PM — Back in full swing

TL;DR

MNHD says SODIC’s acquisition offer is too low + Swvl’s acquisition spree continues. (The Big Stories Today)
What automotive + engineering players have to say about the state’s privatization plans. (Inside Industry)
How slowed human activity during covid affected global wildlife. (For Your Commute)
The science and medicine of psychedelics. (On the Tube Tonight)
Wildfires rage across western Europe amid historic heatwave. (The Big Story Abroad)
Your favorite Maadi bakery is now at Almaza. (Eat This Tonight)
The story of three Muslim friends and cultural gaps in London. (Under the Lamplight)

???? WHAT WE’RE TRACKING TONIGHT

Good afternoon, friends. We’re still shaking off the cobwebs from a well-earned long Eid break, but the news waits for exactly no-one and is kicking into full gear.

THE BIG STORIES TODAY

MNHD says the price isn’t right on SODIC’s acquisition bid: The board of Madinet Nasr Housing and Development (MNHD) held off from giving the green light to SODIC’s offer to buy the company in an all-cash transaction valuing MNHD at some EGP 6.2 bn (USD 328 mn). SODIC’s acquisition bid does not match the “real value” of the company or its assets, MNHD’s board said in a letter (pdf) to SODIC’s majority shareholder Aldar.

Swvl is buying another competitor despite cutbacks: Nasdaq-listed mass transport app Swvl is acquiring 100% of Mexico-based transport startup Urbvan Mobility in a share-swap transaction worth some USD 28 mn based on Swvl’s current share price, Swvl CFO Youssef Salem confirmed to Enterprise. The move is the latest in a string of acquisitions by the Cairo-born startup, as it continues to pursue global expansion plans despite recently announcing major layoffs and operational cutbacks to reach profitability next year.

THE BIG STORY ABROAD

Wildfires rage across western Europe amid historic heatwave: Thousands of firefighters in Spain, Portugal, France, and Greece are continuing to battle huge wildfires that swept across tens of thousands of hectares, fanned by strong winds and hot, dry weather. Soaring temperatures have exceeded 40°C, a record for this part of the world at this time of year. In Portugal, authorities say at least 238 people have died over the past week from the heat, while thousands more have been evacuated in France and Spain.

The story is leading headlines everywhere: Reuters | BBC | The Guardian | DW

HAPPENING NOW- President Abdel Fattah El Sisi is in Berlin to participate in the Petersberg Climate Dialogue following an invitation by German Chancellor Olaf Scholz, according to an Ittihadiya statement. The summit is one of several climate-related stops ahead of the Sharm El Sheikh-hosted COP27 in November, the statement reads. El Sisi is set to meet several top German officials, including Scholz, to discuss cooperation and issues of mutual interest.

**PSA- 6 October and Sheikh Zayed residents have full access to the Mehwar again after authorities fully reopened the crucial roadway from Sheikh Zayed to Lebanon Square, Youm7 reports. The Mehwar was closed in one direction for nearly two weeks while it was being expanded.

** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

Inflation unexpectedly slowed for the first time in seven months in June as food prices declined for a second month in a row, with consumer prices in urban areas rising 13.2% during the month.
The government’s fuel pricing committee raised the price of fuel as it looks to reduce its subsidy bill amid rising global energy prices.
“Productive discussions” with the IMF — but no agreement yet: The IMF and Egyptian officials held “productive discussions” on a fresh assistance programme during recent meetings in Cairo, the Fund and a government spokesperson said in separate statements.

enterprise

*** It’s Inside Industry day — your weekly briefing of all things industrial in Egypt. Inside Industry focuses each Sunday on what it takes to turn Egypt into a manufacturing and export powerhouse, ranging from initial investment and planning to product distribution, through to land allocation to industrial processes, supply chain management, labor, automation and technology, inputs and exports, regulation and policy.

In today’s issue: As public consultations continue over the state’s privatization plans, we talked to engineering and automotive industry players about what they think of the discussions and what else needs to happen in their sectors for the privatization push to play out well. The executives we spoke to highlighted the need to focus on local production and sourcing the raw materials needed, the importance of expediting the licensing process, and the role SMEs could play within the field.

???? CIRCLE YOUR CALENDAR-

State’s national dialogue meetings to resume on Tuesday: The board overseeing the Sisi administration’s national dialogue will hold its second meeting this week, during which it will set a schedule of debate, discuss the agenda and form subcommittees.

Need a refresher on the national dialogue? We’ve got you covered.

