Landslide - AmCham · 2015-04-07 · AmCham Egypt, the U.S. Chamber of Commerce, the U.S.-Egypt...

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LandslideEgypt nets billions in investment

16 I Business Monthly – April 2015

The March economic summit inSharm el-Sheikh netted Egypt around$38.2 billion in deals as well asanother $12.5 billion in aid from theGulf. Officials successfully marketedthe country to the international mediaas a business-friendly destination onthe rise, despite ongoing economicchallenges.

Cover Design: Nessim N. Hanna

© Copyright Business Monthly 2015. 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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Inside

Editor’s Note

Viewpoint

The NewsroomIn BriefThe news in a nutshell

Region NotesNews from around the region

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In DepthAffordable housing megaprojectsmay not be affordable for mostDevelopers eye “middle-income” market

Mulling the pros and consof the VAT How the tax switch could affect SMEs

Market WatchStock Analysis Market pulls back in run-up to economic summit

Capital MarketsA glance at stocks & bonds

Money & BankingForex and deposits

Key IndicatorsThe economy at a glance

Egypt-U.S. TradeImports and exports

Corporate Cl inicSix degrees Cairo tech map shows that successdepends on connections

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The Chamber

Events

Member News

Announcements

Classifieds

Media Lite An irreverent glanceat the press


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56 Executive LifeDining Out Genghis Khan serves up authenticChinese food

FashionArt & Sole

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Last year, a writer friend of mine, seeking a more affordable place to raise her twochildren, moved with her family from New York City back to her native state ofMichigan. Like other creative professionals, she was also intrigued by a nascenturban renaissance taking place in Detroit, an American city that has long been

synonymous with crime and blight. In the second half of the 20th century, the Motor City,as it’s known, went from an industrial powerhouse—home of the auto industry and thefourth-largest city in the United States—to a burned out shell with minimal public servicesand littered with abandoned homes. As American car companies lost ground in an increas-ingly global industry, jobs—and eventually the city’s middle class—fled, and with it wentDetroit’s tax base. Decades of corruption and racial tensions helped conspire to bring aboutthe city’s downfall. But even as it became the largest American city to file for bankruptcy in 2013 after rack-

ing up $18 billion in debt, a steady stream of artists and entrepreneurs was trickling backto Detroit, opening coffee shops and boutique hotels, hatching start-up incubators and sus-tainable urban gardens. While people compared the formerly teeming metropolis to a failedstate—unable to pay to police its streets or educate its children—young professionals andbusinesses bought up and renovated cheap downtown real estate, spurring a 21st-centuryeconomic boomlet. A few years ago, Dan Gilbert, the billionaire founder of mortgage giantQuicken Loans, moved the company’s headquarters there. With other capitalists large andsmall, he set about rebuilding central Detroit, providing services that had previously beenthe job of the government. Business owners and local residents cleaned up storefronts,hired private security companies—even installed their own street lights. In some ways, Detroit’s story would seem to have little in common with Cairo’s. After

all, the former is a dwindling metropolis of barely 700,000 people—down from nearly 2million in 1950—with swathes of abandoned houses, while Cairo is a megacity of nearly20 million and one of the most densely populated municipalities on the planet. Still, bothare faded urban centers long past their heydays whose gritty personas seem to inspire a cer-tain pride among their longtime residents. Their administrations are both struggling to findways to turn them into livable cities. In a way, Cairo’s informal neighborhoods and net-work of microbuses are as much an answer to the Egyptian government’s failure to provideaffordable housing and adequate public transportation as Detroit’s privately-run securitycompanies and self-administered street lights are filling that city’s public-sector void. Obviously, neither is a perfect solution. The point is that sustainable urban development

comes about organically—from the bottom up rather than the top down. Cairo’s traffic,pollution and unemployment won’t be solved by megaprojects or moving people to a shinynew capital in the desert. As in downtown Detroit, the kinds of efforts most likely to bringabout change in Egypt’s millennia-old metropolis are those that involve residents them-selves. Fixing Cairo needs to be done by Cairenes.

ROOTS


Editor’s Note

Director of Publications & ResearchKhaled F. Sewelam

Editor-in-ChiefRachel Scheier

Contributing EditorTamer Hafez

Staff WriterEric Knecht

Art DirectorNessim N. Hanna

Contributing WriterKate Durham

Advertising DirectorAmany Kassem

PhotographersSoha El GabiSaid Abdelmessih

Production SupervisorHany Elias

Advertising & Circulation AssistantsTasneem Abo El Ezz

Market Watch AnalystAmr Hussein Elalfy

Chamber News ContactsNada Abdalla, Farida El Gueretly,Azza Sherif

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

Business Monthly American Chamber of Commerce in Egypt33 Soliman Abaza Street, Dokki 12311 • Cairo • EgyptTel: (20-2) 3338-1050 • Fax: (20-2) 3338-0850E-mail: [email protected]/bmonthly

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RACHEL SCHEIER

For three days, Sharm-el-Sheikh witnessed anunprecedented momentum characterized bythe high caliber of speakers as well as thenumber of attendees to the Egypt EconomicDevelopment Conference. The event alsoended with an emotional patriotic speech by

President Abdel Fattah el-Sisi that set Egyptians on fireand clearly defused all allegations of dictatorship and top-heavy governance. The president definitely has popularsupport and can lead his country out of the turmoil of thepast four years.The Egypt Economic Development Conference started

out with a political day. The active participation of Africancountries, the Palestinian leader and other “non-obviousinvestors” together with U.S. Secretary of State JohnKerry, the heads of Arab states and a solid European pres-ence created a platform giving Egypt a pivotal position inthe Middle East.The second day clearly stood out as a first-rate econom-

ic development forum. Through well-orchestrated panels,important strategic topics were discussed, giving bothguidance and hope for a brighter future. The message wasclear. The attributes of success exist. Use them. The third day was divided into sectorial panels, making

common interests the foundation of tangible business col-laboration based on well-studied, lucrative projects.I purposely did not focus on the financial pledges of

Arab countries. Although they are most welcome econom-ically and politically meaningful, they are not what Egyptshould depend on for its future advancement. Growth hasto come from within; it must be the fruit of sustainableactivities away from windfalls and individual transactions.

Given the present circumstances, Egypt needs to use thesecash injections and economic support mechanisms to comeout of the bottleneck, bearing in mind long-term plans.The Charm of Sharm is behind us; the ball is in our

court. The question becomes how do we run with it?Presidents and foreign dignitaries do not carry magicwands. The administration in collaboration with businessorganizations must create a monitoring mechanism toascertain first that changes to the regulatory framework,promised during the conference, are fulfilled; that thefunds received are well managed, and that the businesscommunity remains engaged and motivated. Egypt willnot get a similar boost any time soon.One of the highlights of the EEDC was the John Kerry

breakfast organized on the first day of the conference byAmCham Egypt, the U.S. Chamber of Commerce, theU.S.-Egypt Business Council and the Egypt-U.S. BusinessCouncil. The secretary’s keynote speech clearly empha-sized the importance of bilateral collaboration, theunequivocal appreciation of the efforts of the newly-elect-ed president and the common goals of both countries con-cerning stability and regional peace.A week after the EEDC, Sharm el-Sheikh hosted anoth-

er crucial meeting of the League of Arab States, which willbe headed by Egypt in the coming term. One of the mostcritical outcomes of this Arab League session was the cre-ation of an Arab military joint force that will combine theefforts of all willing Arab countries to help stabilize thearea and fight terrorism.Sharm el-Sheikh has made History. We will all build the

future.

Viewpoint


ANIS A. ACLIMANDOSPresident, AmCham Egypt

SHARMTHE CHARM OF

In Brief

of a floating natural gas import terminal,which is scheduled to allow Egypt’s firstimports of LNG to begin in April. Thedeal comes on top of recent agreementsmade by Egypt’s state-owned gas compa-ny with global trading houses to supply49 LNG shipments over the next twoyears, a deal with Algeria’s Sonatrach tosupply six shipments and an agreementcurrently under negotiation with UK-based BP to supply 21 shipments.

No more visas at airport for individualsAs of May 15, independent foreigntourists and business travelers will nolonger be able to buy visas upon theirarrival in Egypt. In a circular datedMarch 13, Egypt’s Tourist Authority saidthat individual travelers would have toapply for visas at Egypt’s diplomatic mis-sions before they travel. Tour groups willstill be granted visas on arrival, with theassistance of the Egyptian tourist agen-cies arranging their trips. Security offi-cials told Reuters that the move is meantto give intelligence services more time toassess prospective visitors to the country.The move has drawn protests from mem-bers of Egypt’s tourist industry, such asthe Tourism Federation, which was nei-ther consulted nor informed in advanceof the new regulations. Although the bulkof visitors to Egypt do come with tourgroups, particularly those visiting theRed Sea, the move will affect indepen-dent cultural tourists and business travel-ers from places like North America,Russia, most of Europe, Australia, NewZealand, Korea and Japan, none of whompreviously needed to apply for visas inadvance. The new rules also come at atime when Egypt’s tourist industry isstruggling to recover from the twin blowsof the 2011 revolution and the 2013 over-throw of President Mohamed Morsi, bothof which saw tourism drop sharply. Theindustry began a fragile recovery lastyear but has been on a downturn sinceNovember. According to the latest fig-ures from state statistics agency CAP-MAS, 667,500 tourists arrived inJanuary, down from 781,602 inDecember.

Inflation acceleratesin FebruaryAnnual headline inflation rose to 10.56percent in February, up from 9.66 percentthe month before. Meanwhile, the month-ly rate accelerated to 1.86 percent, upfrom 0.99 percent in January. The CentralBank of Egypt attributes the monthlyincreases mostly to regulated items,which went up by 3.31 percent inFebruary. In particular, butane gas cylin-ders soared by 16.6 percent—shortageshave been a problem for months—andnew tobacco pricing guidelines increasedprices of local and imported tobacco by10.2 percent and 11.4 percent, respective-ly. Prices for fresh vegetables and otherfood items also increased, as did core CPI,which saw a monthly hike of 1.10 percentin February, compared to 0.52 percent inJanuary.

PMI hits 17-monthlow in FebruaryHSBC’s Purchasing Manager’s Index,which measures operating conditions forEgypt’s non-oil private sector, hit a 17-month low in February. The index fell to46.8 that month, down from 49.3 inJanuary and 51.4 in December. Readingsbelow 50 indicate deteriorating condi-tions. According to executives surveyed

for the index, producers are facingsharp declines in both orders and out-puts and rising costs due to the devalu-ation of the Egyptian pound. As aresult, companies said they wereemploying fewer workers.

Egypt to pay moreto foreign gas firmsIn a series of recent deals with multina-tional energy firms operating in Egypt,the Ministry of Petroleum has agreed topay higher prices for natural gas. Theministry announced it increased theamount it pays for gas produced in theDisouq concession in the Nile Delta to$3.50 per million British thermal units, up40 percent from the previous purchaseprice of $2.50 per million Btu. In return,the Egyptian unit of Germany-basedDEA, which operates the Disouq conces-sion, promised to increase its natural gasproduction rate from 145 million cubicfeet per day to 210 million cubic feet perday by this summer and to 300 millioncubic feet per day by the summer of 2016.In a separate agreement, the domestic off-take price for the long-awaited $12 billionWest Nile Delta offshore gas project ledby U.K.-based BP has been set at between$3 and $4.10 per thousand cubic feet,according to industry publication Platts.Egypt has priced expected shale gas pro-duced by Apache and Shell Egypt at

In Brief

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INDIVIDUAL TOURISTS TO EGYPT WILL NO LONGER BE ALLOWED TO BUY VISAS AT THE AIRPORT.


In Brief

Gov’t sets ambitiousfiscal goalsThe Ministry of Finance laid out an ambi-tious set of goals in its Pre-BudgetStatement for the 2015/16 Fiscal Year.The statement comes ahead of an officialdraft budget, which was scheduled to beready by April 1, 90 days ahead of thebeginning of the new fiscal year in July,although the continued absence of a par-liament leaves the exact process for dis-cussion and debate about the budgetunclear. The pre-budget statement doesnot include specific figures on anticipatedspending and revenue but does lay out theministry’s general goals, in particular itsaim of balancing growth-oriented policieswith fiscal discipline and measures to pro-tect Egypt’s most vulnerable citizens. Thegovernment’s macroeconomic goals aimfor a growth rate of 4.5 to 5 percent for2015/16, reaching 6 to 7 percent by2018/19; as well as a budget deficit of 9.5to 10 percent of GDP in 2015/16, down to8 to 8.5 percent by 2018/19. The ministryadded that it expects a deficit of 10.5 to 11percent of GDP this financial year com-pared to 12.8 percent in 2013/14. It alsoaims to bring public debt down to 91 or 92percent of GDP in fiscal 2015/16 anddown to 80 to 85 percent of GDP by2018/19. Debt is expected to reach 93 to94 percent of GDP in the current fiscalyear, compared to 95.5 percent of GDP in2013/14.

Income tax capped at 22.5 percentAs part of a package of reforms passed inadvance of the Egypt Economic

Development Conference in Sharm el-Sheikh, the Ministry of Financeannounced the introduction of a unified22.5 percent income tax. Executive regu-lations for the new tax code had not beenreleased as of press time, but once inplace, they will overturn a June 2014 deci-sion that imposed a 30-percent tax rate onbusinesses earning more than LE 10 mil-lion per year and individuals earning morethan LE 1 million annually. They will alsoroll back a 2013 decision that increasedthe top bracket for individuals and busi-nesses from 20 to 25 percent. At the time,tax increases were presented as necessarymeasures to narrow the deficit andachieve social justice. However, the intro-duction of a 22.5 percent tax cap has been

praised by analysts, who say it willencourage investment and job creationmore than compensating the treasury forany tax losses.

Egypt seals import dealwith Russia’s GazpromGazprom, the Russian gas giant, will pro-vide Egypt with 35 cargoes of liquefiednatural gas, according to a March 17announcement by the Ministry ofPetroleum. The shipments will be deliv-ered over a period of five years, beginningin the second half of this year. The Russia-Egypt deal has been in the works formonths, and the signing of the contractcame along with the long-awaited arrival

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OFFICIALS WANT TO BOOST GROWTH TO 5 PERCENT AND SLASH THE DEFICIT TO 10 PERCENT OF GDP.

