PM — Mayar Sherif gets first WTA title

TL;DR

Supply Ministry announces three cooking oil complexes worth USD 321 mn open for investment. (The Big Story Today)
POLL- Local products are edging out more expensive imported goods. (Inside Industry)
Tesla rolls out its prototype humanoid robot. (For Your Commute)
Homage to Sidney Poitier. (On the Tube Tonight)
Mayar Sherif gets her first-ever WTA title. (Sports)
House of Donuts: Fulfilling our donut needs since forever. (Eat This Tonight)
How the UK became the hub of the offshore economy. (Under the Lamplight)

???? WHAT WE’RE TRACKING TONIGHT

Good afternoon, friends. It’s a slow start to the month and the final quarter of the year here in Omm El Donia.

THE BIG STORY TODAY

The Supply Ministry is tendering three projects to set up cooking oil complexes worth a combined USD 321 mn in Alexandria, Sohag and Al Sadat City, Al Ahram reported.

THE BIG STORY ABROAD

Ukraine reclaims full control of Lyman: Russia has withdrawn its troops from the city in Ukraine’s Donetsk region, which it has been using as a logistics hub. Lyman is one of four Ukrainian provinces (which cover nearly a fifth of Ukraine) that Russia has partially occupied and proclaimed it was formally annexing last Friday. Losing Lyman is Russia’s most significant battlefield loss in weeks, and Ukraine reclaiming the city could be key to liberating the Luhansk region, Luhansk’s governor said. (The New York Times | Reuters | BBC | The Guardian)

HAPPENING TODAY- The National Initiative for Green and Smart Projects will announce the first set of projects that will advance to the next round. The government will reveal the top projects submitted from Alexandria, Beheira, and Matrouh today, according to a Planning Ministry statement. The projects will then be reviewed by a high-level jury and the finalists will be presented at COP27. The nationwide initiative invited applicants to submit projects that would reduce the negative effects of climate change on the environment while also promoting long-term economic growth in their governorates. The finalists will then be matched with funding agencies and investors from around the world to bring their ideas to life.

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

The House of Representatives is back in session: We have a full rundown on bills now before the House of Representatives in the third legislative season of its five-year term.
Israel’s NewMed could acquire Egypt oil + gas assets via Capricorn merger: Capricorn Energy has abandoned contested plans to merge with Tullow Oil in favor of an all-share tie-up with Israel’s NewMed.
TCI Sanmar issued bonds worth USD 117.7 mn in a private placement with nine foreign banks.

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: Amid shortages of imported products, a growing number of consumers are reporting shifting purchasing behavior to rely more on locally produced alternatives that are typically cheaper — but, more importantly, are accessible — a survey conducted by Enterprise shows.

???? CIRCLE YOUR CALENDAR-

UPCOMING NEWS TRIGGERS- Here are some data points and news triggers to be on the lookout for in this month of pumpkin spice and all things nice:

PMI: We’ll know how Egypt’s private sector fared in September when S&P Global drops its latest PMI release this Tuesday, 4 October. The downturn in activity looked to be easing in August when businesses told the survey that demand and output were rising on the back of slowing inflation.
Foreign reserves: The Central Bank of Egypt (CBE) should be out with September’s foreign reserves figures later this week. Reserves remained flat at around USD 33.1 bn in August, having fallen 20% since March due to headwinds caused by the war in Ukraine and tightening financial conditions.
Inflation to notch new highs? Analysts are expecting inflation to have continued rising in September due to the weakening EGP after reaching highs not seen since November 2018 in August. We’ll find out when Capmas and the CBE release the figures next week.

Expect another downbeat forecast for the global economy when the IMF releases its latest World Economic Outlook on Wednesday ahead of the IMF and World Bank annual meetings next week (10-16 October). Expect to hear more from the IMF’s Kristalina Georgieva, the World Bank’s David Malpass, and co this week in the lead-up to the release.

The Central Bank of Egypt does NOT meet in October to review interest rates. The next monetary policy committee meeting is slated for 3 November.

Eight Austrian water companies are here this week: Headed by Austria’s ambassador to Egypt and the VP of the Austrian Chamber of Commerce, a delegation will meet with government officials and local business leaders on 3-5 October to discuss investment in Egypt’s water, wastewater and desalination projects, the Austrian embassy in Cairo said (pdf) over the weekend.

☀️ TOMORROW’S WEATHER- Expect a daytime high of 33°C tomorrow and a nighttime low of 21°C, according to our favorite weather app.

