Nazif Discusses With US Congressmen Boosting Egyptian-US economic Relations Source: Egyptian State Information Service, January 12, 2005
Prime Minister Dr. Ahmed Nazif met on Tuesday with a Congress delegation, currently visiting Cairo to investigate ways of boosting US-Egyptian ties in the economic domain. The delegations' visit comes at an invitation from the American Chamber of Commerce in Egypt (AmCham) (link here).
AmCham President Dr. Taher Helmy said on Tuesday that during the meeting, Dr. Nazif spelt out Egypt's view vis-à-vis a host of economic and political issues.
Dr. Helmy lauded the Qualified Industrial Zones (QIZ) agreement which both countries signed recently, saying the agreement marked a step along the road to signing a free trade agreement between the US and Egypt.
He pointed out that the chamber was currently preparing for a visit to be paid by an Egyptian delegation to the US in March to hold talks with US officials.
The chamber intends to invite some 40 US assistant Congressmen to visit Egypt annually, he said.
General Dynamics To Produce More Abrams Kits For Egypt Source: PBI Media, January 7, 2005
General Dynamics (GD) (link here) announced on December 20 that it was awarded a $267 million contract modification to build Abrams tank kits for the Egyptian tank co-production program.
Under the contract from Army Tank-Automotive and Armaments Command, GD will build 125 kits. Deliveries will begin in 2005 and continue through 2008. GD provides components for the kits used in Egyptian M1Ai production. The kits contain most of the components and materials--such as turret structure, road wheels and some machined parts--used in the tank production in Egypt, a GD spokeswoman told sister publication Defense Daily.
GD will do the work at facilities in Lima, Ohio, Scranton, Penn., Muskegon, Mich., Tallahassee, Fla., Anniston, Ala., and Imperial Valley, Calif.
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Verticent’s ERP Plus Suite for Metal Service Centers Licensed in Egypt Source: MENA Report, January, 9 2005
Verticent, Inc., a leading developer of enterprise software solutions for small-to-medium size manufacturers and distributors, has announced that the Cairo-based Kandil Industries had licensed Verticent’s ERP Plus suite for metal service centers.
Kandil Industries chose ERP Plus to better match their demand and supply chain to achieve lower inventories, improve capacity management at critical bottlenecks in their process, reduce scrap costs and improve yields, streamline financial consolidation of all their divisions and companies, and move the company from islands of automation and spreadsheets to an integrated enterprise solution.
Khalil Kandil, chairman of Kandil Industries, stated “by deploying Verticent’s metal management capabilities, Kandil will become the most efficient metals service center company in the Middle East”. Scott Galloway, president of Verticent, added “this is a very significant win for Verticent. It allows us to leverage our successes in the North American metals industry and gives us a foot in the door of the Middle Eastern market. Kandil Industries is a well known and respected company in Egypt and throughout the Middle East. I can’t think of a better partner with whom we can showcase our solution capabilities. We look forward to replicating this success throughout the Middle East”.
Egypt's Social Fund for Development chooses Oracle E-Business Suite Source: AME Info, January 16, 2005
Egypt's Social Fund for Development (SFD) (link here) has chosen to implement elements of the Oracle E-Business Suite, Oracle Collaboration Suite and Oracle technology platform as part of a European Commission (link here)-funded initiative to develop a new management information system.
The aim is to help the SFD improve the management of its financial resources, and monitor and evaluate its projects better, in order to achieve a greater level of transparency across funding allocations.
As part of its mission to develop Egypt's economy, the SFD typically funds national projects that help alleviate poverty and resist unemployment by facilitating the creation of job opportunities for entrepreneurs through providing credit, technical assistance and necessary skills.
SFD has selected Oracle to centralize and automate such functions as accounting, projects, human resources, asset management and procurement, as well as communications, file sharing and calendaring, across more than 28 regional offices and 500 professional employees based around the country. The contract covers licensing and support for Oracle E-Business Suite software modules including Financials, Purchasing, Project Costing, Project Contracts, Human Resources, Payroll, Project Management and Business Intelligence.
In addition to improved control over projects and increased transparency, the SFD anticipates a reduction in operating costs by integrating all its financial operations and creating a single instance of information on all of its projects across Egypt. As a non-profit entity, SFD will also enhance its efficiency and improve its reporting capabilities on employment opportunities creation projects and ensure compliance with donor agreements.
