MEAT EXPORTS TO EGYPT RISE IN RESPONSE TO STUDY Source: Google News, July 24, 2007
U.S. beef exports to Egypt are on the rise, thanks to a new shelf-life study conducted in part by the Colorado State University's Department of Animal Science (link here).
CSU, partnering with the U.S. Meat Export Federation (link here), researched the effects of frozen storage on color, flavor, protein, quality and safety of U.S. beef livers, hearts and kidneys. The study determined that there were harmless amounts of protein degradation, lipid oxidation and overall rancidity of frozen livers, hearts and kidneys stored up to 320 days. With strong U.S. Department of Agriculture support, the results of this study prompted Egypt to ease its restrictions on shelf life of U.S. beef products, providing exporters with more flexibility.
USDA Foreign Agricultural Service (link here) personnel, presented the study and results to the Egyptian government. Based on the report findings, Egypt changed shelf-life requirements for hearts and kidneys from four to seven months. Egypt also removed requirements that the product had to reach the country with 50% of its shelf life remaining and that the product had to be shipped within two months of production.
Export statistics reported through the first three months of 2007 show U.S. variety meats such as those mentioned above increased nearly 50 percent from 2006, posting a total value of USD 17.4 million. Of that, U.S. beef livers increased 52 percent, and kidneys increased from zero to 1,000 metric tons.
According to Suez Canal authorities, national revenues from the Suez Canal climbed to USD 358.8 million in June 2007 from USD 318.1 million in the same month a year earlier. The news was announced at commemoration ceremony celebrating the 51st anniversary of the canal’s nationalization by Gamal Abdel Nasser. Canal revenues were USD 383.7 million just a month earlier in May 2007. The government-run canal is one of Egypt's main foreign currency earners, generating revenues of USD 3.8 billion in Egypt’s FY 2006/07 alone.
The number of vessels passing through the waterway fell to 1,657 in June from 1,679 in May, but up from 1,534 in June 2006.
The Suez Canal Authority has raised fees on passing ships this year by an average of 2.8 percent. The application of the new tolls started in April 2007.
STEEL PRICES FALL BY AROUND EGP70 PER TON Source: Al- Ahram, EFG-Hermes, July 24, 2007
Monthly steel production has increased by 19,000 tons since March to reach 0.3 million tons in June, according to the Ministry of Trade and Industry’s (MTI) (link here) latest report on steel production and trade. The country’s steel mills produced 100,000 tons a week in July, up from around 90,000 tons a week in previous months. Local sales also increased due to a decrease in exports and higher local demand. Local steel prices fell in the past few weeks by an average EGP70 per ton, down from EGP 3,630 to EGP 3,600 due mainly to a USD 75 decrease in the per ton price of international billets.
GOVERNMENT ACCELERATES DECENTRALIZATION Source: Al Alam al Yom, EFG-Hermes, July 25, 2007
The GOE has recently allocated EGP 125 million to a five-year decentralization project targeted toward the administrative systems in Egypt’s 26 governorates. The project, still in its initial stages, focuses on six centers around Egypt and is designed to help the governorates establish new plans, develop a national network and improve administrative structures at all levels.
2008 ARAB ECONOMIC SUMMIT TO ADDRESS ENVIRONMENTAL ISSUES Source: China Daily.com, July 22, 2007
According to a recent speech by Egypt’s Ministry of State for the Environment (link here), Egypt and a few other Arab countries have recently called for Arab coordination in efforts on natural disaster management. The Ministry’s speech noted the importance of increasing investment resources for environmental projects in the Arab world, particularly those that address prevention and recovery strategies in a region prone to both natural disasters and the most immediate impacts of climate change.
The Arab Environment Ministers Council will be considering relevant topics for discussion at the 2008 Arab economic summit, including initiatives for sustained development in the Arab region, and allocating funds for environmental programs and projects of an Arab nature.
STATOIL AND ALGERIA'S SONATRACH SIGN OIL PRODUCTION ACCORD Source: AFX News Limited, July 17, 2007
Algeria's state oil company Sonatrach (link here) and Norwegian state oil company Statoil ASA (link here) have recently signed agreements for joint research and off-shore oil production in Egypt’s Sinai as a consortium with 80 percent owned by Statoil and the remaining 20 percent by Sonatrach. The scheduled projects will be Sonatrach’s first experiment with off-shore production.