???? FOR YOUR COMMUTE

Someone to keep Sophia the Robot company? Tesla has a prototype humanoid robot, Optimus, which CEO Elon Musk revealed at the annual Tesla AI Day yesterday, BBC reported. Optimus was shown in a video carrying out human day to day tasks such as watering plants and moving boxes. The EV company plans to put the robot for sale in three to five years with a price tag lower than USD 20k after a testing phase that entails working jobs in the company’s car factories.

The automation and AI drive saw the number of robots sold in North America rise to historic highs in 1Q 2022, Bloomberg reported, citing the Association for Advancing Automation. The automation push is expected to eliminate mundane tasks from human employees’ purview, but there are also the eternal concerns about job displacement: “Computerization increases the productivity of highly educated workers by displacing the tasks of the middle-skill workers,” according to scholar David Autor.

The Apple v Android battle will extend to cars: Cars, especially electric models, are experiencing a similar dilemma that occurred in the early days of the mobile phone industry with Google and Apple vying for software partnerships, the Wall Street Journal reports. It’s a dilemma for car companies, who can’t produce software anywhere near the level of Silicon Valley and are beating off competition from Tesla, and have to consider the real risk of ceding control over the user experience and any valuable data collected.

Our issues with smartphone software being limited could transfer to our car software, as the duopoly occurring on our phones affect our vehicles. Android Automotive, an operating system installed in cars that controls a built-in infotainment system, turns the screens in many new vehicles into an Android-powered tablet that runs Android apps customized for cars. It gathers data from the car like speed, battery status, heating and air conditioning, and more. Apple, which has a history of controlling both hardware and software aspects in its devices, may be pushed to create a CarOS to compete with Android Automotive in order to avoid putting Apple intellectual property in Google’s hands. However, this duopoly of software systems may have implications when reselling a vehicle, or switching smartphones from Android to iPhone.

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???? ENTERPRISE RECOMMENDS

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

Apple TV documentary Sidney pays homage to late actor and filmmaker Sidney Poitier. The film examines the actor’s trailblazing career, with its long list of firsts, such as being the first Black man to earn an Academy Award for Best Actor in a Lead Role and the first Black filmmaker to direct a USD 100 mn film. In 1974, Queen Elizabeth II knighted him “Sir Sidney Poitier.” The film highlights Poitier's role as a fierce advocate for civil rights, and his bold acting choices — he “never played a subservient part,” as Morgan Freeman stated. Oprah Winfrey, who served as one of the film’s producers and was a close friend of Poitier (she calls him her “great Black hope”) makes appearances frequently throughout the film. A litany of other Black stars, including Morgan Freeman, Denzel Washington, Spike Lee, and others, communicate the ways Poitier’s career changed Hollywood and paved the way for their respective careers.

???? Our very own tennis champion Mayar Sherif became the first Egyptian WTA champion yesterday after defeating Greece’s Maria Sakkari to win the Parma Ladies Open, the Women’s Tennis Association reported. “It means a lot for my country … It means a lot for the people back home, my family, all the hard work, all the mental struggles in the last weeks. I’m just thrilled and happy. This was never expected,” Sherif said. Sherif had to play both the semifinal and final yesterday, after Friday matches were canceled due to rain.

⚽ Back to our regularly scheduled programming: In the English Premier League, Manchester City and Manchester United hit the field at 3pm — briefly before we dispatched this issue — and the score currently stands at 1-0. Leeds United play Aston Villa at 5:30pm.

Join the Enterprise Fantasy League by clicking on this link, or entering this code: 8o4sut.

La Liga: Real Madrid plays Osasuna at 9pm as it tries to regain the top spot in the Spanish League, which it lost yesterday to Barcelona. Celta Vigo plays Real Betis at 4:15pm and

Girona faces Real Sociedad at 6:30pm.

Serie A: Atlanta plays against Fiorentina at 6pm and Juventus face Bologna at 8:45pm.

???? EAT THIS TONIGHT-

Give local donut joint House of Donuts a try: The chain, which has been around since the 90s, is open 24/7, which means you can get a delicious donut at 3am — we won’t judge. Wondering why you should give the place a try when so many international donut chains have popped up in Egypt in the three decades since House of Donuts first set up shop in Mohandseen? Despite having a relatively smaller selection of flavors than some of their competitors, their donuts taste fresh, are consistently fluffy and their glaze is not overly sweet. Their menu also boasts several varieties of what they call twist donuts; our favorite is the sugar twist. You can also get all kinds of muffins, croissants and other baked goods at their branches in Mohandeseen, Maadi and Madinet Nasr or get your order delivered through Talabat.

