Egypt in Brief
Customs Dutie Cut 25%, Adminitsration Goes Online
Minister of Trade and Industry Rachid Mohamed Rachid announced a
significant reduction in import duties on a wide range of
manufactured goods and raw materials during the first week of
February under Presidential Decree 39 of 2007.
The decree encompasses white goods and home appliances including
refrigerators, televisions and air conditioners; medication and
medical equipment; garments; food products; raw plastics; and
livestock feed, among other items.
Overall, the average import tariff dropped by around 25% to 6.5%,
with almost 90% of the customs tariffs charged on the 1,114 products
mentioned in the decree now in the 10%-or-less import duty bracket.
The move is part of an
effort to curb rising consumer prices, according to Minister of
Finance and Insurance Youssef Boutros-Ghali, who noted that
inflation was stable in January 2007 at an annualized 12.4%.
Custom tariffs for the food industry have been reduced on some
finished products and eliminated altogether for certain inputs.
Tariffs on fabrics dropped to 10% from 22%, on threads to 5% from
12% and on garments to 30% from 40%. Tariffs on agricultural
products of animal origin and on medications dropped to 30% from
While the tariff reduction includes consumer goods, officials said
that one of the objectives of reducing tariffs is to spur industrial
growth by making intermediary products and raw materials cheaper,
thereby improving local producers’ global competitiveness.
The move is estimated to cost the government LE 1.4 billion ($246.8
million), which Boutros-Ghali expects to recoup from taxes on new
While the tariff reduction should help eliminate smuggling by making
it a less attractive and less profitable venture and help provide
consumers with higher quality goods, it will also expose local
products to more competition. Rachid added that the government has
earmarked LE 150 million to help the local clothing industry deal
with competition from abroad.
The decision has met with mixed responses: Food producers welcomed
the reduction of tariffs on their inputs, while fabric and thread
manufacturers were disgruntled with a 55% cut in tariffs that they
say expose them to higher competition compared to garment
manufacturers, for whom tariffs were reduced by only 25%.
Meanwhile, as part of the Ministry of Finance’s efforts to further
restructure its operations, the Customs Authority signed a
memorandum of understanding with Information Technology and Services
Company (ITSC) to provide electronic manifest exchange services for
both inbound and outbound marine and air freight, using EDI and XML
The move will bring Egypt into compliance with UN and World Customs
Organization standards, which demand that manifests be submitted and
updated electronically, saving both time and money.
ITSC is part of the First Arabian Development & Investment Company (FADICO),
whose diverse investments in Egypt cover sectors including banking
and finance, hotels and tourism, manufacturing, energy development,
information technology and aviation.
The group has successfully provided data services for the Sokhna and
Damietta ports and also provides money transfer, bill collection and
corporate collection services.
The Customs Authority aims to implement paperless customs shipping
document management procedures within three months. Analysts expect
the move to sharply cut customs clearance times for inbound and
outbound shipments, but the authority declined to provide estimates
on how much the average time should drop.
The Nation in Brief
MasterIndex: Consumer Confidence Strong, but Sliding
Consumer confidence in Egypt dipped in the second half of 2006
compared with the first half of the year, but the Egyptian consumer
is still the fifth-most optimistic of all emerging markets surveyed,
according to the MasterIndex of Consumer Confidence.
The index in Egypt dropped to 78.2 out of 100 compared to 83
recorded in 1H06. Egypt’s fourth-place ranking among Middle East and
the Levant markets was unchanged from the first half of the year.
Focusing on five key economic barometers — employment, the economy,
regular income, the stock market and quality of life — the consumer
confidence survey is carried out in select South Asian, Middle
Eastern and African (SAMEA) markets twice a year to gauge consumer
perceptions of economic conditions for the six months ahead.
Egyptian consumers in Cairo and Alexandria, the only two cities in
Egypt where the survey was taken, are a little less optimistic about
the next six months than they were in the preceding survey, with
pessimism on all economic fronts.
Despite the dip in 2H06, last year’s score was still higher than its
62.3 in 2H05 and higher than the historical average of 57.2 points.
Survey scores for 2H06 showed the economy index dipping to 73 from
79.3 the year before; quality of life fell to 77.7 from 86.5;
employment rose to 81.2 from 80.5; regular income decreased to 83
from 89.9; and stock market slipped to 75.9 from 78.6.
