A group of Egyptian importers have sent a letter to the Egyptian Prime Minister Mostafa Madbouly

Newsletter

16 Feb 2022

For our top talks today, a group of Egyptian importers, represented by the Federation of Egyptian Chamber of Commerce (FECC), the Federation of Egyptian Industries (FEI), and Egyptian Businessmen’s Association (EBA), have sent a letter to the Egyptian Prime Minister Mostafa Madbouly objecting the Central Bank of Egypt’s (CBE) decision regarding collection documents. Under the CBE’s new directions, importers’ collection documents will not be accepted by banks. The CBE also dictates that importers must present letters of credit for them to be able to buy goods. A policy that will be effective as of the beginning of March. Heads of the FECC, the FEI, and the EBA pleaded for the reversion of such policy, arguing that it will aggravate the supply chain crisis and raise production costs, which will increase prices of goods in the local market.

In addition, they also said that the new policy will have a negative impact on the competitiveness of Egyptian exports.
The new policy will also affect Egyptians’ health by its negative impact on the supplies of the pharmaceuticals industry, heads of the FECC, the FEI, and the EBA noted in their letter to the prime minister. It is worth noting that the new CBE policy requires importers to present a set of documents to banks for their transactions. The CBE will exempt branches of foreign companies and their subsidiaries from its new decision, which comes within the context of the Egyptian Cabinet’s directives regarding the governance of import operations and the activation of the system of pre-registration of shipments. (Arab Finance)
On a positive note, Egypt’s economic growth rate jumped to 7.7% in the fourth quarter (Q4) of the fiscal year (FY) 2020/2021,
from 1.7% in Q4 FY 2019/2020. Many economic activities recorded positive rates during the last quarter of FY 2020/2021, including restaurants, hotels, construction, and natural gas and electricity. Moreover, government investments registered 568.4 billion EGP during the last three years, pumped into many projects. From July 2018 to June 2020, the government pumped 680 billion EGP to execute more than 4,000 development projects. The government data also referred to its efforts to reduce budget deficit to 7.4% in FY 2020/2021, compared to 7.95% in the year before. Financial reforms led to the generation of around 110.7 billion EGP in customs revenue, along with 106.5 billion EGP collected in value added taxes (VAT) and 13.1 billion EGP collected in property taxes in three years. (Egypt Ministry of Planning)
Egyptian Minister of Petroleum Tarek El-Molla has witnessed the signature of a memorandum of understanding (MoU) between Sidi Kerir Petrochemicals Company (Sidpec) (SKPC) and Nigeria’s Rungas Group.
The MoU aims at building a petrochemical complex in Nigeria with the aid of Egyptian experience in this industry. Sidpec will be a partner in the new complex and will provide technical support through all phases of the project. (Gomhuria Online)
The Ministry of Electricity and Renewable Energy has set charging tariffs for electric vehicles (EV).
The charging tariff per a kilowatt will cost a range between 3.38 EGP and 7.50 EGP. Prices will vary depending on the location of the station and its type; whether it is public or privately-owned, or running on alternating current or direct current. (Egyptian Gazette)
Talking green, Minister of Finance, Dr. Mohamed Maait, said that the percentage of green investments amounts to 30% of the budget for the current fiscal year,
and that the private sector is an authentic partner in achieving green and sustainable growth. Which contributes to strengthening the macroeconomic structure, by increasing spending on environmentally friendly development projects, in a way that helps lay the foundations for sustainable investment. He added that the volume of energy from renewable sources is 6,128 megawatts, representing 20% of the maximum electrical loads, and about 3,500 megawatts have been generated through the private sector; This reflects the government’s success in ensuring uninterrupted electricity provision to support economic growth. (Al-Mal)
Also, He pointed out that the government attaches great importance to water projects, whether sewage treatment or water desalination,
and "drip irrigation" is one of the initiatives that complement sustainable projects, and the first phase begins in Beni Suef and Qalyubia with about 7 billion pounds by providing loans with the guarantee of the Ministry of Finance without interest for farmers. The minister stressed that 7.1 billion EGP has been allocated to the presidential initiative to replace aging vehicles with new ones powered by natural gas, as a model for projects that pave the way for Egypt’s gradual move towards switching to low-emissions transportation, explaining that electric cars currently imported are not subject to customs, to encourage the manufacture of cars locally, financial incentives for citizens to encourage them to buy cars manufactured locally. (Al-Mal)