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

Mostafa Nada and The Orientals take the stage at El Sawy Culturewheel tonight at 7:30pm for a night full of Blues, Rock and Oriental music.

It’s swing dancing night at Minglings in Heliopolis — put your dancing shoes on and get ready for a night of dancing games and competitions.

Learn how to make a candle in a one-day workshop at Art Cafe in Galleria 40 from 5-7pm. The workshop will teach you the basics of candle making and you’ll get to make a few of candles using a variety of techniques.

???? UNDER THE LAMPLIGHT-

How the UK became the hub of the offshore economy: British journalist Oliver Bullough explains how “Londongrad” became butler to the oligarchs in Butler to the World. Bullough argues that the UK was in need of a new role, after the US assumed its role as the world’s superpower in the aftermath of WWII, leading the UK to instead take on the role of butler, serving the rich. He points to tax havens like the British Virgin Islands and the Cayman Islands that offer companies tax avoidance, the creation of the eurodollar, and Scottish Limited Partnerships (where GBP 1 bn that was stolen from a bank in Moldova ended up being deposited). “A butler does not only work for criminals, remember, but for anyone rich enough to be able to employ his services,” Bullough writes. “Whether their wealth is dirty or clean,” they all seek low taxes and a lack of transparency, he argues.

???? GO WITH THE FLOW

Are import shortages a blessing in disguise for local producers? Amid import restrictions resulting in shortages of imported goods, consumers have been increasingly turning to locally produced options with cheaper price tags, the results of an Enterprise survey show. Although President Abdel Fattah El Sisi indicated last week that the government could resolve problems facing manufacturers within two months, it appears that consumer behavior has already shifted.

The price pinch: The survey shows that 78.5% of respondents stopped purchasing imported products with 63% of them attributing their behavior to high prices and 37% blamed it on product unavailability.

It’s a matter of affordability and availability — and the impetus for shifting to local products is correlated to income levels: Broadly speaking, we found that higher-income respondents cite product availability as the bigger reason to purchase local goods, while a larger proportion of lower-income respondents cite the prohibitive pricing of imported products. We break down this correlation between income brackets and their reasons for going local:

EGP 30k or more per month: Respondents are split equally down the middle, with half high prices and half citing product unavailability for their shift to local products;
EGP 15-30k: 52% cite high prices and 48% blame product unavailability;
EGP 8-15k: 87% stopped buying imported products due to high prices, while 13% cited product unavailability;
Less than EGP 8k: 67% of respondents in this income bracket stopped buying imported products due to high prices, while 33% blamed it on product unavailability.

But shunning imported products hasn’t necessarily meant local products are filling the gap: The vast majority (73%) of respondents said they found alternatives for only some of the products they typically purchase, while 23% said there are no viable local alternatives at all. A mere 4% said the local market has alternatives for all of the imported products they previously purchased.

Available local alternatives: Consumers found some local alternatives for cosmetics, healthy food products, and clothes.

Bang for your buck? In terms of value for money, 65% of the respondents rated local alternatives as medium, 25% as poor, 9% as good, and only 1% said they are excellent.

Local consumers are ditching imported products: Here’s how many of the survey respondents stopped buying imported products in each of the following product categories: Cosmetics (65%), car parts (30%), furniture (25%), kibble (21%), medicine (21%), school supplies and stationeries (13%) and child care products (13%).

Local high-quality alternatives are limited: Consumers couldn’t find high quality local alternatives at reasonable prices in the product categories of clothes, skin and hair cosmetics, and car parts. “The car parts I used to buy for EGP 400 four months ago now have a higher price tag of EGP 1k due to market shortages, and imported motor oils are unavailable and their local alternatives are not as good,” Karim, a purchasing manager at a food company, told Enterprise.

Although some companies are working to plug the gap: Private sector player Eva Pharma, for example, is taking stock of the imported products that are currently in short supply and is working on locally manufacturing alternatives, a company representative told Enterprise.