The contracts will be carried out by a unit of Sonatrach, Sonatrach International Petroleum Exploration & Production (SIPEX) (link here), in partnership with Statoil.
PGNIG TO BEGIN GAS EXPLORATIONS Source: AFX News Limited, July 23, 2007
Polish gas monopoly PGNiG (link here) will begin gas exploration activities in Egypt over the first half of 2008, plans which were slightly delayed after it its deal with the Egyptian General Petroleum Company was signed on July 18.
BP TO SPEND USD5 BILLION THROUGH 2011 Source: Bloomberg, EFG-Hermes, July 26, 2007
British Petroleum (BP) (link here) recently announced plans to spend USD 5 billion to search for and produce oil and natural gas in Egypt over the next five years. BP will drill in the Gulf of Suez, the Nile delta and in deep waters off the Mediterranean Sea coast with those investments.
The investments come in time, as Egypt steps up exploration to increase production levels, which have declined from 922,000 barrels per day in 1996 to 600,000 barrels a day ten years later. In the last six years, however, Egypt’s proven gas reserves have doubled to 72.3 trillion cubic feet, according to government figures. Egypt aims to double gas exports from 17 billion in 2006 to 35 billion cubic meters a day by 2011 while adding 30 trillion cubic feet to proven reserves through exploration activities.
SHARM DREAMS TO RE-OFFER 1.86 MLN SHARES Source: Reuters Africa, July 17, 2007
Egyptian hotel company Sharm Dreams for Tourism Investment has recently announced its plan to re-open subscription to an uncovered portion of its capital increase. The original offering, which ended in early June 2007, allowed shareholder subscriptions for only 4.14 million shares, with 1.86 million shares still remaining.
The second offering, which took place July 25-27, held subscription prices at EGP 30 and raised the number of company shares to 32 million. A third offering will be held in late August to release the extra 6.4 million, each carrying a nominal value of EGP 10.
ART MARINE OPENS NEW OFFICE IN EL GOUNA Source: asiatraveltips.com, July 23, 2007
ART Marine (link here), a Marine Hospitality Company in the Middle East, has opened an office in El Gouna, the company’s first office outside the UAE. The ART Marine office in Abu Tig Marina, El Gouna, offers state of the art yacht sales and after-sales services to the Egyptian market.
DAMAC REINFORCES ITS PRESENCE IN EGYPT Source: Al Bawaba.com, July 22, 2007
DAMAC Properties (link here), the largest private sector luxury lifestyle provider in the Middle East, is hosting a gala dinner at the Four Seasons Nile Plaza (link here) to introduce the company’s upcoming mega projects in Egypt. Damac plans to launch three projects, one to be called Gamsha Bay, a planned leisure and residence development stretching across 32 million square kilometers of land and 39 kilometers of Red Sea coastline. The Gamsha Bay project has an expected investment of USD 16 billion. With completion scheduled for 2017. Other projects include Park Avenue in 6th of October City as well as another exclusive project in New Cairo.
Park Avenue, to be located in 6th of October City, will offer an international retail experience amidst an array of business and recreational activities. The Park Avenue project has an anticipated value of USD 300 million. DAMAC’s third project in New Cairo, also to include a mix of residential and commercial services, will cover 1500 feddans of land bought at auction for EGP 4.7 billion.
SAUDI COMPANY TO BUILD INDUSTRIAL ZONE IN EGYPT Source: dbfx.com, July 23, 2007
The Ministry of Trade & Industry (MTI) has recently announced the Egyptian Industrial Developers System’s first ever contract with an unnamed Saudi company, which will seal a deal to construct an industrial zone in 6th of October City, stretching across 1.5 million square meters.
Initial investments intended for the zone’s infrastructural base are valued around EGP 0.5 billion, with total investments expected to reach EGP 4.5 billion. The new project will be completed in two years.
Some 60 percent of the Industrial zone will be devoted to local construction industries while the remaining 40 percent will be allocated to the processed food and textiles sectors.
EGYPT TO EXTEND POTABLE WATER NETWORK Source: Al Alam al Yom, EFG-Hermes, July 26, 2007
The Cabinet has recently allocated EGP 1 billion for drinking water projects to extend potable water to all villages and remote areas. The project is designed to improve water services for 1.5 million people.