☀️ TOMORROW’S WEATHER- Expect a daytime high of 41°C tomorrow and a nighttime low of 25°C, according to our favorite weather app.

???? FOR YOUR COMMUTE

Remember how “the planet was healing” in the early days of covid-19? A growing body of research has showed the ways that global wildlife benefited from what scientists have referred to as an “anthropause” — the slowdown of human activity during the covid-19 pandemic — as well as how the ecosystem still relies on human protection and resources, the New York Times reports, citing various studies and researchers. Reduced human travel, traffic, and noise levels affected different species’ movement and choices of habitat. The lack of pollution from swimmers improved water clarity in some areas by 56%, for example, while fish density, biomass and diversity rose in areas that had seen a break from snorkelers, one study (pdf) found. Meanwhile, species began moving to new habitats and increasing their daytime activity as the “landscape of fear” — characterized by high noise levels and abundant human traffic — dissipated.

But we also play a role in protecting them: While the pandemic highlighted how we harm the environment, the nuances in the way our ecosystem works also came to light. Reduced conservation efforts and human control as projects were stripped of funding and forced to make delays made some species more vulnerable to extinction, some studies found. The lull caused by the pandemic also emboldened some invasive species that scientists have been working to cull for years in order to protect other native animals. Meanwhile, illegal poaching of wildlife, as well as logging and mining, saw spikes in several countries as a result of reduced surveillance and human activity.

Minor tweaks to the way we travel and move around can make a world of difference: The answer is not to halt tourism, scientists acknowledge, but to set some boundaries that could help protect wildlife and biodiversity. These efforts could include prohibiting swimming in areas that serve as refuge to some sea creatures during low seasons, or building wildlife crossings over highways to prevent roadkill, some scientists suggest.

You can also make small changes to your beach days so your fun in the sun doesn’t harm the environment: The beach is a meeting point for the three types of threats to the ocean: Climate change, pollution (mostly from plastics), and disturbing marine life biodiversity. Depending on the choices you make leading up to and on your day on the beach, you can either positively or negatively impact all three, chief scientist at the Ocean Conservancy tells the Wall Street Journal. Several of the things you can do to protect the beach, actually start at home, including using fewer fertilizers, avoiding overwatering your garden and not littering, since trash and pollutants can end up in the ocean through runoff. And once you decide to book a beach day, it’s helpful to stay mindful of your carbon footprint when planning travel and accommodation by choosing spots closer to home, relying on low-emission travel, and staying at greener accommodations, such as eco lodges.

The UAE is setting up a USD 817 mn fund to develop satellites and support its space program, UAE President Sheikh Mohamed bin Zayed said in a tweet. The ‘Sirb’ (Arabic for flock of birds) project will launch a constellation of advanced imaging satellites, with the first satellite set to launch in three years. It will be built through partnerships between the public and private sectors and international firms, WAM reports.The satellites will help detect oil spills, and aid in search and rescue missions and monitoring ships. “The project will contribute to the UAE’s efforts to develop solutions to climate change, environmental sustainability and improved disaster management,” the UAE media office said in a tweet.

The fund will also bolster the UAE’s ambitious Space Agency, which deployed the MENA region’s first interplanetary probe into Mars’ orbit last year, and has plans to explore Venus within seven years and send an unmanned spacecraft to the moon in 2024, Bloomberg reports.

This publication is proudly sponsored by

???? ENTERPRISE RECOMMENDS

???? ON THE TUBE TONIGHT-
(all times CLT)

Take a (scientific) dive into the world of psychedelics in How to Change Your Mind. The thought-provoking Netflix docuseries (watch, runtime: 2:20) explores how researchers, psychologists, and medical professionals are finding new uses for mind-altering psychedelics, and turning to them for potential cures to illnesses like PTSD, addiction, anxiety, and depression. Directed by Emmy-nominated filmmaker Alison Ellwood and two-time Academy Award-nominated Lucy Walker, the series is based on a book by the same name by best-selling author Michael Polan, who takes center-stage in the episodes. The first season is made up of four episodes, and each lasts no longer than 55 minutes — but the controversial nature of the docuseries means this is not an easy watch. However, the show’s reliance on facts and scientific research, rather than attention-grabbing tactics to shock viewers, is what sets it apart.

⚽ The Egyptian Premier League is heating up, with three games to keep us entertained tonight: At 6:30pm El Gouna will face Tala’e El Geish, and Smouha will play against Al Ahly Bank. Later at 9pm, El Moqawloon El Arab will play against Ceramica Cleopatra.