Comparing individual markets, Saudi Arabia topped the surveyed
countries at 97.3, followed by Kuwait at 94.5, South Africa at 86.5
and the United Arab Emirates at 80. Lebanon trailed Egypt at 67.6.
This is the sixth MasterIndex conducted for the SAMEA region, which
has declined overall to 80.3 in 2H06 from 82.2 in 1H06. For the
Middle East and the Levant, the index has improved to 83.9 in 2H06
up from 82.1 in 1H06.
The survey group is asked about their outlook for the following six
months. As the region’s real GDP grew by an average 6.5–7% in 2006,
consumers reflected their confidence in the economy’s performance in
the upcoming year.
New Government Budget
Early in February, Prime Minister Ahmed Nazif discussed the broad
lines of the new state budget for FY07/08. Cabinet Spokesman Magdy
Rady said that LE 2 billion would be dedicated to developing the
railways, which is the remainder of an initial budget of LE 5
billion that had been originally earmarked for the project.
Budget housing efforts would be bolstered with an additional LE 1
billion in funding, the industrial modernization budget would be
doubled to LE 500 million from LE 250 million and the training
budget would also be boosted to LE 500 million from LE 250 million.
Mohamed Ibrahim Recognized
Mohamed Ibrahim, the billionaire Sudanese telecommunications
entrepreneur behind the African mobile giant CelTel International,
was honored at a telecoms industry gathering on February 13.
The GSM Association, the global trade association representing more
than 700 GSM mobile phone operators, recognized Ibrahim, who has
deep roots in Egypt, with its prestigious Chairman’s Award at the
annual 3GSM conference, held this year in Barcelona.
Presenting the award, GSM chairman Craig Ehrlich described Ibrahim
as “a visionary wireless technician and mobile businessman, whose
commitment to both the industry and the continent has helped the
world to hear Africa’s voice.”
Ibrahim, whose charity work has previously been profiled by
award-winning columnist Gwynne Dyer in these pages (see “An Honest
Payoff,” December 2006, p. 98) rose to prominence as founder of
CelTel, an African mobile phone operator that was present in 15
African countries when it was purchased by Kuwait-based MTC for $3.4
billion (LE 19.3 billion) in 2005.
He has since focused his efforts on philanthropy — most recently on
the Mo Ibrahim Prize for Achievement in African Leadership, which
will give over $5 million (LE 28.4 million) each year to an African
head of state who transfers power peacefully and democratically.
Newport Media Expands to Cairo
Newport Media, a US-based producer of semiconductors for use in the
digital audio and mobile television industries, announced last month
the establishment of a media design center to be located in Cairo.
Mohy Abdelgany, CEO and founder of Newport and a graduate of Ain
Shams University, was clearly happy to be bringing business back to
his home country, saying, “This is an exciting time in the mobile TV
industry, and the new Egypt design center enables us to quickly
maximize our efforts to develop and support multiple, major programs
Newport’s specialty is the production of computer chips designed
with the delivery of digital television to mobile phones in mind,
with a focus on attributes such as reduced size, weight, cost and
UN General Assembly Gets Egyptian Under-Secretary
Egyptian Ambassador Mohamed Shaaban got a promotion from new UN
Secretary General Ban Ki-moon on February 9. The former assistant to
Foreign Affairs Minister Ahmed Abul Gheit was named to the post of
undersecretary general for General Assembly and Conference
The new posting should allow Shaaban to use the ties he’s made over
more than two decades of work with the UN and other diplomatic
agencies. His most recent posting was as the Abul Gheit’s personal
assistant with responsibility for Egypt’s Middle East Reform
Shaaban previously served as assistant foreign minister for European
affairs from 2001-2004 and assistant foreign minister for African
affairs from 1997-98. The veteran diplomat was also Egypt’s lead
negotiator during talks on Egypt’s accession to COMESA.
Shaaban’s promotion comes as part of an administrative sweep that
saw many top officials replaced, including the appointment of the
former American ambassador to Indonesia as new undersecretary
general for political affairs — one of the UN’s top postings.
Ki-moon has been shuffling the cards he’s been dealt since taking
over the UN’s top job at the beginning of the year. The Secretary
General has accepted at least 17 resignations from senior UN
officials, out of more than 50 reported submissions, according to a
statement by Chef de Cabinet Vijay Nambiar.
Visa Cracks Down on Identity Theft, Fraud
On January 22, 2007, Egyptian Fraud Forum members and Visa
International inked a charter that makes Egypt the only African
state to allow fraud-related information sharing among EFF members.
