Tuesday, 22 November 2022

PM — The battle for EV batteries

TL;DR

WHAT WE’RE TRACKING TONIGHT

Good afternoon, wonderful people. It’s been a slowish start to the news day, but we expect things to pick up as the afternoon wears on. And we’re working with big grins on our faces after Saudi’s shock 2-1 victory against Argentina in the first of today’s World Cup matches.

THE BIG STORY TODAY-

Hisham Ezz Al Arab is back at CIB: Ezz Al Arab (LinkedIn) has returned to CIB’s board of directors as a non-executive director, on the recommendation of the board and following the approval of the central bank yesterday, according to a CIB statement. Ezz Al Arab led CIB to its position as Egypt’s leading home-grown bank in everything from profitability to sustainability as its chairman and managing director between 2002 and 2020, before stepping down after a central bank audit said it found regulatory, compliance and governance concerns. He was appointed an adviser to CBE governor Hassan Abdallah over the summer, after Abdallah took over the reins at the central bank from Tarek Amer.

CIB shares were up 1.47% to close at EGP 38.05 on the news.

THE BIG STORY ABROAD-

The business press still can’t tear its gaze from the meltdown at FTX. One-time crypto darling Sam Bankman-Fried’s failed firm FTX will appear in Delaware bankruptcy court later on today, the Wall Street Journal reports. Management at the defunct firm has located more assets at the company ahead of the court hearing, bringing the running tally to USD 1.24 bn, according to the Financial Times. And Reuters is reporting that the company, Bankman-Fried’s parents, and senior executives built a USD 121 mn property portfolio in the Bahamas before it all went belly up.

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

  • Developers interested in bidding for a piece of the Madbouly government’s multi-bn USD water desalination program can start handing in pre-qualification files starting on Thursday.
  • Employees at Beltone SME have reportedly resigned en masse in opposition to a restructuring being carried out by parent company Beltone Financial.
  • Honoris United Universities’ acquisition of Merit University in New Sohag City has fallen through after the two sides failed to reach an agreement

🗓 CIRCLE YOUR CALENDAR-

The US and Russia will hold nuclear talks in Cairo next week: Washington and Moscow will discuss resuming mutual nuclear inspections during week-long talks from Tuesday, 29 November through to 6 December, Russian Deputy Foreign Minister Sergei Ryabkov said, according to CNN.

The deadline to apply for the Chicago Booth Executive Program in El Gouna is Sunday, 27 November. The two-week program, which kicks off in March 2023, offers executives from Egyptian public and private sector the skills to help them “become a better leader for your organization and support Egypt’s growth in the years ahead.”

☀️ TOMORROW’S WEATHER- Expect temperatures to rise to 25°C during the day tomorrow before falling to 15°C at night, our favorite weather app tells us.

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FOR YOUR COMMUTE

The West could unwind its reliance on Chinese EV batteries by the end of the decade — but it’s going to come with a hefty price tag, Goldman Sachs strategists wrote in a report seen by the Financial Times. The US and Europe would need to put down more than USD 160 bn in capex spending to become self-sufficient in EV batteries and break their reliance on Chinese manufacturers, who currently hold some 75% of market share. Protectionist policies, alternative kinds of batteries that don’t rely on minerals mined mainly in China, and more battery recycling could also help break Beijing’s dominance in the industry.

South Koren firms are stepping in: Major government subsidies have attracted South Korean giants LG and SK to invest in EV battery factories in the US. Goldman thinks US-based Korean manufacturers could capture more than half of market share in the next three years, up from a current 11%. LG Chem only today announced it will build a new USD 3 bn battery cathode factory in Tennessee, the largest of its kind in the US.

Not everyone thinks China can be beat so easily: One EV consultant told the FT that Goldman’s USD 160 bn estimate is way below what’s needed, adding that the 2030 time frame is too optimistic and the impact of battery recycling had been overestimated. The US is already facing labor shortages and wage inflation, making EV batteries more expensive to produce — with capex per unit some 78% higher than in China.