???? EAT THIS TONIGHT-

Pick up freshly-baked goods by the sea at Almaza Bay’s Ratios On The Beach: The artisan bakery specializes in sourdough bread, pastries, sweets, and handcrafted savory creations, and those of us who spent their Eid break in Almaza Bay were delighted to find our favorite Maadi bakery up and running at the Village. What truly stands out at Ratios is the high quality of ingredients they use, and the guaranteed freshness of any item you pick — their bread and croissants are made the traditional way: By hand, and in small batches..Their products also stand out because they undergo a lengthy, natural fermentation process, which results in not only a superb tase, but also makes their bread more easily digestible. We hesitate to name just one item — all their products are highly recommended.

???? OUT AND ABOUT-
(all times CLT)

A women-led musical experience takes center stage tomorrow at El Sawy Culture Wheel with Ritmo Band: Made up of six self-proclaimed music obsessives, the girls of Ritmo Band will present their own unique blend of music by mixing different genres and cultures, including Egyptian, oriental, Lebanese, Khaliji, and international songs. The concert will begin at 7pm.

???? UNDER THE LAMPLIGHT-

These Impossible Things delves into the friendship of three Muslim girls at a critical time in their lives. Written by Egyptian-Irish author Salma El Wardany, this story of family, love, tradition, and faith is as beautiful as it is addictive. The story centers around Malak, Kees, and Jenna, a tight-knit trio of bestfriends who share the trials and tribulations of growing up Muslim in England. As the three of them approach the end of their college days, they are faced with existential questions on which path they will end up taking amid the pressures they face within their culture. The story alternates between the three perspectives, and includes a stint in Egypt, when Malak decides to move back to her home country on her own — an experience that only adds to her confusion, when she realizes she no longer belongs there. The novel is a great summer read that doesn’t shy away from heavy subjects including assault, domestic violence, and generational culture gaps.

???? GO WITH THE FLOW

What automotive + engineering players have to say about the state’s privatization plans: The government’s series of public consultations over its state ownership policy document — which lays out their privatization plans — kicked off last month. In the week prior to the Eid Al Adha break, engineering industry experts and automotive players gathered to share their thoughts on what the sector needs and lay out recommendations on how best to bring the private sector on board, according to an official statement. The biggest areas of concern the session’s attendees cited when Enterprise spoke with them: The need to see actual changes on the ground, expediting processes and streamlining procedures for investors, addressing raw materials shortages, and boosting local component usage.

Refresher: Every Sunday and Tuesday sees workshops on how privatization plans will affect specific industries. These come as the government wants to double the private sector’s role in the economy over the next three years, and aims to raise USD 40 bn over the next four years by selling stakes in state-owned assets to local and international investors. You can catch our coverage of previous workshops on agriculture and FMCGs and you can find more details on the schedule of the meetings here.

The broad sentiment: Everything looks good on paper, but industry players want actual changes on the ground, several experts we spoke to said. “The written statements are excellent, but will they be implemented?” questioned Mohamed El Mohandes, Chairman of the Chamber of Engineering Industries and Chairman of the Mechanical Factories Company. The session dove into the need for legislation enshrining the effective participation of business owners and investors, to achieve the document’s objectives, he added.

Focusing on raw materials could be a boon: Egypt’s engineering industries have the potential to be the country’s highest-growing exporting sector, Sherif El Sayyad, head of the Export Council for Engineering Industries, told Enterprise. This goal could be achieved by introducing incentives for foreign investors to increase the local production of raw materials, cutting customs duties on more industrial components of the sector, he added. The House of Representatives gave its final approval to amending customs duties on hundreds of imports in early June as part of a push to make local manufacturing more viable, but the council wants to include more components to the list. The council also wants to see the government dish out export subsidies more quickly to reduce the disbursement period to 1.5 years.

SMEs could play a big role here: The participants called for more incentives for small and micro enterprises in the state ownership document, to ensure their participation and support the growth of the formal economy over the informal, said Soic Infinity for Facade Engineering and Contracting Chairman Shaimaa Oleba. “We need to support local production, and legislation should comply with the state’s directions to support the industry,” she said.