The EFF — a platform for industry experts to exchange knowledge and
information on commercial crimes and the means to fight it — is
hosted by Visa International. Dina Yassa, deputy general manager of
retail banking at the Arab African International Bank, was elected
Forum chairperson, while other prominent members were drawn from
Commercial International Bank (COMI, bt100 number 13), Banque Misr
and the National Bank of Egypt.
Egypt’s payment-card fraud rate remains lower than both the global
and regional averages, and Visa has said it plans to use the
Egyptian model in other regions.
Savola Plans Egypt Sugar Refinery
Savola Group, Saudi Arabia’s leading food products company, has
revealed plans to establish a sugar refinery in Egypt next August.
The 750,000-ton-per-year plant — a joint venture with Tate and Lyle,
among other companies — will be established on the Gulf of Suez
coast and will focus on sales to the Egyptian, Jordanian, Lebanese
and Syrian markets.
Savola hopes to fill a gap created by the absence of European Union
sugar from the regional market as Arab demand for sugar is estimated
to be growing at about 2.5% per year, spurred by population and
economic growth. Egypt’s market alone consumes 2.5 million tons of
sugar per year, 1.5 million of which is produced locally.
The Egyptian plant will cost Savola an estimated $90 million, with
almost half of its output for the local market and the remainder for
export. It will be Savola’s second refinery, following its Jeddah
plant, which has a 1 million-ton-per-year capacity.
Meanwhile, the group recently broke off negotiations to acquire an
additional stake in the Egyptian Fertilizers Company, in which it
already holds a 30% stake.
IMC and Siemens Sign Three Agreements
The Ministry of Trade and Industry’s in-dustrial Modernization
Center (IMC) and Siemens signed three cooperation agreements at the
Egyptian-German Business Forum held in Cairo last month.
The agreements are all aimed at upgrading factories and machinery as
well as cooperation on training and technical programs.
The first agreement is to modernize automation and machines used in
industrial development centers and schools backed by the IMC.
Siemens will provide equipment for 50 training centers nationwide in
a multi-stage program; each stage will last six months and include
up to 12 centers. Siemens Group will cover 50% of the cost while
Siemens Egypt will cover 30%.
The second agreement is to upgrade machine and equipment factories
in Egypt, including 30 factories, to increase their exports. The IMC
will test all local equipment and help manufacturers to analyze the
gap and provide advice on how to improve. The modernization will
touch on management skills, electrical solutions and technical
know-how transfer. Siemens will provide 400 experts for free.
The third agreement is to improve the use of digital technology in
50 factories, through cooperation between Siemens Energy &
Automation and the IMC by upgrading electric connections in the
production lines using remote control in the furniture, engineering,
textile, chemical and pharmaceutical sectors.
Prime Minister Ahmed Nazif and German Chancellor Angela Merkel
inaugurated the February forum with Nazif quoting a 25% increase in
bilateral trade in addition to an increase in the number of German
tourists coming to Egypt. Germany continues to explore investment
opportunities in the Egyptian housing, industry, tourism, railway
and highway sectors.
Air Traffic Control Satellite in Works
Minister of Civil Aviation Ahmad Shafiq announced last month that
the construction of an Egyptian satellite for air traffic control is
underway, adding that it will be put into operation in 2010.
The initiative aims to serve the growing number of flights to
Egyptian airports, where passenger volume is growing an average of
6% annually, which according to the minister is higher than the
current global rates.
In other news, construction of Cairo International Airport’s
Terminal 3 is almost complete, and the terminal should be
operational in 2008. The ministry is already planning for a fourth
IFC to Fund Local Hospital Expansion
The International Finance Corporation, the private-sector arm of the
World Bank, will step in to support the Middle East and North
Africa’s healthcare industry by financing the expansion of the Saudi
German Hospitals Group.
The IFC will provide $37 million to support a new hospital in Sanaa,
Yemen, and the construction of a hospital in Cairo. The SGH Group
has been a major participant in Saudi Arabia’s health sector since
1988, and the group owns and operates five hospitals.
The planned Cairo hospital will be a multi-specialty facility with a
Gamesa to Provide Wind Turbines
Spain’s Gamesa Corporacion Tecnologica has been awarded two
contracts worth a total of $367.7 million (LE 2.08 billion) to
supply Egypt with 284 wind turbines with a total power capacity of
A company statement indicated that the turbines would be used in the
construction of two wind farms in Zafarana on the Red Sea coast.
