Coffee with Walid Sheta, regional president of Egypt, North East Africa and Levant at Schneider Electric
Coffee with Walid Sheta, regional president of Egypt, North East Africa, and Levant at Schneider Electric: 2019 has been an interesting year for Schneider Electric here in Egypt. Infrastructure development in the country is growing, particularly on the electricity transmission front and on water, desalination and wastewater front. The past year also saw the country take strides in upgrading railway and land transport network. And Schneider has its hands in all of it. But beyond utilities, the company sees itself as a technology solutions provider, specializing in energy efficiency and it’s betting the future on it. The company is also planning to focus on growing exports from Egypt now that it had reached a settlement with the government on overdue subsidies. That’s the vision laid out for us by the company’s regional president for Egypt, North East Africa and the Levant, Walid Sheta, in the latest installment in our Coffee With… series.
Who is Walid Sheta? Sheta’s 25-year career at Schneider Electric has seen him work across Africa, the UAE, France and others. Sheta was regional president of the West Africa region which comprises of Nigeria, Ghana, Sierra Leone and Liberia, following a stint as the company’s vice president for all of Africa.
Is Schneider Electric getting into the VC game? One of the surprising takeaways from the sit-down was Sheta’s announcement that Schneider Electric is setting up a venture capital fund that will target startups whose focus will be on the digital economy and energy efficiency. He added that some of the startups that the company is targeting will be based in Egypt. As we noted yesterday, Middle East and Africa President Caspar Herzberg said that the company is mulling the acquisition of a number of Egyptian tech companies.
Other key takeaways from the interview include:
- Egypt is the anchor for Schneider Electric’s growth in the region, and is at the center of its global transformation strategy;
- Expanding its staff of digitally-literate engineers is the focus of the company’s investment plans this year;
- Schneider Electric anticipates growth in sales in hospitality (and away from traditional oil and gas) as tourism continues to rebound;
- Bureaucracy and red tape continue to be the biggest operating challenge in Egypt;
- The government’s continued focus on electricity power generation with Dabaa despite a surplus is key to ensure supply meets the demands of our birth rates;
- Government taking a step back in infrastructure development and allowing the private sector a bigger role is the most exciting trend happening in infrastructure today.
Enterprise: Can you tell us what the company is focusing on in Egypt? Where does the country fit into its global strategy?
Walid Sheta: Globally, Schneider Electric has shifted its focus for the past 12 years towards energy efficiency and transitioning away from being a company focused on electrical distribution equipment and automation. We define ourselves now as a technology provider that makes energy safer, more efficient, more productive, and greener in all our markets. Globally, we’ve made 74 acquisitions worldwide, two of which were leaders in managing power grids. While we haven’t made any acquisitions for energy efficiency companies in Egypt as of yet, we see it as a prime market for this focus, considering its 100 mn population, its growing consumption rate, and the need to maximize our energy efficiency.
Egypt is also crucial for us in the next step in the company’s global transformation: The move to digital and digitization. We want to become digital technology providers. From a tech point of view, this is very easy to do in Egypt right now. The Egyptian population is extremely digitized and connected. Moving forward, a key focus of ours for Egypt is to train the electricians to adapt to this changing landscape. We’re teaching them how to install electrical equipment in your house, or in electrical distribution boards — a black box that, through the Cloud, can connect you through an app. We believe that transformation is taking place in Egypt in this sector.
E: How does that translate vis-à-vis your investments on the ground?
WS: This year, we’re ratcheting up our investment in people. We added 280 new people to our workforce of 1,600 employees here. Half of the new recruits are tech savvy engineers or white-collar professionals to service our two main lines of business. The first is the standard electricity consuming businesses and the other is the turnkey projects, for which you need a lot of talented project and contract managers, engineers, and others with technical expertise.
This investment in our people is driving our regional expansion plans as we intend to boost our staff of engineers to be able to carry on projects all over Africa. These will likely be major projects that will employ a lot of Egyptians. We also export from our EUR 210 mn Badr City factory which produces low- and medium-voltage distribution equipment. We recently spent approximately EUR 10 mn on increasing capacity for the plant.
E: So in numbers, how much did you invest this year?
WS: In 2018, we invested around EUR 35 mn. It would be slightly less this year.
E: You mentioned earlier that Egypt was a regional success story for Schneider Electric. How does it compare in terms of growth to other countries in the region? Where does Egypt rank?
WS: In 2019, Egypt is spearheading regional growth both in value and percentage all over the Middle East and Africa. This includes Saudi Arabia and the GCC, Turkey, South Africa, Nigeria. This has been the case in 2017, 2018, and is continuing in 2019 where we had consistent double-digit growth. And this spike in growth has been seen in all sectors, including in water and waste-water, utilities, and transportation infrastructure. We’re continuing to supply the electrical equipment that has made the Cairo Metro Line 1 run since the 1990s. Business is also growing in sectors outside of infrastructure. We supply the electrical distribution switchgears for the Zohr gas field. We even supply electrical equipment to important cultural heritage projects like Bibliotheca Alexandrina.
E: Which megaprojects are you guys working on currently?
WS: A big focus for us is working with the Electricity Ministry on the dispatch control centers for the electricity grid. President Abdel Fattah El Sisi has made developing the grid’s distribution capabilities and their required dispatch control centers a national priority. We’ve been tasked with automating and making the grid “smarter.”
We’re also working on supplying the electrical infrastructure works on new cities currently being constructed, including in the new administrative capital. We’re currently advising on making the new capital a smart city and how it can be done in a sustainable, energy-efficient way.