People are turning to cheaper alternatives: Consumers who spoke to Enterprise were looking for low-cost, local or imported alternatives to high-priced office supplies, including pens, bags, paints and cardboard. On Facebook, users created groups and pages such as Al Ghaly Leh Badil to share and review low-cost local alternatives to high-cost imported products. “I look at the price tag and choose the product that is within my budget,” Shaimaa, a journalist, told us. She also turned to cheaper local brands of paper towels and household cleaning supplies. Shaimaa found local products of good and medium quality in the product categories of beauty and body care. Fatma, who works at an oil services company, told Enterprise she gave up nearly all imported products, whose prices have nearly doubled. She looks for available imported products with a cheaper price tag only if local products don’t do the trick.

But the reviews are mixed: For Shaimaa, the high prices of imported baby diapers forced her to buy cheaper local and imported brands, but said the local products “are not the same quality as the imported ones.” “These local products are cheaper and have better discount offers. But they are not of the same good quality. If you compare imported and local products, the local quality is 5 out of 10,” Fatma told us. Other consumers told Enterprise they are ditching imported chocolate spreads, for example, and opting for a local product because it “tastes better.”

Could DIY products serve as an alternative? Sarah, a translator, has started preparing food for her cats from home “or buying from places that sell home-made food for pets, and I completely stopped buying dry food because of its high price.” The dry cat food she previously bought more than tripled in price to EGP 700.

Why are local alternatives lagging behind? For starters, it’s tough for any country to produce all of its needs locally — and Egypt’s local industry is already a far cry from self-sufficiency. “No country is capable of producing everything on its own. Countries depend on each other for production inputs,” Mohamed El Bahy, Federation of Egyptian Industries’ (FEI) customs and tax committee head told Enterprise.

Part of it is also a perception issue: Fatma, for example, says she is uneasy about relying on local alternatives for her mother’s diabetes and blood pressure meds, and even when a doctor prescribes a high-quality local alternative, she finds it difficult to secure. But most meds have multiple alternatives in the local market and “are almost equivalent [in terms of quality] to any imported products, but consumers in Egypt tend to think that imported or expensive products are better,” El Bahy said.

And some things are harder than others to localize: Pharma raw materials, for example, “are very expensive for us to start producing locally,” El Bahy explains. Import restrictions led many pharma factories to suspend production because they had no alternatives, he said. The furniture industry also relies heavily on imports because Egypt is “not a country that produces wood — whether natural or manufactured,” said Mahmoud Abou Shousha, a member of the FEI’s furniture division. Abou Shousha anticipates many furniture workshops and factories will shut down in the next few weeks unless there is a breakthrough in the import situation.

These things take time: “We can’t transition from a net importer to a manufacturer overnight. This is a very difficult task and requires time,” head of the Internal Trade Committee of the Importers Division of the Federation of Chambers of Commerce Matta Bishay told us.

But, in any case, relying on imports to some degree is healthy for market competition: “If the demand for local alternatives increases, prices will rise accordingly,” and imported products maintain market competition, Bishay told Enterprise.

Your top industrial development stories for the week:

President Abdel Fattah El Sisi signaled that import challenges facing manufacturers will be solved within two months.
Auto sales were down by more than half in August compared with the same month last year, as the market continues to struggle with import barriers.
The government’s automotive committee held its first meeting headed by Prime Minister Mousatafa Madbouly last week.
Innovate Egypt is set to invest EGP 150 mn to locally produce EVs, including electric tuk-tuks, in partnership with the Arab Organization for Industrialization.

???? 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.

SEPTEMBER

27 September-27 October (Tuesday-Thursday): The Egyptian Museum the Manial Palace Museum host a book fair.

OCTOBER

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

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

4-8 October (Tuesday-Saturday): The Chemical and Fertilizers Export Council of the Trade and Industry Ministry is organizing a trade mission to Kenya.

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

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

10 October (Monday): The CEO Women Conference.

10-14 October (Monday-Friday): Gitex Global, Dubai International Convention and Exhibition Centre, Dubai, UAE.

10-16 October (Monday-Sunday): World Bank and IMF annual meetings, Washington, DC.

15 October (Saturday): Cairo Metro will launch a global tender for maintenance work on the power stations and overhead catenary system of Line 1.

16-19 October (Sunday-Wednesday): Cairo Water Week 2022, Nile Ritz Carlton, Cairo.

17 October (Monday): Fifth Egypt and UN-led regional climate roundtable ahead of COP27, Geneva, Switzerland.

18 October (Tuesday): The Egyptian-Swedish business forum, Stockholm, Sweden.

23-25 October (Sunday-Tuesday): Egypt economic conference, Cairo, Egypt.