Work on the wind-power installation will begin in the second half of
2008. These two new turnkey contracts make Gamesa the main supplier
of wind turbines in Egypt with 405 megawatts.
TIHC Settles Debts
The extraordinary general meeting (EGM) the Trade Industries Holding
Company (TIHC) held at the end of January approved the return of
80,000 acres of TIHC land in Toshka to the Ministry of Agriculture.
The holding company will retain 40,000 acres.
The EGM was attended by Minister of Investment Mahmoud Mohieldin and
Minister of Manpower Aisha Abdel Hadi. Mohieldin said that six TIHC
subsidiaries had settled debts worth a total LE 1.16 billion with
the National Bank of Egypt, Banque Misr and Banque du Caire. The
companies include El-Nasr Import and Export, which settled LE 646
million in debts; Sidnawy, LE 100 million; and Banzion, LE 180
million. The debt settlement will save TIHC LE 151 million in annual
interest expenses, which will reflect in its 2006/2007 budget.
For FY05/06, TIHC recorded profits worth LE 39 million and total
revenues worth LE 2.035 billion compared to LE 1.885 billion
recorded the year before, indicating an 8% increase. Exports more
than tripled from LE 111 million to LE 409 million during the same
Private Sector to Manage West Delta Project
The World Bank has agreed to extend a $175 million (LE 992.5
million) loan to the Egyptian government to be paid off in 20 years
to develop the West Delta Water Conservation and Irrigation
The project is part of the government’s effort to foster continued
agricultural growth and investment by developing irrigation over a
The private sector will pay off the loan in return for services
including digging a new canal to extend Nile water into the area;
well water, on which the project is currently dependent, is running
Minister of Public Works and Water Resources Mahmoud Abu Zeid said
that it had been a Cabinet decision to let the private sector manage
and operate the project.
Oshkosh to Supply Army Trucks
Oshkosh Truck Corporation, a US manufacturer of heavy-duty trucks
for both civilian and military purposes, inked a deal last month
with the Ministry of Defense and Military Production to supply 30
medium tactical trucks worth a total of $4.9 million (LE 27.8
Oshkosh, the largest supplier of heavy-duty military trucks to the
US Army, also exports trucks for civilian uses such as firefighting
and transportation of construction equipment.
Oshkosh trucks and equipment have been used in the Egyptian Army
since 1990. According to Oshkosh, the first four trucks of the deal
will be shipped fully manufactured from the United States, with the
remaining vehicles to be assembled at the Egyptian Tank Plant in
Best Affirms, Withdraws Ratings on Mohandes
A.M. Best affirmed last month its financial strength rating of B++
and issued a credit rating of bbb for Mohandes Insurance (bt100
number 93) with a stable outlook. Barely a week later, the company
issued a follow-up stating that it had “withdrawn the rating in
response to the company’s request and has assigned it an NR-4
“The rating reflects the company’s strong risk-adjusted
capitalization and good operating performance,” Best said. The
agency also indicated that it “anticipates Mohandes to continue its
good performance through targeting small entities, enabling the
company to maintain its market position despite increased
competition from domestic and foreign firms in Egypt.”
Mohandes faces pressure from new entrants to the Egyptian market for
non-life underwriting, which should prompt it to focus on niche
areas such as new takaful (Islamic insurance) products to counter
the growing threat to its market position.
EFG-Hermes Announces Net Profit Growth
EFG-Hermes (bt100 number 26), the investment-banking firm with
market capitalization of over LE 15.96 billion, announced strong
financial results for 2006 in a February 22 statement.
Revenues grew by over 48%, with net profit climbing 42.4% to LE
498.6 million. EFG has rapidly become one of the largest investment
banks in the Arab world, and analysts expect another strong year
from the firm in 2007 as it expands its operations to the lucrative
market of Saudi Arabia.
Meanwhile, EFG also announced that it would appoint a non-executive
chairman to the board of the company, bringing the firm in line with
international best practices. The Capital Market Authority is
expected to mandate non-executive chairmen for all publicly traded
companies in the coming year.
