Economic reform program behind rise of established, expanded companies

CAIRO – 18 September 2018: The Egyptian Economic reform program was a reason for raising the number of founded and expanding companies during fiscal year 2017/2018, according to Minister of Investment Sahar Nasr.

This came during a press conference to announce the success stories of more than 25 companies investing in Egypt during 2017/2018 in the presence of Minister of Environment Yasmine Fouad and CEO of the General Authority for Investment and Free Zones (GAFI) Mosen Adel, as well as members of GAFI.

Nasr clarified that the reform program included the issuance of laws of investment and bankruptcy, the organization of financial leasing and privatization, amendments to the capital market law and companies, in addition to a number of ministerial decisions contributing to the creation of an appropriate environment for investment, and the expansion the investor’s service centers.

The new investment law provides investors with several incentives and treats men, women, Egyptian and foreign investors equally.

The law also stipulates that foreign employees should not exceed 20 percent of the total number of workers on projects established by non-Egyptian investors.

Moreover, the bankruptcy law regulates financial and administrative restructuring for failed projects and companies, eliminating prison sentences in bankruptcy cases and limiting punishments to a monetary fine.

It also aims to minimize the need for companies or individuals to seek legal settlement as well as simplifying post-bankruptcy procedures.

The minister clarified that the number of established companies reached 20,000 firms, with an increase of 29.1 percent compared to previous year, with a jump of the issued capital from established companies of 64.4 percent, recording LE 49 billion compared to LE 29.8 billion in 2016/17.

According to the minister, the Greater Cairo region allocated the biggest percentage of established firms, accounting for 65 percent of the issued capital of new companies, while the Upper Egypt region occupied second place with 22.6 percent of the issued capital.

As per the expanded companies, their number hiked 61.6 percent compared to the prior year, reaching 3,478 companies.
Arab Companies

The statement noted that investments in Arab companies included the Kuwaiti Kharafi Company, which pumped investments of LE 100 million during 2017/18, and the UAE Canal Sugar Company invested $20 million to establish a factory in the Minya governorate.

The investments of Alrajhi Saudi Group increased LE 150 million and it plans to pump LE 2 billion during the upcoming five years.

Lebanese GLC Company said that it invested LE 120 million during 2017/2018 and is mulling expansion plans during the upcoming period, while Yemen’s Arama Company upped its investments by LE 560 million.

Also, Chairman of Egyptian Steel Company said that the investment law encouraged his company to expand by LE 18 billion to build eight factories.

European Companies

The European companies that invested in Egypt last year included Britian’s Unilever, which pumped $10 million last year, while Germany’s Wannauff and Porcelain invested $30 million.

French Schneider increased its investments by €20 million and upraised the plant’s capacity by 100 percent, while L'Oreal allocated €50 million to establish a factory in Cairo.

The investment by Italy’s Edison amounted to $2.8 billion in Egypt and $250 million was pumped last year. Greece’s Andredding invested LE 1.5 billion last year.
The Norwegian Company Scatec Solar invested by $500 million so far and intends to pump company $200 million in 2019.

US Companies

Mars expanded its investments by $1 billion, while Uber injected $20 million worth of new investments.

Moreover, Cargill Company pumped $150 million in the Egyptian market and Mexico's Simex raised its investment by $80 million.

Asian Companies

China’s Joshi pumped investments worth $150 million during 2017/2018, Indian Sanmar increased its investment in Egypt by $280 million and the expansions of Korean LG reached $80 million.