Egypt is the first line of regional defence, supported by the fast pace of Arab investments in Egypt, said Abdullah Al-Shaheen, managing director of State Holding Company and a major shareholder in Egyptian Steel.
In an interview in Cairo with Daily News Egypt, Al-Shaheen said the total amount of investments by State Holding Group is estimated at $3bn. The Egyptian market acquires 25% each in different sectors, and adding more sectors is to be taken into consideration.
How do you see the situation in Egypt?
Egypt is advancing, and those who did not get to have a chance to be part of its advancement will lose a lot. Right now, in terms of the political situation, the roadmap will be almost complete with the announcement that parliamentary elections will occur by the end of fiscal year (FY) 2015/2016. In terms of the economic situation, there are many structural and legislative reforms but they are not enough.
Why do you think they are not enough?
Investors in Egypt are still suffering from bureaucracy. The post-parliament government has to activate the single window system, to provide investors with their demands as soon as possible. However, I’m very optimistic with the recent economic reforms in general, and I’m waiting to see more. I would like to emphasise that, even though Egypt is a large diversified investment market where investing is fruitful, the resettlement of Arab capital in Egypt is a must in order for Egypt to rise again, and be helped to advance. Egypt is the first defence line for Arabs, and without it, they are in danger.
Where are the investments of State Holding to support Egypt?
The group has injected more than EGP 700m since the beginning of 2015 in various sectors, including Egyptian Steel, as promised at the Economic Summit. By this, we have fulfilled the investment plan that we announced at the Economic Summit in Sharm El-Sheikh. However, I’m very sad over the weak response from investors regarding the summit projects, including what was announced in the context of activating the tourism fund with a capital of $1bn and an investment company with capital of EGP 20bn. I wish they were activated and I they speed up the pace of committing to what was announced as investments. Egypt needs investors to keep their investment promises today and it will protect them tomorrow, not just on the economic level, but also on the security and strategic ones.
What is the amount of State Holding’s investments in Egypt?
The total amount of State Holding’s investments on the global level is estimated at $3bn, managed by First Equity Partners Bahrain. The Egyptian market acquired 25% of its investments, managed by First Equity Partners Egypt, distributed on several sectors, including Egyptian Steel. I’d like to point out that our investments are always aimed at serving Egyptians, not supporting any political regime. The proof is that the group never decreased its investments during the Muslim Brotherhood’s rule, although we opposed its policies strongly.
What about Egyptian Steel?
Egyptian Steel is an entity with total investments of nearly $1bn, with Arab investors contributing to it, such as State Holding led by Qatar’s Sheikh Mohmed Bin Suhaim Al-Thani, and Bahraini company First Equity Partners, that includes in its board of directors Kuwaiti Industry man, Mohamed Ali Al-Naqi, and Essam Abul. From the UAE, there is Sheikh Abdullah Bin Hamad Bin Saif Al-Sharqi, from Saudi Arabia there is Hany Al-Bakry, from Bahrain Qais Al-Maskati, and Egyptian businessman Ahmed Abou Hashima, founding partner and CEO of Egyptian Steel Group.
We aim to increase the market share of Egyptian Steel to 25% of total steel market in Egypt by the end of 2017 with a production of nearly 2.25 million tons of steel, and the completion of new expansions and the inauguration of the Beni Suef factory. We hope that the post-parliament government would provide facilities and new legislations that stimulate investment in Egypt. The group is ready to expand in steel and cement production, through competing on any new licences issued by the government after accurate studying, upon the availability of energy.
What are your plans for contributing to the Suez Canal Axis?
We are seriously studying being present in the Suez Canal Axis development. We are waiting for the establishment of an economic development body responsible for the new economic region. Our attention is focused on establishing a large logistic area to serve ships with loading, supply and maintenance, and a feasibility study of this is underway. We are also studying the establishment of another logistical area interested in small and medium projects, which will hopefully help Egypt’s advancing economy. Our investment arm, First Equity, will handle the feasibility studies of these projects.
I would like to stress the importance of the state’s separation between non-Egyptian investors and their political regimes that may be in disagreement with the ruling regime. Qatari investments in Egypt are very successful and are not in any way connected to the relationship between the ruling regimes of both countries.
As groupings of Arab businessmen, do you have a role in promoting Egypt abroad?
Of course. We have investments in a large number of countries around the world, and our international connections with business and finance circles are on a wide scale. Our message to all of them is that Egypt is safe, and investing in it is confidence in the future, especially as large economies are currently suffering and collapsing, unlike with Egypt that continues to advance. What makes this easier for us is that international media is reconsidering the nature of what happened in Egypt, and are starting to see it as a genuine will for change by Egyptians. The reason for this is President Al-Sisi’s international moves to change this view, and his pledges to make political, legislative and economic reforms.
We have many friends to whom we recommended injecting investments in the Egyptian market, however, the preferred is from the European market, and time proved us right when we said the Egyptian market is safer than the global market, which is witnessing a major decline and larger challenges that push the world’s largest economies toward austerity, including China, while Egypt is on its way up.
What should the government do to attract investments?
Reassuring investors will occur with the elimination of bureaucracy and speeding up the completion of the one stop shop, as well as resolving all pending investment disputes that harm the investment climate and may subject Egypt to large international arbitration fines that shake the world’s confidence in Egypt as a safe haven for investment. This must be the government’s main duty. President Al-Sisi’s fast moves, which were much faster than ours at so many points, as well as his follow-ups, have exceeded our feasibility studies and set plans, unlike the government. Egypt needs to clone the president. I demand that the government forms a committee to deal with Arab investors, in particular and foreign investors in general. The committee should manage all their businesses and simplify the procedures. Another committee should be formed to deal with local investors in a way that contributes to improving the business environment.
Did you exit the ready-mix concrete project in Voghera?
We have exited about 50% of the project of ready-mix concrete and construction services with a value of Dir 0.5bn for a coalition that includes investors of different nationalities like Kuwait, Saudi Arabia and others. We are committed to the remaining share and it will be developed through an integrated plan being currently developed.