NTRA SLASHES BROADBAND INTERNET SUBSCRIPTION TO A NEW MAXIMUM RATE Source: Al Ahram, EFG-Hermes, July 26, 2007
The National Telecommunications Regulatory Authority (NTRA) (link here) has recently agreed to slash the maximum subscription rate charged by internet service providers (ISPs) for 256 kilobyte-per-second ADSL services from EGP 95 to EGP 45 per month. The reduction will become official in September 2007. The new plan aims to offer subscribers a choice between maximum downloads or number of connectivity hours according to their preference. The NTRA board will also allow ISPs to reduce rates for lower connection speeds and Broadband internet service providers to reduce their monthly subscription fees below EGP45 maximum to reach a broader audience. Providers can offer packages with different speeds and hours for different monthly subscription fees.
GPX LAUNCHES NEUTRAL MIDDLE EAST INTERNET EXCHANGE IN CAIRO Source: Al-Bawaba, July 21, 2007
GPX Global Systems, Inc. (link here) has recently announced the opening of its Middle East/North Africa Internet Exchange (MEIX) hub site in Cairo, Egypt. MEIX will be one of the key telecommunication transit service providers operating in a free telecommunications zone and is fully licensed by the Ministry of Communications and Information Technology (link here). The state-of-the-art Internet exchange is located in Heliopolis and is the first of its kind in Egypt.
GPX’s MEIX offers customers collocation, onsite interconnectivity, a secure and reliable environment to house servers and network equipment, and local access to ISPs and telecommunications providers residing within the exchange. MEIX also allows local and international customers to interconnect without having to route data outside Egypt, eliminating long haul transport costs and mitigating network outage risks.
Unlike other telecommunications and ISP-owned interconnect businesses within the region, GPX does not resell network transport or hosting services, so customers are free to choose, in an open, neutral environment, partners that best meet their needs based on their criteria such as pricing, performance, and service levels.
WIESC BRINGS INTERNET TO LUXOR AND NAAMA BAY Source: Internet Travel News.com, July 27, 2007
WIESC (link here), a USAID funded project dedicated to promoting connectivity in Egypt, has recently made WiFi technology available in Luxor and Naama Bay in Sharm El Sheikh.
The WIESC project is working to expand internet connectivity among Egyptian tourist cities, complementing the growth of Egypt’s dynamic technology and tourism sectors.
MOBINIL BUYS 3G LICENSE FOR EGP3.4 BILLION Source: Cellular News.com, July 19, 2007
MobiNil (Amcham Member) (link here) recently bought a 3G license for EGP 3.4 billion (USD 599 million), scheduled for payment in installments. In June it was announced that the company was soon to outgrow its 2G spectrum due to strong growth. Both of MobiNil’s competitors, Vodafone Egypt (Amcham Member) (link here) and Etisalat Misr (Amcham Member) (link here), have already bought 3G licenses of their own.
VODAFONE EGYPT OPTS FOR VISTO TO PROVIDE BUSINESS EMAIL Source: TMC.net, July 23, 2007
Vodafone Egypt (Amcham Member) (link here) has opted for Visto (link here) to enhance its Vodafone Business Email offering. With the deployment of Visto Mobile platform, Vodafone aims to offer mobile email, calendar, contacts, tasks and other services to consumers, small and medium businesses and busy professionals all over Egypt. With Visto Mobile, Vodafone’s Business Email can facilitate the connectivity needs of a broader market by offering a service that is both easy to use and widely available.
INTEL PARTNERS WITH NTI TO PUSH WIMAX IN EGYPT Source: Al Bawaba.com, July 29, 2007
In a bid to continue driving greater access to technology and the online world through WiMAX technology (link here), Intel has teamed up with the National Telecommunications Institute (NTI) (link here) in Egypt to establish a wireless training lab at the NTI’s facility in Smart Village (link here) and implement a training and certification program on WiMAX technology in Egypt. The Memorandum of Understanding (MoU) signing ceremony took place in June during the first official visit of Intel CEO Paul Otellini to Egypt.
Intel will be providing the NTI with the equipment, software, technical support, information and setup needed to ensure that the lab runs smoothly, which comes as part of Intel’s desire to boost the local expertise in computing and communication technologies to serve the needs of the regional markets.