In Brief

$5.45 per MMBtu, according to Reuters,which also reports that prices for offshoredevelopments could go as high as $6 perMMBtu, up from a previous cap of $2.65.These price increases go some waytoward meeting the demands for higherprices among international firms, whichneed to have sufficient motivation to putup the large amounts of capital necessaryto explore and extract Egypt’s natural gasresources, particularly in risky and expen-sive offshore fields.

BOP deficit hits $1 billionin first half of fiscal yearEgypt ran an overall balance of paymentsdeficit of $1 billion in the first half of the2014/15 financial year compared to a sur-plus of around $2 billion in the same peri-od the year before. “This attests to thecommitment and ability of the Egyptianeconomy to honor its external obligationson a timely basis,” declared a statementfrom the Central Bank, explaining that thewidening deficit was due largely to $3 bil-lion worth of payments for bonds and thereturn of CBE deposits. Meanwhile, thefigures show the current account deficityawned to $4.3 billion, up from $866 mil-lion the year before, an increase largelydriven by a $20 billion trade deficit. Netunrequited transfers fell as well, shrinkingto $12 billion as official transfers fell from$6.2 billion to $2.6 billion. Tourism

revenues helped achieve a services sur-plus of $3.9 billion, a marked improve-ment over the $463 million deficit record-ed at the same time last year, but notenough to push the current account intothe black. The capital and financialaccount saw net inflows of just $883.8million, compared to $3.2 billion in thesame period a year earlier. A small bumpin net foreign direct investment, up to $2.7billion from $2.1 billion the year before,was not enough to counterbalance a $2.1billion net outflow of portfolio investmentand a $525.5 million net outflow in CBEliabilities.

Suez Canal revenues down Egypt’s income from the Suez Canaldropped to $382 million in February,down from $434.8 million the monthbefore, reports Reuters. Despite themonthly decline, Canal Authority headMohab Mamish said he expects thatannual revenues will exceed LE 40 bil-lion. According to the State InformationService, Mamish added that LE 16 billionhas been spent so far on dredging opera-tions as part of the expansion plans for thecanal, which are scheduled to be complet-ed in August. Meanwhile, about 94.8 per-cent of the dry digging for the new canalis said to be finished since the projectlaunched last August. ■

Would you move to a new capital? Why orwhy not?

I like the Red Sea, and being close to it sounds appealing.But there are massive considerations. I own an advertisingfirm, and it’s important for me to stay close to my clients. Ialso don’t want to lose my employees because they can’t getto work. If all my clients went to the new capital but myemployees couldn’t follow, I think I would just open a secondoffice in the new capital with me and maybe one other aide.

Tarek Nadim, 49, business owner

Almost definitely not. I don’t think my company would closeits office in Cairo. So it makes zero sense to me to move to sucha faraway place while I have a job so close to where I live. Mywork revolves around focus groups and consumer surveys,and I believe our target market will mostly remain in Cairo.

Dina Abdel-Allah, 29, marketer

I would definitely relocate if I am still with the same compa-ny. I work for a shipping company in Suez, and I work there24 consecutive days out of the month. Then I travel back toCairo for a debriefing. My family lives in Cairo because thereare better services, schools and entertainment. But it’s a hec-tic lifestyle. A new capital where they promise it will be, andwith the services they say it will have, would be fantastic. Ijust hope I can afford to buy an apartment there.

Yassin El Rawy, 32, project manager

I wouldn’t want to live there, even if I could afford to. Cairowill always be Egypt’s central city, home to the majority ofEgyptians and therefore most of the businesses and services.Whether they like it or not, the government will have to con-tinue spending money on it. This new capital will be for veryrich people who can afford to move their businesses there.Right now I live in an informal home. Will the new capitalprovide us with a better alternative? That seems highlyunlikely. I also don’t think there will be opportunities therefor someone who sells flags and cheap posters. The busi-nesses and services there will cater to rich people.

Hassan Ramiz, 25, amateur painter and street peddler

That city will not be for people like me. We are fighting to getour salaries raised to the national minimum. From what I’veread and watched on the news, the new city will be for theelite, where they will live in complete isolation from the restof the country. They talk about moving the government overthere. Somehow, I don’t think they will move something likethe Mogamma, but they might move ministers’ offices andstaff who take the fat salaries.

Badria Rashid, 36, civil servant

I would definitely relocate there, if what they’re promisingcomes true. I am in the import-export business. So the clos-er I am to Egypt’s business center, the better. I currently liveand work in Mohandseen. The new capital will be, I’m sure,a breath a fresh air, with all those green, open spaces andparking facilities. I am sure it will have the best Internet inEgypt as well as unbelievably huge networking opportuni-ties. Also, the mockups of the architecture look stunning,unlike the dark grey concrete jungle that is Mohandeseen.

Tarek El Nashar, 41, importer/exporter

COMPILED BY TAMER HAFEZ


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■ Twitter to set up shop in Dubai Popular social media platformTwitter plans to open its first MiddleEast office in Dubai, aiming toimprove service in the Arab worldand tap into regional markets.According to Gulf Business, theannouncement came, fittingly, viaTwitter during the Arab Social MediaInfluencers Summit in Dubai lastmonth. “Twitter is coming to Dubai,”tweeted a company official. As ofMarch last, the California-basedmicroblogging platform had around5.8 million Arab world users, whoproduce an average of 17.2 milliontweets per day, according to the ArabSocial Media Report. That includesmany officials and government agen-cies, which often use the service tomake official announcements. In2013, as Twitter’s regional user baseexpanded, the company began sellingads. Twitter follows in the footstepsof U.S.-based social media compa-nies LinkedIn and Facebook, whichhave both opened Dubai offices.

■ Corruption trial begins forAlgerian oil officialsAfter a five-year delay, officials fromAlgerian state-owned energy firmSonatrach went on trial March 15 ona raft of charges including corrup-tion, embezzlement of public funds,money laundering, inflating contractprices and taking millions of dollarsin bribes in exchange for awardingcontracts to foreign firms. However,the trial was postponed after morethan a third of the 108 witnessesfailed to show up. Corruption inAlgeria’s oil sector came to light in2009 after an investigation byAlgeria’s Department of Intelligenceand Security. Former Sonatrach CEOMohamed Mesian and two of hissons are among the 19 defendants inthe case. Italian oil company Saipemand Germany's Funkwerk were alsoimplicated. A related 2010 investiga-tion led to charges being filed againstthen-energy minister Chakib Kheliland his close associates, but theyhave yet to stand trial. A former

Sonatrach executive told theAssociated Press that Algeria loses $3to $6 billion annually to corruption inthe oil sector.

■ Saudi Arabia declared world’sbiggest arms importerWith its weapons spending increasingto $6.5 billion last year, Saudi Arabiasurpassed India as the world’s biggestarms importer. According to esti-mates by arms trade analyst IHS, thefigure will likely rise to $9.8 billionin 2015, amounting to almost 15 per-cent of the world’s total weaponsimports. An analysis by theAssociated Press attributes theincreased spending to political frac-tures across the region, the rise of theIslamic State, concerns about sectari-an conflict and Iran’s rising influenceand a desire to reinforce ties with theUnited States, which is the biggestbeneficiary of Middle East arms con-tracts. On March 26, Saudi Arabiaand its regional allies launched airstrikes against rebels in Yemen.


Region Notes

Map intended for illustrative purposes only and may not accuratelydepict national boundaries or disputed territories.

In Depth


In Depth


niche’s potential. Last March, as thenGeneral Abdel Fattah el-Sisi prepared torun for president, officials announcedthey would partner with Arabtec, theEmirati construction firm behind the 23-storey luxury Nile Towers in Maadi, tobuild one million affordable homes “forEgypt’s youth.” But with basic-calcula-tions on the LE 280 billion project indi-cating that homes would work out to awholesale price of LE 280,000,observers questioned at the time justhow affordable the homes would end upbeing. Then in November, the housingministry launched Dar Misr, a projectthat aims to build 150,000 middle-income homes on the outskirts of satel-lite communities like 6 October and 10Ramadan cities. Officials say the projectis meant to set a market standard forEgypt’s booming middle-income hous-ing market, ultimately bringing pricesmore in line with what middle-incomeEgyptians can afford. “These apart-ments are sold at cost,” explainsFarahat. “The price of Dar Misr, in par-ticular, will be a benchmark for privatemiddle-income developers.” The news of Dar Misr was music to

Amar’s ears when he heard it sixmonths ago, even though construction,estimated to take 18 months, hasn’t evenstarted yet. But his hopes quickly dissi-pated when the housing ministryannounced the prices—LE 255,000 fora 100-square-meter, two-bedroom inBadr City to LE 550,000 for a 130-square-meter three-bedroom, two-bath-room flat in New Cairo. “I am sure thegovernment was not targeting anyonewho was standing in line when we werebuying the application from the Housingand Development Bank,” says Amar bit-terly. Applicants pay LE 200 to enter thelottery for the units He says the pricesare far out of the range of someoneattempting to support a family on hissalary, which nonetheless falls squarelywithin the range the government definesof middle income. That is anyone whoearns between LE 3,000 and LE 10,000per month, regardless of whetherthey’re a singleton or supporting a fam-ily of five. “These prices are definitely anotch or two above the means of the

average middle-class Egyptian,” agreesAhmed Anis, former head of theEgyptian Association for Real EstateAppraisers. Nonetheless, according to the housing

ministry’s Farahat, the aim of Dar Misris to undercut market housing prices by30 to 40 percent. “Dar Misr is targetingpeople who have decent jobs and sav-ings. It is their right to own property andwe are offering them this chance,” saysFarahat, of the housing ministry. Butindustry analysts say Dar Misr’s pricingis not much lower than what’s alreadyavailable on the lower-end of the hous-ing market. The problem is that leavespeople like Amar out in the cold.Meanwhile, developers will likely waitto see whether the Dar Misr apartmentsare nice enough to stack up as genuinecompetition—which could drive downprices across the board, as the govern-ment hopes. Another possible scenario,however, is that Dar Misr could inad-vertently drive housing costs up instead,says Ahmed El-Zeiny, head of the con-struction materials division at the CairoChamber of Commerce. He predicts that“current prices will receive a noticeablehike,” simply because developers canoffer a comparable product to the gov-ernment’s, but with much less hassle. Though Egyptians have a constitu-

tionally guaranteed right to affordablehousing since 1952, the reality is thatthe government has a pretty dismalrecord when it comes to providing it.Most people of limited means are forcedto find a place to live however theycan—often by building informal, illegalsettlements on land they don’t own. Inresponse, the pattern has been that offi-cials periodically make high-mindeddeclarations about housing the poorwhile simultaneously treating informalsettlements like a social blight. Beforethe 2011 revolution, the two most recentsuch projects were the National HousingProgram, started in 2005 and betterknown as Iskan Mubarak, and the SocialHousing Project, otherwise known asthe “million unit” project. Both havefallen well short of delivering homes atthe pace and quality promised.Affordable housing advocates say that

Gamal Amar wears adiscouraged expres-sion as he sits in aMaadi coffee shopporing over realestate brochures. At

42, Amar and his wife and two kidsshare a crowded, 200-square-meter flatin Zahraa el-Maadi with his brother andhis family. But Amar dreams of one dayowning his own place. “My kids havenow come to an age where we need tohave a separate home,” he says. Overthe years, he has saved up enough of hisLE 7,200-a-month salary as a clerk at alocal law firm that he thinks he will soonbe able to afford to buy a modest flat. “Imight require one or two more years of

saving before I can afford one of thesecheaper apartments. I have been savingfor 11 years now. So what’s another oneor two?”As Egypt’s population has tripled in

the last half century to nearly 90 million,the vast majority of its citizens continueto live crammed together in the NileValley, on just five percent of the coun-try’s land. While the private sector hasproduced a glut of luxury apartmentsand upscale developments, there are fewoptions for ordinary working people likeAmar. Seeking to address Cairo’s chron-ic shortage of affordable housing, thegovernment has recently announcedseveral splashy mega-developments. Inparticular, these projects purport to fill

the need for so-called medium-incomehousing among Egyptians who earn toomuch to qualify for state-subsidizeddevelopments for the poor but can’tafford to pay market-rate real estateprices. “There is a massive gap in themiddle-income segment,” says MagdyFarahat, vice president of the housingministry’s New Urban CommunitiesAuthority. “The private sector has beenmoving more upmarket and demandingunreasonably high prices. We had tointervene to bring balance to the marketand create feasible alternatives for themiddle-income class.” The government isn’t the only one to

recognize the need for middle-incomehousing. Private developers, too, see the

REAL ESTATE

AFFORDABLE HOUSING NOTSO AFFORDABLE FOR MOST BY TAMER HAFEZ


In Depth

many of those units that were built wereshoddily constructed or lacked basicamenities like water connections. Moreover, much of the government’s

affordable housing efforts since 2004have targeted low-income households—individuals who make LE 1,250 or lessand families making a maximum of LE3,000—who are eligible to apply forsubsidized, low-cost homes and financ-ing via the government’s MortgageFinance Fund. Those unable to qualifyfor government housing because theirincome exceeded the fund’s threshold—and those unable to prove their earningsbecause they were among the manyEgyptians who earn a living informal-ly—often headed to new satellite citiessuch as 6 October City and SheikhZayed, where land was relatively cheap,and developers were catering to indus-trial workers and other middle-incomeEgyptians. “This is what created theconcept of new cities, and with it, realdevelopment started,” said Salah Hegab,a freelance architect and landscaper andthe former head of the EgyptianBusinessmen Association’s constructioncommittee. Real estate prices inched upward as

the economy picked up steam. Coupledwith corruption and lax building regula-tions, fixed-price plots intended to spuraffordable development and alleviatecrowding in the capital were oftenbought and simply flipped at a profit afew years later, undeveloped. “It becamea trade” says Hegab. The real estateboom increasingly left ordinaryEgyptians behind. The World Bank clas-sifies Egypt as a low-middle incomenation, with a per capita GDP of lessthan LE 12,000. CAPMAS maintainsthat the average Egyptian income isaround LE 3,000. By the World Bank’scalculations, the gross national incomeper capita— which divides the netincome from products and servicesminus taxes of the entire economy bythe population and is an indication of theaverage income of citizens—was LE1,960 per month in 2013. By either def-inition, the housing prices of Dar Misrwould appear out of range for the aver-age Egyptian earner.

