Wednesday, 1 June 2022

PM — There’s more EV and factory automation uptake afoot

TL;DR

🔎 WHAT WE’RE TRACKING TONIGHT

Good afternoon, wonderful people, and happy almost-THURSDAY to us all. It’s shaping up to be an interesting news day as we race towards the end of a rather busy news week.

THE BIG STORY TODAY

A step closer to our first waste-to-hydrogen plant? The Suez Canal Economic Zone (SCZone) has signed an MoU with H2 Industries to establish Egypt’s first waste-to-hydrogen plant in East Port Said, according to a statement. The plant will cost USD 4 bn to establish, the statement said. The company is set to get its ducks in a row before signing final contracts during COP27 in November in Sharm El Sheikh.

THE BIG STORY ABROAD

Leading the conversation in the international press this afternoon: Russian troops are closing in on the center of the Ukrainian industrial city of Sievierodonetsk, which “has been the main focus of their ground offensive for several weeks,” Reuters reports, citing Ukraine's General Staff. The advance comes as US President Joe Biden said Washington would provide Kyiv with precision rocket systems as part of a USD 700 mn weapons supply package that is expected to be announced later today.

HAPPENING NOW-

El Sisi talks food + energy + migration with EU’s Varhelyi: EU Commissioner for Neighborhood and Enlargement Olivier Varhelyi discussed “food and energy security issues and our further cooperation on migration” with President Abdel Fattah El Sisi in a meeting that wrapped a few minutes ago. Varhelyi yesterday attended the signing ceremony for the project to expand the Helwan wastewater treatment plan, which is being backed with a EUR 78 mn loan from the European Investment Bank.

The Islamic Development Bank’s 2022 annual meetings kicked off this morning and wrap this Saturday, 4 June in Sharm El Sheikh. Stay tuned for updates from the meetings, which Enterprise is attending.

The Islamic Corporation for the Ins. of Investment and Export Credit will hold two high-level parallel meetings on climate action and digital transformation during IsDB’s annual meetings.


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

  • Is the Manpower Ministry about to enforce a 1% tithe on corporate net income? The House of Representatives needs to move quickly if it wants to prevent every business with more than 10 people on payroll from being hit with a new(ish) 1% tithe on net income as the Manpower Ministry looks at how to enforce a recent decision.
  • We could be finally getting our hands on some Ukrainian wheat: A shipment of Ukrainian wheat will soon make its way to Egypt from Romania, Egyptian Holding Company for Silos & Storage official Yasser Tawfik said.
  • Plans to link our electricity grid with Greece could move faster after the shunning of Russian fossil fuels: The Greek developer of a proposed direct link between the electricity grids of Egypt and Greece expects the EU to accelerate the project as the bloc looks to transition away from Russian fossil fuels

🗓 CIRCLE YOUR CALENDAR-

NEWS TRIGGERS you’ll want to keep an eye on as the new month gets underway:

  • PMI: Purchasing managers’ index figures for May will be released next Sunday, 5 June. Saudi Arabia’s PMI will be out the same day, and the UAE data is released on Friday, 3 June;
  • Foreign reserves figures for May should be announced sometime next week;
  • Inflation figures for May are due out at the end of the week from state statistics agency Capmas) and Sunday, 12 June (central bank figures);
  • Capmas’ monthly bulletin covering the price of key building materials is due out on 5 June;
  • The Central Bank of Egypt’s monetary policy committee meets next on Thursday, 23 June.

Conference season continues next week:

  • Africa Health ExCon runs from Sunday-Tuesday, 5-7 June at Al Manara International Conference Center, Egypt International Exhibitions Center, and the St. Regis Almasa Hotel in the new administrative capital.
  • Technology conference Tech Invest 4 will take place next Tuesday, 7 June at the Grand Nile Hotel in Cairo.

☀️ TOMORROW’S WEATHER- It’s going to be more or less the same weather as we’re having today, with a daytime high of 35°C and a nighttime low of 22°C, according to our favorite weather app.

enterprise

🚙 FOR YOUR COMMUTE

How the war in Ukraine could help speed up the transition to electric vehicles: A cheap component that bundles car cables together — the wire harness — has become a surprising casualty in the Ukraine war, in yet another blow to the auto industry, Reuters reports, citing industry players and experts. Ukraine is responsible for a chunk of the world’s production of supply harnesses and supplies have been choked since the onset of the war. While these low-tech parts do not command the world’s respect like microchips, for instance, the truth is that cars can't be built without them. Their scarcity could lead to a quicker downfall of combustion cars and a faster transition by some legacy automakers to switch to a new generation of lighter harnesses designed for eEVs, industry players have predicted. “This is just one more rationale for the industry to make the transition to electric quicker,” said Sam Fiorani, head of production forecasting firm AutoForecast Solutions.

No workers, no problem: Robots pick up more factory jobs as companies struggle to hire enough employees: More robots are popping up in assembly lines and factory floors as companies find new ways to deal with a tight labor market, robotics industry trade group Association for Advancing Automation said, according to the Wall Street Journal. During the first quarter of the year alone, workplace robot orders in the US jumped by 40% y-o-y, but US manufacturers continue to trail behind other industrialized countries such as South Korea, Japan and Germany, according to the International Federation of Robotics. But the current shortage of workers, along with rising wages, are leading to an attitude shift towards utilizing more robots for more advanced roles. “Before, you could throw people at a problem instead of finding a more elegant solution,” said Joe Montano, chief executive officer of Delphon Industries LLC, a maker of packaging for semiconductors, medical devices and aerospace components.

