Philip Morris, paid about 450 million USD to obtain the new license to produce traditional and electronic cigarettes in Egypt

Newsletter

05 Jun 2022

Philip Morris, the world’s largest tobacco company, paid about 450 million USD (about 8.3 billion EGP) to obtain the new license to produce traditional and electronic cigarettes in Egypt. Only Philip Morris submitted the bid through its subsidiary “United Morris Tobacco” and won it. British American Tobacco, Palm Smoke, and Al-Mansour International Distribution companies withdrew from the bidding that Egypt is conducting regarding the license, citing the withdrawal that the new bidding terms will create a near-monopoly in the cigarette market. (Bloomberg Asharq)

The new "United Tobacco" company will lease a factory and its equipment from the Eastern Tobacco Company for 200 million EGP annually.
he Eastern Tobacco agreement with Philip Morris regarding the new company states that if any of the tobacco companies operating in Egypt or abroad owns 10% of the shares of Eastern Tobacco, Philip Morris has the right to purchase Eastern Tobacco’s stake in “United Tobacco” at a nominal value, in addition to 108 million dollars, which is equal to 24% of the value of the paid license. The new company will break Eastern Tobacco's monopoly on the cigarette industry in Egypt, and Eastern Tobacco will manufacture cigarettes, pipe tobacco, cigars, and molasses. The company's market share is about 70%, compared to about 30% for foreign companies. (Bloomberg Asharq)
Etisalat Misr intends to increase its investments in the country by 15% due to the movement of the Egyptian pound exchange rate, according to Hazem Metwally, the CEO of Etisalat Misr.
During the first quarter of this year, Etisalat Misr, a subsidiary of the UAE's Etisalat Group, had said that it would invest between 5 and 5.5 billion EGP in Egypt during 2022 to develop the network and grow its business. The exchange rate of the Egyptian pound has fallen by about 15% since the first rate hike this year last March, and the Central Bank of Egypt has raised interest rates by 300 basis points since the beginning of the year in an attempt to absorb inflationary pressures in the market. (Bloomberg Asharq)
In addition, Telecom Egypt" signs agreements with "Etisalat Misr" worth 17 billion EGP for a period of 10 years in the areas of infrastructure services, availability and roaming.
Also, Telecom Egypt" and Etihad Etisalat "Mobily" had signed a memorandum of understanding to build the first direct bilateral submarine cable linking Saudi Arabia and Egypt, in line with the increasing growth of communications traffic between the two countries. From launching the cable within two years. (Bloomberg Asharq)
Al Futtaim Group is considering investing around 700 million USD to 1 billion USD in Egypt over the coming three years,
according to the group’s CEO Omar Abdulla Al Futtaim. The Emirati group is planning to expand in the Egyptian market, particularly in the industrial sector, the CEO noted. The retail sector in the North African country is currently facing some challenges due to the ongoing Russian invasion of Ukraine, he added. Moreover, he highlighted that Majid Al Futtaim Group has a presence in Egypt for around 40 years and it seeks to boost investments in Egypt under the recently announced Industrial Partnership for Sustainable Economic Growth between the UAE, Egypt, and Jordan. On May 29th, Minister of Industry and Advanced Technology Sultan bin Ahmed Al Jaber announced that the UAE-based ADQ Holding would allocate 10 billion USD in investment fund for projects in Egypt and Jordan, in line with the directives of President Mohamed bin Zayed Al Nahyan. (Al Mal)
The Islamic Development Bank (IsDB) has opened its first regional headquarter in Cairo, Egypt.
This announcement was made during the IsDB’s 2022 Annual Meetings, which was held in Sharm El Sheikh under the supervision of President Abdel Fattah El-Sisi to discuss economic and financial developments. It is worth that the Vice President of IsDB Amer Bukvic revealed that the bank invested 4.3 billion USD in member countries and Islamic communities across the world to alleviate the impact of the Covid-19 pandemic. (Arab Finance)
Egypt is ready to transfer expertise in the field of developing and digitizing customs systems to the African countries, the Egyptian minister Mohamed Maait said.
The minister highlighted the vital role played by the technological solutions in cutting the customs release time to 50% in accordance to a study conducted in collaboration with the World Bank Group. Egypt would help Nigeria develop its customs system through applying the single-window system and the advance cargo information (ACI) system. (Arab Finance)
The Egyptian Suez Canal expects to achieve revenues of 3.5 billion USD during the first half of 2022, as revealed by the head of the Canal Authority Osama Rabie.
Revenues from the Egyptian Suez Canal increased by about 23% in May 2022, on an annual basis, to reach 657 million ISD. Rabie pointed out 4 factors that played a role in achieving these record revenues, represented by the growth of the global economy, the continued recovery of global trade, the pricing policy and raising fees by the Canal Authority, in addition to the increase in oil and gas shipments transiting from the Arab Gulf states to Europe, as a result of the Russian-Ukrainian war. He expected the canal's business growth rate to remain at the same pace for the rest of the year. (Bloomberg Asharq)
Moreover, the Economic Committee at the Egyptian House of Representatives has approved the new budget of the Suez Canal Economic Zone (SCZONE) for the fiscal year (FY) 2022/2023, with total allocations of 42 billion EGP.
As per the new budget, the SCZONE is expected to achieve a net profit of about 1.9 billion EGP. During the current FY, the SCZONE signed a series of key agreements with the aim to localize industries with global interest, Deputy CEO of the SCZONE for investment Walid Gamalddin said. These agreements include a contract with Red Sea National Petrochemicals Company with total investments of 7.5 billion USD, as well as a contract for the International Methanol Complex with total investments of 2.6 billion USD, Gamalddin added. (Al Mal)
Dice Sport and Casual Wear (DSCW) has reported a 198.38% year-on-year (YoY) hike in consolidated profits attributable to the parent company during the first quarter (Q1) of 2022, recording 9.569 million EGP.
Consolidated net sales soared to 383.789 million EGP in Q1 2022 from 297.626 million EGP in Q1 2021. As for the standalone financial statement, Dice turned to profits during the three-month period ended March 31st, recording a net profit after tax of 803,458 EGP, compared to a net loss of 6.641 million EGP in the year-ago period. Dice is an Egypt-based company engaged in the casual wear garments and textile industry. The company manufactures and distributes ready-made casual wear made of pure and mixed cotton, polyester, and viscose fabrics in different types, as well as other knitting products. (Arab Finance)
Madinet Nasr Housing and Development (MNHD) is seeking to generate around 6 billion EGP in contracted sales during 2022,
as well as raising the prices of its units in new projects by around 15%, according to the company's CEO Hassan Abdallah Sallam. The company has already increased the prices by 7% since the beginning of the year as it has a stock of ready-for-delivery units, Sallam added, pointing out that the potential 15% raise could be implemented right away or in phases. He further revealed that his company will launch nearly six new projects until the end of 2022, of which most are parts of Taj City and Sarai mega projects. Located on about 3.5 million square meters (sqm) with around 100 billion EGP of investments, Taj City is a complete residential compound in Middle Cairo. Sarai is situated on 5.5 million sqm in New Cairo, near the New Administrative Capital. (Bloomberg Asharq)