WORLD BANK CHIEF MEETS MUBARAK ON ECONOMIC REFORMS Source: AFP, November 15, 2007
The World Bank chief Robert Zoellick met on Thursday the 15th of November with the Egyptian President Hosni Mubarak on his first trip to Cairo as head of the development lender.
Zoellick's trip is aimed at assessing the type of aid Egypt needs, whether financial or technical, during the two-day trip which includes talks with the Minister of Investment Mahmoud Mohieddin.
The pace of economic reforms, the World Bank's funding of infrastructure as well as poverty-reduction policies were the focus of Zoellick's talks.
It is worth mentioning that The World Bank (link here) will grant Egypt $600,000 in technical assistance to the central unit for Public Private Partnership (PPP) at the Ministry of Finance (link here) to support ongoing efforts. The Minister of Finance had discussed the PPP unit’s project during meeting with senior World Bank officials in Washington.
PRESIDENT MUBARAK RENEWS FAROUK EL OKDAH’S APPOINTMENT Source: Beltone Egypt News, November 29, 2007
President Mubarak has issued a decree renewing Farouk El Okdah’s appointment as the Governor of the Central Bank of Egypt (link here) for a second four-year term. Since taking office in December 2003, Mr Okdah commenced a five year restructuring program in the Egyptian banking sector, focusing on the privatization of state-owned banks and selling state-owned stakes in joint venture banks, as part of a full fledged financial reform program.
The currency reform in late 2004 paved the way for full convertibility of the Egyptian pound. During his time in office, Egypt’s net foreign reserves have more than doubled, to $31 billion from about $14 billion in 2003.
GOVERNMENT RAISES ELECTRICITY PRICES Source: EFG Hermes, Al Masry Al Youm, November 19, 2007
The Egyptian government, in an unannounced move, raised the price of the electricity that it charges households, businesses and agriculture. The increase in costs to households ranges from 7% to 11% and for businesses and agriculture from 7% to 8%, depending on how much electricity they consume each month. The first 50 kilowatt hours consumed by households will remain unchanged in order to protect low income users. The change will be effective this month and will be first paid in next month's bills.
GDP GROWS 6.85% in 2007/08-Q1 Source: Reuters, November 28, 2007
The Egyptian economy grew 6.85% in 2007/08-Q1 (July-September 2007), the Ministry of Economic Development (link here) announced.
This rate of growth compared is with 7.2 percent in 2006/07-Q4 (April-June 2007) and 7.1 percent in the whole of the financial year 2006/07 which ended in June 2007.
The International Monetary Fund (IMF) (link here) said in September that it expected the Egyptian economy to grow about 7 percent in the 2007/08 year starting in July. The government has said it expects the economy to grow at least as fast as last year.
VFE ADDS 1.2 MILLION SUBSCRIBERS IN THIRD QUARTER Source: EFG Hermes, November 15, 2007
Vodafone Egypt (VFE) (Amcham Member) (link here) added 1.2 million subscribers -in last three months to the end of September- to the 12.2 million subscribers, Vodafone Group said in a statement providing key performance indicators for the second quarter of 2007/08. VFE is 44.7% owned by Telecom Egypt (TE) (Amcham Member) (link here) and 55% by Vodafone Group (link here). This was less than the 13.7 million subscribers of its main competitor in Egypt, Mobinil (Amcham Member) (link here). We estimate that this would give VFE a market share of 43%-44%, a figure that would be confirmed when Etisalat Egypt (Amcham Member) (link here) announces its subscribers number for September. VFE’s blended average revenue per user (ARPU) for the quarter slipped to L.E.71.60, fromL.E.75.6 the previous quarter.
ETISALAT EGYPT TO PAY INTERNATIONAL GATEWAY LICENSE FEES SOON Source: Nooz, EFG Hermes, November 15, 2007
Etisalat Egypt (Amcham Member) will pay a fee of L.E.200 million (L.E.100 for each existing subscriber) within the next few days for the international gateway license that it has agreed to buy. Etisalat Egypt is so far the only mobile operator that has agreed to buy one of the gateway licenses the National Telecommunications Regulatory Authority (NTRA) (link here) is offering to sell, a move that will end the monopoly of Telecom Egypt (TE) (Amcham Member) in international calls services.
VERIZON BUSINESS TO BID FOR EGYPT SECOND FIXED-LINE LICEN Source: AL-Alam al-Youm, EFG Hermes, November 19, 2007
US-based Verizon Business (link here) is interested in bidding for Egypt’s second fixed-line license, said Verizon’s vice CEO Carl Robert. Verizon will bid with a local partner for the license, which is expected to be sold in an auction in 2008 and to be operational in 2009.
TE SIGNS A $36 MILLION CONTRACT WITH IMEWE CABLE CONSORTIUM Source: Bloomberg, EFG Hermes, November 19, 2007
Telecom Egypt (TE) (Amcham Member) signed a contract worth $36 million with India-Middle East-Western Europe (IMEWE) cable consortium to increase submarine data links between the Red Sea and the Mediterranean. IMEWE is a partnership of telecommunications companies operating a data cable network from India to Western Europe. It is expected to start operation in mid-2009. The contract allows IMEWE to use TE’s infrastructure in Egypt to pass from the Red Sea to the Mediterranean.
