Axa Insurance

Mohamed Shoueib Head of Treasury & Trading - Arab Investment Bank

Ayman Kandeel Chief Operating Officer for AXA Egypt - Axa Insurance

Food & Beverages

Non-Governmental Organizations (NGOs)

Mohamed El Hennawy General Legal Counsel - International Company for Agro Industrial Projects “Beyti”

Ghada Shaker Senior Public Relations Consultant - Ahl-Masr Foundation for Development

Amr Salem Human Resources Director - International Company for Agro Industrial Projects “Beyti”

Gihan El-Saadawi CEO & Board member - Ahl-Masr Foundation for Development

Engy El Maghraby Communications Manager- International Company for Agro Industrial Projects “Beyti”

Hospitality/Tourism/Travel

Mohamed Eid Marketing & Public Relations Manager - Cairo Group (Rixos Hotels Egypt)

Human Resources

Mahmoud Abdallah General Manager-Business Development – Jobmastergroup

Petroleum

Ali Hamed Chief Information Officer - Egyptian Drilling Co.

Real Estate

Mohamed Mahrous Senior Manager- Commercial Department- Capital Group Properties

Textiles

Mohammed Mohammed Farid Khamis Vice Chairman - Oriental Weavers Co.

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New Members Changes Change in Company Address: Alkan Holdings Address: 1 Mokattam Road, Building 1, Citadel Plaza Telephone: (20-2) 2512-2336

Thomas Zorn CEO, Mercedes-Benz Egypt

Change in Company Name: Integrated Marketing Solutions (Formerly- Solutions Consulting)

Rui Matos CFO, Amreyah Cement Company

Change in Member Category (Principal Members): Basel Hussein Roshdy Investment Director - RITSEC Randa Ibrahim Abdou Group CEO - Creative Lab Change in Member Company: Noha Salem Policy & Communications Director - MSD Egypt Mohamed Shanab Managing Director - General Electric International Operation Mohamed El Ahmady School of Sciences & Engineering Faculty Representative - The American University in Cairo

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Amr Baggatto Local Partner, Helmy, Hamza & Partners (Baker & McKenzie) Mohamed Saad Awadalla Managing Director, Egyptian Refining Co.

Category: Multinational Sector: Automotive

Category: Affiliate Sector: Building Materials

Category: Affiliate Sector: Legal Services

Category: General Sector: Petroleum

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

Member News ADIB ADIB-Egypt has been recognized as the Best Islamic Financial Institution in Egypt for 2016 by Global Finance Magazine, a business magazine distributed in 191 countries. Winners are selected by Global Finance’s editorial team following consultation with industry experts using quantitative criteria such as growth in assets, profitability and product innovation, as well as qualitative ones such as customer satisfaction and industry perception.

MEACOMS MEAComS was the only Egyptian firm to win a prize at the inaugural African Excellence Awards for projects done in 2015. The awards recognize outstanding work

by PR and communication firms operating within Africa. MEAComS won the award for best Corporate Film and Video and placed second in the Food & Beverage Category, beating agencies from nine other African nations. There are 46 categories including Agency of the Year, Brand Relationship and Best Website.

LTC LTC – Leadership Training & Consultancy ran a health care workshop for 20 nurses from Cairo University’s Specialized Hospital for Children (Abo El-Reesh Hospital) on communication skills in high-stakes, emotional and risky situations. This session was organized by the Rotary Club of Qasr Al-Nil to help develop communication skills in the nursing staff who regularly interact with patients.

RIXOS The Rixos Sharm el-Sheikh has been recognized by the European travel website HolidayCheck as one of the most popular hotels worldwide in 2016, based on online reviews posted by travelers. Especially popular with German-speaking guests, HolidayCheck is available in 13 languages. The Rixos Sharm el-Sheikh is located eight kilometers from the Sharm el-Sheikh International Airport and overlooks the Gulf of Aqaba and Tiran Island. It has almost 700 rooms.

