INFLATION HIGHER IN MARCH Source: EFG-Hermes, April 24, 2007
Prices of food items rose faster in March than they did in February, according to a breakdown of the March consumer price index (CPI) released by the government statistic agency CAPMAS (link here). Prices of food items rose by 16.7% Y-o-Y in March, up from 15.7% in February. The monthly rise was the fastest since October 2006. The Y-o-Y CPI as a whole rose to 12.8% in March from 12.6% the month before. Prices of other items in the index on average rose by the same rate in March as in February. EFG expects that prices of food items will remain high in the short term, due in part to religious holidays in April and the lead-up to the summer holidays.
EGYPT TO INVEST LE122 BILLION FOR LOCAL DEVELOPMENT IN 2007-2010 Source: EFG Hermes April 30, 2007
The government is proposing to invest EGP122 billion for local development in the 2007 to 2010 five-year plan, said Minister of State for Local Development Mohamed Abd ElSalam Mahgoub. Some 55% of the investment would be directed to basic development projects, 14% to services projects and 31% to projects implemented by the governorates. The plan aims to promote sustainable development, strengthen the linkages between sectors, develop human capital and provide social security. Under the plan, which was constructed in coordination with the UNDP (link here) http://www.undp.org/, Greater Cairo would receive 25% of the investment, Upper Egypt 22%, Alexandria 21%, Suez 19% and the Delta 13%, Mahgoub added.
EMAAR PLANS TWO NEW CONSTRUCTION PROJECTS IN EGYPT Source: Arabianbusiness.com, April 19, 2007
Dubai-based property developer Emaar (link here) has announced it will take on two real estate developments in Cairo, as the company fulfills its vision to grow its international presence. Emaar Misr (link here), the wholly owned Egyptian subsidiary of Emaar Properties, will work on two community projects, one at New Cairo City and the other at Cairo-Alexandria Desert Road.
The New Cairo City development is to be a residential project which will cover 3.8 million square metres, worth AED3.7 billion (US $1 billion). The plot will hold around 5000 housing units and is situated near the new campus of the American University in Cairo. The Cairo-Alexandria development will spread over 160 acres (670,000m2) and will hold both residential and commercial properties costing a total of LE 4 billion ($702.5 million).
From the last quarter of 2005 throughout 2006 Emaar had bought up real estate projects in Syria, Saudi Arabia, Morocco, Tunisia, Turkey, India, Pakistan and Egypt. In June 2006, the company staked a claim on Western soil as it announced it had acquired John Laing Homes (link here), the second largest real estate builder in the USA, for $1.05 billion. And in August of that year, it acquired London-based realtors, Hamptons.
ORASCOM CONSTRUCTION TO BUILD LE 760 MILLION POWER PLANT IN EGYPT Source: Marketwire.com, April 16, 2007
Orascom Construction Industries (OCI) (AmCham member) (link here) announced that it has signed an EGP 760 million contract with the Cairo Electricity Production Company (CEPC) (link here), an affiliate of the Egyptian Ministry of Electricity. The award is for the construction work on a new 2 x 350 MW Thermal Power Plant located in El Tebbin, 25km south of Cairo. The plant is also located near the industrial areas of Helwan and Maadi in greater Cairo.
The scope of work under the contract includes all civil works including the plant's intake pump house and discharge structures, reinforced concrete cylinder pipes which are 2.5 meters in diameter, a 150 meter high chimney, steam turbine buildings, all auxiliary and ancillary facilities, all underground facilities, piping and duct banks as well as all associated piling, foundation, mechanical and electrical works.
GOVERNMENT ADDS CONSULTANCY TO SECURITIES COMPANIES ACTIVITIES Source: Al-Alam al-Yom, April 26, 2007
The government has added financial consultancy to the list of activities that securities companies can engage in, said Investment Minister Mahmoud Mohieldin. The move is designed to reduce the tendency of inexperienced entities and individuals to consult others and to help raise the standards of Egypt's securities market, he added. Companies must have a capital of at least LE 250,000 to engage in the activity. The change was made to clause 27 of the capital market law number 95 of 1992.
CIB JOINS WITH TAMWEEL TO FORM ISLAMIC MORTGAGE COMPANY Source: EFG-Hermes April 23, 2007
Commercial International Bank (CIB) (AmCham Member) (link here) is joining UAE-based Tamweel (link here) and other Gulf investors to establish an Islamic mortgage company, reported Al-Mal, without citing a source. CIB is expected to own one-third of the company, which will have an initial capital of LE 500 million. Tamweel, with its expertise gained from its UAE operation, will manage the new company. CIB meanwhile will continue to offer housing loans through its own branches.
WIPRO INFOTECH SETTING UP CENTER IN EGYPT Source: Moneycontrol India, April 20, 2007
Wipro Infotech (link here) is setting up a development centre in Egypt to cater to its clients in West Asia. The development centre at Cairo would be operational over the next couple of quarters, said Mr Suresh Vaswani, head of Wipro Infotech.