According to the housing ministry, theproject will consist of gated compoundswith green areas, garages and servicesincluding supermarkets, clinics andschools. Minister of Housing MostafaMadbouly told reporters that it mayeven have swimming pools. Some41,000 Egyptians entered the drawingfor Dar Misr’s first 30,000 units, whichrequired a 20 percent down payment.Madbouly promised that applicants whodidn’t get a home in the first round willautomatically get apartments in the pro-ject’s second phase, to be announcedthis month. However, with proof ofincome requirements relatively lax,some say that the project is likely to endup mostly benefiting traders and specu-lators—or others who can clearly affordto buy market-rate homes—rather thanactual middle-income Egyptians. “Whatis wrong with this project is that themarketing blurb and government speakdon’t match what is happening on theground,” says Anis, formerly of the realestate industry group.

Farahat acknowledges that while ahandful of speculators may have slippedthrough the cracks, “We have deliberate-ly made prices and payment conditionsexpensive to prevent traders from buy-ing or applying for multiple units andtherefore depriving someone who reallyneeds the unit from getting it.” But EhabGalal, project manager at the Sawa Co.for Real Estate Marketing, says DarMisr is in fact attracting a segment of thepopulation that’s above average, onethat’s “choosy about where they want tolive.” The more expensive units inbooming New Cairo, for example, got24,200 applicants vying for 7,000 units.That community has “a lot of potential

for growth and for house prices toincrease,” explains Galal. On the otherhand, more established, slower-growthcommunities like 6 October City sawjust 6,000 applicants for 12,000 avail-able units. “Dar Misr seems to be moreabout people capitalizing on opportuni-ties than having a real need,” says Galal. Whether government-built units

affect the pricing of private develop-ments will depend on whether develop-ers perceive Dar Misr as a competitor,says Jamal Afifi, managing director ofDallah for Real Estate Investments. Ifthe project lives up to the promisesmade by the housing ministry, then pri-vate developers building middle-incomehomes may have no option but to lowertheir prices to compete. “Middle incomehousing pricing will definitely cool off,”says Afifi, who believes the projectcould force developers to lower theirprices by LE 300 to LE 400 per meter. Meanwhile, the much-touted Arabtec

project that promised to begin building amillion middle-income homes beforethe end of 2014 had been suspended asof early March. According to the origi-nal deal, the military was to donate 160million square meters of land for theproject, mostly on the outskirts of Cairo,while mortgages and construction wereto be financed with loans “fromEgyptian and foreign banks.” The gov-ernment changed those terms mid-stream, however, saying Arabtec mustobtain all the funding from abroad. Italso changed its mind about giving awaythe land, saying that it would sell it tothe developer via NUCA and the hous-ing authority. Reporters quoted housingministry sources in mid-March sayingthat the parties had arrived at agree-ments on some of the disputed terms,but at press time, no formal new dealhad been announced. In the meantime, there remains an

enormous unfilled need among theAmars of Egypt—working Egyptianswho earn too much to qualify for low-income housing but can’t afford DarMisr. “This segment of society, whatev-er it might be called,” says Afifi, needspartial housing subsidies from the gov-ernment rather than at-cost prices.” ■

“THE MARKETINGBLURB AND GOVERN-MENT SPEAK DON’T

MATCH WHAT IS HAPPENING ON THE

GROUND.”

BUSIN

ESS M

ONTH

LY A

RCHI

VES


After 15 years in Sheikh ZayedCity, 51-year-old electricianShoukry Hassan has estab-lished a good reputation

among his clients. His small shop sellswire, bulbs and other electrical goods andemploys three technicians and a sales-man. In 2011, Hassan began catering tolocal large-scale businesses as well.“From a business perspective, I can’tcomplain. Life has been good,” he says. Ithas been very good in that Hassan’s shop,like countless other Egyptian small busi-nesses, is unregistered, meaning he does-n’t pay any tax. Even when he deals withlarge, formal businesses he escapes pay-ing a tariff on his income, thanks to aloophole in the sales tax law.Egypt’s imminent switch to a value-

added tax, or VAT, could change the gamefor Hassan and lots of informal outfits

like his. Under a VAT system, sellers paytax on their profits at every stage in thesupply chain, from raw materials to con-sumer goods. Unlike Egypt’s current 10percent sales tax, which is assessed basedon the sale price, it’s a consumption taxbased on the “value added” at each stageof production. Currently awaiting presidential approval,the VAT is expected to take effect startingin fiscal 2015/16 and the Tax Authorityexpects it to triple the revenue that comesfrom the current sales tax. Since the1990s, institutions like the InternationalMonetary Fund have been pushing forEgypt to adopt the value-added tax,which is used by virtually every majoreconomy in the world with the notableexception of the United States. With morethan 150 countries using a VAT, theEgyptian government hopes that moving

to a compatible taxation system will alsomake cross-border investment and tradeeasier.The business community largely sees

VAT as an evolution of the current salestax system, which has been in place for 25years, and is pushing for its implementa-tion. However, such a wide-scale conver-sion is bound to create noticeablechanges. “The application of VAT willimpact the market is a very profound wayin terms of how much things will cost aswell as business dealings among formaland informal businesses alike,” says HalaEl Ghawy, an economics professor atModern Academy in Maadi.For the VAT to work as intended, each

link in the supply chain must be registeredwith the Tax Authority and present a validreceipt for transactions. “Legally, I am notobliged to register,” says Hassan, whose

TAXES

MULLING THE PROSAND CONS OF THE VATBY TAMER HAFEZ

In DepthIn Depth


revenue is much less than the LE 1 mil-lion minimum tax threshold set by thecurrently proposed VAT law. But an audi-tor told him that businesses that arerequired to pay VAT may not want to dobusiness with unregistered companiesunder the new system, because theauthority will not recognize their receipts.Hassan fears if he registers with the TaxAuthority, however, he will have to raisehis prices up to cover his tax burden. “Iwould therefore lose many of my regularclients in favor of a few more lucrativeones,” he says. A comprehensive VAT would greatly

simplify the sales tax structure, whichhas been changed over the years in an adhoc fashion to satisfy the demands ofbusinesses and consumers. Presently, inaddition to exemptions for things likefood staples and books, there are a con-fusing array of special tax rates. Thislabyrinthine system leaves plenty ofopportunities for would-be tax evadersto commit fraud. “Overall, the cost ofliving will increase just because peopleare paying taxes on stuff that was nevertaxed in the past,” says Ghawy. In earlyMarch, Mostafa Abdel Kader, the newly-appointed head of the Tax Authority, saidthat to protect the poor from VAT-relatedprice hikes, the authority is exemptingcertain products and services—forexample, perishable goods, publichealthcare and education. Assuming the VAT rate stays at 10 per-

cent, the same as the current sales tax,products that are currently taxable shouldnot increase in price, according toMohamed Al Bahi, head of the Federationof Industries’ taxation committee. “Therehas been a lot of rumors about this hap-pening,” he says. “Applying this tax should actually

lower prices,” says Osama Abdel Khalik,a finance professor at Ain ShamsUniversity. That’s because the sum of thetaxes remitted at each stage of productionis equal to the tax paid by the end con-sumer for the product or service. The gov-ernment collects its 10 percent, but inincrements across the supply chain. Witha straight sales tax, the entire bill is taxedevery time there is a transaction. “Underthe VAT, any price increase will most like-

ly come down to traders’ greed or marketmanipulation from producers,” saysAbdel Khalik. “That’s where the govern-ment needs to step in.” The VAT is also expected to push more

businesses onto the tax rolls. VAT-payingbusinesses will only want to deal withother legally registered businesses,because their receipts for purchases, “areas good as cash,” says Bahi. “This is theway toward achieving equality. Everyonewill be operating in the formal sector.”According to government forecasts,annual VAT revenue is expected to reachLE 14 billion to LE 20 billion comparedto around LE 6 billion currently.

However, factory owners have reserva-tions about the VAT’s proposed minimumtax threshold, which says that only com-panies earning at least LE 1 million inannual revenue are liable. Under the cur-rent system, the minimum sales thresholdis LE 54,000 for producers and LE150,000 for traders. The Tax Authority’srationale is that companies with annualrevenue of less than LE 1 million usuallycater to the lower end of the market,which is in line with their policy ofexempting products targeting low andmiddle-income consumers. MohamedGenedy, the Industrial Investors Unionchairman, says that the minimum revenuerequirement actually creates a biggerplaying field for informal businesses toexist and cooperate with each other. “I amsure this is not the intention of the statewhen it decided it wanted to switch toVAT,” he saysThe informal sector is estimated to

comprise at least 40 percent of the econ-omy, and those companies are complete-ly self-sufficient, says Bahi. The LE 1million revenue minimum means thatthe overwhelming majority of SMEs—which make up the backbone of Egypt’s

economy—will have legal access to theinformal sector. “This will allow them toget much cheaper inputs than their for-mal competitors,” says Bahi. Genedy says this creates unfair compe-

tition because SMEs don’t necessarily tar-get the low or middle income segment.“The smaller firms will have a legaladvantage over their registered competi-tion,” he notes. “This is not good forEgypt’s business environment.” Bahithinks that the high minimum tax thresh-old could encourage businesses to forgereceipts to remain below it. “Receipt trad-ing is already used by some small pro-ducers to pay fewer taxes,” he saysHassan, the Sheikh Zayed electrician,

will have to choose between his high-pay-ing but infrequent clients and the morefrequent small jobs that generate littlecash. “The lower end of the market is veryprice sensitive. If I charge more because Ipay VAT, that part of the market will notcome to me,” says Hassan. “The big play-ers will want me to give them taxablereceipts. That means I would have to reg-ister as a formal business and pay VAT.It’s one administrative hassle I prefer tostay away from.” Egypt’s lack of a receiptculture is a sticking point for implement-ing the VAT, and Hassan points out thatmany small businesses do providereceipts, even if it’s only to track theirexpenses.Bahi predicts that this will change as

the VAT takes effect. “Other than educat-ing the public about the importance ofreceipts, we have to change the entireconcept upon which people are taxed inEgypt,” says Bahi, who explains that cus-tomers need to be able to get tax rebates ifthey have receipts in their hands. “Thisway everyone will demand a receipt whenbuying a product or using a service. Andbusiness that don’t offer them will simplynot sell.”Despite these concerns, the business

community believes that the VAT is amust, especially as the government triesto attract foreign investors from nationswith similar tax systems. “The idea ofVAT will definitely work in tandem withthe government’s attempts to attract FDIand the new investment law,” says AbdelKhalik. ■

“THIS IS THE WAYTOWARDS ACHIEVINGEQUALITY. EVERYONE

WILL BE OPERATING INTHE PRIVATE SECTOR.”

Last month’s three-day economic summit in Sharm el-Sheikh nettedEgypt some $38.2 billion in deals and potential deals worth $92 bil-lion in addition to $12.5 billion from our deep-pocketed friends in theGulf. Most of the money was pledged by multi-nationals like BP,Siemens and General Electric and was concentrated heavily in theenergy sector, with real estate and infrastructure projects also drawingsignificant interest. At the close of the three-day conference, Egypt hadsuccessfully marketed itself to the world as a business-friendly desti-nation on the rise. Despite near-daily media reports of low-impactexplosives in and around Cairo in recent months, around 2,000 dele-gates from 112 nations, including 30 heads of state and numerousexecutives attended the conference. In his closing speech, PresidentAbdel Fattah el-Sisi promised to make the summit an annual event andinvited everyone to visit again next year.

Business Monthly – April 2015 I 3736 I Business Monthly – April 2015

COVER STORY

Cleaning up

38 I Business Monthly – April 2015 Business Monthly – April 2015 I 39

North Coast/ South MarinaAs part of the government’s plans todevelop the Mediterranean coastline,housing minister Mostafa Madboulysigned an MOU with Emirati tycoonMohamed Alabbar to develop theSouth Marina project on the NorthCoast. The $3 billion project is sup-posed to create 14,000 jobs.

Western DesertEni, the Italian oil giant, signed an initialdeal with the Egyptian government toinvest some $5 billion over the comingfour to five years. Oil minister Sherif Ismailsaid the investments will span concessionsin the Mediterranean, the Nile Delta andSinai as well as the Western Desert andcould generate some 900 million standardcubic feet of natural gas. A subsidiary ofENAP, Chile’s state-owned energy firm,also said it would spend $30 million onbuilding a 90-kilometer gas pipeline.

BeheiraBeyti, the milk andjuice company ownedby PepsiCo and SaudiArabia’s Al-Marai, willinvest $525 million tobuild a new factory inthe governorate. U.S.-based PepsiCo also saidit would invest $500million to expand itsEgyptian operations in2015.

CairoEmirati mall operator Majid Al Futtaim has committed to spending some LE5 billion to build eight new malls in Egypt over the next five years, four innew residential developments the government has yet to build and four ingreater Cairo. Coca Cola said it would spend $500 million to expand itsmanufacturing, distribution, sales and marketing capabilities.

New CairoSome $6 billion in real estate projects are planned for the satel-lite city by developers like Egypt’s Palm Hills and MountainView, Saudi Arabia’s Sisban and UAE-based Bloom Properties.

6 October CityAs well as an MOU between Palm Hills and Emirati investmentoutfit Aabar to sponsor a $19.7 billion real estate development,6 October City may soon be getting a $4-billion “tourist town,”thanks to a preliminary deal among a consortium of Arab firms.

Upper Egypt German industrial giant Siemens agreed toinvest $10.5 billion in wind farms and powerplants. The centerpiece of its plans is a 4.4gigawatt combined-cycle power plant in BeniSuef. Together, the projects should createaround 1,000 jobs and 500 apprenticeships,says Siemens CEO Joe Kaeser.

Red Sea coastA consortium led by Nassef Sawiris’ OrascomConstruction plans to build a 3,000-megawattcoal-fired power plant near El Hamrawein Port.Saudi Arabia’s ACWA Power has also agreed tobuild a power plant on the Red Sea, an invest-ment worth $3 billion.

Sharm el-SheikhA $450-million expansion of the Sharm el-Sheikh International Airport aims to nearlydouble its capacity to 18 million passen-gers annually by 2025, which would makeit Africa’s third-biggest airport after those ofCairo and Johannesburg, South Africa.

Damietta The UAE’s al-Sweidan Group agreed to invest$6 billion in the government’s proposed effortto turn Damietta into a global grain tradinghub and the Suez Canal megaproject.

