Al-Ahram Weekly   Al-Ahram Weekly
9 - 15 December 1999
Issue No. 459
Published in Cairo by AL-AHRAM established in 1875 Issues navigation Current Issue Previous Issue Back Issues

Front Page

Greek investment revives

By Shaimaa Labib

Despite historically strong ties -- Greek participation in the Egyptian economy peaked during the '40s and '50s -- the nationalisations of the early sixties triggered an exodus of Greek capital from Egypt.

That is until two years ago, when following a series of initiatives between the governments in Cairo and Athens to revive bilateral economic ties, the two countries began to once again build a strong commercial relationship.

"There has been a lot of progress over the past two years," said Assimina Missa-Kerkentzes, counsellor for commercial and economic affairs at the Greek Embassy in Cairo.

The trade balance in 1998, the last year for which figures are available, stood at $24,500 million (excluding oil exports), according to Missa-Kerkentzes. Egyptian exports to Greece consist mainly of aluminum, oil, cotton and fabrics, potatoes and nuts while Greek exports to Egypt consist mainly of cement, asbestos, oil pipes, leaf tobacco, beech wood and agricultural machinery.

Four Greek companies, "motivated by the favorable investment climate and the success of the privatization programme, have come to invest in Egypt", according to Missa-Kerkentzes. The four companies are specialised in irrigation systems, paint manufacture, car radiators and food products. Other sectors that could prove attractive to Greek businessmen, according to the economic counsellor, are "textiles, construction, engineering, technology, tourism, maritime transportation and agricultural machinery", with several joint ventures currently under negotiation.

The Greek Embassy already participates in and encourages Greek businesses already established in Egypt -- such as the National Bank of Greece -- to organise regular seminars and investment forums in both Alexandria and Athens. The aim, according to the commercial counsellor, is to provide businessmen from both countries with a chance to meet together to discuss possible investment opportunities.

One such forum was organised last month in Alexandria under the auspices of the National Bank of Egypt in collaboration with its Greek counterpart.

"It was agreed during the forum that the two banks would cooperate in financing a shipping line, capitalised at LE400 million, which improve transport between the two countries. They also signed an agreement which sets aside $50 million to help small and medium sized companies, from both sides, to develop to the stage where they can float on the stock market," said Missa- Kerkentzes.


It was decided during the forum that similar meetings would be held twice a year; Greece in May, and Egypt in November.

Greek economic participation in Egypt, though, has yet to expand to include mega-projects. "However, a delegation from some multinational Greek construction companies, which attended the last forum, has decided to conduct studies of the Egyptian market to decide the best possible collaboration in this field."

Although there are two Greek Chambers of Commerce, one in Cairo and another in Alexandria, there is still no official business association linking Egyptian and Greek businessmen.

"We are depending on regular seminars so as to recruit interested companies to form such an association," said Kerkentzes.

The Pyramids Paper Mills, a Greek company that started production in Egypt twelve years ago, is marketing its products in Egypt under the brand name Flora.

"Before the presence of Flora, Egypt was an importer of paper tissues but now it is the biggest exporter of paper tissues to the Middle East and North Africa as well as to Europe. The United Kingdom is our largest market," revealed Christos Cavallis, general manager of Flora.

In Egypt, Flora commands a 35 per cent share of the market. Egyptians own 37.5 per cent of its shares, 25 per cent being held by Misr Insurance company, eight per cent by Suez Canal Bank and 4.5 per cent by individual local investors.

"Flora is, in fact, more Egyptian than other paper mills based in Egypt," said George J Zeritis, managing director of Flora. Carmen, the oldest paper mill factory in Egypt, is in fact Iraqi, Fine is Jordanian while Zina is jointly owned by Lebanese and Kuwaiti businessmen.

Local demand for paper tissues, though, is minimal when compared to American or European consumption. "In the US, per capita consumption of paper tissues is 20 kilos, in Europe, it is 10 kilos but in Egypt it is only 300 grammes annually," said Zeritis.

According to Zeritis, his company is eager to participate in the privatisation process. But "unrealistic demands" on the part of the officials of one company being privatised, for instance, represent serious obstacles to concluding any deal.

"We are constantly approached to take part in the privatization process and we are always ready to discuss any possible opportunities. However, the sale price of the company being privatised is one of the things that hinders the conclusion of any deals with officials seeking always to sell companies at some unrealistic book valuation."

EDIC CHIPITA for food industries is another jointly-owned company that has emerged in Egypt over the last couple of years, a venture between the Egyptian company, Tasty Foods, and a Greek company that furnished 25 per cent of its capital. The company owns a factory in 6th of October City, producing croissants, that are marketed in the Egyptian market under the brandname Molto.

"We have faced no serious obstacles in conducting our business in Egypt," said Samir Berzi, chairman of EDIC CHIPITA. The Greek partner, according to Berzi, is responsible for providing the necessary know-how and the latest technology. "We regularly send delegations of technicians to Greece to keep up-to-date with the latest technologies or to attend training courses on new machines and production lines in this field," Berzi said.

All the company's products are for the local market. "The limited shelf-life of our products presents a serious impediment to exports," said Berzi.

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