The SFD, which utilizes funds from international organizations to eliminate poverty and align Egypt with the global economy, is implementing a new information technology project to streamline its processes. 'The funds and grants are allocated from many sources, which we use to finance diverse poverty-tackling initiatives that support the small and micro enterprises' said Mohamed Mehrez, General Manager of the Financial & Administrative Affairs Group of the SFD. 'This project implementation will enable us to improve the efficiency of our administration, ensuring that more of the funds we receive are spent on the causes we support rather than internal costs.
A key objective of the implementation is to link the SFD's remote offices with headquarters, giving central management a real-time, single source of accurate information on charitable and administrative processes in play around Egypt at any given point. This level of reporting also enables us to respond promptly to geographical areas or causes that urgently need SFD assistance. '
Atef Helmy, Managing Director, Oracle Egypt, said: 'This selection by the SFD gives Oracle a unique opportunity to serve the government and the people of Egypt, which is part of Oracle's steadfast commitment towards the development of this region. To be selected unanimously by such a highly professional and respected committee is quite an honour and is very gratifying.'
In addition to business and communications solutions, the SFD selected the Oracle technology platform, including Oracle Developer Suite, to enable in-house application development and business intelligence.
Microsoft to Set Up Technological Creation Center in Egypt Source: Egyptian State information Service, January 15, 2005
Minister of Communications and Technology Tarek Kamel said chairman of Microsoft (AmCham member) (link here) Bill Gates will sign with Egyptian officials some agreements including setting up of a technological creation center at the Smart Village to train youth.
Kamel in an interview with Al Ahram pointed out that Gates will visit Egypt this month for only 18 hours, and it will be his second visit.
The Minister added that the Ministry is studying setting up a third mobile phone network for Egyptian consumers.
Egyptian PM Sees Stronger Pound Source: Trade Arabia January 15, 2005
Egypt's prime minister was quoted on Saturday, January 15 saying the Egyptian pound would strengthen on the foreign exchange market, where it has gained more than five per cent against the dollar since December.
"The Egyptian pound will become stronger in the future in the foreign exchange market," Prime Minister Ahmed Nazif was quoted as saying by the official Middle East News Agency.
He did not give a time frame. "Supply is currently more than demand for foreign currency after citizens realized that holding on to the dollar was not beneficial and sought to get rid of what they had," he said.
Economists have attributed the pound's strengthening to strong tourism revenues, gas exports and Suez Canal receipts. Foreign exchange dealers say clients have been selling dollars anticipating a further strengthening of the pound.
The pound closed at a weighted average of 5.90 to the dollar on Thursday, compared to a level of around 6.22 before a foreign exchange inter-bank market was launched on December 23.
Nazif also said the reduced price of the dollar would cut the prices of imported commodities. Egypt is one of the world's biggest importers of wheat to make bread for its population of 70 million.
Egypt's central bank said on Jan. 4 it was not looking for the Egyptian pound to be revalued against the dollar and that it wanted to see supply and demand reach a break-even point for the currency.
Bank of Alexandria Sell-off Likely Source: Trade Arabia, January 4, 2005
The Egyptian government has chosen Bank of Alexandria (AmCham Member) (link here) as the first of the big four public-sector banks it will offer for sale to the private sector, Egyptian newspapers said.
The financial daily Al Alam Al Youm and the state daily Al Gomhuria quoted Investment Minister Mahmoud Mohieldin as saying Prime Minister Ahmed Nazif had approved the choice of Bank of Alexandria, one of the smaller of the big four.
An official at Mohieldin's office declined to comment and others were not immediately available.
The newspapers gave no details of when or by what method the government planned to carry out the privatization.
The Egyptian government has spoken for years about privatizing one of the big four, Banque Misr (AmCham Member) (link here), National Bank of Egypt (AmCham Member) (link here), Banque du Caire (AmCham Member) (link here) and Bank of Alexandria (AmCham Member) (link here), as evidence that it is serious about reducing the size of the public sector.
But analysts say that the public-sector banks are useful instruments for implementing the government's monetary, credit and foreign exchange policies.
Hassan Abdel-Hamid, a board member of Bank of Alexandria, said he could not confirm the report. But he added: "It is among the possibilities for privatization."