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Announcements Jobs AMCHAM RECRUITMENT CENTER Code

Vacancies

Company Name

101162 101294 101306 101295 101530 101591

Sales Account Manager General Manager Logistics Operations Manager Consulting Manager Quality Assurance Manager HR Manager

Xceed Contact Center CompuGeorge Dakahlia Poultry CID Consulting Asfour Crystal International Luna Group

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 Deadline

Bid bond Specs fees

Request of offers from agents for the supply of 530 tons 4 color inks for the Color Man Akhbar El Yom Est., the Foreign Purchasing Committee Machine per specs. Ref.14/ 2016.

June 22, 2016

300,000 LE LE 200

Industry I.T., Telecommunication and Media

Construction of 17 residential buildings in Madinet Al Khama'yel for completion in 26 Real Estate Projects Agency of the Ministry of months. Pre bid meeting set for 6/12/2016. Bidders need be classified by the Interior, The Cashier Contractors Federation not less than grade 2 for integrated works. P.23

June 19, 2016

550,000 LE LE 5,000

Construction Projects Sovereignty Agencies

Client

Description

Beneficiary Sectors

Sectors

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.

Environment-Water

WasteExpo 2016

wasteexpo.com

Hany Wassef

2797-3422

ICT

InfoComm 2016

infocommshow.org

Cherine Maher

2797-2688

June

Franchise

International Franchise Expo

www.ifeinfo.com

Cherine Maher

2797-2688

Food / Agribusiness

Fancy Food Show (Summer) 2016

www.specialtyfood.com

Cherine Maher

2797-2688

Rania Mekhail

2797-3487

July Healthcare

2016 AACC Annual Meeting & Clinical Lab Expo

www.aacc.org

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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Classifieds Benefits ABU DHABI ISLAMIC BANK – EGYPT Abu Dhabi Islamic Bank - Egypt, is Assigning A@W (ADIB at Work), a dedicated account manager to handle all requests received from members as well as a special web link to share the offer with all members.

Members will receive a special rate on admin fees from 1.5% to 1% for all types of loans.

Members applying for ADIB cash back cards, will benefit from waiving the annual fees for the first year, in addition to the below privileges: - Members will be offered current accounts - Gold customers (over 500,000 EGP) - Cash Back Cards

***Discounts will be granted for AmCham members upon presenting their AmCham 2016 membership card*** For more information, please contact: Serag El Ruby •Mobile: (20-12) 2888-4444 •E-mail: serag.ElRouby@adib.ae Adel Megahed •Mobile: (20-10) 9999-3617 •E-mail: Adel.Megahed@adib.ae Amr El Mahdy •Mobile: (20-11) 2720-7777 •E-mail: amr.a.abdelalim@adib.ae

DUSIT THANI LAKEVIEW CAIRO HOTEL Dusit Thani Lakeview Cairo is pleased to offer a 20% discount to AmCham members on Food & Beverages in all restaurants, Branzino (International), Garden Grill (Oriental), Lobby lounge & terrace, Izumi (Sushi Bar), Ruen Thai, Dusit Gourmet and Blue Rose (Bar); excluding alcoholic beverages, service charge and taxes.

The offer is not applicable during special promotions and public holidays.

***Discounts will be granted for AmCham members upon presenting their AmCham 2016 membership card*** For more information, please contact: Phone: Hot Line: 16198; (20-2) 2614-0000 Nairy Hagopian: Mobile: (20-12) 2234-2613 Email: nairy.hagopian@dusit.com Amr El Kot: Mobile: (20-11)1128-8872

Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits

Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits

This offer is valid until December 31, 2016

This offer is valid until December 31, 2016

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 2016 membership card*** For more information, please contact: Reservation Department at Hurghada Marriott Red Sea Resort Phone: (20-65) 3446-950 Fax: (20-65) 344970 E-mail: reservation.hurghada@marriott.com

THE NILE RITZ-CARLTON, CAIRO The Nile Ritz-Carlton would like to extend exclusive benefits to AmCham members.