I-FLEX RE-AFFIRMS PARTNERSHIP WITH EGYPTIAN FINANCIAL SERVICES INDUSTRY Source: Data Monitor and Press Trust of India, November 21, 2007
I-flex solutions (link here), a leading provider of information technology solutions to the global financial services industry and a successful partnership with the Egyptian financial services industry [including Banque Misr (Amcham Member) (link here), Banque Du Caire (link here), Credit Agricole (Amcham Member) (link here), Barclays Bank (Amcham Member) (link here) and Citibank (Amcham Member) (link here)] looks to further strengthen and reiterating its commitment through providing world-class IT solutions that will empower the industry.
I-flex also plans to open a support centre in Egypt. “The centre will not only support our customers in Egypt, but also can serve as the hub for the Middle East, Africa and Southern Europe.” said N Raman, managing director and chief executive officer of I-flex solutions.
“It is estimated that a substantial percentage of the total banking transactions in Egypt are handled by banks that use Flexcube, I-flex's core banking solution.” added Raman.
SAP SIGNS $10 MILLON POSTAL-SERVICES CONTRACT Source: Market Watch, November 27, 2007
German Business Software Company SAP (link here) said on Tuesday the 27th of November that it has signed a memorandum of understanding with the Egyptian government, having been selected as the government's strategic IT provider to implement software solutions.
A multi-million dollar agreement for cooperation on software solutions will be effective for five years from 2008.
The company has a four-year deal with Egypt's state postal service, the Egyptian National Postal Organization (link here), worth $10 million. It is also planning, in partnership with the government, to open a SAP customer support center in Egypt, in an effort to boost job creation in Egypt. The agreement aims to support growth of Egypt's information technology and communications sector and to create additional jobs.
GAZ DE FRANCE ACQUIRES STAKE IN WESTERN DESERT IN EGYPT Source: Thaindian News, November 18, 2007
Gaz de France (link here), a major energy player in Europe, has acquired 45 per cent stake license in Egypt from the Greek company Vegas Oil and Gas (Amcham Member). Covering 1075 sq.km, this license is located at the Abu Gharadig Basin in the Western Desert, south-west of Alexandria. Several significant discoveries have already been made there and an exploration program has been underway. Oil production is expected to begin very shortly, followed by natural gas production in the years to come. Vegas Oil and Gas will remain the operator for the license. The transaction is subject to approval by the Egyptian authorities.
EL SEWEDY NEGOTIATING TO BUY STAKE IN ELECTRICAL INSULATORS COMPANY Source: EFG Hermes, November 21, 2007
El Sewedy Cables (Amcham Member) (link here) is negotiating to buy a stake in the Egyptian Company for Manufacturing Electrical Insulators (link here), a private sector company. El Sewedy was considering buying 100% of the company. It did not mention the size of the stake it is considering, the amount of the deal or a timeframe for negotiations.
EGYPT’S LAFARGE TITAN TO INVEST $180 MILLION Source: Reuters, November 14, 2007
Egyptian joint venture Lafarge-Titan Group (link here) will spend close to $180 million to boost its cement production capacity by about 50 percent. Medhat Stefanos, the group's commercial director, said that the investment in the Beni Suef Cement Plant will increase the company's production capacity to 4.7 million tons per year from 3.1 million tons. Some 50% of the cost will be financed by banks and the rest from their profits in Egypt.
Lafarge-Titan was established in 1999 as 50-50 joint venture of France's Lafarge Cement and Greece's Titan. The joint venture has two subsidiaries in Egypt, Beni Suef Cement and Alexandria Portland Cement.
GOVERNMENT REOPENS BIDDING FOR CEMENT LICENSES Source: EFG Hermes, Mist News, November 19, 2007
The General Authority for Industrial Development (link here) has begun receiving bids for new 1.5 million ton per annum cement plants in Sohag and the New Valley. The deadline for bids is December 6. The Egyptian government had offered the licenses on October 28, when it awarded six licenses to set up cement plants in other parts of the country. Companies that have already won licenses are not allowed to participate in the new bid, said Amr Assal, Director of The General Authority for Industrial Development. The two new cement plants would have a combined investment cost estimated at L.E.2.4 billion.
AHMED BAHGAT GROUP DISCUSSING SALE OF SIXTH OF OCTOBER LAND Source: Al-Alam al-Youm, EFG Hermes, November 18, 2007
Bahgat Group (Amcham Member) (link here) is discussing with the National Bank of Egypt (NBE) (Amcham Member) (link here) the possible sale of 1,200 feddan of land in the Sixth of October City and to help repay its outstanding bank debt to National Bank of Egypt (NBE). The land would be sold through a public auction, at an expected price of L.E.1000 to L.E.1800 per square meter. This would likely cover most debt owed by Ahmed Bahgat.