Across the board, licensing needs to be faster + easier: Industrial licenses should be processed faster, and registration procedures should take less time and cost less money, El Mohandes suggested, adding that authorities should ensure that administrative employees are following through the state’s mechanisms and facilitating the process for businesses across governorates, not just in Cairo. Expanding access to “golden licenses”— which are meant to expedite approvals for projects — to the entire private sector could also help attract more investments faster said Raafat El Khanagri, Chairman of the Egyptian Company for Auto Feeding Industries. The Madbouly Cabinet recently approved amendments to the Investment Act’s executive regulations that would expand access to “golden licenses” to limited liability companies.

And pushing the automotive industry forward is a priority: One of the most important points of discussion was how to turn Egypt into a regional center for the automotive industry, according to Khaled Saad, General Manager of Brilliance and President of the Automobile Manufacturers Association, who added that the sector is currently suffering from a shortage of raw materials worldwide, along with the high cost of shipping, the availability of USDs, and the required letters of credits (L/Cs). In February, a change in rules required importers to get letters of credit (L/Cs) in order to import non-essential goods, but the presidency later announced that production inputs and raw materials will be exempt from the rules handed down by the Central Bank of Egypt. Under the presidential decision, businesses have been permitted to use documentary collection to speed the payment for imported goods, but industry sources tell Enterprise importing components is still more challenging than it used to be.

Addressing these issues will likely be on the forefront as the gov’t works on its automotive strategy: A government-drafted bill was referred to the House that would establish a council for vehicle manufacturing and a fund to manage the financing of a local electric vehicle production industry. This is likely part of government plans to develop the local automotive industry with a focus on EVs, which saw it unveil its automotive strategy earlier this year.

Supporting EVs has to be a priority, auto industry players reiterated, and the localization of Egypt’s auto industry should be concentrated on EVs as the world transitions away from traditional cars, Saad believes. Egypt plans to produce its first locally assembled electric vehicles in 2023, and has invested EGP 450 mn to roll out the infrastructure required to make EVs viable on Egyptian roads. State-owned El Nasr Automotive recently signed an MoU with Chinese car manufacturer BAIC Group to produce EVs in Egypt and is planning to sign final contracts by the end of July.

Electric vehicle batteries could be our gateway to production growth: Producing EV batteries could create a gateway to manufacture electric cars locally and attract investments, suggest Saad and El Khanagry. Egypt could become a regional hub and export to Africa and the Middle East, instead of merely assembling cars for the local market, they said. Enterprise recently learned that El Nasr Automotive is partnering with Germany’s FEV Group to consult on how to build the EV battery sector from scratch while also looking for a Chinese partner to help with the manufacturing.

Also on the agenda: How to reform public enterprises. Investors want assurances that companies’ success does not depend solely on workers, several experts we spoke to said. Public sector employees typically get their full compensation regardless of individual performance or the company’s earnings, unlike private sector companies where workers get paid by the hour and business owners prioritize their own bottom lines, an industry insider explained. This has resulted in many public sector companies taking on more losses than they can afford, which makes them less appealing to investors.

The perfect reform equation needs to give equal weight to four components, Tanta Motors Managing Director Amr Abu Freikha, told Enterprise: Employees’ incomes, shareholders’ bottom lines, the state’s tax revenues, and the company’s growth. “If you prioritize one of these over the others, it creates an imbalance within the company,” Abu Freikha said. The mechanisms for evaluating companies must be reconsidered in order to avoid recurring privatization problems, Abu Freikha said, and legislation amendments should ensure investor rights.

… and the Labor Act amendments should address that. The relationship between workers and the company has to be built and managed properly, Abu Freikha said, to ensure that the state receives its dues and that investors achieve profitability. The experts we spoke to are hopeful that the newly-overhauled Labor Act, which the Senate approved in February, would address some of these concerns. The law would, if enacted, cap working hours, and change minimum raise increments. Catch our explainer here.

Your top industrial development stories for the week:

LRT kick-off: The first phases of the light rail transit system (LRT) connecting Cairo, the new administrative capital and Tenth of Ramadan began operations in the first week of July.
Taqa Arabia and Abu Soma Tourism Development Company agreed to establish a solar-powered seawater desalination plant at Somabay.
GB Auto is set to turn a brownfield site in Sadat City into a passenger car and light commercial vehicle factory. The factory will assemble some 50k cars for Chinese brands Changan and Haval annually and is expected to start operating in November 2023.
Austrian steelmaker Voestalpine and Egyptian National Railways are joining forces to form a JV to make railway tracks at ENR’s Cairo factory.

???? CALENDAR

OUR CALENDAR APPEARS in two sections:

Events with specific dates or months are right here up top
Events happening in a quarter or other range of time with no specific date / month appear at the bottom of the calendar.