- 30% discount on food and beverages (excluding alcoholic beverages) in all of The Nile RitzCarlton 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.

Conditions as follows: • The offer does not apply to banquets or large organized events.

• Offer is not applicable on corkage charges.

• Offer is not applicable on alcohol and tobacco.

***Discounts will be granted for AmCham members upon presenting their AmCham 2016 membership card*** For more information, please contact: Restaurants Reservations Phone: (20-2) 2577-8899 Ext. 2002 E-mail: rc.cairz.restaurants.reservations@ritzcarlton.com

Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits

Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits

This offer is valid until December 30, 2016

This offer is valid until December 31, 2016

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

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Current Benefits

Only With Your AmCham Membership 2016 Card

Academic/ Educational/ Research & Development (R&D)

Accounting

The Institute of Management Accountants (IMA) 30% discount to AmCham Members on IMA Membership.

As a member of the IMA , you can benefit from a wide array of benefits from networking, to access to thought.

December 31, 2016 BDO Khaled & Co. 15% discount for two main outsourcing services: Human Resources Outsourcing, Finance & Accounting Outsourcing December 31, 2016

Automotive

Bavarian Auto Group (BAG) 1- 2% discount on BMW line sticker prices.

2- Original car carpet & Key chain as a gift on your car.

3- BMW insurance with different packages, services and special rates: * Rate 4,25% including taxes, stamps and issuing fees * Road assistance 24/7 4- Premium BMW cars to be traded with the best market price.

5- Several bank finance programs on all BMW cars with a downpayment to start from 25% of the car value. * Terms & Conditions apply December 30, 2016 SMG Engineering Automotive Co. Up to 20% Discount on Spare Parts & Labor for KIA, SEAT, Mercedes and SsangYong Car Owners.

June 30, 2016

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, a wide range of retailers and service providers with distinct Rewards & Benefits, bringing along Peace of Mind to your banking experience and many more ‌ Enclosed proposition for your review.

CRITERIA: 1: Liabilities Relationship (Opening Current or Saving accounts)- Require an initial deposit balance of EGP 500,000 & above.

2: Liabilities & Loans Relationship- Require an initial deposit balance of EGP 300,000 and an outstanding loan balance of EGP 200,000.

3: Liabilities & Credit Card Relationship- Require an initial deposit balance of EGP 300,000 and a Credit Card limit of EGP 100,000.

4: Liabilities & Business Relationship- Require an initial deposit balance of EGP 250,000 and Business banking account balance of EGP 250,000. Relaxation for 3 months on Premier balance drop fees

For more information about the offer, please browse the below link. http://www.barclays.com.eg/premier/overview/index.html December 31, 2016

Consultancies

Courier Services

Media Waves 15% to AmCham members on the full day course below for maximum of eight people plus Half Day oneon-one for ONE Top Executive, free of charge.

July 31, 2016 Aramex International Egypt Free Shop & Ship Membership & a 30% Discount on all Personal Domestic Services.

December 31, 2016 DHL Express DHL Express is proud to offer all AmCham members an exclusive 30% discount on DHL published rates for outbound international shipping services.

December 31, 2016 FedEx Egypt FedEx Egypt Save up to 45% discount off the full cash rate on FedEx Inbound & Outbound international shipping, and a 40% discount off the full cash rate on FedEx domestic shipping.

December 31, 2016

Health

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Dar Al Fouad Hospital Offering EXCLUSIVE prices on Complete Physical Check Up Program using AmCham 2016 membership card.

December 31, 2016

Business Monthly – June 2016

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, 2016 Conrad Cairo Hotel 15% discount on Food and Beverages on the below restaurants at Conrad Cairo.

- Oak Grill - Kamala, Asian bar and dining restaurant * Discount is not applicable on alcoholic beverages December 31, 2016 Emaar Misr for Development 20% Discount on Room Rate; 15% Discount on Food & Beverages from Al Alamein Hotel- Marassi June 20, 2016 Fairmont Nile City Hotel 10% discount on food & beverages at Saigon Restaurant & Lounge, Napa Grill, Bab El Nil, Onyx Lounge, and Sky Pool (Excluding Alcoholic beverages).