AGF Allianz Discusses Investment Opportunities in Egypt
Hugues de Roquette-Buisson, AGF Allianz Group’s general manager for
the Middle East and a member of the French Business Investors
Association (MEDEF), met with Prime Minister Ahmed Nazif and the
ministers of finance, investment, and trade and industry, as well as
members of the Egyptian Businessmen’s Association and the General
Authority for Free Zones and Investment, to discuss ways to boost
French investment in Egypt.
MEDEF arranged the bilateral meetings as part of the Egyptian-French
presidential business council established by President Hosni Mubarak
and French President Jacques Chirac.
During his visit, de Roquette-Buisson announced that after offering
takaful products in Saudi Arabia, Allianz is in the process of
opening a new takaful insurance company in the Gulf, emphasizing the
company’s aim to secure a strong presence in this region as a
full-service provider offering asset management, reinsurance,
banking and management of special risks.
Allianz Egypt is a leading provider of life insurance, long-term
care insurance products and health excess of loss insurance
products. The company comprises two subsidiaries: Allianz Insurance
Company and Allianz Life Assurance of Egypt.
Egypt Signs Trade Agreement with EFTA
The European Free Trade Association’s (EFTA) four members signed a
free-trade agreement with Egypt on the sidelines of January’s World
Economic Forum in Davos.
The accord will liberalize trade in industrial products and
processed agricultural products and contains provisions for
protecting intellectual property rights, competition and technical
cooperation. Provisions for services, investments and public
procurement will be negotiated at a later date.
The agreement on agricultural trade was left to be decided on a
Minister of Trade and Industry Rachid Mohamed Rachid said he hoped
the deal would open up business opportunities and cement relations
between the EFTA and Egypt.
Tajikistan Revives Egypt Relations
Tajik President Emomali Rakhmonov visited Egypt and Syria in
February with hopes of restoring ties that lapsed during
Tajikistan’s five-year civil war from 1992 to 1997.
During his weeklong visit, the Tajik president held top-level talks
in Cairo and Damascus and met with Egyptian and Syrian business
The Tajiks hope to lure both Egyptian and Syrian investment. Today,
economic relations between the two sides are virtually non-existent:
Tajikistan’s total bilateral trade with Egypt rang in at exactly
$3,100 last year, while it exchanged goods worth $126,400 with
Rakhmonov was also expected to address security and policing
questions during his visit.
Publicly Traded Petroleum Company?
Minister of Petroleum Sameh Fahmy has delegated a team to look into
a proposal made by MP Mohamed Abul Einein to establish new
exploration companies to be traded on the stock market.
The plan is for the small investor to benefit from the strides made
in the petroleum sector. The move would also make Egypt the top
beneficiary of its petroleum wealth, Abul Einein said.
The ministry has said it would consider creating an exploration firm
with 70–80% of its equity on the Cairo and Alexandria Stock Exchange
and the rest in the government’s hands.
Turkey Warns on Drilling Rights
Turkey has warned Lebanon and Egypt not carry out their oil and gas
exploration deals signed with Cyprus. A statement from the Turkish
foreign ministry said that Turkey was “determined to protect its
rights and interests in the eastern Mediterranean and will not allow
attempts to erode them.”
Lebanon and Cyprus had signed an agreement on January 17 for the
demarcation of a border across the 200 kilometer-wide oil- and
natural gas-rich seabed between the two countries to facilitate
future oil and gas exploration.
A similar agreement was signed between Egypt and Cyprus, allowing
for joint exploration of potential undersea oil and gas fields.
Turkey’s determination to terminate the agreements comes in light of
the Turkish-Greek divide that exists in Cyprus. The Greek-Cypriot
government based in the south of the island, which is the
internationally recognized government, said it would launch an
international tender in February for offshore oil and gas
Dana Gas Sixth Largest in Egypt
Dana Gas, the Sharjah-based natural gas company owned by a
consortium of 300 founding investors from the Gulf Cooperation
Council countries, has announced significant developments regarding
its Egyptian operations.
Dana Gas entered the Egyptian market by acquiring Canada’s Centurion
Energy in a $950 million (LE 5.39 billion) deal in January.
Dana Gas is now the sixth-largest natural gas producer in Egypt and
well positioned to ride an expected boom in the local natural gas
sector over the coming years. Since 2002, Egypt’s proven natural gas
reserves have doubled to over 70 trillion cubic feet, with expected
natural gas exports to reach $10 billion (LE 57 billion) by 2010.
Dana’s acquisition of Centurion also gave it ownership of lucrative
fields in gas-rich regions such as Tunisia and offshore West Africa.
