The Suez Canal Economic Zone has sealed an agreement with a consortium comprising Roots Commodities and UAE’s Rosa Grains for the establishment of eight factories in Port Said

Newsletter

07 Apr 2022

The Suez Canal Economic Zone has sealed an agreement with a consortium comprising Roots Commodities and UAE’s Rosa Grains for the establishment of eight factories in Port Said

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For our top talks today, first, The Suez Canal Economic Zone (SCZONE) has sealed an agreement with a consortium comprising Roots Commodities and UAE’s Rosa Grains for the establishment of eight factories in Port Said for packaging and wrapping of grains and value adding industries with a cost of 800 million EGP. The project will be located in the logistic hinterland of the planned grain terminal in East Port Said Port. He said that the planned factories will be situated on 500 square meters, adding that the agreement between SCZONE and the consortium is set to be signed in a few days. That agreement is separate from the agreement for the building of the grain terminal which is still pending the approval of the Parliament. In August 2021, the Egyptian government signed a contract with Rosa Grain and Roots Commodities for the building of a bulk grain terminal in East Port Said with expected accumulated investments of 2.2 billion EGP. (Al Mal)

Second, Egypt’s General Authority for Investment and Free Zones (GAFI) signed a memorandum of understanding (MoU) with Japanese operating automotive supplier Yazaki Europe Limited for the establishment of a new factory for car components in Faiyum with primary investments of up to 20 million EUR.
Under the MoU, GAFI will provide necessary support to Yazaki for the establishment of the new factory which will be situated on 60,000 square meters. GAFI will also fulfill all required procedures in coordination with competent authorities to finalize the project in the set schedule. The new factory is set to create around 3,000 jobs after becoming operational in July 2023. Yazaki will export 100% of production with an estimated value of 100 million EUR annually. The company will integrate up-to-date Japanese technology into Egyptian industries, turning the country into a regional investment hub for car manufacturing. (Arab Finance)
On the other hand, Egyptian imports of Russian wheat grew 24% year-on-year (YoY) in March despite disruptions in supply on the heels of the Russian-Ukrainian war.
Egypt, the world’s top wheat exporter, received 479,195 tons of wheat from Russia in March. Meanwhile, Egypt’s wheat imports from Ukraine dropped 42% YoY to 124,500 tons in March. Earlier in April, the Egyptian Ministry of Finance provided a sum of 1.1 billion EGP in advance to the General Authority for Supply Commodities (GASC) and the Agricultural Bank of Egypt (ABE) to finance the purchase process of local wheat. The government aims to supply around six million tons of local wheat at a value of 36 billion EGP in 2022. Prices of supplying local wheat have been raised by 1,100 EGP per ton this year as compared to 2021. (Reuters)
The Egyptian President Abdel Fattah El-Sisi issued a law authorizing Minister of Petroleum and Mineral Resources to sign contracts with the Egyptian Mineral Resources Authority (EMRA) and Shalateen Mineral Resources Company for explorations of gold and associated minerals and exploitation thereof in Eastern Desert.
Explorations will cover areas in Jabal Maseih, Jabal Olba, Jabal Al Jarf, Hamata area, Fateri area, and Aswan area in Eastern Desert. The law is effective as of the following day to the day of publication. (Arab Finance)
Next, Rated Egyptian banks have a mild exposure to Russian and Ukrainian banks, and the conflict between both countries is not likely to directly impact asset quality of banks in Egypt, S&P Global Ratings said in a report on rated banks across the Middle East and Africa region.
The EGP lost 15% of its value against the US dollar since mid-February, however, the impact of such depreciation was limited, as foreign currency loans make up 20% of Egyptian banks’ total loans, the report said. S&P noted that foreign currency loans “are usually granted to companies that generate revenues in the same currency." Hikes in inflation and sluggish growth may weigh on credit losses, which could remain manageable, the report remarked. As per S&P data, domestic retail deposits account for the majority of funding base of Egyptian banks, and growth of deposits was solid despite the crisis. (Mubasher)
Moving to our EGX and companies talks, Saudi Arabian logistics company GLT Express has acquired Egyptian logistics company Gallop Express.
The deal is a part of the expansion plans of GLT Express’ parent company Global Logistics and Technology (GLT) Holdings in the Middle East and North Africa (MENA). "We aim to contribute to the country’s revolutionary vision through providing a list of logistics solutions to Egypt that distinguishes GLT Express from the competition,” GLT Express’ CEO Mark Humphries commented. GLT Express provides a variety of logistical services Saudi Arabia including fulfilment, last-mile delivery, freight, and global address. (Arab Finance)
National Bank of Egypt (NBE) and the Arab African International Bank (AAIB) signed on April 5th an EGP 1.8 billion 7-year mutual financing agreement with a subsidiary of Hassan Allam Properties to fund a residential project.
Located on 173 feddans in the 6th of October City, Swan Lake West is planned to include 550 residential units. AAIB and NBE were lead arrangers and guarantors of the deal. Misr Company for Management and Engineering Development acted as the independent engineering advisor. Moreover, CEO of Hassan Allam Properties Mohamed Allam revealed that Swan Lake West will accommodate around 2,200 people. It will include a set of harmonious stages which are semi-independent project with special entrance, Allam added. (Arab Finance)
Moreover, the board of directors of Heliopolis Housing and Development (HHD) (HELI) approved to sign a sale contract of a vacant land plot at the 20th district in New Heliopolis city for around 1.735 billion EGP.
Spanning 243 feddans, the land plot is assigned for integrated residential services. The land plot is set to be sold for 1,700 EGP per square meter (sqm), excluding cost of utilities. The price of the land will be paid by 20% once the contract is signed, with the remaining 80% to be settled over 16 equal quarterly installments without interest. Cash proceeds from this deal will help to accelerate the company’s development pace in line with its strategy that aims at transforming New Heliopolis into an integrated city. (Arab Finance)
In addition, the purchase price offered by Al Wehda Industrial Development to fully acquire the National Company for Glass and Crystal has been amended to EGP 2.25 per share, instead of EGP 1.35 per share.
The deadline for the purchase offer has been extended to April 20th. It is worth noting that Al Wehda previously submitted an offer to purchase up to 15 million shares or a 100%-stake in the National Company for Glass and Crystal. (EGX)
valU, a subsidiary of EFG Hermes Holding (HRHO), announced partnership with OPPO, the leading smart device manufacturer.
This partnership will enable OPPO’s customers to benefit from valU’s financing plans when buying products across the retail network of OPPO. Accordingly, customers can purchase a wide range of products offered by OPPO, including phones, tablets, earphones, and accessories through valU’s tenures from six to 60 months throughout the company’s local retail network of 12 OPPO Experience stores. (Arab Finance)
and finally, the ordinary general meeting (OGM) of Egypt Aluminum (Egyptalum) (EGAL) has endorsed the estimated budget for fiscal year (FY) 2022/2023, targeting a net profit of 1.608 billion EGP.
Moreover, the OGM has approved the FY 2022/2023 investment budget, with a sum of EGP 800 million to be self-financed. The OGM also recommended bringing the company’s total production to 310,000 tons amid higher global prices. The company’s board of directors previously endorsed the preliminary indicators of the FY 2022/2023 estimated budget, with a net profit after tax of 1.26 billion EGP. Egyptalum is an Egypt-based company specialized in extruding aluminum profiles for architectural and industrial applications. The company undertakes the activities of aluminum billet casting, dies, extrusion, alloys, painting, and anodizing. (EGX)