Industry
From The Report: Egypt 2012
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Industrial activity remains an economic mainstay in Egypt, with well-established sectors such as textiles, food processing, consumer staples and automotive assembly. Although 35% of industrial producers suffered significant setbacks in 2011 following the political upheaval, the consumer staples segment fared well throughout the year, and even experienced growth.
The shift to modern retailing has only just begun in Egypt. With more than 98% of all commercial interactions taking place informally, modern retailers take a long-term perspective when entering the market. Although the average monthly income per household hovers at $244, Egypt is still considered to have a relatively large middle class, into which 85% of Egyptians fall based on income levels over $2 a day. Global grocery retailers have long eyed the Egyptian market, but in the past, success has been limited at best. Today, a small number of major international grocers are moving in once again.
This chapter contains an interview with Osama Kamal, former president, Egyptian Petrochemicals Holding Company (ECHEM).

Articles from this Chapter

Overview

Building for the future: Challenges and reforms both shake and strengthen the sector
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Industrial activity remains an economic mainstay in Egypt, with well-established sectors such as textiles, food processing, consumer staples and automotive assembly. Egypt’s large population makes it an attractive market for manufactured goods given robust consumer demand, which is set to increase with the pace of expansion in the overall economy and per-capita income levels. In 2012, however, some of the opportunities in this long-term outlook may be less obvious, as recent political uncertainty…

Analysis

Cost of inputs: Finding the best ways to restructure a sector mainstay
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Petrochemicals are a central feature of Egypt’s industrial strategy, making up about 3% of GDP. The sector first began to grow in the early 1950s, when ammonia was generated from surplus fuel from the country’s refineries. By 2010 the industry had grown to 86 companies, 15 of which operate in one of Egypt’s export-oriented free zones. Both the public and private sectors have interests in the petrochemicals segment, as do a number of foreign investors. TRIBULATIONS: Since the start of…

Interview

A global market: OBG talks to Osama Kamal, Former President, Egyptian Petrochemicals Holding Company (ECHEM)
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Interview: Osama Kamal What obstacles is ECHEM encountering as it implements its master plan for the sector? OSAMA KAMAL: The biggest challenge is project financing. Given the current economic climate, finding international financing for mega-projects is not easy. ECHEM is actively pursuing the local private sector to play a larger role in this area. The company also expects that the political situation will stabilise and funding challenges will ease now that the president is in place. We do have…

Analysis

Holding on, fast: Basic staples weather political tribulations
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The market for fast-moving consumer goods (FMCG) is in some ways a microcosm of Egypt as a country: established but also in flux. Egypt has one of the world’s largest and fastest-growing populations, and this rate of expansion will create new social demands as well as naturally increase the country’s consumer base. The market preserved a double-digit sales growth rate in 2011, meaning demand held up despite political uncertainty that began early that year. CONSUMPTION ERA: This phenomenon…

Analysis

Healthy prospects: Regulatory reforms can stimulate growth
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Annual double-digit growth rates have been a regular feature of the Egyptian pharmaceuticals industry, and the country’s compelling demographic dividend offers some of the same benefits to producers as seen in other segments of the economy. However, in 2012 and likely into 2013, the outlook is more modest, as recent challenges since the political upheavals of 2011 have exacerbated pre-existing constraints and created short-term concerns. These include currency risk, counterfeit products and…

Analysis

Gearing up: A strong production base awaits its comeback
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Going off an already established production base, international players are expanding their local presence. In a large market with low levels of vehicle ownership, Egypt’s automotive industry is promising. Although sales suffered in 2011 due to the revolution and economic slowdown, sector leaders are confident that signs of recovery in 2012 will soon develop into full-blown growth, thanks to strong sector foundations. MARKET HIT: Egypt turned out 81,731 vehicles in 2011, of which 53,072…

Analysis

Tight weave: Surviving and thriving in troubled times
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One of the most important industrial segments, Egypt’s textiles sector is a major employer and source of export revenue. Proving resilient to competition, economic downturns and social unrest in recent years, it thrives on a number of competitive advantages, like favourable trade relations and active government support. INTEGRATED & IMPORTANT: Egypt has a fully integrated textiles industry, with businesses in every stage of the supply chain, from cotton farming to the manufacture of…

Overview

Purchasing power: A growing population will provide the consumer base of the future
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The fast growth in Egypt’s retail sector took a pause in 2011 and early 2012, as political uncertainty following regime change led many retailers to scale back expansion plans. However, the expectation is that once political stability returns, the increased purchasing power of Egypt’s rapidly-growing population is likely to drive expansion once more, and the shift from traditional markets to modern retail spaces will pick up pace, perhaps back to pre-revolution levels. INFRASTRUCTURE NEEDS:…

Analysis

Marketplace of opportunities: Online retailing shapes future commerce
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As internet penetration rises and Egyptian consumers seek a growing range of brands, online retailing is expanding. While structural constraints on the segment exist, these are expected to ease in the coming years, and more retailers are tapping into the market. GROWTH SECTOR: Estimates of the market’s size vary. A 2010 report by research and consulting group Arab Advisors calculated that Egypt’s internet users spent $2.1bn online in 2009, including bill payments. Forecasting firm Euromonitor,…