24 October (Monday): Empowering Sustainable Trade Flows with Factoring conference, St. Regis Cairo.

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

27-30 October (Thursday-Sunday): Cairo ICT, Egypt International Exhibition Center, New Cairo.

30 October – 1 November (Sunday – Tuesday): Egypt Energy, Egypt International Exhibition Centre (EIEC) in New Cairo.

Late October-14 November: 3Q2022 earnings season.

Late October: First Abu Dhabi Bank to complete full integration with Bank Audi’s Egyptian operations after merger.

NOVEMBER

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

1-2 November (Tuesday-Wednesday): Arab League annual summit, Algiers, Algeria.

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): Autotech auto exhibition, Cairo International Exhibition and Convention Center.

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

7 November (Monday): The inauguration of the first line of the high-speed rail.

9 November (Wednesday): Finance Ministry to host “Finance Day” at COP27.

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.

DECEMBER

3 December (Saturday): Dior Men’s pre-fall collection show in Giza.

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

13-15 December (Tuesday-Thursday): US-Africa Leaders Summit.

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

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

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

December: Egyptian Automotive Summit.

December: Egypt to expand Sudan electricity link capacity to 300 MW.

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.

1 January (Sunday): Use of Nafeza becomes compulsory for air freight.

1 January (Sunday): Residential electricity bills are set to rise as per the government’s six-year roadmap (pdf) to restructure electricity prices by 2025.

7 January (Saturday): Coptic Christmas.

24 January-6 February: The 54th Cairo International Book Fair, Egypt International Exhibition Center

25 January (Wednesday): 25 January revolution anniversary / Police Day.

26 January (Thursday): National holiday in observance of 25 January revolution anniversary / Police Day.

FEBRUARY 2023

11 February (Saturday): Second semester of 2022-2023 academic year begins for public universities.

13-15 February (Monday-Wednesday): The Egypt Petroleum Show (Egyps), Egypt International Exhibition Center, Cairo.

23-27 February (Thursday-Monday): The eighth annual Business Women of Egypt’s Women for Success conference.

MARCH 2023

March: 4Q2022 earnings season.

23 March (Wednesday) — First day of Ramadan (TBC). Maghreb will be at 6:08pm CLT.

APRIL 2023

17 April (Monday): Sham El Nessim.

22 April (Saturday): Eid El Fitr (TBC).

25 April (Tuesday): Sinai Liberation Day.

27 April (Thursday): National holiday in observance of Sinai Liberation Day (TBC).

Late April – 15 May: 1Q2023 earnings season.

MAY 2023

1 May (Monday): Labor Day.

4 May (Thursday) National holiday in observance of Labor Day (TBC).

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

JUNE 2023

19-21 June (Monday-Wednesday) Egypt Infrastructure and Water Expo debuts at the Egypt International Exhibition Center.

28 June-2 July (Wednesday-Sunday): Eid El Adha (TBC).

30 June (Friday): June 30 Revolution Day.

JULY 2023

18 July (Tuesday): Islamic New Year.

20 July (Thursday): National holiday in observance of Islamic New Year (TBC).

23 July (Sunday): Revolution Day.

27 July (Thursday): National holiday in observance of Revolution Day.

Late July-14 August: 2Q2023 earnings season.

SEPTEMBER 2023

26 September (Tuesday): Prophet Muhammad’s birthday (TBC).

28 September (Thursday): National holiday in observance of Prophet Muhammad’s birthday (TBC).

OCTOBER 2023

6 October (Friday): Armed Forces Day.

Late October-14 November: 3Q2023 earnings season.

EVENTS WITH NO SET DATE

2H 2022: The inauguration of the Grand Egyptian Museum.

2H 2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

2H 2022: The government will have vaccinated 70% of the population.

3Q 2022: Ayady’s consumer financing arm, The Egyptian Company for Consumer Finance Services, to release its first financing product.

3Q 2022: Swvl to close acquisition of Urbvan Mobility.

4Q 2022: Infinity + Africa Finance Corporation to close acquisition of Lekela Power.

4Q 2022: Electricity Ministry to tender six solar projects in Aswan Governorate.

4Q2022: Raya Holding subsidiary Aman and Qalaa Holdings’ Taqa Arabia to launch their fintech company.

4Q 2022: Saudi Jamjoom Pharma to inaugurate its EGP 1 bn pharma factory in El Obour.

End of 2022: Decent Life first phase scheduled for completion.

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.

1Q 2023: Adnoc Distribution’s acquisition of 50% of TotalEnergies Egypt to close.

**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.