Earmark more time for your World Cup watch parties: The first five World Cup matches saw an average of 16 extra minutes of playtime, as FIFA changes up its rules to more accurately measure stoppages and maximize time when the ball is in play. The England-Iran match ran for 30 minutes longer than scheduled after a goalkeeper and a defender were injured, while yesterday’s other matches also all saw significant extra time, football news outlet Goal reports. “Think about it: if you have three goals in a half, you'll probably lose four or five minutes in total to celebrations and the restart” alone, chairman of FIFA's referees committee, Pierluigi Collina, told ESPN (Listen: 1:08:35).

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ENTERPRISE RECOMMENDS

📺 ON THE TUBE TONIGHT-
(all times CLT)

Along came an underrated Morgan Freeman classic: 2001’s Along Came A Spider is a high-intensity, neo-noir psychological thriller. Freeman’s detective Alex Cross retires from the force after the traumatic death of his partner in a sting operation. When a senator’s daughter is kidnapped, he’s drawn back into the drama — only to discover that the criminal was targeting Cross himself all along. So far, so cheesy — but Freeman is captivating as always, elevating this classic detective romp into more than just a guilty pleasure. Adapted from a James Patterson novel of the same name, Along Came A Spider is the second in a trilogy of Alex Cross films that began with 1997’s Kiss The Girls (also starring Freeman) and ended with 2012 reboot Alex Cross, with Tyler Perry in the titular role. We can confidently say that Along Came A Spider is the only one of the three worth seeing. Find it on Netflix.

It’s day 3 of the World Cup: Teams in groups C and D play their first games of the tournament today (all times CLT):

Saudi Arabia are the surprise victors over heavy favorites Argentina: The Group C match ended 2-1 to our KSA neighbors shortly before we hit send on this afternoon’s issue. The New York Times is calling it “one of the greatest humiliations” in the history of the Argentinian national team. The favorites were 1-0 at halftime, with star Lionel Messi on good form — but the Saudis scored two goals within the first eight minutes of the second half and held on til the end, in what will surely go down as one of the most surprising World Cup match results yet.

On the pitch now: Denmark v Tunisia (3pm).

Still to play today: Mexico v Poland (6pm) and France v Australia (9pm).

GROUP B-

P W D L GD Points
🏴󠁧󠁢󠁥󠁮󠁧󠁿 England 1 1 0 0 4 3
🇺🇸 USA 1 0 1 0 0 1
🏴󠁧󠁢󠁷󠁬󠁳󠁿 Wales 1 0 1 0 0 1
🇮🇷 Iran 1 0 0 1 -4 0

GROUP C-

P W D L GD Points
🇸🇦 Saudi Arabia 1 1 0 0 1 3
🇦🇷 Argentina 1 0 0 1 -1 0
🇲🇽 Mexico 0 0 0 0 0 0
🇵🇱 Poland 0 0 0 0 0 0

🥐EAT THIS TONIGHT-

Sophisticated dishes in hearty portions at Clay: This new Korba restaurant with its sleek yet welcoming interiors is definitely worth the visit. We recommend you start off with the honey crispy halloumi — the honey-glazed cheese is wrapped in filo dough and topped with sundried tomatoes, a dukkah mix, and teriyaki sauce, making for a sweet and flakey bite. There are quite a few good options for mains but one standout is the short ribs, with the overnight slow-cooked beef served atop a creamy truffle risotto. Clay also boasts extensive breakfast options if you’re looking for a new weekend brunch spot, with everything from avocado and poached egg-topped croissants, to healthier fare like chia pudding.

🎤 OUT AND ABOUT-
(all times CLT)

Dynamic vocal duo Rola and Lynn are combining genres from funk to jazz in their debut concert for Oldies Night at Room Art Space New Cairo at 9pm tonight.

Start doing your vocal exercises: It's karaoke night at Room Garden City tonight at 8pm.