Bank of Alexandria and Banque du Caire are the two smallest of the four big state banks, and analysts have said they expected the smaller banks to be privatized first.
Egypt Directs Millions to Upgrade Railway Services Source: Financial Times, January 5, 2005
Egypt's Prime Minister Ahmed Nazif and seven ministers have recently discussed the broad lines of a plan aimed at upgrading the railway services.
The Premier, during the meeting attended by Ministers of Transport, Finance,
Planning, Investments, Industry, Home Trade and International Cooperation as
well as Governor of the Central Bank of Egypt, approved more allocations
estimated at LE 318 million to improve the service and renovate trains.
Talking to reporters after the meeting, the Government's spokesman said that
the plan will see regular maintenance and upgrading work on passenger and
freight trains, rail trucks and communications systems. Mr. Magdi Radi, added
that the plan also includes making the best economic use of capital assets like
train stations, open- air storage areas and warehouses, owned by the Railway
Authority.
Egypt's railway network--the first in the Middle East and Africa -- is
burdened by overstaffing, low fares and under-investment. Its equipment and
facilities are old and its services are often poor.
DEPA Wins DH15M Contract From Gulf Egypt Source: Financial Times, January 2, 2005
Hotel interiors contracting company Depa has won a Dh15.4 million contract with Gulf Egypt, for interior finishing and fit-out of the Sheraton Heliopolis Hotel in Cairo.
The five-star property, located in the Heliopolis suburb of Cairo, is a Sheraton Luxury Collection Hotel operated by International Star Wood Company.
"The furnishings we used for this project were custom made and designed from
the finest materials to best fit the prestige and status of this hotel," said
Depa CEO Mohannad Sweid. The interior of the hotel was designed by Wimberly
Allison Tong & Goo, the hospitality, leisure and entertainment design firm.
Athens-based Consolidated Contractors International (CCC) (link here) is the main contractor, and delivery of the project is within 14 months. Depa specialises in
full scope fit-out and furnishing of five-star hotels, yachts and facilities.
The company's main office is in Dubai with branches in Milan, Cairo and Abu
Dhabi, and site offices in various cities in the Middle East and North Africa.
AL-Kharafi Group Expands Investments Source: Financial Times, January 11, 2005
According to Al-Sharq Al-Awsat newspaper (January 10, 2005), the Kuwaiti
Al-Kharafi Group (AmCham Member) announced increasing to LE1 billion its capital in a paper and carton-manufacturing project in the northwestern Suez Gulf region in Egypt.
Al-Kharafi plans to install a second production line in this factory in order to
expand its paper production capacity from current 60,000 tons to 180,000 tons.
French Bid for Suez Cement Fails Source: Middle East Economic Digest, January 7, 2005
France’s Ciments Francais (CF) (link here) – a subsidiary of Italy’s Italcementi Group (link here) – and a consortium of local and regional investors have failed in their bid for a controlling stake in Suez Cement Company (SCC) (AmCham Member), the country’s biggest cement producer.
By the close of its offer to buy SCC shares on 30 December, CF had secured about 5.8 per cent of SCC’s capital, taking its shareholding from 34.1 per cent to 39.9 per cent. The group was seeking at least 17 per cent of the shares to achieve a minimum 51 per cent stake. Its offer on 6 December of £E 80.10 ($12.90) a share represented a premium of more than 12 per cent on the average stock market price in November – about $543 million for the 65.9 per cent of SCC’s issued share capital that it did not hold "We are disappointed," says a source at CF. "In the end the government did not agree with our valuation for the company. But we are still interested in Egypt. We will now regroup and decide whether to try again. Our increased share makes us the largest single shareholder."
Gippsland Granted Free Trade Zone in Egypt Source: AAP Information Services January 12, 2005
Gippsland Ltd (link here) today announced the Egyptian General Authority for Investment & Free Trade Zones (link here) had approved an application to have the company's 40 million-ton Abu Dabbab tantalum project operate within a project-specific Private Free Trade Zone.
The Private Free Trade Zone, which was flagged last August, will provide a number of long term benefits to the Abu Dabbab project including, but not limited to, the following:
1. Zero customs import duty for plant and equipment;
2. Zero customs import duty for project consumables;
3. Zero sales tax; and
4. Zero general and company profit taxation.
Benefits afforded by the Private Free Trade Zone will accrue for the life of the project which, based on a mining rate of 2 million tons per annum, is expected to be several decades.