DFG BUYS 24.62% STAKE IN EFG-HERMES Source: Al-Alam al-Youm, EFG Hermes, November 20, 2007
Dubai Financial Group (DFG), a financial holding company owned by Dubai Group (link here), has agreed to buy a 24.62% stake in EFG-Hermes (Amcham Member) (link here) from UAE-based Abraaj Capital for L.E.63.40 per share. This is 111% more than the L.E.30 per share that Abraaj paid when it bought its stake in EFG-Hermes in September 2006. The sale has earned Abraaj Capital a profit of L.E.3.2 billion. Abraaj Capital owned its stake in EFG-Hermes through two fully owned companies, Abraaj Egypt and Abraaj SPV, both purchased by DFG.
MINISTRY OF FINANCE SEEKS TO ISSUE INTERNATIONAL BONDS Source: Info Prod, November 26, 2007
The Ministry of Finance seeks to issue new bonds on the international market in Egyptian pound in January 2008 similar to the ones issued in July 2007. Minister of Finance Youssef Boutros Ghali said that the ten-year bond will be run by Morgan Stanley Company (Amcham Member) (link here), HSBC Bank (Amcham Member) (link here), the National Bank of Egypt, and Banque Misr. The new bond will be registered in the US Capital Market. Ghali added that, following the issuance, the Ministry of Finance would register the bond under the name self-registration to allow Egypt to issue bonds in the Egyptian pound or US dollar.
SACE AND BANK OF ALEXANDRIA START CREDIT PROGRAM Source: ANSA English Corporate Service, November 26, 2007
Italian Export Credit Agency SACE and Egypt's Bank of Alexandria (Amcham Member) (link here), owned by Italian banking group Intesa SanPaolo, and signed an agreement to launch a credit program in Egypt. The program is destined to serve Egyptian small and medium-sized enterprises which are interested in acquiring machines made in Italy. The total amount of the loans to be extended is 50 million euro ($73.11 million).
The main objective of the deal, signed in Cairo, is to reinforce the connections between the companies from Egypt and Italy.
Bank of Alexandria also signed an agreement with Italian bank Banca OPI, owned by Intesa Sanpaolo, and National Committee for the Robbikki Leather City headed by the Egyptian Government, to build infrastructure in the industrial district of Robbikki in Cairo.
POLVARA REQUESTS LAND IN SADAT CITY TO ESTABLISH NEW FACTORY Source: Al Mal, EFG Hermes, November 18, 2007
Arab Polvara has applied to the Sadat City Institution for 200,000 square meters of land to build a new factory, said Polvara chairman Salah Abdel Salam. If approved, Polvara, a spinning and weaving company, will relocate assets from its factories in Alexandria to Sadat City and sell the vacated land to benefit from current high land prices. The company will release the details of the cost and capacity of the new factory after it receives the new land, which it hopes will happen before the end of this year.
INDIA'S MARICO PLANS THIRD PLANT IN EGYPT Source: Forbes, November 20, 2007
Indian consumer goods producer Marico Ltd (link here) is in the process of setting up its third manufacturing facility in Egypt and it is expected to be operating by the second half of next year.
“The Egypt facility will supply to markets in the Middle-East & North African (MENA) region” said Vijay Subramaniam, chief executive of Marico International Business Group.
The plans are in line with Marico's strategy of making Egypt the hub for expansion in the MENA region. Apart from being a reasonably strong growth market, consumer preferences in the region are similar to those in India.
SAINT GOBAIN PLANS $180 MILLION EGYPT GLASS PLANT Source: Reuters, November 27, 2007
French building materials group Saint-Gobain (link here) said on Monday the 26th of November that it would build a 120 million euro float glass production line in Egypt as part of its growth strategy in emerging countries.
Saint-Gobain, the world's biggest building materials group, said that production line was scheduled to begin in 2009 and its output would be sold in Egypt, the Middle East and Africa. The float line will be built in Ain El Sokhna, 120 kilometers east of Cairo on the Red Sea coast.
STATE HOLDING COMPANY TO SELL LUXOR LAND FOR HOTEL DEVELOPMENT Source: EFG Hermes, Al-Alam Al-Youm, November 19, 2007
The state-owned Holding Company for Tourism and Cinema has invited investors to bid for 19,589 square meters of land in Luxor to develop a five-star hotel. The terms of reference booklet was available as of November 18 and the deadline for submitting bids is January 15.
REZIDOR OPENS ITS FIRST MID-MARKET PROPERTY IN EGYPT Source: Al Bawaba, November 19, 2007
The Rezidor Hotel Group (link here), one of the fastest growing hotel companies, has opened its first fresh and energetic mid-market brand in the Middle East - Park Inn Sharm El Sheikh in Egypt. The property was formerly known as the ‘Golden Resort by Rezidor’ and was re-branded Park Inn this month with an additional 203 rooms, bringing the total number to 401.
This first resort property within the Park Inn portfolio is on the protected area of Nabq Bay, 10 minutes from Sharm El Sheikh Airport.
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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