The company proposes to hire locally for the Egyptian development centre, which could begin with a couple of hundreds of engineers. "We are in talks with the Egyptian government seeking their help to get the required skill sets," Mr Vaswani said. Traditionally, it is the Egyptian talent that's widely used in the Saudi Arabian market, he said.
Further, Mr Vaswani said the joint venture with the Dar Al Riyadh Group (link here) of Saudi Arabia — Wipro Arabia Ltd would be operational soon. Wipro Infotech owns 66 per cent stake in the joint venture, which is being floated to tap the local market.
The new company will have a combined workforce of some 300 people, of which about 220 will be from Wipro Infotech. In fiscal 2006-07, Wipro Infotech garnered a revenue of Rs 138 crore from West Asia, registering a year-on-year growth of 46 per cent.
For year-ended FY07, Wipro Infotech clocked a 46 per cent to record revenues of Rs 2,484 crore. The profit before income tax (PBIT) grew 47 per cent to touch Rs 214 crore. The services business, which accounted for 34 per cent of Wipro Infotech's revenues, grew 37 per cent. For the March quarter, revenues grew 38 per cent to Rs 784 crore and accounted for 18 per cent of the company's total revenues.
MIDDLE EAST CALL CENTER POSITIONS PROJECTED TO GROW 30% ANNUALLY Source: Maktoob Business, April 17, 2007
HDI Middle East and Africa (HDI-MEA) (link here), the world’s largest membership association for technical service and customer support professionals, has predicted that Middle Eastern call center positions will increase by 30 per cent annually, as competitive costs, multi-lingual residents and tax incentives encourage companies to outsource their call center and technical support operations to the region.
Additional results of an in-depth call center and technical support industry study will also be previewed during the upcoming HDI-MEA Conference and Expo, which will showcase a range of call center, outsourcing and IT service management best practices at Cairo’s Intercontinental City-Stars Hotel from May 26-31, 2007.
“The Middle East is gaining international acclaim for its superior customer service, technological innovation and trend setting initiatives that encourage many large and multinational companies to open offices in the region. This corporate growth supports the development of the outsourcing industry as a large percentage of executives consider outsourcing to provide innovative, secure and cost effective measures to improve their business processes,” said Moustafa Kadous, President and Chief Operating Officer, HDI-MEA.
“As a result, the call center and technical support sectors of the outsourcing industry represent a potential goldmine of employment opportunities as many new jobs will be created to support the outsourcing requirements of these large companies. Middle Eastern call centers, in particular, are gaining momentum as they offer key advantages such as multilingual staff, competitive labor costs, and relatively low taxes,” Kadous added.
ETISALAT MISR TO LAUNCH MAY 1ST Source: businessportal24.com, April 30, 2007
The UAE's Etisalat (AmCham Member) (link here) is to launch Egypt's third mobile phone network tomorrow, Tuesday, and its first utilising 3G technology, reported Reuters. The network's original launch date was back in February but it took longer than expected to set up the required infrastructure. The network will initially cover Greater Cairo, Alexandria, Aswan, Sharm El Sheikh, Hurghada and Luxor according to a government statement.
GIPPSLAND TO START COPPER-NICKEL EXPLORATION AT ABU SWAYEL IN EGYPT Source: Hemscott, April 18, 2007
Australian miner Gippsland Ltd (link here) said it is mobilising electromagnetic and induced polarisation equipment to commence exploration at the Abu Swayel copper-nickel prospect in Egypt. The company said previous exploration results clearly show that copper and nickel mineralisation is present at substantial grades and a programme of exploration is required to quantify the contained tonnage of mineralisation.
Assuming the historical copper and nickel grades, the mineralised material has an in-situ (unchanged) value of about $1,060 per ton. This value, together with a potential platinum credit, presents a very exciting opportunity for the company,' executive chairman RJ Telford said in a statement.
EGYPT SEEKS TO INCREASE CRUDE OIL PRODUCTION BY 100,000 BPD BY 2008 Source: Al-Ahram, April 26, 2007
The Petroleum Ministry (link here), hoping to boost crude oil production by 100,000 barrels per day (bpd) by 2008, is encouraging oil companies to speed up the development of new discoveries in the Gulf of Suez and the Western Desert, Minister of Energy and Petroleum Sameh Fahmy said. The government wants to increase Gulf of Suez production by 60,000 barrels and Western Desert production by 40,000. Egypt on average produced 616,000 bpd in January, down from as high as 870,000 bpd in April 1999, according to US Department of Energy statistics. To reduce costs, the companies will use existing facilities to deliver the crude to market.
EGYPT, LEBANON SIGN NATURAL GAS EXPORT DEAL Source: ANSAmed, April 24, 2007
An agreement for the export of natural gas from Egypt to Lebanon has been sealed in Cairo on the sidelines of the official visit of Lebanese Prime Minister Fouad Siniora to Egypt. Under the agreement, signed yesterday by Egyptian Oil Minister Sameh Fahmi and Lebanese Energy and Water Resources Minister Mohammed Safdi, the natural gas will be transported through the Arab pipeline connecting the Syrian city of Homs and Tripoli, in northern Lebanon.