The Private Free Trade Zone will also apply to the company's nearby 98 million ton Nuweibi tantalum deposit which, like Abu Dabbab, is covered by a 30-year mining license that may be extended for a further 30-year period if required.
Egypt Eyes Polyethylene Deal Source: Trade Arabia. January 11, 2005
Egypt will soon sign a joint venture agreement to build a polyethylene plant, the last of eight such deals in the first phase of a more than $10 billion petrochemical expansion plan, an official said.
Sherif Ismail, executive deputy chairman of state-owned Egyptian Petrochemicals Holding Company (ECHEM) (AmCham Member) (link here), said the agreement with a strategic investor would be signed within 90 days, but he would not name the investor.
Industry reports have said that US firm Chevron Phillips Chemical has signed a tentative agreement with ECHEM for the plant.
The strategic investor is expected to take a 60 per cent stake in the $1.1 billion plant.
"We have signed an MoU (memorandum of understanding) with one of the top 10 producers of polyethylene in the world .... We will convert this into a JVA (joint venture agreement) within 90 days, which will allow us to achieve this start-up date at the end of 2008," he said.
Ismail said seven other joint venture agreements for new plants in the first phase of seven years until 2008 had already been signed. They are part of a 20-year master plan.
"All these projects are fully subscribed. I mean by that we have major strategic or financial investors signed for every project," he told a petrochemical conference organized by Middle East Economic Digest.
He said the eight projects were together worth about $3.5 billion, bringing in $2 billion foreign direct investment.
ECHEM, which was set up in 2002, is overseeing the master plan, which aims to attract more than $10 billion for 24 petrochemical plants, generating revenues of $7 billion. Of those revenues, $3 billion is expected to come from exports.
The plan is part of efforts to utilize gas reserves of about 66 trillion cubic feet and take advantage of Egypt's strategic trading location near Europe. It also seeks to create 100,000 jobs for the fast-growing population that is now 70 million.
Industry experts say Egypt is in an ideal position to export to Europe from its northern Mediterranean coast, but can also export easily to Asia via Red Sea ports. Although bigger Gulf producers are closer to Asia, experts say shipping routes in the Gulf have higher insurance premiums, so freight is more pricey.
They said Egypt has also lured investors with attractive gas feedstock prices, which experts say are much lower than comparable rates in the US or Europe.
"If you look at the European market, it is really competitive (in pricing)," said one industry expert.
The eight projects in the first phase of the masterplan include a plant to produce linear alkyl benzene (LAB), used in the detergents industry, and a plant to make polyvinyl chloride (PVC), used in products like water pipes.
ECHEM said it was keeping its program flexible to ensure it was in tune with international demand, so some planned projects could be delayed or moved up the queue.
"It's only when you are flexible that you can find investors," said Carsten Braemer, product manager at Germany's HELM AG, which has a deal to take output from the LAB plant.
Other plants will produce methanol and urea, while the first plant to start will produce acrylic fibre, coming on stream at the end of this year.
ECHEM has been taking stakes in the projects, but Ismail said part of ECHEM's strategy was to withdraw from each project once they were up and running.
"For each project we have an exit strategy ... This is because we want to generate funds to invest in the next phase of the development," Ismail said.
He said ECHEM was in talks with Egyptian and international banks to set up a fund to invest in petrochemical projects.
Egypt Becomes Potential LNG Supply Source for US Market Source: Energy Intelligence Group, Inc. January 3, 2005
A new project is set to join the ranks of liquefied natural gas exporters, and potentially emerge as a new supplier to the growing US natural gas market.
After nearly a month's delay from the original start-up date of Dec. 10, the Spanish-Egyptian Gas (Segas) venture at Damietta, which will produce 5 million tons (245 Bcf) of LNG per year, is now expecting to load its first cargo around Jan. 3, according to an Egyptian source.
That cargo will be taken by Union Fenosa Gas (link here), a 50-50 venture between Spanish power company Union Fenosa and Italy's Eni, to the Huelvareceiving terminal in Spain.