As an early member of the WiMAX Forum, Intel has been pushing for greater use of WiMAX technology to reach large communities. A substantial need for Internet access in areas where cable connectivity is not present exists, with WiMAX an ideal way of bypassing this dilemma.
EGYPT FIRST ARAB COUNTRY TO SIGN OECD DECLARATION ON INTERNATIONAL INVESTMENT Source: OECD Website, July 23, 2007
On 11 July 2007, Egypt became the first Arab and first African country to sign the OECD Declaration on International Investment and Multinational Enterprises (link here), marking a new stage in Egypt's drive to attract more foreign direct investment (FDI). A series of policy reforms have helped to raise Egypt’s FDI 15-fold between 2001 and 2006, with FDI reaching USD 6.1 billion during Egypt’s fiscal year 2005/06, and USD 9 billion during the first 9 months of
A signing ceremony at OECD headquarters was followed by a news conference with Egypt's Minister of Investment and OECD’s Secretary-General. The news conference also presented its new findings in a recently published OECD Investment Policy Review of Egypt, which notes Egypt’s success in enacting policies toward a more favorable investment environment over the last few years.
Since 2006, Egypt has chaired a joint MENA-OECD Investment Program, which is scheduled to have a ministerial meeting entitled Making Reforms Succeed: Moving Forward with the Investment Policy Agenda in Cairo on 27-28 November 2007.
GOVERNMENT TO PROVIDE NEW INCENTIVES FOR AGRICULTURAL INVESTMENT Source: Al Alam Al Yom, EFG-Hermes, July 23, 2007
According to the Ministry of Agriculture, a new package of services including extended lending through the Social Fund for Development (SFD) (link here) will soon be offered as part of a strategy to promote agricultural investment. The SFD has been allocated EGP 440 million by the Principal Bank for Development and Agricultural Credit, which is also urging the SFD to increase its lending rate and borrower community.
STATE ALLOCATES PUBLIC ASSET RETURNS TO INFRASTRUCTURE PROJECTS Source: Al Ahram, July 25, 2007
The government of Egypt (GOE) has recently allocated EGP 856.5 million in returns generated from the management of public assets to four infrastructure projects. The four projects receiving funds include the Kalioub Bridge, valued at EGP 44 million, a road connecting Sohag to the Red sea, valued at EGP 640 million, a sanitation project in al-Gharibiya al-Mahalla al-Kubra valued at EGP 170 million and a water outflow project in Aswan, valued at EGP 2.5 million.
GAFI IMPLEMENTS NEW INVESTMENT ZONE SYSTEM Source: Al Ahram, EFG-Hermes, July 31, 2007
The General Authority for Free Zones and Investment (GAFI) (link here) is set to begin implementing a new system to govern the country’s 250 private investment zones. The regulations will be revised over the next month and the economic value of the zones reassessed. GAFI is also considering the establishment the first government investment zone in southern Egypt to attract private investment to the region.
GAFI has also recently announced it will no longer give licenses for investment in cement, steel, aluminum and fertilizers in new zones because they are harmful to the environment and require heavy energy consumption.
Investment zones run similar to free zones in terms of facilitating permits and licenses, but unlike free zones are not exempt from customs and taxes and not limited to specific sectors.
MOI AMENDS FUNDS REGULATIONS TO EXPAND SCOPE Source: Al Ahram, July 26, 2007
The Ministry of Investment (MOI) link here has issued amendments to the capital market law that will expand the scope of investment funds active on the Egyptian capital market while increasing government supervision. According to the amendments, members of the board of investment funds should be independent and have no relations with the company managing the portfolio. The amendments also provide for the regulation of two new kinds of funds: real estate funds and holding funds. Real estate funds allow investors to invest collectively in real estate, while holding funds allow them to invest in securities issued by other investment funds. The amendments forbid real estate funds from borrowing more than 50 percent of the value of their assets to control leveraging activity. The amendments also put regulations in place for other kinds of portfolios, such as money market funds and private equity funds. In addition they allow brokerage firms to trade in open ended funds that distribute risk and expand investments.