Suez Canal U.S.-based General Electric will invest $200million in a manufacturing and training facilityin the proposed economic zone around thenewly-renovated Suez Canal. The firm has alsodelivered 34 of 46 gas turbines as part of a $1.9billion deal to boost Egypt’s power capacity.

Ain SokhnaEgypt’s transport ministry signed a deal withDubai Ports International to build a $415-mil-lion station for liquid bulk on 400,000 squaremeters.

AssiutSaudi Arabia’s Islamic Development Bankwill fund a $198 million petroleum refineryfor the production of high-level octane inone of six financing agreements worth atotal of $3.875 billion.

West Nile DeltaBP plans to sink $12 billion over fouryears—the single biggest foreign investmentin Egypt’s history—into developing 5 trillioncubic feet of gas resources and 55 millionbarrels of condensates in the West Nile Deltaas well as the exploration of the East NileDelta and the Gulf of Suez. Production is setto start in 2017 and could reach 1.2 cubicfeet of gas daily, according to BP.

AlexandriaAmong some $2.2 billion worthof planned ports and railwayprojects around the country,China’s state-owned AviationIndustry Corp. will finance andoperate a $700 million electrictrain from Alexandria to AbuQir. The 22-kilometer routepromises to move an estimated1.5 million passengers monthly.

Cairo, which has been the country’s seatof power since 969 A.D., when Fatimidinvaders built an enclosure for their newmosques and palaces that they called al-Qahera. More than a millennium later, thesprawling megacity is bursting at theseams. Cairo’s 18 million current resi-dents are expected to grow to 40 millionby 2050. Something must be done torelieve the burden on what is already oneof the densest cities on the planet.However, past efforts to relieve Cairo’schronic congestion by building satellitecities in the desert have not been especial-ly successful. In theory, moving peopleout of Cairo makes sense in a countrywhere 96 percent of the population liveson 4 percent of the land. In practice, how-ever, a dearth of jobs or any viable publictransport to these planned desert commu-nities meant that only people with themeans to own a car could reasonably livethere. As a result, places like 6 OctoberCity and New Cairo still house only afraction of the millions of Cairenes whowere originally envisioned to inhabitthese municipalities. It’s a reality that

seemed to escape investment min-ister Ashraf Salman last monthwhen he triumphantly proclaimedthe new capital “the new NewCairo.” Urban planners are skeptical

about the idea. David Sims, aCairo-based city planner, wonders

about the infrastructure that would benecessary to support such a mammothcity. “It’s more like a scripted media eventthan a serious proposal, reflecting thecurrent government’s obsession with for-eign, Gulf investments somehow comingto Egypt’s rescue,” he tells the AssociatedPress. Others say that a shimmeringdesert city modeled on Dubai isn’t appro-priate in Egypt, where 42 percent of thepopulation are poor. Moreover, building ashiny new capital would inevitably suckmuch-needed resources from the old one,says AUC Professor Khaled Fahmy onthe popular urban planning blog,Cairobserver. Even if some 5 to 7 millionCairenes do in fact relocate to the newcapital, he writes, “What will happen tothe rest of us?” But Dan Ringelstein of Skidmore,

Owings & Merrill, the American archi-tectural firm behind the design of thenew capital, told Mada Masr that “Wetried to make sure that, whatever we do,the new city is completely connected tocentral Cairo, obviously through trans-port links, but more importantly in termsof character.” He added he welcomedpeople’s feedback on the new city andstressed it was not meant to detract fromthe old capital. “It is meant to be anextension of Cairo, part of its naturalprogression to the east. It is not meant toreplace it.”

RACHEL SCHEIER


EEDC BY THE NUMBERS

EGYPTIANRENAISSANCEOR DESERTMIRAGE?

“WE ARE BEHIND, AND THOSEWHO ARE LATE MUST EITHERSPEED-WALK OR RUN…EVEN

RUNNING WILL NOT BEENOUGH IN OUR CASE.”

PRESIDENT SISI

Imagine a sleek, well-plannednew capital city that’s sustain-able, pedestrian-friendly andfilled with well-maintained gar-dens and “mixed-use publicsquares.” It would offer a central

park twice as big as New York City’s anda theme park four times the size ofDisneyland. There would be shoppingmalls, efficient public transport, and ofcourse, plenty of well-paying, 21st centu-ry jobs. People from all walks of lifewould dwell harmoniously in leafy,diverse neighborhoods. In other words, imagine a city that’s

everything Cairo isn’t. That’s preciselywhat President Abdel Fattah el-Sisi’s gov-

ernment envisions with its megaproject tooutdo all megaprojects—a brand newgleaming capital built from scratch onsome 700 square kilometers of emptydesert somewhere between the currentCairo and the Suez Canal. Estimated at$45 billion, The Capital Cairo, as it’sbeing called for now, promises 21 resi-dential districts, 2,000 schools, 663 hospi-tals and clinics, 1,250 mosques andchurches and housing for up to 7 millionresidents. In terms of population, thatwould make it the biggest “planned” cap-ital ever built, “nearly as large asIslamabad (population: an estimated 1.8million), Brasilia (2.8 million), andCanberra (380,000) put together,” reportsThe Guardian.

The project is being put together byCapital City Partners, a real estate fundled by Dubai businessman MohamedAlabbar, who built the world’s tallest sky-scraper, the Burj Khalifa. “It’s a naturalextension for the city of Cairo,” Alabbartold the BBC, adding that the new globalcity would breed “confidence” and“pride” in Egyptians. A slick new websitepromoting the project touts it as “the cat-alyst for an Egyptian renaissance.” At therequest of Sisi, the initial 10-year time-frame for the project has been acceleratedto five years, a goal urban planners agreeis wildly ambitious even under the mostoptimistic of scenarios. For years, Egyptian officials have tried

to tackle the problem of overburdened

$130 billion Outside estimate of the total dollar value of investment deals and grant agreements signed or announced during the Egypt EconomicDevelopment Conference

$200 to $200 billion How much President Abdel Fattah el-Sisi estimates Egypt needs to spark a true economic turnaround

$35.5 billion Total amount Saudi Arabia, Kuwait and the United Arab Emirates committed to Egypt in oil shipments, cash grants and deposits sincePresident Mohamed Morsi’s ouster in mid-2013

Third In what place Egypt’s benchmark EGX 30 ranked globally in terms of performance in 2014

$4 billion Amount of FDI Egypt brought in during the last fiscal year

$18 billion Amount of FDI the government aims to bring in annually by 2018

60 Percentage of foreign investment that ends up in Egypt’s petroleum sector

10 Percentage of Egypt’s total tax revenue that’s contributed by corporate income tax

4,300 Kilometers of new roads the government announced it will pave to help stimulate the economy

1,000 Number of suits and ties South Sinai Governor Khaled Fouda gave out to taxi and minibus drivers ahead of the EgyptEconomic Development Conference

45 Percentage increase in March of the average hotel occupancy rate in Sharm el-Sheikh

19 Number of times President Abdel Fattah el-Sisi’s opening speech was interrupted by applause


Egypt’s economic future is not driven byany government, U.S. Secretary ofState John Kerry told a packed hotelballroom at a March 13 AmChambreakfast meeting, “Egypt-U.S.Relations: Investing in the Future” at

the three-day economic summit in Sharm el-Sheikh.“It’s the private sector, it’s the innovators, it’s theentrepreneurs, it’s people who are willing to put theircapital into an idea and let that idea blossom by virtueof its acceptance in the marketplace and all that thatthen brings in terms of jobs, prosperity, opportunity,education—the next generation doing better,” saidKerry. Speaking before an audience of about 450 business

leaders, Kerry brought a message of bilateral cooper-ation, thanking event co-organizers AmCham Egypt,the U.S. Chamber of Commerce, the Egypt-U.S.

Business Council and the U.S.-Egypt BusinessCouncil “for their belief in this formula and in theability of the private sector to make an enormous dif-ference,” said Kerry, who was the ranking official inthe 100-person American delegation attending theeconomic conference.Wisely channeled, “private-sector engagement cre-

ates growth that is sustainable,” Kerry said.Sustainability, he added, “lifts living standards, ithelps build bridges to communities that have for toolong been left behind. It’s why I have always said thatwe must keep in mind this synergy— symbiosis, ifyou will—between the private sector and governmenttoday, if government today is doing its job properly.”Kerry outlined specific measures the government can

take “to improve and sustain a welcoming investmentclimate.” In addition to bringing back the one-stop shopto ease the registration process for businesses, Egypt

needs a strong bankruptcy law and better protections ofintellectual property, said the U.S. secretary of state.The latter is “not a luxury in today’s global market-place,” he said. “They are essential to being able tobuild confidence and attract capital.”“The more inclusive and the more diverse and the

more rules-based and accountable the political processis, the greater confidence the business community willhave,” Kerry added. “More than ever, trade, innova-tion, investment are not just the principal engines of astrong economy; they’re the principal engines of astrong society.”Above all, Kerry said, “Entrepreneurs have got to be

empowered to create jobs and grow their businesses.Egypt boasts a lot of very capable entrepreneurs; I’vemet many of them. Too many are still in the diaspora.They need to come back.”The job of the secretary of state “is to encourage

investment and help break down the barriers to thebuilding of confidence that is essential for the move-ment of capital,” Kerry said. “We want to promotearound the clock shared prosperity in Egypt and acrossthe region, but particularly, I say, in Egypt.”To that end, Kerry pointed to the U.S. Chamber of

Commerce-sponsored trade delegation that visited last

November, bringing some 160 CEOs and 70 compa-nies. Egypt’s foreign ministry also announced afterKerry’s meeting with Minister Sameh Shoukry thatanother U.S. delegation of government officials andprivate-sector companies would be visiting Egypt tofurther strengthen the economic, commercial andinvestor relations between the two countries.Stressing the country’s appeal to investors, Kerry

noted: “Egypt has always had an extraordinary busi-ness corps. Egypt has great capacity. This is not some-thing new. In addition, Egypt has always had a vibrantcivil society. And it has been there for the hub ofthinking, of progress, of energy, of direction in thisregion—not to mention the fact that it represents aquarter of the population of the Arab world. It hasalways, in my judgment, had the ability to demon-strate entrepreneurial energy.”Kerry warned his audience not to take a wait-and-see

attitude toward investing. “You have to commit to makecertain that we’re attracting capital, that we’re investingin the future,” he said. “Because the more jobs that arecreated, the more people begin to see the movementtowards that future, the more opportunities there are forthose young people, the faster all the other things will betaken care of, and the faster things will turn around.”

Power of the Private Sector INVESTMENT


Market Watch

Capital Markets

Egyptian price indices - EGX 30

EGX 30 9726

Egyptian price indices - EGX 70

EGX 70 558

Selected sector performance


Stock Analysis

Ahead of Egypt’s long-awaited economic conference inSharm el-Sheikh, the market cut its gains for the yearin the face of declining liquidity. While the bench-

mark EGX 30 slipped slightly, dropping by 0.6 percent duringthe period from Feb. 15 to March 15, the EGX 70 and the EGX100 dropped by 6.9 percent and 4.3 percent, respectively.Declines outnumbered advances by a ratio of 3-to-1.Obviously, the market is realizing that despite the much-hypedeconomic summit and billions of dollars’ worth of projects inthe pipeline, investments are unlikely to flow in right away.Most of the planned projects are of a long-term nature andwhich will take years to implement. A case in point is Egypt’snew planned capital east of Cairo, the investment cost ofwhich is estimated at $45 billion over five to seven years.That said, the EGX 30 got a boost from CIB, its largest com-

ponent comprising around a third of its value. The bank’s stockwas up another 4.9 percent in the period to LE 58.38. Banksshould be among the first firms to enjoy the fruits of the EgyptEconomic Development Conference. Indeed, shares of theExport Development Bank of Egypt (up 6.4 percent to LE10.54), NBK Egypt (up 3.8 percent to LE 23.25), EgyptianGulf Bank (up 3.3 percent to $1.27) and Faisal Islamic Bankof Egypt (up 2.5 percent to $7.08) all got a bump.

Meanwhile, Egypt’s 2014 earnings season continued withmixed performances. Some companies have reported better-than-expected results, while others missed analyst estimates.Arabian Cement posted an 11 percent decline in year-over-year earnings on one-offs but still beat the analyst consensusby 26 percent. The stock dropped 6.7 percent to LE 17.29.EFG Hermes posted its 2014 earnings as well, posting a prof-it of LE 538 million compared to a loss of LE 540 million lastyear, thanks to its investment banking operations. The stockclimbed 3.1 percent to LE 17.46. On the other hand, OTMTreported a loss of LE 62 million, falling short of the consensus.Similarly, Telecom Egypt (TE) posted 57 percent lower earn-ings than the previous year, missing the consensus by morethan 40 percent. While OTMT shares slipped 2.4 percent toLE 1.23, TE’s declined 5.8 percent to LE 11.27.The market is witnessing some movement involving capital

increases, mergers and acquisitions and new listings. GB Autoplans to raise LE 960 million in April, while Pioneers Holdingfinally won the takeover bid for Arab Dairy, while Edita for FoodIndustries will stage a LE 2-billion IPO. However, investorsseem to be wary of being overly optimistic about the outcome ofthe conference A weaker pound could be a deterrent for some for-eign investors, but it could also lure in those looking for bargains.

Raya Holding, once merely a mobile phone reseller,has rapidly diversified itself over the past few years.Having added call centers, it went on to branch intorecycling and logistics. More recently, the companysaid it is in the process of conducting financial andtechnical studies on a prospective foods factory; afeasibility study will be presented to the board indue time. Meanwhile, Raya Holding stock jumped13 percent in the last period, from LE 5.48 to LE6.19 with more than 3.5 million shares worth LE 21million changing hands.

