Schneider Electric has been a key player in Egypt’s energy sector for over a decade. Representatives from the company sat down with Prime Minister Sherif Ismail to talk about the company’s interest in Egypt.
Daily News Egypt spoke to Frédéric Abbal, Executive Vice-President at Schneider Electric, to discuss the company’s future investments, how they view the business environment in Egypt, and their interest in new and renewable energy projects.
How would you evaluate the investment environment in Egypt?
First of all, I think that Egypt is a country that has very strong opportunities ahead of it. One of the key sectors in this country is energy, whether it is electricity or gas or any natural resources being explored in the country. You have a huge population, which is growing every year. I remember that 12 years ago, and during my five years in the country, the number of people increased a lot. There is a large young generation here and a lot of trained and experienced population. I met the Prime Minister and said that this is a country that has huge opportunities in term of its geographical position, economically and the number of people, in terms of capacity and skills.
Investment is linked with whether you have enough money to invest or not. So on one hand you need to generate the revenue, which is somehow a bit impacted by the level of oil pricing, but at the end of the day the real topic is how to manage energy in terms of revenues on the one hand, and in terms of bringing energy to everybody at the right level on the other hand.
I think energy is at the core of the equation, which again is an equation from the revenue and consumption point of view. I understand that in this landscape, Schneider Electric has been doing a lot of work because we had [been part of] the [government’s] emergency plan. The company has been contributing to this plan, and out of the 3.6 KW, the company contributed about 1.5 KW. The investments are vital in terms of energy and Schneider has been participating in it. We see two things in the field of investments. The first is about how energy is reliable, and the second is how energy is efficient. On those two fields, it is the reliability of the energy that we are brining, through the national grid or through industrial people or big electrical players or residential buildings. [Now], as soon as you connect someone with a phone, they would need 3G and the 3G needs energy to operate the data centre. Energy is becoming really critical. We are playing an active role in the criticality of energy and developing our added value.
What is the company’s current volume of investments? What is your aim in the next five years?
Out of the investment part, I would say that Schneider has been always present. The story of Schneider has been told since 1987, so it’s a long story. Again I was telling the Prime Minister that we want to invest and we are bringing in investors. The question is not just how I am investing, but what I am creating in the investment in Egypt. We are bringing in investors because they trust our business model, our technology, and that they will get the payback of what they are investing at the end of the day. If I want to talk about how Schneider is investing in this country, it is more about how long Schneider has been investing.
When I arrived in this country 15 years ago, Egypt was in the middle of a real estate crisis and it was impossible to get hard currency. The Egyptian pound was not convertible and it was a very strong crisis. We didn’t leave and we kept going, we kept investing and growing the business. How much business we were doing at the time, which was about €15m compared to what we are doing now, which is about €150m in terms of turnover, we have multiplied by 10 in the last 10 years. This is what we are doing.
How much value have we contributed through partners? We like working with our distributors, our panel builders and our contractors. Thos partners are very precious for us. How much have they been investing in that time? I don’t know, but I can tell you that they multiplied it by 10. We are getting the revenue from our investment and we are very attached to developing this country. It is not a story of one day, but it is a long-term story. Even during the darkest times in Egypt, we have always been supporting our people here and supporting the economy.
What are your future plans?
We don’t talk a lot about figures, but we are 1,500 [employees] in Egypt. We are creating value with those people. I am not considering the number of people working with my partners because if I do that number will multiply by five. We are close to 10,000 people working in the landscape and the network of Schneider. My answer is that we want to grow by double digits. We want to grow in Egypt and outside of Egypt. We want to invest and serve. We acquired a company called Invensys and we have around 500 engineers, and those engineers are working mainly for Africa and for other [countries]. We want to see a double digit growth during this period of five years.
Let’s discuss your upcoming projects. Are you interested in new and renewable energy?
We are following the master plan of the Egyptian government and it has decided to invest quiet a lot in the renewable energy. Solar energy in this country is cheap and available and it is very strong, except for very few days [in the year]. We can invest quite well in the field of solar energy. The Egyptian government wants to have a double digit percentage of the mix of the global energy generation form solar and wind energy. Here, we are at the core of what Schneider can provide. Here starts the way and the work of Schneider, in how it is capable to manage and master energy throughout the grid.