Shell Egypt Announces Discoveries
Shell Egypt announced last month a series of new oil and gas
discoveries in the Western Desert, which will increase the company’s
daily production capacity by an additional 42 million cubic feet per
day of natural gas and 4,000 barrels per day of oil.
At current market prices, the new discoveries would increase yearly
production revenues by $211 million (LE 1.2 billion). In 2006, Royal
Dutch Shell, Shell Egypt’s Anglo-Dutch parent company, became the
second-largest corporation in the world by earnings, with total
revenues surging to $318.8 billion and yearly profit up by 25% to
BP Egypt Announces Offshore Gas Discovery in West Nile Delta
BP Egypt announced the successful drilling of the Giza North-1 well
in the North Alexandria concession jointly held by BP, RWE Dea and
EGPC/EGAS. The well struck a significant gas accumulation and is
estimated to hold reserves equivalent to nine months of local gas
The Giza complex is estimated to contain more than one trillion
cubic feet of gas. The drilling of another well is planned for April
2007 to further appraise the complex. The rig will shortly move onto
the next appraisal well in the Taurus field as part of a four-well
appraisal program in the North Alexandria concession.
Currently, 65 multinational companies are conducting exploration
activities across the country, with a rate of success that is three
times more than the global rate, especially in the Mediterranean
The country’s proven gas reserves have doubled over the last seven
years from 36 trillion cubic feet in 1998-99 to 67 tcf in 2004-05.
Potential reserves are estimated at 100-120 tcf with 70 tcf
estimated to lie in deep waters, making Egypt second in the world in
terms of potential deep-water reserves
Vodafone to Launch Voice Messaging
Vodafone Egypt has signed a deal with US-based Bubble Motion,
developers of voice applications for mobile phone users and
Bubble Motion’s most successful product to date is BubbleTALK, a
voice SMS system that allows mobile phone users to send voice
messages to contacts in much the same way that text messages are
BubbleTALK is seen by telecommunications industry analysts as one of
a number of ways in which mobile network operators will look to
increase revenue in coming years. As market penetration increases
and the cost of gaining new customers becomes higher, revenue growth
will become increasingly reliant on growing average revenue per user
(ARPU) rather than simply growing the number of subscribers.
Mobinil’s launch of EDGE high-speed data services (over which it has
entered into a dispute with government regulators), and Vodafone
Egypt and Etisalat’s expected entry into the market with third
generation (3G) data services are also signs of a major focus on
ARPU growth in coming years.
AMD and Centra Sign Deal
Advanced Micro Devices, the world’s second-largest chipmaker,
announced a partnership with Egypt’s Centra Technologies, a
PC-assembling company that supplies both the local and international
The agreement will give Centra access to AMD’s full range of
computer processors. Market analysts attribute the move as a
response to Intel’s activity in Egypt.
Intel, which controls a 78% share of the PC chip market globally,
launched a series of initiatives in Egypt last year, including the
establishment of a high-tech “digital village” in the rural town of
Oseem, supporting the development of an electronic Qur’an and
launching a low-cost PC for the local market.
Tejari Launches in Egypt
Tejari, a Middle East business-to-business marketplace, launched its
Egyptian operation, Tejari Egypt, at Cairo’s Information and
Community Technologies (ICT) exhibition held February 4-7, 2007.
The gateway into the North Africa market has been established in
partnership with Al-Ahly Development and Investment (bt100 number
94) and will introduce e-procurement and e-commerce services to both
government departments and private enterprises, providing an
expected 15–20% procurement savings.
At a press conference held at ICT, Tejari CEO Omar Hijazi said,
“Over the next five years, we plan to cater [to] more than 20,000
Egyptian organizations who will adopt e-procurement through Tejari
Egypt, resulting in more than $1 billion worth of trade being
transacted through our marketplace. We see enormous potential for
e-commerce and e-procurement in Egypt, and with ADI, Tejari has the
ideal partner to offer the measurable procurement efficiencies and
other benefits that our online marketplace can bring to
organizations in Egypt.”
Tejari has a presence in eleven countries, including UAE, Jordan,
Oman, Lebanon and Pakistan.
MCIT Assigns Commercial WiMAX Licenses
The Ministry of Communication and Information Technology is working
on a project to transform Luxor and Sharm El-Sheikh into wireless
cities through the use of WiMAX high-speed wireless internet
MCIT is using the two tourist hubs as pilot projects pending a
nationwide rollout of WiMAX licenses, says Khaled Ismail, senior
technology development advisor to Minister of CIT Tarek Kamel.