UF Gas, which owns 80% of the Segas liquefaction facility, will lift 2.5 million tons/year, with BP taking 1.1 million tons and BG and Malaysian state Petronas taking 700,000 tons each. Egyptian General Petroleum Corp. (EGPC) and Egyptian Natural Gas Holdings (Egas) own 10% each in the liquefaction plant.
The structure of the extended Segas project is unusual, in that the partners are different at each level of the value chain and have committed for varying periods of time. Italy's Eni is to provide part of the feed gas and take an indirect stake in liquefaction, while Egas and EGPC participate in both upstream and liquefaction. Union Fenosa has no upstream role, but indirectly holds 40% of the liquefaction plant through its participation in Union Fenosa Gas, and will lift its share of LNG on its own tankers.
BG (AmCham member) (link here) and Malaysian state Petronas (link here) are to supply feed gas from their Scarab Saffron fields for five years starting in 2005, and lift roughly equivalent volumes of LNG for the duration of the project. Finally, BP, which has no interest in the liquefaction plant, is to both supply gas and lift LNG.
BP's simultaneous supply and purchase deals provided a necessary boost to the Segas project, which was stalling for lack of certainty about available gas, BP's (AmCham Member)(link here) Andy Lanetold CWC's Annual LNG Summit in Rome earlier this month. This admittedly complex arrangement "put the project on the fast track," while at the same time accelerating the development of BP's gas discoveries in Egypt.
Full commercial operations of the Segas plant are expected to begin in March. The off-taker of the next LNG cargo has yet to be decided, but industry sources say it is likely to be BP, which is expected to take its cargo to the Bilbaoterminal in Spain.
Lane told Natural Gas Week that BP's volumes from Damietta will go "to our portfolio," which aside from Bilbao includes regasification capacity at Cove Point in the US and at National Grid Transco's Isle of Grain terminal in the UK, which is due to start operations in 2005. Observers expect a portion of the Segas output to swing between Spain, the US and eventually the UK on an arbitrage basis.
All sales contracts related to the project are understood to be on an f.o.b. basis. Sources say BP will likely fix two of the three ships it currently uses for spot deliveries -- the British Trader, British Innovator and British Merchant -- for the Segas plant.
Globeleq Takes Control at Sidi Krier Source: Middle East Economic Digest, January 7, 2005
The UK’s Globeleq (link here), part of the UK’s CDC Group, has acquired a controlling stake in the build-own-operate-transfer (BOOT) Sidi Krier power project, with the purchase of a 61 per cent stake in the plant from InterGen, a joint venture between the Royal Dutch/Shell Group (AmCham Member) (link here) and the US’ Bechtel (AmCham Member) (link here).
Italy’s Edison International (link here) retains its 39 per cent in the 650-MW plant. Sources at the Globeleq say all existing third-party long-term maintenance contracts for the plant and offtake arrangements for fuel and electricity supply remain in place.
Power Projects Move Forward Source: Middle East Economic Digest, January 10, 2005
East Delta Electricity Production Company (EDEPC) (link here) has awarded a joint venture of the local Orascom Construction Industries (OCI) (AmCham Member) (link here) and its Belgian affiliate Besix (link here) the LE 283 million ($45.5 million) civils package on the $315 million project to build a new 750-MW combined cycle power plant at Talkha. The contract covers site preparation, foundations, structures, cooling water intakes and outlets, pipes and associated buildings.
The contract is the second major award on the project. In November, Germany’s Siemens (link here) signed the estimated $100 million main turbine package, covering the supply and installation of two 250-MW gas turbines. Project sources say further package awards are expected soon, including the supply and installation of steam boilers and transformer units.
In late December, the European Investment Bank (EIB) (link here) announced that it was extending a Eur 160 million ($212 million) loan to Egyptian Electricity Holding Company (EEHC) (link here) for the construction of the Talkha plant, together with a 750-MW combined cycle plant at Kureimat, 90 kilometers south of Cairo. The grant comes from the EIB’s Facility for Euro-Mediterranean Investment & Partnership (FEMIP). Also in December, the Kuwait Fund for Arab Economic Development (KFAED) extended a KD 26 million ($85 million) loan to Cairo for the Talkha plant. Further finance is coming from the Arab Fund for Economic & Social Development (AFESD – MEED 17:12:04).