Raya HoldingIN THE SPOTLIGHT

Market pulls back in run-up to economic summit


BANKING & RESERVES (in millions of LE)

INTEREST RATES

EGYPTIAN POUND EXCHANGE RATES

Market Watch

Money & Banking

Currency March 15Feb. 15, 2015 Dec. 15, 2014 Oct. 15, 2014 March 15, 2014

Amount change Amount change Amount change Amount changeAustralian Dollar 5.799 5.904 -1.78% 5.868 -1.16% 6.238 -7.04% 6.266 -7.45%Bahraini Dinar 20.015 20.044 -0.14% 18.8854 5.98% 18.802 6.46% 18.320 9.26%British Pound 11.197 11.712 -4.40% 11.188 0.08% 11.406 -1.83% 11.536 -2.94%Canadian Dollar 5.941 6.109 -2.75% 6.151 -3.41% 6.348 -6.41% 6.260 -5.10%Chinese Yuan 1.231 1.238 -0.58% 1.163 5.86% 1.161 6.07% 1.130 8.99%Euro 7.972 8.665 -8.01% 8.874 -10.17% 9.048 -11.90% 9.637 -17.28%Indian Rupee 0.121 0.122 -1.57% 0.114 6.04% 0.116 3.53% 0.113 6.68%Japanese Yen (100) 6.256 6.403 -2.30% 5.993 4.39% 6.660 -6.07% 6.834 -8.46%Jordanian Dinar 10.687 10.688 -0.01% 10.055 6.29% 10.017 6.69% 9.788 9.18%Kuwaiti Dinar 25.253 25.746 -1.91% 24.313 3.87% 24.651 2.44% 24.614 2.60%Lebanese Pound (100) 0.502 0.503 -0.20% 0.470 6.81% 0.465 7.96% 0.455 10.33%Russian Rouble 0.122 0.120 1.52% 0.124 -1.91% 0.465 -73.78% 0.455 -73.20%Saudi Riyal 2.025 2.028 -0.15% 1.897 6.70% 1.900 6.56% 1.851 9.38%Turkish Lira 2.874 3.094 -7.11% 3.094 -7.10% 3.136 -8.37% 3.110 -7.59%UAE Dirham 2.068 2.071 -0.15% 1.939 6.63% 1.941 6.54% 1.890 9.42%US Dollar 7.597 7.612 -0.19% 7.124 6.65% 7.131 6.54% 6.942 9.43%

End of May June July August Sept. October November December

Reserve Money 347,865 364,473 364,473 370,901 374,619 368,636 363,202 362,922

Int'l Reserves (net, US$ mln) 17,306 16,687 16,737 16,836 16,895 15,905 15,356 15,429

Domestic Liquidity 1,484,420 1,516,591 1,545,032 1,557,379 1,543,756 1,560,327 1,572,950 1,606,505

Foreign Assets (net) 126,059 128,425 117,934 1,131,557 1,115,556 1,128,931 1,138,833 1,160,773

Domestic Assets 1,358,361 1,388,166 1,427,098 1,437,647 1,425,945 1,448,684 1,470,645 1,522,143

Dollarization Rate (%) 19.42 18.95 19.01 18.66 18.83 18.50 18.17 17.49

Discounted Bills (except CBE) 3,649 3,786 3,519 3,608 3,848 3,755 3,896 4,260

Bank Loans (except CBE) 575,850 584,066 584,484 584,378 597,394 611,952 614,397 624,961

Securities (except CBE) 812,226 825,524 830,089 845,896 863,626 866,843 884,375 904,293

Currency in Circulation 283,716 289,875 305,067 299,073 299,333 295,508 292,653 294,227

2014

Market Watch


Corporate News

Capital Markets

International stock price indices

EFIC to boost production, add new factoryEgyptian Financial & Industrial Company (EFIC) announcedplans to increase the annual production capacity of its fertilizerplant in Assiut to 400,000 tons by the end of the year. It plansto do this by replacing and renewing old production lines toincrease its annual capacity from 100,000 to 150,000 tons, inaddition to installing a new line with an annual capacity of250,000 tons. Meanwhile, EFIC announced that it had startedconstruction on a 250,000-ton-per-annum fertilizer complex inAin Sokhna. The firm signed a contract with Canal PowerDistribution to provide the project with electricity and itreceived official approval to provide it with gas. It expects tobegin construction on the LE 375-million complex bySeptember 2016.

NUCA approves Madinaty settlementEgypt’s minister of housing announced that the New UrbanCommunities Authority has approved a settlement with TalaatMoustafa Group (TMG) over their Madinaty land dispute.Under the deal announced back in February, the in-kind pay-ment of the built-up area to be delivered to the government wasincreased by 0.5 million square meters to 3.2 million squaremeters from 2.7 million square meters; in addition, the compa-ny agreed to pay LE 2.9 billion over the next 10 years. The gov-ernment will recover almost LE 9 billion (LE 2.9 billion inaddition to LE 6 billion from the additional BUA).

Palm Hills Developments inks deals in New Cairo and6 October CityPalm Hills Developments (PHD) signed a memorandum ofunderstanding with the housing ministry to construct a tourismproject in New Cairo. The project will occupy more than 500feddans and is estimated to cost some $3 billion. The housingministry announced that it has also signed a memorandum ofunderstanding with Emirati real estate developer Aabar and

Palm Hills Developments to build the $20-billion OasisOctober project. Built on 10,000 feddans in 6 October City, itwill include administrative, commercial and housing units.According to the ministry, the project has an expected returnrate of 25 to 30 percent.

CIB and ADIB eye Citigroup’s Egyptian retail businessCommercial International Bank (CIB) and Abu Dhabi IslamicBank Egypt, among several other banks, were shortlisted aspotential buyers of Citigroup's Egyptian retail business.Negotiations were still in preliminary stages.

Regulators ok Triquera’s bid for stake in MinapharmMinapharm Pharmaceutical announced that the EgyptianFinancial Supervisory Authority had approved a mandatory bidsubmitted by Dutch company Triquera BV to acquire 46.7 per-cent of the firm at LE 37.5 per share. The bid was to run fromMarch 5 to April 1.

Cairo Poultry shareholders approve stock splitCairo Poultry got approval at an extraordinary general meetingfor a proposed two-for-one stock split, which would reduce thestock's par value from LE 2 to LE 1 per share. The number ofshares would also increase from 174.2 million to 348.4 million,leaving issued and paid-in capital at LE 348.4 million.

Orascom-IPIC consortium plans to build coal-firedpower plantOrascom Construction (OC) announced that its consortiumwith the Abu Dhabi-based International PetroleumInvestment Co. (IPIC) signed a deal to development a3,000-megawatt coal-fired power plant on the Red Seacoast. The cost of the project’s first phase is expected to bearound $3 billion. Funding will be through equity and debtof up to $1.95 billion.

DOW

March 15 Feb. 15 Dec. 14 Oct. 14

value % change value % change value % change

18,019.35 17,977.42 0.23% 17,180.84 4.88% 16,141.74 11.63%

NASDAQ 4,893.60 4,929.51 -0.73% 4,605.16 6.26% 4,215.32 16.09%

S&P 500 2,096.99 2,081.19 0.76% 1,989.63 5.40% 1,862.49 12.59%

FTSE 100 6,873.52 6,804.08 1.02% 6,182.72 11.17% 6,211.64 10.66%

NIKKEI 225 17,913.36 19,246.06 -6.92% 17,099.40 4.76% 15,073.52 18.84%

SOURCE: US INTERNATIONAL TRADE COMMISSION (USITC)

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 JANUARY 2015

EGYPTIAN IMPORTS FROM THE U.S.DURING JANUARY 2015


Total

Exports (Q1 14-15) Imports (Q1 14-15) Balance (Q1 14-15)

6469.2 16211.3-9,742.1U.S.A 682.0 822.4

E.U. 2,328.4 4,392.6 -2,064.2Other European countries 365.4 1,130.1 -764.7Russian Federation & CIS 305.2 631.8 -326.6Arab countries 1,512.6 4,747.0 -3,234.4Asian countries (non Arab) 773.4 3,260.4 -2,487.0African countries (non Arab) 123.7 123.6 0.1Australia 10.6 82.9 -72.3Other countries 367.9 1,020.5 -652.6

The CPI (Consumer Price Index)and PPI (Producer Price Index) are based on the results of surveysof expenditure and consumption andrelevant baskets of goods and weights.

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

Year 2013-142012-132011-122010-112009-10

Tourists7.97 million11.96 milion10.95 millon11.93 millon13.7 millon

Change-34.7%9.2%-8.2%

-12.9%11.4%

TOURISM VISITS

SOURCE: CENTRAL BANK OF EGYPT

SOURCE: CENTRAL BANK OF EGYPTSOURCE: CENTRAL BANK OF EGYPT SOURCE: CENTRAL BANK OF EGYPT


DEMOGRAPHICS

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


NON-PETROLEUM TRADE (in millions of U.S. $)

GDP GROWTHINFLATION

2006 2007 2008 2009 2010 2011 2012 2013

Total Population (millions) 73.6 77.5 79.1 83.5 84.5 88.0 90.2 92.2Labor Force (millions) 19.4 23.9 24.7 25.4 26.2 25.8 27.0 27.6Labor Force / Population (%) 31.8 32.5 32.8 33.1 33.4 33.0 32.7 32.7Unemployment Rate (%) 10.6 8.9 8.7 9.4 9 12.0 12.7 13.2

Q4 End of Year Q1 Q2 Q3 Q4 End of year Q1

Trade Balance -7,724.6 -31,542.0 -7,687.1 -7,752.3 -9,742.7 -9,607.2 -33,702.7 -9,742.1

Exports 6,152.1 25,971.3 5,939.2 6,631.2 6,252.1 6,564.0 26,119.0 6,469.2

Imports -13,876.7 -57,513.3 -13,626.3 -14,383.5 -15,994.8 -16,171.2 -59,821.7 -16,211.3

Services (net) 1,178.4 6,692.0 135.8 36.8 1,155.2 560.3 978.5 2,109.8

Receipts 4,953.0 22,220.9 3,965.3 4,027.1 4,832.1 4,806.9 17,631.4 6,448.8

Payments 3,774.6 15,528.9 3,829.5 3,990.3 3,676.9 4,246.6 16,652.9 4,339.0

Balance of Goods & Services -6,546.2 -24,850.0 7,551.3 -7,715.5 -8,587.5 -9,046.9 -32,724.2 -7,632.3

Transfers 4,850.8 19,267.9 8,308.3 6,202.7 9,110.6 7,233.7 30,367.9 6,188.6

Balance of Current Account -1,695.4 -5,582.1 757.0 -1,512.8 523.1 -1,813.2 -2,356.3 -1,443.7

Capital & Financial Account 5,413.2 9,686.7 3,978.7 -992.4 546.1 1,984.6 4,934.5 811.4

Foreign Direct Investment 1,628.6 3,004.7 1,246.4 1,602.7 1,840.6 1,045.0 4,119.3 1,773.2

Overall Balance -2,327.2 -237.0 -3,746.7 1,747.4 -218.2 -738.9 -1,478.6 410.0


012/13 2014/15

Market Watch

Key Indicators

2013/14

Entrepreneurship


SysDSoft are among Egypt’s most influential tech outfits.Their founders and employees have started dozens of otherenterprises since the 1990s. This sort of spin-off is encourag-ing, as the people that leave these firms “are taking with themsome of the magic, connections, ideas and managing tech-niques for running a company,” making these start-ups morelikely to succeed, says Rhett Morris, the global director ofEndeavor Insight, at a recent AmCham launch event for theCairo Tech Map.Gamal explains that the success of major tech ecosystems in

places like Silicon Valley and New York were built on theshoulders of “mafias”—groups and institutions that fostered a“hub of mentorship and investment” and a culture of reinvest-ment. This leads to a multiplier effect, in which the output ofeach entrepreneur is “basicallyquadrupled” thanks to theirconnections. PayPal, theonline payment service, is aclassic example of a companywhose founders and employ-ees went on to spark an extra-ordinary number of other suc-cessful, high-profile ventures including LinkedIn, YouTubeand 500Startups. “When I see all the connections and influ-ence arrows going back and forth, it gives me the positivereinforcement that we are building a collaborative ecosys-tem,” says Gamal.The map also tells the story of the Cairo tech sector’s incred-

ible growth over the past two decades. The infographics can bebroken down by time periods. Highlight the earliest periodavailable, 1991 to 1998, and you’ll find a lonely handful ofcompanies with a meager four connections linking them. Asyou move forward into the 2000s, however, the number of start-ups explodes, along with the lines connecting them, quicklygrowing too messy to count. From 2010 on, the map shows thatthe sector has been growing at an average pace of 35 percentevery year. Roughly every two and half years, the number ofcompanies doubles, making Cairo “among the fastest growingtech networks in the world,” says Morris.The study also yields a profile of who Cairo’s tech sector

entrepreneurs are and how they compare to their counterpartselsewhere in the world. Cairo’s tech denizens are relativelyyoung: In Egypt, the average tech entrepreneur is between 21and 26; in New York, they tend to be closer to 30. Ninety per-cent of Cairo’s start-up founders are male, but New York’sgender balance isn’t that much better, with 80 percent of itstech firms started by men. And though some have criticizedEgypt’s start-up culture for being an elitist bubble, the TechMap shows that around one-third of Cairo’s entrepreneurswent to a public high school, which indicates that “the sectoris relatively meritocratic,” says Morris.New York, of course, is a far more established technology

hub that has the benefit of being located in the world financial

capital. But Morris insists that “Cairo should be comparingitself to the best tech centers in the world.” While the Egyptiancapital naturally has far fewer firms than New York, the TechMaps of the two cities show that in recent years, they have seensimilar growth rates both in terms of start-ups and connections.The key difference between the two cities’ tech sectors, as themaps illustrate, is that Cairo’s companies tend to invest far lessin one another than do their Manhattan peers. Moreover, justone in 10 Cairo start-ups received venture capital funding,whereas in New York more than half did. This piece of data issimply more evidence of the dearth of investment capital cur-rently available to Egyptian entrepreneurs. “We know that hav-ing angels invest who have already been successful is an indi-cator that your company is likely to be successful,” says Morris.