DANA GAS ACQUIRES DEVON’S EGYPT HOLDINGS Source: Gulf News, Oilvoice.com, April 20, 2007
Dana Petroleum (link here) is pleased to announce that its wholly owned subsidiary, Dana Petroleum (E&P) Limited, has signed an agreement with Devon Energy Corporation (AmCham Member) (link here) to acquire Devon's entire upstream petroleum business interests in Egypt spanning eight companies and eight Production Sharing Contracts.
The purchase price at the effective date of 1 January 2007 is $375 million. In addition to receiving the oil and gas production and exploration assets of Devon Egypt, Dana will also gain approximately $67 million of working capital in Devon Egypt. Dana will pay the net consideration of approximately $308 million in cash (as adjusted at completion for ongoing 2007 production income and expenditure) via a newly arranged banking facility with ABN AMRO Bank. During 2006, Devon Egypt had working interest production of approximately 12,300 barrels per day, and USGAAP operating profits of approximately $53 million. At the end of 2006 gross assets were approximately $242 million.
Devon Energy's interests in Egypt span the prolific Gulf of Suez and Western Desert oil regions. The portfolio of assets comprises interests in eight Production Sharing Contracts, with 13 fields currently producing. Upon completion, the acquisition will add production of approximately 12,500 barrels of oil per day to Dana and add approximately 30 million barrels of proven and probable reserves to Dana.
Dana also noted that it signed an agreement with Kuwait International Oil and Environment Co (KIOEC), a subsidiary of Taqat Holding and Gulf Oil Investments, to participate with a 50 per cent working interest in Dana Gas' Komombo concession, located in the Western Desert, Upper Egypt and approximately 800 kilometres south of Cairo. Dana Gas will remain as operator of the concession.
DOW EXPANDS OPERATIONS IN EGYPT Source: Webwire, April 19, 2007
The Dow Chemical Company (AmCham Member) (link here), opened a new polyurethane systems market development and prototyping laboratory in Egypt. The laboratory will help create new products that meet the growing needs of the local customer base across Middle East, India and Africa.
Earl Shipp, President Basic Chemicals, Dow Chemical Company inaugurated the new laboratory stating, “Dow is committed to establishing facilities and state-of-the-art petrochemical complexes with strategic local partners. The Middle East, India and Africa are strategically vital to Dow’s growth and the expansion of our site in Egypt is an essential part of our growth strategy and plans.”
The new market development and prototyping laboratory that Dow Polyurethane Systems opened will support the continuous development of innovative polyurethane-based fully formulated products to serve a vast array of applications while the polyurethane systems facility will continue manufacturing and commercializing products for diverse applications including appliances, building & construction, footwear applications, coatings adhesives sealants and elastomers for a wide variety of applications including the oil and gas industry, and flexible systems for the furniture and transportation industries.
Dow launched the Dow Export office in Egypt over 30 years ago and opened Dow Mideast Systems and the polyurethane systems facility in 1997. Recently, Dow made headlines in the Egyptian press when a Dow Polyurethane Systems team of experts worked to protect a historical treasure by wrapping the 85-ton granite statue of the ancient Egyptian pharaoh Ramses II in VORACOR™ rigid polyurethane foam system ensuring a safe, 10-hour journey for the 3,200 year-old statue from downtown Cairo, to the Grand Egyptian Museum near the Great Pyramids of Giza.
FRENCH CONSORTIUM WINS CAIRO UNDERGROUND BID Source: ANSAmed, April 27, 2007
French Trade Minister Christine Lagarde will travel to Egypt on Sunday to sign the contracts for the first stage of construction works of Cairòs underground line 3. The construction works will involve various French companies (Alstom (link here), Alcatel (AmCham Member) (link here) Vinci (link here), Bouygues (link here), Spie (link here), Thales (link here), Vossloh – Cogifer (link here)) which won the 250 million euro bid. French companies built the first two lines of the Cairo underground in the 1980s and 1990s. "This tender demonstrates that despite the 6% decrease in French exports to Egypt in 2006 the economic relations between the two countries remain solid," the French Trade Ministry said in a statement. The signing of the agreements will take place in the presence of Egypt's Prime Minister Ahmed Nazif, Transport Minister Mohamed Younes Lofti Mansour and International Cooperation Minister Fayza Aboul Naga.
TOURISM PROJECTS WORTH EGP10 BILLION UNDER CONSTRUCTION IN SINAI Source: Al-Alam al-Yom, April 26, 2007
Some 184 tourism projects worth EGP10 billion are being built in Sinai, said Tourism Minister Zuhair Garana. The new resorts, which represent 35% of all tourism projects under construction in Egypt, will add 46,300 hotel rooms and create 225,000 jobs. Sinai currently has 316 tourism resorts and hotels, representing 33% of Egypt's total, Garana added. Sinai has a room capacity of 61,000 rooms, 40% of Egypt's total.
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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