ORASCOM CEO SEES WEATHER IPO END 2007, EARLY 2008 Source: AFX Limited, July 17, 2007
Orascom’s (Amcham Member) (link here) CEO Naguib Sawiris recently announced plans to launch the initial public offering (IPO) of telecom holding company Weather Investments SpA at the end of 2007 or early 2008, noting that Weather will not refinance its senior debt at the moment due to adverse market conditions. Weather Investments, which holds a 51 percent share in Orascom, controls Italy's Wind Telecomunicazioni SpA (link here) as well as Greek mobile operator TIM Hellas (link here).
Sawiris also noted Orascom’s interest in bidding for the fixed-line assets in Italy of Tele 2 AB and consideration of the sale of TIM Hellas by 2007 end.
CIB SELLS 10% STAKE IN HOUSING AND DEVELOPMENT BANK Source: Al Alam Al Yom, EFG-Hermes, July 26, 2007
CIB currently holds a 10 percent stake in Housing and Development Bank (HDB) (Amcham Member) (link here), reducing its stake to 5.2 percent. Following the sale, HDB’s ownership structure is composed of the New Urban Communities Authority with a 22.5 percent share, the Housing Finance Fund with a 12.7 percent share and the Religious Endowment (Waqf) Authority with an 11.7 percent share. Lesser shareholders include the Egyptian Reinsurance Company at 14.9 percent, the Misr Development Company at 2.7 percent, CIB at 5.2 percent, Suez Canal Bank at 6.1 percent, Arab Investment Bank at 3.6 percent, the Employees Fund at 0.9 percent, and other shareholders together at 12.43 percent.
TALAAT MOSTAFA GROUP TO ACQUIRE SUBSIDIARIES AHEAD OF IPO Source: Al-Alam al Yom, EFG-Hermes, July 26, 2007
Talaat Mostafa Group Holding plans to simplify its ownership structure ahead of an initial public offering (IPO) scheduled for the end of 2007. The group plans to acquire its various subsidiaries, including the Egyptian Arab Company for Development (Amcham Member), Alexandria Company for Real Estate Investment, Alexandria Company for Urban Projects and San Stefano Company for Real Estate Investment, in share swaps. Talaat Mostafa Group has already offered to acquire the shares of Alexandria Company for Real Estate Investment through a share swap that values Alexandria Company for Real Estate Investment’s share at EGP 394.
SHARQIYA GETS NEW SUGAR AND FERTILIZER FACTORIES Source: Al Ahram, EFG-Hermes, July 31, 2007
Two new factories to produce sugar from sugar beet are scheduled to be built in the Sharqiya governorate. The first factory will span 350 feddans (357 acres) and cost EGP 3 billion, to be funded by joint Egyptian and UAE investors. The factory will have an anticipated annual capacity of 450,000 tons.
The second factory will span 50 feddans (51 acres), cost EGP 850 million, and have a capacity of 150,000 tons of sugar per annum. A third factory to produce fertilizers from agricultural waste will also be established, which will have an anticipated capacity of 20 tons per hour.
OCI MAKES CEMENT DEAL WITH NORTH KOREA Source: Financial Times, July 16, 2007
Orascom Construction Industries (OCI) (Amcham Member) (link here) is set to announce its tentative USD 115 million investment in a cement plant in North Korea. The deal with North Korea’s state-owned Pyongyang Myongdang Trading Corp will give OCI a 50 percent stake in Sangwon Cement, which operates a cement plant near Pyongyang, the North Korean capital. North Korea relaxed foreign investment laws in 2004 but there has been little follow-up due to political tensions.
FRANCORP PARTICIPATES IN US FRANCHISE DEVELOPMENT CONFERENCE Source: Mediasyndicate.com, July 23, 2007
Francorp Middle East (link here), in conjunction with Francorp USA, will sponsor a U.S. Franchise Development Conference in Egypt this October. The conference will aim to support the expansion of the franchise industry in Africa and the Middle East while introducing American franchisors and Master licensees to opportunities in the booming African and Middle Eastern markets.
Egypt’s franchise market has developed rapidly in a short period of time. U.S. franchises are estimated to account for almost 35% (just under 140 million) of the total Franchise revenues in Egypt, making many local regional investors interested in American franchise. The Middle East’s overall franchise industry is valued at over $14 billion and is growing at an annual rate of 27%.
Compiled by: Business Studies & Analysis Center E-mail: Studies@amcham.org.eg If you want to receive this bulletin on a regular basis, fill out this form
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