“These connections are importantto an ecosystem, and unfortunatelywe’re not seeing as many in Cairo.” But as Heba Ali, Mercy Corps’senior entrepreneurship advisor,points out, “Most companies on themap are between the seed and take-off stage.” In other words, they’re

not yet developed enough to require large-scale infusions ofnew cash. What they really need, argues Ali, is good “top mid-dle management” that can help them take their companies “tothe next level.” Endeavor’s research bears out this conclusion.When entrepreneurs were asked to name the greatest obstaclesthey faced, lack of capital was conspicuously absent from thetop of the list. Rather, most listed political instability, lack ofqualified managers and technical talent and corruption as theirbiggest concerns. “When firms talk about lack of talent, thismeans they are growing—it’s a good sign,” says Morris. That Cairo’s tech sector is extremely well-connected should-

n’t be taken for granted. A densely connected network “is notalways the case in other parts of the world,” notes Morris. InCairo though, there seems to be “a strong tradition of entrepre-neurs reinvesting their success in other companies.” There’s awhole host of reasons why this might be the case. As HebaGamal points out, part of this is a testament to the small army oforganizations that have rapidly emerged in recent years to helplink up and support start-ups, whether they are incubators andaccelerators like Flat6Labs or investor networks like CairoAngels. And as Morris points out, the collaborative environmentcan also be credited to the early founders in the sector, who setthe tone by being actively involved in other young companies.All this connectivity also spawns jobs. The tech sector ecosys-

tem the Cairo map studied, for example, currently employs 5,000people. But if the growth rate continues at its current pace, thisnumber will reach 20,000 by 2020. Of course, that’s not going toput much of a dent in Egypt’s unemployment figures, but still,these “are well paying jobs with good benefits that enable peoplewho are well educated and want a career to stay in Cairo,” saysMorris. “This is is important for the city in the long run.” ■

The output of each entrepreneuris “basically quadrupled” thanks to their connections.


Entrepreneurship

Step within earshot of any start-up-related eventand you’re bound to get a big dose of jargon.“Scalability,” “leveraging” and “bootstrapping”are some of the industry’s favorite shopwornterms. For an ordinary English-speaker, thebuzzwords can be bewildering, requiring furtive

smartphone consultations in order to keep up. But perhapsnone of these phrases has been more overused over the pastfew years than “start-up ecosystem.” The term refers to thenetwork of companies, investors, organizations and individu-als that support, interact with and feed off local entrepreneurs.Google’s Ngram Viewer, which measures how frequentlywords and phrases appear in written form, shows how the useof “start-up ecosystem” has spiked since the mid-2000s. Andlike all hackneyed phrases, its overuse eventually wore out thethreads out of its meaning. So what is a start-up ecosystem?And what does Cairo’s look like? In March, the local arms of two international development

organizations—Mercy Corps Egypt and Endeavor Insight—sought to solve a piece of that puzzle with their Cairo TechMap. Endeavor has done other tech maps for cities such asNew York, Buenos Aires, and Bogotá. They employ interac-tive online infographics using concentric circles to illustratethe ways in which tech companies, their founders and employ-ees overlap and connect. The infographics resemble dense,miniature solar systems, in which younger companies orbitaround older ones. The map’s data tell several stories about Cairo’s tech sector,

but the overarching narrative is one of increasing connectivity.

It provides a visual for the intricate ways in which small firmsthat are just getting started interact with more establishedcompanies. To draw the map, Endeavor surveyed 200 entre-preneurs about their links to other technology companies infive basic categories: mentorship (Did they mentor or werethey mentored by other firms?); inspiration (Did they inspireor were they inspired by others?); investment (Did they investin other start-ups or receive investments from others?);employment (Where did employees work before they joinedthe firm and after they left?); and founding (What other com-panies did their founders start?). Different colored “influencearrows” denoting the different types of connections stringtogether the various companies on the map.Understanding these links is vital to an organization like

Endeavor, which seeks to identify and provide support liketraining and funding for “high impact” enterprises, those withthe greatest potential to push the sector—and the society—for-ward, explains Heba Gamal, managing director of EndeavorEgypt. Before they drew the map, only rudimentary raw datawas available to inform the group’s assessments of whichfirms were generating the most revenue or creating the mostjobs. Moreover, they were missing another critical indicator.“We felt that the triangle was missing one of the angles, andthat was influence,” says Gamal. The map shows that a handful of local firms have become

engines of growth. Not only have these start-ups made moneyand created jobs, their founders have gone on to help startother firms and provided mentorship and inspiration else-where in the sector. Firms like ITWorx, LINKdotNET and

SIX DEGREESCairo Tech Map shows that success depends onconnections

Published by Endeavor Insight and Mercy Corps EgyptAnalysis by Eric Knecht

Dining Out

restaurant is on a leafy residentialblock off Degla Square that I’m toldonce housed another authentic Asianrestaurant called China Winds, wherethey served things like braised camelhooves and lily bulb soup. Anyway,this two-storey converted house nearCAC is now home to Genghis Khan.Apart from the red lanterns hangingout front and the preponderance oflurking stray cats, you wouldn’tguess that this gated building paintedin gaudy shades of Dreamsicleorange and cream housed a restau-rant at all. Inside it still looks moreor less like someone’s living room—albeit with tables where the couchwould be. There’s even a secondfloor, with more tables and a terrace,but it wasn’t open the night we went.The décor is plain, perhaps even a lit-tle drab, owing especially to the flu-orescent lighting. But then again,people don’t come to this place forthe wonderful ambience. Apparently,word has spread about the food atGenghis Khan. Even on a Tuesdayevening, there was a decent crowd.

Like many authentic Chineserestaurants, the menu at GenghisKhan is a bit cryptic. “stir-fry chick-en with green paprika” or “flavouredeggplant” are the most detaileddescriptions you’re going to get. Ifyou ask the friendly Chinese waitresswhat’s good, she’ll recommend thestandard favorite of Westerners atChinese eateries around the world—General Cho’s Chicken. (LE 68).(That’s what she recommended tome, an American, anyway.) Eventhough I don’t particularly love thisdish of what are essentially ChickenNuggets in sauce, I ordered it any-way, and it was the best version ofthe dish I’ve ever tried. The saucewas heavily infused with ginger andchili, which managed to balance thesweetness. My friend and I alsodecided to start with Sichuan Hot andSour Soup (LE 25). A thick, spicy,vinegary broth with egg, Chinesemushrooms and tofu, this stuff wouldbe a godsend to anyone with a cold.But my absolutely favorite appetizer

at Genghis Khan—which was sogood that I remembered it from myfirst trip there three years ago—wasthe Tiger Style Salad (LE 30). It’sjust a simple mix of cucumbers, car-rots, red onions and plenty of corian-der, chopped fine and mixed togetherin a sesame oil dressing with saltyroasted peanuts. This last ingredient,of course, is what makes the dish,adding protein, flavor and extracrunch.

Not every dish on the GenghisKhan menu is a hit, however.Wanting some kind of seafood andremembering the tangy Szechuan-style prawns I used to order in SanFrancisco and New York, I tried onemore time to ask the waitress forguidance, but again, she wasn’t muchhelp. Finally, I chose the TomatoSauce Prawns (LE 88), which turnedout to simply be a row of jumboprawns, which I had the feeling camefrom a bag in the supermarket freez-er section, battered and deep friedand served with a ramekin ofketchup. The Spicy Cabbage withChili (LE 30) was much better, if alittle greasy, consisting of braisedwhite cabbage leaves in a spicy soysauce. All this is meant to be eatenwith rice, of course—and GenghisKhan offers the usual assortment offried rice with vegetables, chicken,beef or shrimp. We opted simply for

the plain Steamed Rice (LE 4), whichcomes perfectly cooked, steaming andsticky in small, individual white bowls.

Chinese restaurants aren’t reallyabout dessert, in my experience, but Imust admit that the Golden CrispyTaro (LE 38), pictured on the restau-rant’s Facebook page, looks intrigu-ing. They’re little fried fingers rolledin some kind of crunchy stuff andserved with a little dish of condensedmilk for dipping. (If you’ve nevertried sweetened, condensed milk, goto the supermarket and buy a can ofit right away and eat it with a spoon.)Actually, there are quite a few thingson the Genghis Khan menu that Iplan to order on my next visit. It’sone of the those places where youhave to eat there a half a dozen timesor so before you get the hang ofwhich dishes are really delicious andwhich are just generic, half-heartedattempts to appeal to Western tastes.Another option is to invite a bunch ofyour friends and make it a party—that way you can try everything inone go. ■


SOHA

ELGA

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Genghis Khan Street 208, Villa #5, off DeglaSquare, Maadi010-6926-6502Open daily, 11:30 a.m.to 10:30 p.m.

Dining Out


As a kid growing upjust outside SanFrancisco, Sundayafternoons werewhen my fatherwould take my

mother, my sister and me out to lunch“in the city.” Food, in my family, wasnot something you consumed for fuelor had on the way to something else—it was the day’s central activity. Andmore often than not, the destinationwas Chinatown. Then as now, SanFrancisco’s Chinatown, which is thelargest outside of Asia, felt like a for-

eign country—just without markedborders. Suddenly, you’d cross thestreet and the romantic outdoor cafésof North Beach (the city’s Italianneighborhood) would give way to redpaper lanterns and outdoor bazaarspacked with all manner of tinyBuddhas and cheap plastic knick-knacks. It was to one of these streetsthat my dad would lead us, skepticaland complaining about the weirdsmells. “You’re gonna love thisplace,” he’d say, shepherding us intosome questionable looking establish-ment where the menus weren’t in

English. Then we’d sit down and eatplates and plates of food. Often timesthey were delicious, others they werescary, but it was always an adventure.

The closest I’ve come in Cairo tothose authentic, hole-in-the-wallChinese restaurants of my youth isGenghis Khan in Maadi. Someonetook me there during one of my firstweeks in Egypt, when it was stilllocated in a tiny storefront on Road233. Though I remembered the placefondly, I didn’t go back for threeyears, partly because I couldn’t findit. Turns out, it moved. Now the

SOHA

ELGA

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GENGHIS KHAN SERVES UPAUTHENTIC CHINESE FOODBY RACHEL SCHEIER

For three generations, AhmedNage’s family has been mak-ing shoes. Starting in the1930s, his grandfather sold

his footwear out of a shop in Attaba. Asa child, Nage remembers the elder manwatching with a stern eye as he learnedto cut out leather patterns. “He’d hit mewith a stick until I got it right,” saysNage, who swore he’d do somethingelse when he grew up. He hated thepainstaking work, the way “the gluegets all over your hands.” Even hisfather eventually abandoned the familycraft to become a real estate broker. Incollege, Nage studied acting and direct-ing at the Giza Academy of Arts. In

2011, he dabbled in graffiti and gothimself arrested for political activism.He saw himself as an aspiring artist.But ultimately, like countless otheryoung Egyptians, he couldn’t find ajob. He flipped burgers at McDonald’sfor awhile, desperate to make endsmeet. And then one day it suddenlyoccurred to him: “I have skills. I canmake shoes.”

So two years ago, he crafted a car-pet into a pair of shoes for his girl-friend. She wore them to Germany,where everywhere she went, peoplewanted to know where they could buya pair. “They were all asking her,‘Who made these?’” says Nage, who

soon started selling his footwear onFacebook. “I saw some pairs of shoeson the Internet that were really expen-sive, like €150 or €200, and I thought,Come on, we have the same materials.I can make the same thing.”

Using an old pair of scissors,roundhead knife, awl, last and othercobbler’s tools handed down by hisgrandfather, Nage fastidiously fash-ions each pair to order. Typically, hecombines an ordinary leather upperand pairs it with a vamp and toe boxcut from a floridly-patternedEgyptian carpet—the contrast yieldsthe same sort of visual pop as oneexperiences when a stoic business

ART &

SOLE BY ERIC KNECHT

Fashion


Downtime


pant is hiked up to reveal an irrever-ently-hued dress sock.

At 27, Nage is now a micro-celebrity of sorts around downtownCairo, where he peddles his uniquehand-crafted footwear creationswherever he can—posting images onsocial media, chatting up strangers atcoffee shops and showing off sam-ples he keeps stowed in a bag slungover his shoulder. “Everybodyknows him as that guy with theshoes,” says William Wells, theexecutive director of TownhouseGallery, a downtown contemporaryart space that’s known for discover-ing and promoting local artists.Wells first met Nage a couple ofmonths ago, when he interviewedhim for a graphic design internshipat the gallery. Naturally, Nage startedtalking about his shoes, which aremade from all kinds of carpets, fromthose with colorful floral and geo-metric patterns to prayer rugs. “Iimmediately picked up that there wassomething interesting about him,”says Wells, who was struck by theway Nage seemed to visualize his

creations, painting them in the airwith his hands as he spoke. Wells,who is interested in the intersectionbetween art and design in our hyper-commercialized age, asked to seeNage’s shoes. “Within three days, hebrought two pairs specifically forme,” says Wells. “He said, ‘Theseare for you, I measured your feet.’”Impressed by the hodgepodge of fab-rics and intricate designs piecedtogether in patterns not usually seenin footwear, Wells decided to put theimprimatur of his prestigious gallerysquarely on their soles.

For a month, from March 22 toApril 22, Townhouse’s first-floorgallery space has been converted intoa workshop-cum-vitrine for theyoung designer. “This is anExhibition About Shoes,”—a titleDave Eggers might have come upwith—features Nage’s signatureavant garde oxfords suspended fromevery wall, while in a small adjacentroom, the artist himself measures,cuts and glues from a small woodenwork bench. On opening night, Nagelooks the part of the struggling 21st

century creative—reed thin, in hip-ster spectacles and a navy blazerover a paisley t-shirt and jeans.People stroll in and snap photos ofthe shoes; some inquire about order-ing. From his little workshop, Nagekneels at the feet of a 20-somethingfashionista whose tawny, knee-highsuede boots suggest a seriousnessabout her choice of footwear. Thescribbles measurements into a smallred notepad. “I’m so nervous,” heconfesses, after the customer leaves.

But Wells is confident that Nagehas a future as a fine artist.Townhouse has a strong track recordof launching the careers of suchunlikely Egyptian artists as AymanRamadan, a world-renowned concep-tual artist who started as a securityguard, and Mohamed Sharkawy, aformer janitor who is now famousfor his two-dimensional, minimalistimages. Wells trusts his instincts,and already he has booked Nage fora second, larger exhibition inSeptember. “Most magazines willwant to be featuring his shoes,” hesays. “There will be a lot of articlesabout what he is producing, and peo-ple will be catching up to the factthat this is going on.” What’s more,Wells predicts that the newfoundexposure will bring a whole newlayer of influence and sophisticationto Nage’s work.