The Aragid ensemble, led by Farah El Masri, is performing a selection of traditional Nubian songs typically associated with weddings, celebrations, and holidays, at Makan at 8pm tonight.

💡 UNDER THE LAMPLIGHT-

A historical fantasy wrought in vivid tones: Set in the early 19th century, R. F. Kuang’s Babel: An Arcane History weaves strands of magic into the history of the British Empire as it interrogates the ways in which knowledge serves power, and whether violence is ever justified in resisting it. The novel follows Robin Swift, a Chinese boy raised in Britain by the mysterious Professor Lovell after he loses his family to cholera. Lovell trains Robin in languages for years to get him into Babel, Oxford University’s prestigious (and fictional) translation institute. But when he gets there, Swift soon realizes the institute has been using dark arts to serve the colonialist aims of the British Empire. When Britain goes to war with China, Robin is forced to choose whether he will abandon his ancestral ties or join a plot to sabotage the Empire. This New York Times bestseller flits between history and fantasy, keeping you on the edge of your seat while also making you think.

GO WITH THE FLOW

The EGX30 rose 1.39% at today’s close on turnover of EGP 1.79 bn (32.7% above the 90-day average). Local investors were net buyers. The index is up 5.63% YTD.

In the green: Heliopolis Housing (+5.7%), Alexandria Containers and Cargo Handling (+4.8%) and Fawry (+4.5%).

In the red: Ezz Steel (-3.3%), Elsewedy Electric (-2.4%) and Juhayna (-1.8%).

FOUNDER OF THE WEEK

OUR FOUNDER OF THE WEEK– Every Tuesday, Founder of the Week looks at how a successful member of Egypt’s startup community got their big break, asks about their experiences running a business, and gets their advice for budding entrepreneurs. Speaking to us this week are Farah (LinkedIn) and Ahmed Selim (LinkedIn), siblings and co-founders of co-working space startup CO-55.

We both studied at Northeastern University in Boston before joining the family business, an export-import firm. We worked there for two years until we noticed a gap in the market for co-working spaces and seized the chance by establishing CO-55 three years ago.

We first came up with the idea for CO-55 after noticing that entrepreneurship is becoming increasingly popular among younger generations and that social media was placing a lot of attention on the startup ecosystem. We wanted to find a way to service the industry — all of these businesses would require a working location at some point in time.

We were introduced to different co-working space concepts while living in the US. We conducted market research and discovered that 99% of co-working spaces operating in Egypt were housed in two-bedroom residential apartments and lacked a license. The remaining 1% were affiliated with global companies that needed an office to use when visiting Egypt on business. Since 2019, it has been our job to build something that is entirely Egyptian, meets international standards, and serves all startups.

Before we entered the industry, we wanted to learn everything we could about it. There were few market participants at the time and no manual for how to carry out the business. We were taking shifts at the front desk and juggling work to understand the ins and outs of the business.

Three years later, we have reached the point where we have accumulated enough knowledge to begin expanding. We established two new facilities in New Cairo this year.

We have shifted our focus to serviced offices. We currently cater to multinational corporations that want to operate in Egypt but do not want to own assets and prefer flexibility. Companies are also showing heightened interest in satellite offices, as employees are becoming more reluctant to commute. Now our clients include VMWare, Oncare, DiDi and Verizon. We owe a great deal to our outsourced services from LEOS’ DEN marketing agency and Two Emms interior design firm.

Farah: The best part about our job is hearing positive feedback. This brightens my day. It also makes me really happy when I introduce myself to someone and mention CO-55 and they already know about it.

Ahmed: The best thing about our job is that we get insights about how the economy is performing. Companies — no matter what field they operate in or how big or small they are — are always looking for workspaces. Sometimes there are a lot of international corporations interested in opening offices, and other times there aren't any leads or sales. We also work with a variety of industries, which allows us to become acquainted with and have a comprehensive understanding of the job industry as a whole.