JULY

July: A law governing ins. for seasonal contractors will come into effect.

July: Actis’ expected sale of its majority stake in Lekela to Infinity and Masdar’s Infinity Power.

19 July (Tuesday): The national dialogue’s board to reconvene.

21 July (Thursday): European Central Bank monetary policy meeting.

26-27 July (Tuesday-Wednesday): Federal Reserve interest rate meeting.

30 July (Saturday): Islamic New Year.

Late July-14 August: 2Q2022 earnings season.

AUGUST

August: Work to extend the capacity of the Egypt-Sudan electricity interconnection to 600 MW to be completed.

August: Sharm El Sheikh will host the African Sumo Championship.

18 August (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

SEPTEMBER

September: Egypt will display its first naval exhibition, Naval Power.

September: Estate Waves Egypt real estate exhibition through metaverse technology.

September: Central Bank of Egypt’s Innovation and Financial Technology Center to launch incubator for 25 fintech startups.

September: The sixth session of the Egyptian-German Joint Economic Committee.

September: A delegation from Germany’s Aldi will visit Egypt to look at potential investments.

6-9 September (Tuesday-Friday): Gate Travel Expo 2022, El Kobba Palace, Cairo.

7-9 September (Wednesday-Friday): African Finance Ministers to meet in Cairo to coordinate an African-led position during COP27.

The ministers’ meeting, scheduled for September 7 to 9 in Egypt,

8 September (Thursday): European Central Bank monetary policy meeting.

18 September (Sunday): Deadline for brokerage firms, asset managers and financial advisors to register with the Egyptian Securities Federation.

20-21 September (Tuesday-Wednesday): Federal Reserve interest rate meeting.

22 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

26–27 September (Monday-Tuesday): The Africa Women Innovation and Entrepreneurship Forum (AWIEF) at the Cairo Marriott Hotel.

OCTOBER

October: Air Sphinx, EgyptAir’s low-cost subsidiary to commence operations.

October: Fuel pricing committee meets to decide quarterly fuel prices.

October: The finals of the IEEE’s Arab IoT & AI Challenge will be held during GITEX Technology Week in Dubai next October, with participants from 11 Arab countries.

1 October (Saturday): Use of Nafeza becomes compulsory for air freight.

6 October (Thursday): Armed Forces Day, national holiday.

8 October (Saturday): Prophet Muhammad’s birthday, national holiday.

10-16 October (Monday-Sunday): World Bank and IMF annual meetings chaired by CBE Governor Tarek Amer, Washington, DC.

18-20 October (Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

27 October (Thursday): European Central Bank monetary policy meeting.

Late October-14 November: 3Q2022 earnings season.

NOVEMBER

November: Cairo Water Week 2022.

1-2 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

3 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

3-5 November (Thursday-Saturday): Egypt Fashion Week.

4-6 November (Friday-Sunday): The Autotech auto exhibition kicks off at the Cairo International Exhibition and Convention Center.

6-18 November (Sunday-Friday): Egypt will host COP27 in Sharm El Sheikh.

7-13 November (Mon-Sun): The International University Sports Federation (FISU) World University Squash Championships, New Giza.

21 November-18 December (Monday-Sunday): 2022 Fifa World Cup, Qatar.

13-14 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15 December (Thursday): European Central Bank monetary policy meeting.

DECEMBER

22 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

December: The Sixth of October dry port will begin operations.

JANUARY 2023

January EGX-listed companies and non-bank lenders will submit ESG reports for the first time.

January: Fuel pricing committee meets to decide quarterly fuel prices.

MAY 2023

22-26 May (Monday-Friday): Egypt will host the African Development Bank (AfDB) annual meetings in Sharm El Sheikh.

EVENTS WITH NO SET DATE

2H2022: The inauguration of the Grand Egyptian Museum.

2H2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

2H2022: The government will have vaccinated 70% of the population.

3Q2022: Ayady’s consumer financing arm, The Egyptian Company for Consumer Finance Services, to release its first financing product.

End of 2022: e-Aswaaq’s tourism platform will complete the roll out of its ticketing and online booking portal across Egypt.

2023: Egypt will host the Asian Infrastructure Investment Bank’s Annual Meeting of the Board of Governors in 2023.

**Note to readers: Some national holidays may appear twice above. Since 2020, Egypt has observed most mid-week holidays on Thursdays regardless of the day on which they fall and may also move those days to Sundays. We distinguish above between the actual holiday and its observance.