Daily News Egypt

Egypt-Kuwait Holding Company to establish $600m project in Suez Canal zone: Al-Alfi - Daily News Egypt

Advertising Area

Advertising Area

Egypt-Kuwait Holding Company to establish $600m project in Suez Canal zone: Al-Alfi

Company invests $6.8bn in petrochemicals project

Daily News Egypt sat with businessman Moataz Al-Alfi, CEO of Egypt-Kuwait Holding Company and also CEO of Americana Egypt to identify his future investments in the Egyptian market. He also shared his views on the current status of the Egyptian economy.

You announced earlier the signing of a MoU between the Egyptian Petrochemicals Holding Company, Egypt Phosphate, Egypt-Kuwait Holding Company and the Kuwait Boubyan Petrochemicals to pump $6.8bn in Egypt, what are the details?

The petrochemicals projects consist of four projects, to be implemented in coordination with the Ministry of Petroleum, thus the ministry can provide us with the energy needed for it. The budget set for these projects is $6.8bn.

What is the Egyptian share in the project?

Our share in the petrochemical project will be 51% and the other share will be for petroleum companies participating in the project. In other projects, our share can reach above 75%.

When is the study phase of the projects expected to end?

In six months.

Where will be those projects?

Most of them will be in Alexandria and the Gulf of Suez.

The Egypt-Kuwait Holding Company had announced willingness to invest in the Suez Canal zone, can you tell us more details about the four projects?

Our project is for fuelling ships and providing petroleum tanks in the Gulf of Suez. There is another Kuwaiti company called Agility Logistics, currently studying a logistics project of navigation services, managing ports and maritime and air transport.

What is the budget and ownership of the fuelling ships project?

The project will be owned by the Egyptian-Kuwaiti Holding Company and the Suez Canal Authority, with a cost of $600m.

What is your plan for financing the projects? Are you considering taking loans from local or foreign banks?

Most probably it will be from local banks.

When will the studies of the project be concluded?

After one year.

Who will have the largest share in the project, the government or the private sector?

The largest percentage should be for the private sector as the public side has some bureaucratic procedures and fall under many regulatory agencies. So, we should have a percentage more than 75%.

But the government said that it will have the largest percentage in Suez Canal zone projects.

We are now focusing on investing in the Suez Canal zone because it has its own law, which is the Economic Zones of a Special Nature, and it is expected to improve the situation. There will be no direct government hand in managing the zone, but there will be an authority managing on its own. It will make Egypt similar to Dubai, Hong Kong and Singapore.

Amid the increasing energy shortage that challenges Egyptian businessmen, what are your efforts in supplying energy to your projects?

We have continuous meetings with technological companies and the Ministry of Petroleum to solve the issue.

In the meantime, the government is aiming to attract foreign investments; however, most of them have concerns. How do Kuwaiti companies review the Egyptian market?

The main concern of Kuwaiti investors is the unavailability of lands and the energy shortage; we have lots of factories that can’t get natural gas needed for operating. For example, Alexandria Fertilizers Company could only provide us with 15% of our needs from January to July 2015. The Kuwaiti side is interested in the Egyptian market and there are many opportunities for them, but the aforementioned points are negatively affecting it.

But the government is trying to address these issues through the New Investment Law. Do you think it will improve the investment climate?

The law is available but the bureaucracy will disrupt the implementation of the law.

The unavailability of US dollars is also a challenge facing Egyptian investors. Did the dollars issue affect your activities?

It has affected many businesses; however, we weren’t so much affected as we have exports that supply us with US dollars. The dollar should be extensively provided, or then, let its value be increased to EGP 8.2 per $1.

Kuwait’s Al-Kharafi National Group’s dispute with the government over price increases for gas distribution to fertiliser companies in Alexandria has long been in negotiations. When will they announce the settlement?

The settlement is going well, but the announcement will come by the end of this year. The Egyptian side isn’t part of the dispute, we are only middlemen. It was late because the government sometimes changes its opinions, but the settlement will occur in way that pleases both sides.

What about Americana Group? Is Americana Group planning to acquire new franchises?

No. We are horizontally expanding.

What is the market share of Americana Group in Egypt?

Egypt has the fourth largest market share in the Arab region, following Saudi Arabia, United Arab Emirates and Kuwait respectively. Americana investments in Egypt have stopped after the 25th of January Revolution due to the insecurity and the workers’ strikes.  But things have become better now as I see the best government came after the revolution is the current Ibrahim Mehleb government as he is really willing to improve the situation.

What are the expected financial results of Americana in 2015?

This year is worse than last year due to the energy shortage. Profits decreased by 20%.

What is the most profitable Americana franchise?

Kentucky (KFC).

Recently, KFC has faced many boycotting campaigns, citing food poison incidents. How do you see campaigns against KFC?

They are social media campaigns from rivals aiming to defame KFC in order to increase their work.

Are you planning to expand KFC branches?

We are currently planning to expand in villages and governorates. We open 20 new branches annually.

How do you see the freezing of assets belonging to businessmen such as Juhayna CEO Safwan Thabet and Mohamed Farid Khamis’s Oriental Weavers?

Any businessman becomes worried as for instance the shares of those businessmen in the stock market subsequently became negatively affected, which later affects the confidence in the market. When foreign investors hear about such things, they will think of avoiding the market as the investor is like a bird searching for a place to land to feed himself. In Egypt, when we find an investor we arrest him.

What about the activities of the petroleum company, TriOcean?

Its activities are stable, sometimes affected by dues from government, but not a big effect.

Do you think the election of a new parliament will have a positive impact on the economy?

No, I don’t think it is important for the economy. We already have economic legislations and the needed ones can be issued by the president. Businesses only need stability and security to restore tourism.

How do you see the capital gains and dividends tax on the stock market?

The stock market is already suffering from a weak performance. This kind of tax can only be effective in countries that have stable and well-rooted stock markets such as the United States. If it became effective, the stock market would drop down.

Egypt has received economic aid from Gulf countries several times after the 2011 revolution, how do you see that?

I think we need to depend on ourselves.

In your opinion, what is the most needed reform to stimulate the economy?

The Egyptian population increases by 2.5 million every year, so all the recent economic reforms will disappear in two years as the population will jump to five million. The economic growth must be four times double the population growth.


Topics: suez canal

Advertising Area

Breaking News

No current breaking news

Receive our daily newsletter