December 30, 2016 Four Seasons Hotels and Resorts, Egypt 15% discount in all restaurants (food and non-alcoholic beverages only) as well as spas at all Four Seasons Hotels in Egypt.

December 31, 2016 Kempinski Nile Hotel Kempinski Nile Hotel 15% discount on Food and Beverages on all restaurants at Kempinski Nile Hotel during breakfast, lunch and dinner.

December 31, 2016 Safir International Hotel Management Egypt 20% discount to AmCham members on accommodation published rates, and also applied on food & beverages in all restaurants.

December 31, 2016 Semiramis InterContinental Hotel 20% discount on the below restaurants during weekdays.

December 29, 2016 The Egyptian Co. For International Touristic Projects (Americana) 15% discount at the following restaurants in Egypt December 31, 2016

Information Technology

National Trading Company (Appliance) 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.

December 31, 2016

Insurance

Arab Misr Insurance Group | gig 15% discount on medical frames, sunglasses and lenses available at all Magrabi Optical stores in Egypt.

December 31, 2016

Optical

Magrabi Group 15% discount on medical frames, sunglasses and lenses available at all Magrabi Optical stores in Egypt.

December 31, 2016

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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MASERATI

BMW

Italian luxury car manufacturer Maserati has announced it will resume operations in Egypt after a three-year hiatus. While Maserati continued to support its existing clients with after-sales services, vehicle imports and sales operations stopped in 2013. The renewed focus on the market is in line with Maserati’s global growth strategy.

Maserati has grown its worldwide sales to over 30,000 units per annum with the sixth generation of the Quattroporte, Ghibli and its first ever luxury SUV, the Levante. All models are being produced in Italy.

Bavaria Auto Group, Egypt’s official dealer for BMW, has launched the BMW X4 and BMW X6, rounding out BMW’s local SUV range alongside the BMW X1 and X5. The X4 and X6 will be assembled locally in 6 October City. The X6 comes with a 4.4-liter, eight-cylinder engine with BMW-patent TwinPower Turbo technology to produce 450 hp. The X4 has a 3.0-liter, six-cylinder engine using the same turbo technology to produce 306 hp. Both cars come with an eight-speed automatic gearbox, all-wheel drive and M-Sport body kit.

NESPRESSO

KLM

Nespresso, the worldwide pioneer in premium portioned coffee, announced the opening of its third shop in Egypt, located in Cairo’s Zamalek neighborhood to meet increased demand. “Nespresso has shown continuous growth in Egypt and huge success in this special market,” said Etienne Benet, Nespresso Regional Manager, Middle East, Africa and Caribbean. “We are eager to continue this success and these achievements for our loyal customers in Egypt.”

KLM Royal Dutch Airlines is currently using its Boeing 787-9 Dreamliner for trips between Amsterdam and Cairo for the duration of the summer. KLM’s Egypt team celebrated with passengers boarding the first Boeing 787-9 Dreamliner, named Sunflower, from Cairo to Amsterdam on May 3. The Cairo-Amsterdam route is served by KLM’s Boeing 787-9 Dreamliner and Boeing 777-200, offering four direct flights per week.

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Business Monthly – June 2016

Advertorial SAMSUNG Samsung has announced the launch of the Samsung Safety Screen application that helps users, especially children, hold their mobile devices at an ideal viewing distance. Available for free to all Android devices at the Google Play store, the Samsung Safety Screen runs in the background on mobile devices and can even be password-enabled by parents. Employing advanced facial recognition software, a friendly animation pops up, shutting down the screen when the device is held too close, unlocking only once the device is held at the minimum recommended safe distance.