The project follows one of the three top recommendations from a
digital transformation study completed by global management
consulting firm A.T. Kearney. The study also recommended that Egypt
open itself to the Indian economy and that the government help the
CIT industry focus on areas of inherent strength.
Ismail says focusing on Luxor and Sharm will have the additional
benefit of improving Egypt’s image in the eyes of tourists. He
expects the WiMAX project to create approximately 1,000 jobs in the
TE Data and EgyNet will build and operate the first two WiMAX
Opening up to the Indian economy is expected to create 35,000
employment opportunities as Egypt cooperates, and not competes, with
the Indian CIT sector. “We have a competitive advantage in the
technical support sector and we should make use of it,” Ismail says.
Sawiris Moves on to Greece
Orascom Telecom Chairman Naguib Sawiris announced Weather
Investment’s acquisition of Greece’s third-largest mobile operator,
TIM Hellas, for $4.4 billion in early February.
Weather Investments — 97% owned by the Sawiris family — is poised to
become a leading operator in Europe after its 2005 acquisition of
Italian mobile operator Wind Telecomunicazioni for $6.22 billion
from power company Enel.
The sale was funded by Deutsche Bank, Citibank and Banca IMI, which
to date have provided a total equity worth $647.75 million. Speaking
to the press, Sawiris denied any extra funding was made to refinance
Weather Investment’s debts.
TIM Hellas is Greece’s third-largest mobile telephone operator by
market share after the Hellenic Telecommunications Organization and
Vodafone Group’s local operation. (See story on page 40.)
Acer and Mantrac Support ‘PC in Every Home’ initiative
Acer Computer Middle East and Mansour Group’s Mantrac have announced
that they will supply a large share of PCs earmarked for millions of
homes across Egypt as part of the government’s home-computing
Acer had received the highest rating from the Egyptian government of
all platforms tested in both the notebook and desktop categories
The plan will see desktop requirements met by 10 government-approved
partners (seven Egyptian and three international vendors) while five
will serve the laptop segment (three international and two
Mantrac is the authorized Caterpillar and Michelin dealer in Egypt;
the company established an IT distribution division in 1998, which
is today a multi-brand, multi-product distributor for names
including Acer, Dell, HP, 3COM and Fujitsu-Siemens.
DAMAC Properties Opens Office in Egypt
DAMAC Properties, Dubai’s leading private-sector luxury property
developer, cemented its presence in the Egyptian market with the
opening of its first office in the country last month.
The developer’s first project in Egypt, Gamsha Bay, was announced
last December. The area’s largest township, Gamsha Bay is located 60
kilometers north of Hurghada and will offer an array of housing
options as well as entertainment and recreational amenities
including a theme park.
The 320 million-square-foot project, to be completed in five phases
over the next decade, will be divided into nine zones: Gamsha
Marina, Marina Park, Coral Golf Course, Sea View Crescent, Creek
Retreat, Gamsha Bay, Peninsula Luxury Villas, Downtown Gamsha and
Extreme Sports World Theme Park.
Total investments are expected to reach $16 billion.
In a statement, DAMAC Chairman and founder Hussain Sajwani said, “We
are delighted to open our first office in Egypt, as it is a key
regional market with significant growth potential. This is only the
first step along the way to establishing a strong presence for DAMAC
Properties in Egypt.
“Egypt is blessed with a number of factors such as the natural
beauty of its coastlines and easy access to international markets
that will help position it as one of the top countries to attract
overseas home owners,” he added.
DAMAC Properties is a division of Dubai-based DAMAC Holding, a
global conglomerate with operations in 18 countries. DAMAC
Properties’ portfolio currently includes 52 towers worth $4 billion.
The group recently won three awards at the CNBC Arabian Property
Awards 2006: best development award for Oceanscape, best
architecture award for Ocean Heights 2, and best website award for
the company’s website.
Talaat Mostafa Taps Saudi Market
Talaat Mostafa Group is dipping its toes into the Saudi market: TMG
has established Aknan Urban Development with capital worth $319
million. Partners in the new venture include businessman Essam
Moheeb; Saudi development company Al-Oula, headed by Abdallah
Fawzan; and Saudi Arabia’s Al Ibrahimiya for Real Estate Development
headed by Qays Goleedan. Aknan’s investments worth $2.6 billion are
underway in Jeddah and Riyad to build integrated communities.