Despite these heady ambitions, forthe moment, Nage’s shoes are stillmore of a hobby than a livelihood. Heestimates he usually sells between fiveand 10 pairs a month, at around LE 500each. Nage’s local fame is also a resultof his eccentric reputation and quirkyapproach to sales and marketing.“There are many designers, but I’m theonly one that makes shoes out of car-pets,” he says. Nage regards himselfnot as a street peddler but an artist,however—an image that he guardsfiercely. “I’m just trying to work on mybrand,” he says, which for the momenthe calls Nage Shoes. Then he is quick-ly whisked away to measure someone’sfeet. ■

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

Chamber news

COMMITTEELEADERS(July 2014 to June 2015)

Agriculture and Food SecurityChair: Tarek Tawfik, International Company for Agricultural Productionand ProcessingCo-Chairs: Seif ElDin Saad ElSadek, Agrocorp For Agriculture InvestmentTony Freiji, Wadi Holding

Banking and FinanceChair: Zeinab Hashim, CEO and Managing Director, Abu Dhabi IslamicBankCo-Chair: Nadir Shaikh, Citibank, NA Egypt

Corporate Social Responsibility (CSR)Chair: Mohamed El Kalla, Cairo for Investment and DevelopmentCo-Chair: Shereen Shaheen, Pepsi-Cola Egypt

Customs and TaxationChair: Hassan M. Hegazi, Master Trading, SAECo-Chair: Hossam Nasr, Allied Accountants - Ernst & Young

EducationChair: Amr Ezzat Salama, The American University in Cairo Co-Chairs: Elizabeth KhalifaShahinaz Ahmed, Amideast Egypt

EnergyChair:Khaled Abu Bakr, TAQA ArabiaCo-Chairs: Ali Bakr, ExxonMobil EgyptArshad Sufi, BG EgyptOsama ElSaid, Masa Electro

Entrepreneurship and InnovationChair: Alaa Hashim, ECESCo-Chair: Hashem El Dandarawy, Team 4 Security

Health & PharmaceuticalsChair: M. Maged El Menshawy, ManapharmaCo-Chairs: Ahmed Ezz El Din, Johnson & Johnson Medical EgyptMohamed Roushdy, Amoun Pharmaceutical Company

Human ResourcesChair: Somaya El Sherbini, Microsoft EgyptCo-Chair: Maisa Galal, General Motors Egypt

Industry & TradeCo-chairs: Mostafa El Halwagy, The Egyptian Company for InternationalTouristic Projects (Americana)Omar El Derini, FAOM Consult/Red WingSuresh Narayanan, Nestle Egypt

Information & Communications TechnologyChair: Bassel Mubarak, Oracle EgyptCo-Chairs: Ayman Elgohary, Cisco International SystemsReem Asaad, Raya Holding

InsuranceChair: Alaa El-Zoheiry, Arab Misr Insurance Group (AMIG)

International CooperationChair: Hanaa El Hilaly, Social Fund for DevelopmentCo-Chair: Rafeh Saleh, CID Consulting

Investment & Capital MarketChair: Aladdin El-Afifi, board member, ASEC Company for Mining (ASCOM)Co-Chairs: Hussein El SherbinySharif El Akhdar, Beltone Private Equity

Legal AffairsChair: Ahmed Abou Ali, Hassouna and Abou Ali Law OfficesCo-Chairs: Emma El Meligi, Pepsi-Cola EgyptGirgis Abd El Shahid, Sarwat A. Shahid Law Firm

MarketingChair: Hisham Ezz El Arab, Danone EgyptCo-Chairs: Mai Aly, 4PR CommunicationsTamer El-Araby, Nielsen Egypt

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

Transport & LogisticsChair: Alfred Assil, Menarail Transport ConsultantsCo-Chairs: Amr Kabil, National Stevedoring GroupAmr Tantawy, DHL ExpressTarek Fahmy, Mediterranean Shipping Company (MSC)

Travel & TourismChair: Karim El Minabawy, Emeco TravelCo-Chairs: Cesare Rouchdy, Four Seasons Hotels & Resorts, EgyptRoland Bunge, Carlson Wagonlit Travel

Women in BusinessChair: Hala El Barkouky, Allied Business ConsultantsCo-Chairs: Ghada Hammouda, Qalaa Holdings Jailan Shindy, Shindy and Associates

PRES IDENTAnis A. Aclimandos, Transcentury Associates

EXECUTIVE VICE PRESIDENTSCurt Ferguson, Middle East & North Africa Business Unit, The Coca-Cola Company

Sherif Kamel, School of Business, The AmericanUniversity in Cairo

VICE PRESIDENT, MEMBERSHIPDalia Wahba, CID Consulting

V ICE PRESIDENT, PROGRAMSAmr Talaat, IBM

VICE PRESIDENT, LEGAL AFFAIRSSaid Hanafi, Orascom Hotels & Development

TREASURERSherif El Kilany, Allied Accountants-Ernst & Young

MEMBERS OF THE BOARDAmr Allam, Misr Sons Development - Hassan Allam SonsNevine Loutfy, Abu Dhabi Islamic BankOmar Mohanna, Suez Cement Group of CompaniesThomas Maher, Apache Egypt Companies

PAST PRESIDENTM. Gamal Moharam, MGM Financial & BankingConsultants

CHIEF EXECUT IVE OFFICERHisham A. Fahmy

BOARD OF GOVERNORS

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Events


“We are keeping our best resources unutilized. This is our poten-tial,” said Khaled Hanafy, minister of supply and internal trade,at a Feb. 26 AmCham luncheon event titled “Why Invest inEgypt?” at the Conrad Cairo Hotel. Egypt currently uses only alittle more than 10 percent of its land, and the majority of itsunemployed citizens are between 25 and 35, most of whom areeducated youths. “This means that we have a lot of room fordevelopment,” said Hanafy.“It is a major stop along Egypt’s aim for development,” said

Hanafy. “What we are targeting now is not just economicgrowth. We are targeting structural changes in Egypt’s businessenvironment.” This will require new laws reflecting the govern-ment’s economic policy, which is a “market-oriented” one,according to Hanafy. He said that regulatory frameworks andguidelines for this legistlation also need to be updated to encour-age proper enforcement and provide real benefit to individualsand corporations. “If we only develop better laws, those who areimplementing them will still run into problems because the exec-utive document still has the process and procedure problems ofthe older version.” The government’s other major goal is to include all business-

es in Egypt’s economic environment and development plan.Hanafy noted that there is a large informal sector. “Formal busi-nesses face problems such as unfair competition because infor-mal businesses are not included in the system,” the minister said,pointing out that informal businesses don’t pay taxes.Hanafy used reforms in the bread subsidy system to encour-

age bakeries to formalize, he said. Previously, delays in the sup-plies of wheat and other production needs meant slow work forsmall, government-supplied bakeries. Reforms have reducedthose delays, and now some 50,000 small bakeries have hired

more people to manage the new supply chain and opened bankaccounts. “Private companies have started dealing with them,”said Hanafy, adding that this has resulted in an increase in prod-uct circulation of almost LE 500 million a month. “We neverexpected this level of success. And if we can formalize tiny bak-ers, we can formalize more and more businesses in any sector.”Much of this depends on educating both businesses and con-sumers about the benefit of being part of the formal sector. “Weneed to talk to people to make them more aware of their rights,”said Hanafy. To that end, The Coca-Cola Co. has several programs in Egypt

and the region, including one that aims to empower 5 millionfemale entrepreneurs by 2020. “A lot of them are coming fromMENA,” said Curt Ferguson, Coke’s regional president. Theglobal beverage giant also has a similar program called GlobalShapers that targets start-up businesses. “We help them bringtheir ideas to life. Sometimes it’s with money, other times it’s byconnections or just giving them a spark,” said Ferguson.If programs like these are scaled up with the help of domestic

partners, they should help dent unemployment rates in Egypt, hesaid. Accordingly, Coke has budgeted $500 million to invest inthe community in the coming three years to expand its domesticoperations. Another $100 million has been allocated to build anew juice factory that will contract with local growers to supplyit with fruit. “We are proud to play the role of the big investor,”said Muhtar Kent, chairman of the board and CEO of Coca-Cola, adding that the Egyptian arm of the company exports to 40other markets. “There is no question in my mind that Egypt willbe among the next five booming economies. These economieswill be champions in growth, create a new middle class andshow the world what a dynamic environment is,” he said.

INVESTMENT & CAPITAL MARKETS

Room to invest

The hospitality industry is diverse, and in today’s world, justabout anyone can make a career in this vast and complex sector.That was the message of hospitality management expertChristian Muhr, vice president of operations in Egypt and theLevant for Hilton Worldwide, at a March 12 session of theAmCham Marketing Committee’s Inspiring Young Talentsroundtable series.Muhr began with an overview of Hilton, starting with

Conrad Hilton purchasing his first hotel in 1919 in Cisco,Texas, to its evolution into one of the world’s fastest-growingglobal hospitality companies, with hotels in 94 countries. Obviously passionate about his work, Muhr explained that

inspiring talent requires a leadership development model thatbegins with oneself and moves on to leading others, such asmanagers and enterprises. He added that Hilton Worldwide hasdeveloped global programs that are built around a stepped pro-gression designed to move up deserving talent through the

organization to eventually become hotel general managers.They include general manager excellence programs, VP excel-lence programs, women’s leadership programs and enrollmentin Hilton Worldwide University and its colleges.As a parting thought, Muhr noted that it is critical to map out

a personal career path at the beginning, as it helps you stayfocused on your goals and enables any necessary adjustments inorder to fulfil your dreams.

MARKETING

Inspiration through hospitality

In the first event of its kind, the AmCham MarketingCommittee gathered three different stakeholders from thetelevision industry—a TV producer, a channel representativeand an advertiser—to discuss the challenges and opportuni-ties they face at its Feb. 24 meeting entitled “The TVIndustry: Challenges and Opportunities.”Ahmed Lasheen, brands and communication director at

Etisalat Misr, discussed the challenges of creating a mediaindustry regulatory body for advertising. He also noted thatwith an increasingly fragmented viewership, offering longeradvertising breaks on TV channels makes no sense. Rawia El Shater, strategies and news initiatives group

director at Future Media Group, added that it is also impor-tant to monitor intellectual property rights. She noted that thelocal TV industry is quite young, most channels are private-ly owned, and viewership tools and analysis have yet todevelop.Tarek Al Ganainy, producer and owner of the TVision

Production Co., noted that fewer producers are entering themarket and fewer series are being produced, while themajority of content is slated to be aired during Ramadan.

According to Al Ganainy, there is no audience meter to mea-sure how many viewers watch television during the rest ofthe year. The panelists pointed out that the increase in content from

the Gulf and Turkey has led to more competition and fewerlocal series being distributed regionally. There are also cashflow issues in the TV industry that come as a result of chan-nels mediating risks between advertisers and producers. Onthe upside, channels are more open to less well-known seriesand new talents, while the Internet offers many opportunitiesfor the television industry to expand.

MARKETING

The TV industry: three angles


Events

“Private pension funds registered with EFSA have reached610 with over EGP 40 billion in assets,” said Sherif Samy,chairman of the Egyptian Financial Supervisory Authority,at a March 9 AmCham Insurance Committee meetingcalled “Overview of the Overdue Insurance LegislativeChanges in Egypt.” The chairman said the authority isdeveloping new executive regulations for the PrivatePension Funds Law, which dates back to 1975, in order toenhance governance, allow private pension funds to bemore active players in the capital market within conserva-tive investments guidelines and enable asset managers tomanage their investments.Samy explained that the EFSA has issued several direc-

tives on the rules regarding insurance intermediary activityand the conditions that insurance companies should abideby while operating open-ended, money market and debtinstrument funds. The EFSA is also addressing regulationsfor marketing insurance products through banks and thepostal authority and on registering reinsurance companiesand concentration limits for Egyptian insurance companiesin dealing with reinsurers.

The EFSA has three main objectives for 2015, said Samy.The first is amending the executive regulation, which will,among other things, find new distribution channels, simpli-fy the process for insurance brokers, amend investmentlimits, amend fluctuation provisions and open a narrowdoor for takaful and reinsurance. The latter involves thenew insurance law, which will cater to new technology-based distribution channels, allow for microinsurance,allow for the establishment and regulation of specializedmedical insurance companies and bolster flexibility. Samysaid that the financial authorities’ final goal is to addressthe Policyholders Protection Fund.

INSURANCE

Opening the market

How do you capture Egypt’s mood? AmCham’s MarketingCommittee, in cooperation with Nielsen Egypt, explored thisquestion at a March 1 meeting at the Four Seasons Hotel Cairoat Nile Plaza. The event featured marketing experts from var-ious sectors anchoring a series of youth-focused, brand-focused and product-focused megatrends panel discussionsthat offered insights into the latest trends in the Egyptian mar-ket and how companies can remain one step ahead of theirconsumers. The event kicked off with a video covering Nielsen Egypt’s

report, “Mood of the Egyptian Nation,” followed by a paneldiscussion moderated by Christin Ghobrial, deputy managingdirector at AMA Leo Burnett. Ahmed Nazmy, franchise mar-keting manager at Coca-Cola Egypt Atlantic Industries, high-lighted the company’s strategy for engaging Egypt’s youth incontroversial topics. Cairo Runners co-founder MahmoudTarif said he relies on social media to reach out to the compa-ny’s young followers; while Fadi Abi Nader, Egypt marketdirector for Mars, engaged with the audience on his compa-ny’s brand strategy for targeting youth. The next session focused on branding and corporate

sustainability, and Heba Afifi, head of insights and commu-nications at Nestlé Egypt, presented a video celebratingNestlé’s century of production in Egypt. Shereen Shaheen,head of corporate affairs at PepsiCo Northeast Africa,offered different perspectives on corporate social responsi-bility and how addressing CSR may contribute to buildingand establishing a brand. The conference concluded with a session on digitizing

one’s product and product safety featuring panelists OmarElsahy, general manager at Souq.com Egypt; MarianMakary, head of communications at Mobinil; and SallyKhairat, Knorr marketing manager at Unilever Mashreq.

