By Mohamed Alaa EL Din
The Engineers’ Consulting Group (ECG) aims to increase the size of its business from EGP 600m in 2014 to EGP 750m this year.
The group aims to do this with support from the expansion in the smart building designs in addition to the Egyptian market’s recent economic mobility. They also plan to expand in the Gulf area through “Tea Computers”, a company specialised in technological solutions for the financial sector. Engineer Amr Allouba, chairman of both companies, told Daily News Egypt in an interview that they will mainly target markets in the UAE and Qatar.
How do you see the current investment climate in the Egyptian market?
If you look at neighbouring countries, you will find them in a state of war, like Libya, Yemen, Syria, and Iraq, which negatively affects the investment climate in the Middle East. But this has a positive side, as the Egyptian market captures the eyes of investors because it is relatively keeping its balance compared to the mentioned markets. Also, there are many good investment opportunities; especially as Egypt has witnessed a period of almost four years without the introduction of big investments or national projects. For these reasons, the current period is considered a new opportunity for attracting foreign investments as the government is moving towards national projects resulting in strong market mobility.
Why is the Egyptian market still attracting investors?
We halted investment for four years and we have many projects delayed during this period, this is why it is considered an investment opportunity. We also have many problems such as energy, which needs investments as well, in addition to the Egyptian market being the largest market in the Middle East. However, the market needs activating laws to improve the investment climate.
You started your company in the ‘60s, when Egypt was going through rough times because of wars – is there a similarity with the current situation?
In the ’60s, Egypt was going through a series of wars and President Nasser was adopting the principles of communism, which affected the investment climate at that time. However, the situation now is more stable and despite the situation is Sinai, there is government openness towards Western countries and a welcome in cooperation with foreign companies. The biggest proof of this is the Economic Summit held in Sharm El-Sheikh.
How did you deal with the economic situation over the past years?
In such situations, investors have two options – either to expand or to shrink, and the later would not help with our industry due to our dependence on human resources as an essential element. If we had followed the shrinking policy, it would have resulted in the escape of these human resources to Gulf countries looking for job opportunities. That’s why we overcame this period by expanding outside Egypt, and we were aided by having company branches outside Egypt, in Qatar, the UAE, and Sudan.
Before the 25 January Revolution, the Egyptian market occupied 70% of our business, while the foreign markets took up the rest. With the complication of the economic situation in Egypt during the past years, we preferred expanding abroad starting from 2012, as the Egyptian market was hit by stagnation. Thus, the bigger percentage of the size of our business was outside Egypt, so the size our local activity became 30% and the greater percentage (70%) was for foreign markets.
When will the Egyptian citizen feel the impact of the Economic Summit?
This will take some time. However, serious steps have been taken by the government to implement some projects. For example, we recently finished designing a water and sewage line with a capacity of 100,000 cubic metres a day in the new capital, through our company ECG. The Egyptian citizen may feel a positive impact within five years at the least, and it may even be 10 years.
Why do we see successful models in the private sector more than in the public sector?
This happens because a manager in the private sector can make decisions and be away from the routine procedures of the public sector, unlike any officials in the public sector.
Smart Village is one example for ECG – are there other models for smart villages you are working on?
We are currently working on the design of a technological zone in Ismailia, and we are carrying on with the designs of the technological zone in Maadi. We also started to expand externally in partnership with Smart Villages to execute a small model of Egypt’s Smart Village in Jordan on a land area of 1m metres, and another one in Uganda on a land area of 50 acres.
What was the volume of ECG’s business last year, and what are your expectations for next year?
The volume of ECG’s business last year amounted to EGP 600m, of which 40% was inside Egypt, and the rest was from our branches outside Egypt. We target an increase at EGP 750m by the end of 2015, with the support of the recent economic recovery in Egypt and the expansion in building smart villages.
Did Qatar’s organising of the World Cup help you increase the volume of business externally?
It did indeed. Qatar is currently working on several infrastructures within its preparation for the World Cup. We have already started designing a number of hotels and stadiums.
What about your sister company, TEA Computers?
TEA Computers started its activities in Egypt in 1974, and back then was the first Egyptian company to work in computers. We were agents selling computers to banks. In the ‘90s, we created the first e-trading system with the capital market authority, and mechanised Misr El-Makasa as well as brokerage companies. We expanded in this business in Libya until the company specialised in providing technological solutions to the financial sector.
What about the volume of business for the company in Egypt?
TEA Computers’ current business volume does not exceed EGP 100m. We tried to raise the volume of business through expanding externally. We postponed regional expansions for now.
Do you have expansion plans regionally?
We plan to expand in the gulf markets like the UAE, Saudi Arabia, and Qatar through offering trading applications, managing assets of the brokerage companies, and managing the portfolios and investment funds. We also plan to offer cloud-computing services in the coming period.