New Unified Building Law Due in Months
During a conference on real estate finance and investment organized
by the Egyptian Junior Business Association held at the end of
January, Minister of Housing Ahmed El-Maghrabi revealed plans for a
unified building law, which he expects will help solve “85% of
Egypt’s real estate problems.”
On a separate note, El-Maghrabi blamed the rent law for the
deterioration of investments in real estate over the past decades.
He re-emphasized the need for an in-depth analysis of laws to
determine the scope of their effect on economic activity and the
society before passing them.
He added that his ministry has launched a tender for international
planning companies to present plans for the development of Egypt’s
suburbs, indicating that LE 19 billion has been spent on extending
utility services to these areas over the last three years. He also
pointed out that the Housing Ministry is fighting the trend of “land
cooling,” where landowners hold onto land without developing it,
only to sell it when its price appreciates.
With regards to the new building law, Maghrabi said that maximum
heights will be clearly indicated, along with requirements for a
minimum 10% green space in the form of public gardens.
Minister of Investment Mahmoud Mohieldin pointed out that loans
given to finance real estate have exceeded LE 1 billion. He also
noted that improvements in the land registration process have
reduced fees to a maximum of LE 2,500.
The Ministry of Investment is in the process of establishing three
mortgage companies that will begin operations in 2008; each company
will have its own financing unit so clients will not be forced to
deal with only banks when trying to finance their new homes.
Tourist Arrivals on the Rise
CAPMAS statistics for November 2006 show that the number of tourists
coming to Egypt increased 8.8% compared to the same month the year
before, reaching 802,952. The number of tourist nights also
increased 9.4% for the same comparative periods.
European tourists were the largest group, making up 74.4% of the
total, followed by tourists from Middle East countries at 13.4%,
North America 3.3% and Africa 3%.
The total number of Arab tourists dropped 2.8% between November 2005
and November 2006, nevertheless the number of tourist nights spent
by Arab tourists increased 16%, with Lebanese in the lead, followed
by Saudi and Sudanese tourists, respectively.
Statistics showed that tourists from Qatar increased 26.4% in 2006
compared to 2005, the highest jump in the region. Of the GCC
countries, Saudi Arabia continues to be the strongest source of
outbound tourists with more than 388,000 visitors to Egypt, a 7.5%
increase over 2005. UAE visitors increased 21.8%, Libya 17.8%,
Jordan 16.9%, Kuwait 16.7%, Tunisia 14.7% and Bahrain 13.4%.
InterContinental Concludes Garden Reef Resort Sharm El-Sheikh
InterContinental Hotels Group announced the termination of its
management contract with InterContinental Garden Reef Resort Sharm
El-Sheikh as of January 29, 2007, according to a company statement.
IHG continues to operate eight hotels and resorts across three
brands in Egypt, including the recent addition of InterContinental
Taba Heights Resort, which opened mid-2006.
UK-based IHG is the world’s largest hotel group by number of rooms:
It owns, manages, leases or franchises through various subsidiaries
more than 3,650 hotels and 540,000 guest rooms in nearly 100
countries and territories around the world. The group aims to
increase its portfolio by 50,000–60,000 rooms by 2008 and as such is
exploring new opportunities in the Egyptian market.
IHG owns a portfolio of well-recognized and respected hotel brands
including InterContinental, Crowne Plaza, Holiday Inn, Staybridge
Suites, Candlewood Suites and Hotel Indigo. It also manages the
world’s largest hotel loyalty program, Priority Club Rewards, with
over 28 million members worldwide.
Sukari Gold Mine Approved
Australian gold mining company Centa- min Egypt, which has been
eyeing vast gold reserves in the Eastern Desert since 1995, has
announced that it will proceed with the $216 million (LE 1.23
billion) Sukari gold mine project there.
Centamin, whose operations have previously been profiled by bt
(“Fools Rush In?” September 2006, page 89), plan to have the mine
fully operational by 2008.
The Sukari mine has confirmed reserves of 8.26 million ounces of
gold, worth approximately $5.42 billion (LE 30.74 bn). It is
planned that the gold will be extracted at a rate of approximately
200,000 ounces per year for 15 years. As Sukari is only one of many
such untapped ancient gold mines, the first Egyptian gold rush since
the time of Pharaohs could well be upon us.