Al-Ahram Weekly | Economy

		17 - 23 October 2002 Issue No. 608 Economy	Current issue Previous issue Site map
Published in Cairo by AL-AHRAM established in 1875		Recommend this page

US-Egypt trade ties boosted
MORE credit facilities will now be extended to Egyptian businessmen seeking to purchase American goods. In an event hosted by the American Chamber of Commerce in Egypt (AmCham) this week, a new agreement was signed by the US's Export-Import Bank (Ex-Im Bank) and four Egyptian commercial banks by which Ex-Im Bank will guarantee loans required by Egyptian buyers of American products or services. Egyptian buyers will only be required to pay 15 per cent of the value of their purchases, while EX- Im Bank guarantees the rest.
The four Egyptian banks are the Commercial International Bank, the Egyptian American Bank, Banque du Caire and the National Bank of Egypt.
"This agreement is but a first step on a longer path. We need to have more presence in the Egyptian market as a credit-guarantee bank," said John Richter, chairman of Ex-Im bank. Richter said his bank's volume of activities is quite large in North African countries. In Algeria, the bank engages in a volume of operations of $1.8 billion and in Morocco its operations are worth $524 million. Meanwhile, its operations in Egypt do not exceed $40 million.
The Ex-Im bank is currently studying the possibility of raising the guarantees in Egyptian pounds to up to the equivalent of $10 million. "This is perhaps the first and only currency which [we are presently considering] apart from the dollar," Richter said.
For his part, Minister of Foreign Trade Youssef Boutros Ghali criticised what he described as an "utter misperception" on the part of the US administration, as well as a lack of interest and complete ignorance of the basic facts related to the Egyptian economy. "On the political arena, Egypt is very much a partner in US policy- making, [but] on the economic front, Egypt does not exist. This is not fair. We should not be ignored," said Ghali.
He added that the situation may not be totally the fault of the US, which has dozens of other countries to trade with. "However, Egypt has the people, the vision and the will. All we need is to adopt the right policies so that we can have a part on the world map," he said.
Ex-Im Bank promotes US goods and services with the aim of creating jobs in the USA.

Mobile doctor
THE EGYPTIAN Company for Mobile Services (MobiNil) has launched an emergency health care programme dedicated to mobile subscribers in Egypt. In cooperation with Cairo Care Clinics, a company that specialises in the management of health care programmes for companies and organisations, the new service (Doctor 012) will be provided through mobile phones. According to Osman Sultan, president of MobiNil, "mobile phones are increasingly turning into much more than just a gadget for communication. Rather, it is the key to a vast world of services, meeting the needs of subscribers in their daily lives."
"Members of Doctor 012's health care programme will enjoy a number of privileges," Sultan said. One of these benefits is an emergency medical service offered seven days a week, 24 hours a day, by dialing a dedicated emergency number from any MobiNil mobile phone.
Ihab Abul-Magd, president of Cairo Care Clinics, said that the special number connects MobiNil subscribers to a special medical centre that provides numerous emergency services. These include ambulances, access to a network of hospitals nationwide and various other services.

The ties that bind
A HIGH level Indian delegation, headed by Indian Minister of State for Small- Scale Industries Vasundhara Raje, was recently in Cairo to boost trade and investment relations. The delegation, including 15 businessmen representing a variety of sectors such as tourism, food processing, garments and industrial machinery, met with Egyptian officials and non-government business associations.
The delegates also discussed the benefits Egypt could derive from Indian experiences in the small and medium enterprise sector.
Prime Minister Atef Ebeid, meeting with the Indian delegation, announced that Egypt-India cooperation was a "win-win situation for both countries". Ebeid expressed hope that the two sides would succeed in establishing joint institutions.
According to Raje, small and medium-sized enterprises (SME's) are the driving force behind the Indian economy, accounting for 19 million jobs, 37 per cent of total exports and 40 per cent of manufacturing activity. Small and medium enterprises in India are estimated at 3.4 million, producing more than 8000 different products.
Moreover, she added that to promote SMEs, the Indian government has provided entrepreneurs with easy credit, access to modern technology and the help of large industries, universities, NGOs and international agencies.
However, she emphasised the need to adopt an integrated approach and expressed India's desire to share its experiences with Egypt.
To promote bilateral trade and investment in common industrial sectors and facilitate technology transfer activities, a memorandum of understanding was signed between the Social Fund for Development (SFD) and the Indian ministry. The agreement will go into effect in April of 2003 and will be valid for three years. It focuses on technology transfer, exports, exchange of information services and joint ventures.
An Egyptian-Indian bilateral trade agreement has been in effect since March 1978. Egypt is also considered to be one of India's most important trading partners in the African continent.
The volume of bilateral trade increased from $248 million in 1996, to $536 million in 2000.
Major Egyptian imports from India include frozen meat, cotton yarn, paper, pharmaceuticals, pumps, sesame seeds and diesel engines, while Indian imports include petroleum, raw cotton and phosphate.
India's total investments in Egypt stand at $330 million spread over 43 projects, including the Alexandria Carbon Black company.

Pharco's controversial purchase
THE ISLAMIC Company for Pharmaceuticals and Chemicals (Pharco) has bought 95 per cent of Ameriya Pharmaceuticals in a LE252 million deal.
Pharco bought 6.8 million shares at LE36.75 each. The deal was successfully concluded despite reservations by Ameriya's investors over the offer price, who described it as "unfair". The Capital Market Authority (CMA), which had approved the deal, responded by saying that there were "no legal obstacles" to the purchase.
Initially, Pharco expressed its intent to purchase a minimum of 51 per cent of Ameriya at LE36.75. However, despite Ameriya minority shareholder reservations, Pharco was eventually able to purchase 95 per cent. Market analysts attribute a change in Ameriya investor strategy to concerns that they might not be able to sell their holdings following Pharco securing a majority stake. The problem, in their view, would have been intensified by the fact that the company's shares are relatively illiquid.
According to a report on Ameriya Pharmaceuticals issued by the Commercial International Investment Company (CIIC) last July, the fair value of the company stands at LE40.75 per share.
Ameriya Pharmaceuticals, established in 1984, is majority shareholder in European-Egyptian Pharmaceutical Industries as well as Abu-Qir Trading, holding a 97 and 73.8 per cent stake in each respectively. Both companies are tax-exempt until the year 2007.

A heroic acquisition
SWISS food processing company Hero recently bought 65 per cent of Vitrac, one of Egypt's leading producers of jams and juices.
According to the deal, which became effective earlier this month, Hero will also assume Vitrac's management.
Vitrac's founder and managing director Mounir Fakhry Abdel- Nour will retain a stake in the company and will remain as a member on the board of directors.
The acquisition of Vitrac is part of Hero's plan to expand its activities in the Middle East, according to the company's Chief Executive Officer, Stefan F. Heidenreich.
"Following our successful business start-ups in Saudi Arabia and the Gulf states, and the recently concluded joint venture with our Turkish partner Ulker, Vitrac is a further crucial element in the group's Middle East regional strategy," Heidenreich said. In addition to maintaining Vitrac's current production lines, Hero plans to use the newly purchased company's facilities to launch new products. These will be in its core products of jam and infant nutrition.
While the two parties declined to say how much the deal was worth, it is believed to be one of the biggest in Egypt's food processing sector. With this new investment, Hero has joined other multinationals from the food industry who have invested in the Egyptian market, such as Nestle and Heinz.
In 2001, Vitrac's sales were $22 million. The company, whose Egyptian market share amounts to 60 per cent, was formed in 1981 as a French-Egyptian joint venture.

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