MARKETING

Selling the Egypt of tomorrow

New MembersFuture University in EgyptKhaled AzazyChairman

Address: Road 90, Fifth SettlementTel.: (20-2) 2618-6100Fax: (20-2) 2618-6171

Academic/Educational and R&D

Membership TypeGeneral

Mortimer Harvey Africa Middle East LTDThibaud WeickCEO

Address: 6 Kamal Al Tawil St. ground floor,flat 3, ZamalekTel.: (20-10) 0933-8592www.mortimerharvey.com

Consultancy

Membership TypeMultinational

Canal for Agriculture DevelopmentIslam SalemCEO

Address: Cairo Festival City BusinessPark, building B1, floor 2, FifthSettlementTel.: (20-2) 2616-8200Fax: (20-2) 2616-8204

Agriculture


AB Care Medical TechnologyMohamed ZoheirVice President

Address: 224 Almoltaka Al Arabi St. Almaza,HeliopolisTel.: (20-2) 2266-6609Fax: (20-2) 2268-5745

Industrial Machinery and Equipment


Madinet Nasr for Housing and Development (MNHD)Ahmed AlyChairman and CEO

Address: 4 Youssef Abbas St. Nasr CityTel.: (20-2) 2261-9570Fax: (20-2) 2405-2659www.mnhd.com

Real Estate

Membership TypeAssociate Resident

Al-Mashoura Consulting Firm L.T.DPacinthe FahmyPresident and Managing Director

Address: 12 Al Nasr Ave. Rabaa AdawiyaInvestment Project BuildingTel.: (20-2) 2291-6937Fax: (20-2) 2291-6935www.almashouraltd.com

Consultancy

Membership TypeAssociate Resident

Affiliate MembersAcademic/Educational/Research & Development (R&D)Brian MacDougallExecutive Vice President for Administration and Finance - TheAmerican University in Cairo

Agriculture Ahmed ElsherbinyPlant Superintendent - Cargill Trading EgyptAmr SalahTrading Manager - Cargill Trading EgyptNermin Louis Regional Trade Execution Manager - Cargill Trading Egypt

Emile BoustanyChief Operating Officer - Wadi Holding, SAEMohamed MahgoubStrategic Business Development Manager - Wadi Holding, SAE

AutomotiveSafinaz SolimanBusiness Development Manager - National Automotive Co."NATCO"

Construction/Engineering Magdy GirgisGeneral Manager - Finance and Administration - SamcreteEgypt Engineers & Constructors, SAE

ConsultancyMouhamed MoussaPartner and Senior Architectural Designer - ManconConsultancy & Project Management

Mohammed NaguibManaging Director - FREMIR Reinsurance Services

Zeinab MoussaPartner and Senior HR Coordinator - Mancon Consultancy &Project Management

Food & Beverages Ihab Eissa Operations Manager - Coca-Cola Egypt – Atlantic Industries

Amr MahgoubQuality Assurance Manager - Coca-Cola Egypt – AtlanticIndustries

Khaled MokhtarDistribution Center Manager - Golden State Foods (GSF Egypt)

Industrial Machinery & EquipmentAmir MalakGeneral Manager - General Electric International Operation

Information Technology Khaled Rabie Chief Business Officer (CBO) - Etisalat Misr

Ahmed NassarSenior Director, Business Development - Raya Holding

PetroleumJames SughruCommercial Manager - Apache Egypt Companies

Pharmaceuticals/Medical/Health Nevine Raafat Governmental Affairs and Policy Director Middle East WestAsia & Africa - Janssen

Real Estate Mostafa RedaVice President - Arabian American Real Estate Co./ GlobalRelocation Consultants

Walid El Hindi Chief Development Officer - Emaar Misr for Development

Ahmed El HitamyGeneral Manager - Madinet Nasr for Housing & Development(MNHD)

Mohamed Abdel SalamChief Financial Officer (CFO) - Madinet Nasr for Housing &Development (MNHD)

Ahmad TouniDevelopment Director - Al Futtaim Real Estate Development, SAE

Service ProvidersFatma SarhankSenior Manager- President's Technical Office - InternationalBusiness Associates Group (IBAG)Ismail SarhankTechnical Officer- President's Technical Office - InternationalBusiness Associates Group (IBAG)

Textiles Ahmed Tolba CEO - Cairo Cotton Center

TransportationAssem ShoheibGeneral Manager - Aramex International Egypt

New replacements in member companiesOsama Soliman Commercial Manager, Cargill Trading Egypt

Hanan El Sheikha Head of Performance and Talent Manager – Learning& Dev. – Organizational Dev., National Bank of Egypt

Shady William Business Development Director, Samcrete EgyptEngineers & Constructors, SAE

Amr Seif Bahgat Head of Treasury and Capital Markets, Piraeus Bank

Bishoy Anis Abdalla Partner and Managing Director, El Raed Groupfor Real Estate Investment

Onur Dostel General Manager, Beko Egypt Trading LLC.

Magdi Ibrahim Director Risk Management, HR,Admin & I.T. Egypt and Lebanon,Travel Choice

Soha Soliman Managing Director, Social Fund forDevelopment

Heba Elmahdy Country Manager, Johnson & JohnsonGroup of Consumer Companies

Category: Affiliate Sector: Agriculture

Category: AffiliateSector: Financial Sector

Category:Multinational

Sector: Industrial

Category: AssociateResidentSector:

Hospitality/Tourism/Travel

Category: Public & DiplomaticSector: Diplomatic Missions

and NGOs

Category: GeneralSector: Chemicals

Category: AffiliateSector:

Construction/Engineering

Category: AffiliateSector: Financial

Sector

Category: Associate ResidentSector: Real Estate

62 I Business Monthly – April 2015 Business Monthly – April 2015 I 63


Member News

INTERCONTINENTAL HOTELS GROUP

As part of its continuing efforts to contribute to the community, theInterContinental Cairo Citystars, the Holiday Inn Cairo Citystars and StaybridgeSuites Cairo Citystars sponsored a blood drive in collaboration with theAssociation of Friends of the National Cancer institute. IGH set up a clinic at theInterContinental Cairo Citystars where people could give blood. It was donatedto cancer patients at the Children’s Cancer Hospital Egypt 57357.

PHILIPS

Philips Healthcare, the global healthcare technology firm, has signed a memo-randum of understanding with Children’s Cancer Hospital Egypt 57357 thataims to boost awareness about the disease in Egypt. Philips is lending its sup-port to the hospital’s Awareness against Cancer initiative, which promotes earlydetection of the disease and aims to improve the quality of medical care andservices for children suffering from cancer. Studies show that more than 70 per-cent of Egyptian children who are diagnosed with cancer annually die.

GHABBOUR AUTO

GB Auto signed an agreement with Cairo University whereby the car manufac-turer said it would support students who participate in the Baja SAE competitionorganized by SAE international, a group of around 138,000 engineers and tech-nical experts in the aerospace and automotive industries. GB Auto is offeringLE 375,000 as well as technical support to the contestants in their quest to buildtwo cars from scratch.

PEPSICO

Celebrating the 12-year success of its Pepsi Schools League, PepsiCo Egypt isteaming up with La Liga, the top professional association of the Spanish footballleague. The partnership aims at enhancing the skills of talented young playersby providing them with training from international football experts in the hopesof giving them a shot at professional careers.


Advertorial

After record sales in 2014, Mercedes-Benz presented its full passenger carline up at the 22nd Automech-Formula motor show. Models included theMercedes-Benz A-Class, CLA, GLA and GLK models as well as the com-pany’s core models; the C-Class, the E-Class and the flagship S400HYBRID. “In 2014 we sold approximately 4,300 cars representing abouta 40 percent growth bump over 2013,” said Zakaria Mackary, the com-pany’s director of sales and marketing. “In 2015, we plan to introducenew cars… and further invest in network expansions to continue to offerthe best levels of customer satisfaction.”

MERCEDES-BENZ

AbrajMisr has announced that The Gate, the first and largest eco-friendly, multi-use development in Egypt and the Middle East willcover an area of 35,000 square meters and cost LE 4.5 billion. “TheEgyptian real estate market is highly competitive and has hugeuntapped potential, which offers attractive long-term prospects,” saidAli Rabei, AbrajMisr’s CEO. The Gate is situated along Al NozhaStreet in the heart of Heliopolis. It’s a 10-minute drive from CairoInternational Airport and is close to Al Nasr, Salah Salem and AlOrouba Streets. The compound is expected to be finished by 2018.

ABRAJMISR

ABB, the global leader in power and automation technologies, hasannounced that it will be supplying Shalateen, Egypt’s most southerlytown, with a state-of-the-art grid application for a solar-powered under-ground water extraction station. The grid was ordered by SparkRenewables, a multi-disciplinary company operating in the field of windenergy and other renewable power sources.

ABB

Al-Mansour Automotive, a leading auto company for more than 40years, showcased its passenger car lineup at Automech-Formula2015. The new offerings include the new Meriva, Corsa, Adam,Cascada and Mokka models. "Opel is gearing up to grow tremen-dously as a popular brand in Egypt,” said Ankush Arora, AlMansour’s chief operating officer. He said that for the first time, theEgyptian Opel factory is producing five new models in the same year,and it’s also inaugurating the latest Al-Mansour Automotive show-room in Sheikh Zayed City.

AL MANSOUR AUTOMOTIVE


Announcements


Benefits

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 moreinformation, or to place a classified ad, contact Amany Kassem at (20-2) 3338-9890, fax (20-2) 3338-0850, e-mail: [email protected]

Would like to extend its exclusive offer of a 15% discount in all restaurants during weekdays.In addition to:

- City view rooms upgraded to Nile view with Egyptian direct rate during weekdays andweekends; late check out to 4p.m. subject to hotel availability.

- Special packages on spa, health club (available anytime till end of September 2015)- 20% discount on laundry during the stay.

* The offer is not applicable during public holidays and special events.

***Discounts will be granted for AmCham members upon presentingtheir AmCham 2015 membership card***

For more information, please contact:Rooms Information and reservations:Mahmoud Abou Hussein: Office: (20-2) 2798-8000• Fax: (20-2) 2798-8015E-mail: [email protected] Information and reservations:F&B reservation desk: • Office: 2798-8000 - Extension: 1151

Please visit AmCham’s Cyberlink on http://www.amcham.org.eg/cyberlinkfor more information on all AmCham benefits

Offer is valid until September 2015

SEMIRAMIS INTERCONTINENTAL HOTEL

Economy Mining

Electromechanical WorksEnergy

Revamping of the company's Al Hamrawin port on the Red Sea. This is a repeat-ed tender with extended deadline. Pre bid meeting is set for 3/24/2015.

Completion of the implementation of the medium and low voltage electricity networkand the street lighting network to serve the city's third district. Pre-bid meeting is setfor 3/30/2015.

El Nasr Mining Co., Commercial Division, the cashier,

New Urban Societies Authority, Al Shorouk CityDevelopment Agency, the cashier

LE 3,000,000LE 22,000

LE 500,000LE 1,000

April 29, 2015

April 15, 2015

www.amcham.org.eg/TASFor 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: [email protected]: www.amcham.org.eg • US Website: www.amcham-egypt.org

Description Client Bid bondSpecs feesDeadline Sectors

Beneficiary Sectors Generating Sectors

For more information about these jobs and others, visit: www.amcham.org.eg/recruitment – e-mail: [email protected], Tel: (20-2) 333 88 220 Ext. 1513 - 1514 Fax: (20-2) 333 73 779

Jobs

Top Tenders

AMCHAM RECRUITMENT CENTER

TOP TENDERS FROM TAS

Code Vacancies Company Name89437 Sales & Marketing Manager Mamiba Cosmetics89474 Project Manager Intelligent for Field Marketing89256 Treasury Manager Ideal Standard89491 Technical Team Leader Raya Holding Group89232 Sales Capability Manager Al Bardi Paper Mill Co. (Fine) - Nuqul Group89224 Administration Manager Ahram Security Group

U.S. Exhibitions

*Please refer to the Commercial Service at the US Embassy for any updates on the exhibitions.

Listings are now available on our website:www.amcham.org.egExhibitions related to the following sectors are scheduled for the upcoming months

Sector Show Name Website Embassy Contact

April

Broadcast The 2015 NAB Show nabshow.com [email protected]

May

Energy-Oil 2015 Offshore Technology Conference otcnet.org [email protected]

HospitalityThe National Restaurant Association Restaurant, Hotel-

Motel Show (NRA Show) 2015show.restaurant.org [email protected]

For more information about these exhibitions, please contact: The Commercial Service at the US EmbassyTel: (20-2) 2797-2330/ 40 - E-mail: [email protected]


Feb. 7, 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 theoriginal publications and no attempt has been made to ascertain their veracity.

MONKEY BUSINESSA group of escaped monkeys led resi-dents and authorities on an extendedchase after they managed to escapefrom a veterinary hospital in Nasr City.How some 14 to 18 of the primatesescaped from the government-ownedfacility—or what they were doing therein the first place—wasn’t clear. But pho-tos appeared on the Internet of theerrant apes perched in windowsills andsitting in trees. Several days went bywhile the authorities struggled to chasedown the monkeys, while in the mean-time, locals took to social media. Somecomplained that the monkeys were rav-aging their gardens, while others sug-gested novel strategies to catch them—from bananas laced with sleeping pillsto peanuts in cages. “If anybody cap-tures one of these monkeys, I would liketo keep it,” wrote one resident onTwitter. “I always wanted a monkey.”Others said there goes the neighbor-

hood: “We have enough street dogshere as it is,” someone tweeted. “Nowwe have street monkeys.”

Various media, March 4

NINE LIVESA lucky star must have been followinga stray cat who was recently rescuedfrom inside the walls of the NaguibMetro station, where she’d beentrapped for several years. A rider alert-ed authorities after hearing troubledmeowing coming from somewherewithin the underground structure. Thepolice, who were also apparent animallovers, dispatched a team straightawayto break down the wall. After workingfor eight hours, they managed to freethe frightened feline, who was nonethe-less in relatively good health after herlong ordeal. As it turned out, this was-n’t the first time fortune had smiled onthe charmed kitty. A local shop owner

explained that he had been feedingher scraps daily through a hole in thewall for about five years.

Al Watan, March 16

LABOR PAINSA kerfuffle erupted on a SaudiArabian Airlines flight scheduled totake off from Cairo InternationalAirport when the crew refused to flywith a visibly pregnant woman. Themother-to-be, however, declined toget off the plane, producing a doc-tor’s letter certifying that she was ingood health. She insisted that shemust get to Jedda to see her husband.The standoff went on for some twohours before the woman finallyagreed to leave the aircraft and go toa nearby hospital for a checkup.Before arriving at the clinic she wentinto labor, however, and a few hourslater gave birth.

Daily Arabia, March 19

Media Lite

A Glance At The Press

“We will fightbureaucracy!”

“Come back tomorrow,mister.”

Landslide - AmCham · 2015-04-07 · AmCham Egypt, the U.S. Chamber of Commerce, the U.S.-Egypt...

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Transcript of Landslide - AmCham · 2015-04-07 · AmCham Egypt, the U.S. Chamber of Commerce, the U.S.-Egypt...