Moving to our EGX and companies talks, International Company for Medical Industries (ICMI) has denied the recently published news on one of the newspapers claiming that ICMI is in talks with a number of banks to obtain a loan worth 15 million EGP. )
The company has not informed any news agency with specific figures. It is worth noting that ICMI’s board of directors previously approved the arrangement of the required financing to import production lines within the framework of the company’s plan. The company will reveal the amount of any financing it gets for importing the production lines once it is determined. (Arab Finance)
Alameda Healthcare Group has signed a memorandum of understanding with the UK-based CMR Surgical for enhancing robotic surgery in Egypt.
Under the signed MoU, Alameda will buy four of the British company’s Versius robots over the coming four years. The Egyptian healthcare group is set to receive the first robot in March 2022, with will be installed at As-Salam International Hospital in Maadi. As per this partnership, a training center for robotic surgery will be established in Egypt, providing direct access to the latest robotic surgery technologies in the entire region. This collaboration will also ease setting up a joint governance committee, aiming at optimizing, expanding, and advancing patient-centric care. (Arab Finance)
Giza Systems has announced that it has entered into an agreement with the Spanish international group “EOSOL” to sell a 50% stake in Giza Systems Electromechanical “GSEC”,
a subsidiary of Giza Systems, which was established as an engineering, procurement and construction (EPC) contractor specialized in the field of electromechanical contracting projects that Covering various sectors, to the EOSOL group. This new partnership comes as a new strategic step to take advantage of the two companies’ efforts to implement their plan to increase business and push towards renewable energy sources, benefiting from the experience of “EOSOL”, as a leading group in the renewable energy sector, as well as opening new markets for Giza Systems Electromechanical “GSEC” in this new field. To expand its presence as one of the largest companies operating in this field in the Middle East. And about this new partnership. (Al-Mal)
ADES International Holding is set to launch an initial public offering (IPO) in the Saudi Stock Exchange (Tadawul) early 2023, according to the Chairman of INTRO Group Mamdouh Abbas.
Tadawul is more suitable for oil and energy projects, Abbas added, noting that there is a possibility for the consideration of listing the company in the Egyptian Exchange (EGX) later. It is worth mentioning that INTRO Group holds a majority share in ADES International. (Arab Finance)
Brmaja Innovation for IT, an Egypt-based subsidiary of Saudi Arabia’s Brmaja, has completed the registration of its shares at Misr for Central Clearing, Depository, and Registry (MCDR) ahead of its planned initial public offering on the EGX.
The Egyptian unit plans to manage a business volume of over 180 million USD over the coming five years. The company is currently preparing for the estimated budget and the business plan for the next years. Brmaja Innovation for IT has a presence in 16 countries across the world, providing its customers with high-quality IT consulting. (EGX)
Paints and Chemical Industries (Pachin) (PACH) has turned to losses during the first half (H1) of fiscal year (FY) 2021/2022.
The company incurred a net loss attributable to the parent company of 12.83 million EGP in H1 FY 2021/2022, versus a net profit of 35.41 million EGP in the same period of FY 2020/2021. Consolidated sales amounted to 427.95 million EGP in the first six months of FY 2021/2022, compared to 415.09 million EGP in the year-ago period. At the level of the standalone financial results, Pachin incurred a net loss after tax of 1.91 million EGP in H1 FY 2021/2022, versus a net profit of 2.36 million EGP in the prior-year period. (EGX)
On the other hand, Eastern Company (EAST) reported a 15% year-on-year (YoY) increase in net profit after tax for the first half (H1) of fiscal year (FY) 2021/2022.
Net profit after tax amounted to 2.92 billion EGP2in H1 FY 2021/2022, compared to 2.53 billion EGP in the year-ago period. Total sales rose by 6% YoY to EGP 34.43 billion in the six-month period ended December 31st 2021 from 32.59 billion EGP. (EGX