The worst aspect of our job is the stress, responsibility, and its ups and downs. We have a lot of responsibility and monthly commitments to meet. Also, we’ve switched all of our attention, energy, effort, time, and money to CO-55, which forced us to quit working on other projects.

The three most important KPIs we monitor on a regular basis are office turnover, occupancy rate, and how quickly we occupy the space. We always aim to open the space with at least 40-50% occupancy, and the footfall and how busy the space is are also crucial KPIs for us.

When we have a problem at work, we always turn to our father. He has more than 30 years of experience in real estate, including residential complexes, commercial centers, five-star hotels, and administrative offices. CO-55 is a real estate company with a twist, so he knows how to help. He’s also always challenging us to think outside the box and determine our next steps.

Moving forward, our plan is to expand to more governorates, but with tailored services and offerings. We want to build an infrastructure that provides people working in governorates with good internet, amenities, and all the necessary services for a comprehensive and spacious working environment that matches them and the nature of their work.

Our future plans also include owning the assets we operate rather than renting them. We have already purchased a property in New Cairo and will begin operations in Q4 2023. We are also heading to Sheikh Zayed very soon.

If we could give budding entrepreneurs one piece of advice, it would be to grow a thick skin and to be extremely resilient and persistent. We also encourage working with a co-founder.

Farah: I believe we are aligned in terms of business inspiration. We were inspired by the energy of “I want to establish my own business and be the CEO of myself.” There was a lot of potential, and we were able to be very generous with our spaces given there was no adequate competition.

Being a startup founder is a lonely journey. You must forego your social life and other interests in order to focus on your career, and establish the name you told yourself you would build.

Ahmed: The last great thing I watched was WeWork: Or the Making and Breaking of a USD 47 bn Unicorn.

At first, our family was very skeptical of the industry. However, now that we have reassured them, they are happy and proud of what we do.

Farah: A startup I believe is killing it is Thndr. Ahmed: I believe Breadfast and MaxAB are doing a great job.

CALENDAR

NOVEMBER

13-22 November (Sunday-Tuesday): Cairo International Film Festival (CIFF).

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

22 November- 23 November (Tuesday-Wednesday): The Fingerprint Summit will be held at the Nile Ritz Carlton Hotel.

27 November (Sunday): Senate in session.

27-28 November (Sunday-Monday): The first edition of the Egypt Media Forum.

27-30 November (Sunday-Wednesday): Cairo ICT and Pafix, Egypt International Exhibition Center, New Cairo.

29 November – 6 December (Tuesday-Tuesday): US and Russia to hold talks on resuming mutual nuclear inspections in Cairo.

DECEMBER

1 December (Thursday): Sphinx International Airport will begin operating international flights.

1 December (Thursday): Contractors to break ground on Egypt-Saudi interconnection project.

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

5-8 December (Monday-Thursday): QS Reimagine Education Awards and Conference, multiple locations.

5-7 December (Monday-Wednesday): Food Africa 2022 kicks off at Egypt International Exhibitions Center.

6 December (Tuesday): Enterprise Climate X Forum, Grand Egyptian Museum.

7 December (Wednesday): Euromoney Egypt 2022 conference

10 December (Saturday): The TriFactory’s Pyramids Half Marathon.

10-12 December (Saturday-Monday): The 2nd edition of the Nebu Expo for Gold and Jewelry kicks off.

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.

December: Chinese President Xi Jinping visit to Saudi Arabia

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.

January: Infinity + Africa Finance Corporation to close acquisition of Lekela Power.

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.

30 January-1 February (Monday-Wednesday): CI Capital’s Annual MENA Investor Conference 2023, Cairo, Egypt.

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): 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

1 April (Saturday): Deadline for banks to establish sustainability unit.

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.

End of December/early January: SFE’s pre-IPO fund to kick off roadshow.

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

4Q 2022: Raya Holding subsidiary Aman and Qalaa Holdings’ Taqa Arabia to launch their fintech company.

4Q 2022: Saudi Arabia’s 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.

1Q 2023: Internal trade database to launch.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

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