OPPO

OPPO launched its latest smartphone OPPO F1 Plus, featuring the latest technology in its highly advanced front-facing camera. The camera has 16 megapixels to capture four times the amount of light of its competitors, and its f/2.0 aperture lens is close to what semiprofessional cameras offer. For low light shots, the F1 Plus front camera is supported by a flash and TrueBright sensor for high color replication accuracy. The phone has a 5.5 inch screen, a 2.0Ghz octa-core processor, 4GB of RAM and 64GB of internal storage which can be expanded.

CAIRO MARRIOTT HOTEL & OMAR KHAYYAM CASINO

CAIRO MARRIOTT HOTEL & OMAR KHAYYAM CASINO

In support of the Egyptian community, the Cairo Marriott was the official hotel sponsor for Lebanese soprano Majida Al Roumi’s concert by the Pyramids. Proceeds from Al Roumi’s concert will help fund the construction of the first non-profit hospital in the Middle East and North Africa to specialize in treating burn victims. The event was organized by Ahl Masr Foundation, a non-government social dev elopment organization that aims to revolutionize the concepts of charity and healthcare development in Egypt.

Raya Integration, a subsidiary of Raya Holdings, won the Cisco Architectural Excellence Service Provider Architecture Partner of the Year award for Europe, the Middle East, Africa and Russia. The Cisco Partner Summit Global Awards recognize its leading partners across the region who demonstrate successful business practices and serve as models to the industry. Cisco’s criteria include the partners’ overall performance, business practices, architecture-led successes, strategic business outcomefocused programs and a demonstrated ability to seize new opportunities.

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Media Lite

A Glance At The Press The return of the paper pound “Oh my God! All that happened while I was away?”

May 31, Al-Masry Al-Youm 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.

CAT AND MOUSE

The head of Egypt’s State Information Service, Salah Abdel Sadek, has attributed the rise of extremism in the Middle East to violent television cartoons and video games. The show Sadek pointed to as the worst glorifier of blood and mayhem? “The Tom and Jerry Show.” In a recent speech at Cairo University, the Egyptian censorship head said that the animated antics of the classic cartoon duo, Tom the cat and his always-one-step-ahead prey, Jerry, a small brown mouse with a perpetual smile, “portrays the violence in a funny manner and sen ds the message that, yes, I can hit him…and I can blow him up with explosives.”

Apparently, Sadek hasn’t seen more modern-day forms of screen entertainment like Mortal Kombat and Grand Theft Auto. In any case, Youm7 followed up with an article titled “Five Accusations ‘Tom and Jerry’ Faces in Egypt,” which maintained that as well as glorifying smoking and drinking,

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the cartoon encourages children to come up with sinister plans and encourages violence and the use of sharp instruments such as knives, guns, and chainsaws.

Egyptian Streets, May 4

DOUBLE TROUBLE

A pair of identical twins managed to pull off a twin swap worthy of a Hollywood movie—almost. A man from Minya, in Upper Egypt, paid a visit to his twin, who was serving time in Cairo’s Torah prison. In the crowded visiting hall, the two managed to swap clothes without guards noticing. The Minya twin donned his brother’s blue jumpsuit, while the convict headed for the door, hoping to enjoy a visit with family members for a few days—until the next visiting day. Unfortunately, before he could make it outside the prison gates, guards noticed that the “inmate” didn’t know anyone’s name. They alerted prison authorities, who put the

place on lockdown while they chased down the slippery twin.

Youm7, May 7

LIVE COMBAT

TV viewers of the talk show “At 10 p.m.” were treated to an on-the-air sparring match among two middleaged football commentators. The trouble started when ex-footballer Ahmed Shobeir boasted that he’d turned down a prime job offer at Qataribased Bein Sports out of patriotism.

Fellow guest Ahmed Al Tayeb accused Shobeir of lying, and things got increasingly heated when Shobeir accused Al Tayeb of “working for Qatar” and swore on his wife and daughter’s lives that he was telling the truth. The dramatic climax came when Shobeir picked up his glass of water and hurled it at Al Tayeb. Luckily, producers managed to cut to a commercial as the attack escalated.

Various media, May 28