The FEMIP loan complements an EIB loan worth Eur 220 million ($250 million), also finalized in late December, to Spanish Egyptian Gas Company (SEGAS) to build one of the world’s biggest liquefied natural gas (LNG) trains at Damietta, 60 kilometers west of Port Said. The 4.9 million-tonne-a-year train, which will cost an estimated $1,400 million, will supply LNG to Europe and the US. The project includes construction of a liquefaction plant, storage facilities and gas export equipment. The plant is to be located within the port of Damietta, which has been extended by 120 hectares to accommodate the facility.
Egypt to Start LNG Exports Source: Trade Arabia, January 3, 2005
Egypt's first shipment of liquefied natural gas (LNG) is now expected to head to Spain around mid-January, a month or so later than originally planned, an Egyptian gas source said.
Segas, a venture including Spain's Union Fenosa and Italy's ENI, had planned the first exports for early December, a date then postponed until the start of January due to commissioning delays, and now put off a few days more.
'Cooling down the ship will probably commence on Jan. 4 or 5 with complete loading and departure by or before the middle of the month,' the source said.
LNG is gas that is super-cooled into liquid form, so tanks in LNG ships also need to be cooled before loading. The already lengthy process is taking longer in this case because Segas is using equipment for the first time.
The source previously said a commissioning hitch had further delayed loading, while the LNG plant would also have to operate below capacity temporarily because of a scheduled shutdown for work during part of January at a major Egyptian gas field.
Segas officials could not immediately be reached to comment. Segas is the first of Egypt's two LNG projects to start processing gas for export. The Segas plant has capacity to produce about 4.8 million tons a year of LNG.
The second project being built by a consortium including Britain's BG (AmCham Member) (link here) Group is expected to start exports during 2005.
The two plants, which are both on Egypt's north coast, will sharply increase Egyptian gas exports, which began in 2003 with the opening of a gas pipeline to Jordan.
Egypt has proven reserves of about 66 trillion cu ft (1.869 trillion cu meters) and has been seeking to develop its gas business as production of crude oil has fallen in recent years.
General Dept. for Drainage Projects in Damanhour
issued a request on January 10, 2005 for Supply &
erection of the electromechanical equipment pertaining
to At Tahaddy irrigation pumping station at Al Bostan
Zone in Beheira Governorate comprising three pumps
of 1.5 M3/ second discharge at 3.42 meters static
lift on turnkey basis. The specification fee is L.E.
1,000, the performance bond is 5% and the bid bond
is L.E. 145,000. Deadline for the submission of offers
is March 13, 2005.
General Org. for Potable Water & Sanitary Drainage
in Dakahleyya, Contracts & Purchases Dept. issued
on January 9, 2005 Three tenders for the supply &
erection of (a) sanitary drainage water treatment
station of 10,000 M3/ day capacity to operate under
the extended aeration system at Nousa Al Gheit Village
in Markaz Aga, also (b) rehabilitation of the maintenance
center for the potable water networks& (c) supply
of equipment for the rehabilitation of the filters
tables at Basat Potable Water Utility. The specification
fees are L.E 5,500 & 330 & 275 and the bid bonds are
L.E. 150,000 & 18,000 & 15,000 respectively. Deadlines
for the submission of offers are February 12, 2005
for the first two tenders and February 13 2005 for
the third tender.
Construction
General Dept. for Horizontal Expansion & Irrigation
Projects in West Delta issued a request on January
12, 2005 for the Construction & execution of the auxiliary
works pertaining to El Nasr El Gedida lifting station
No. 4 at Kilo 40.800 on El Nasr Canal. The specification
fee is L.E. 500 each and the bid bonds is L.E. 110,000.
Deadline for the submission of offers is February
14 2005.
Ministry of Health & Population, General Secretariat,
the Contracts & Purchasing Department issued on Januatu
15, 2005 Five tenders for the construction of 29 health
care units at different governorates. Bidders need
be classified by the Contractors Federation not less
than grade 4, 5, 6, 5 & 7 respectively. The specification
fees are L.E 5,000 & 3,000 & 1,500 & 2,500 & 500 respectively,
the bid bonds are L.E 180,000 & 100,000 & 50,000 &
80,000 & 15,000 and the performance bond is 5%. Deadline
for the submission of offers is February 14, 2005.
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