US investment firm Redbird Capital Partners has signed a definitive agreement to acquire Serie A champions AC Milan in a EUR 1.2 bn transaction, the football club said in a statement today. Redbird will be acquiring the club from its current owners, Elliott Advisors UK, who will “retain a minority financial interest in the club and seats on the Board of Directors.” The agreement is expected to close “no later than September 2022,” with the leadership transition expected to happen over the summer, according to the statement.

👌 ENTERPRISE RECOMMENDS

📺 ON THE TUBE TONIGHT-
(all times CLT)

You’ll find yourself rooting for one angry, arrogant man in Wrong Side of the Tracks. Netflix’s new Spanish crime drama is a witty, gritty, and suspense-ridden show worth watching. The series follows Tirso Abantos — stellarly played by José Coronado — a war veteran who runs a hardware store in Madrid and misses the thrill of his former life. So when Tirso discovers that his granddaughter Irene has gotten mixed up with dangerous local thugs and drug dealers, he takes matters into his own hands. Over the span of eight episodes, many interesting characters collide while managing to remain raw, authentic, and refreshingly realistic. Just like in real life, Tirso struggles and faces setbacks while trying to reach his goal. And good news: The show’s second season just finished airing in Spain, which hopefully means Netflix could add the episodes for our streaming pleasure soon.

AFCON qualifiers take center stage: The group phase of the 2023 Africa Cup of Nations qualifiers kicks off today, as the journey to the next tournament in the Ivory Coast begins. Ghana will face Madagascar at 9pm, with two games taking place at 6pm: Libya v Botswana, and Angola v Central African Republic.

ICYMI: The Pharaohs’ new coach Ehab Galal has announced the final squad for our two opening games Guinea and Ethiopia.

IN OTHER FOOTBALL NEWS: French midfielder Paul Pogba will leave Manchester United at the end of the month when his contract expires, the Premier League club announced.

🎤 OUT AND ABOUT-
(all times CLT)

Consoleya is hosting a Startup Meetup event in collaboration with Wuilt at 6pm tonight. “The event covers different business-related topics like the e-commerce, legal, fintech & funding” to help SMEs grow their operations online and offline.

Mazaher Ensemble is taking the stage at the Egyptian Center for Culture & Arts at 8 pm tonight for a women-led performance inspired by the traditional art of Zar music.

💡 UNDER THE LAMPLIGHT-

The Trouble with Happiness is a powerful yet unsettling collection of domestic noir short stories by the iconic Danish writer Tove Ditlevson who was hailed by critics as a “terrifying talent.” These beautifully written 21 tales of marriage and family life in mid-century Copenhagen are just as grim as they are realistic — a husband chases away his wife's beloved cat because he feels threatened by her love for it, and a betrayed mother impulsively sacks her housekeeper. Themes of desire and despair coincide as women and men dream of becoming free of the roles assigned to them. The legacy of Ditlevson, who died in 1976, endures through these elegantly crafted words, drawing on autobiographical experiences to very different ends.

🌊 GO WITH THE FLOW

EARNINGS WATCH-

Sidi Kerir Petrochemicals (Sidpec) reported a 65.4% y-o-y rise in its bottomline to EGP 251.07 mn in 1Q2022, according to its financials (pdf). Revenues jumped 61% to EGP 2.11 bn during the quarter.


The EGX30 fell 0.7% at today’s close on turnover of EGP 653 mn (22.6% below the 90-day average). Foreign investors were net sellers. The index is down 15.6% YTD.

In the green: Palm Hills Development (+5.5%), Cleopatra Hospital (+4.6%) and Rameda (+1.9%).

In the red:Ibn Sina Pharma (-4.3%), MM Group (-3.8%) and GB Auto (-3.7%).

🌴 CLIMATE

Could the aviation industry really ever become green? While the slowdown in international travel and commuting ushered in by the pandemic brought energy-related pollution down 5.8% globally, according to the IEA, there’s still an inherent problem with how carbon-intensive the world’s air travel system remains. The technological solutions needed to facilitate this overhaul are fairly clear: Alternative fuels will need to replace fossil fuel powered jet engines. The question that remains is how quickly we’ll be able to make this transition a reality.

If you needed a reminder, flying is pretty bad for the environment: The tourism aviation industry alone is estimated to have contributed 5% to global greenhouse emissions in 2016 and that figure is on track to grow by at least 25% by 2030, according to the World Tourism Organization. Emissions from aviation grew 33% between 2013 and 2019, and despite a small breather during the pandemic, is now returning to business as usual.

Sustainable aviation fuels could be part of the answer: There’s a “growing consensus that sustainable aviation fuels (SAFs) is the way to go, particularly in the short to medium term,” Filip Cornelis, director for aviation at the European Commission, tells Euronews. SAFs are biofuels that come from organic plant matter or municipal waste and only emit a fraction of the carbon that fossil fuels do while containing just about the same amount of power.

But there’s a catch: SAFs are expensive and adoption has been slow. Today, they account for just 0.01% of all jet fuel. “Because the sector is extremely competitive, no single airline can afford to suddenly become a major user of SAFs without defeating its competitive position. Because of that there’s little production. Because there’s little production, the prices are high," Cornelius said.

How are we supposed to get over this hurdle? Some have suggested that airlines be forced to purchase more of this kind of fuel. Others — particularly those in the airline industry — argue it would be more effective to force companies to produce more SAFs. “We should be putting an obligation on the fuel companies to produce it. There is a desire on the part of airlines to move in this direction, cost is a significant factor, but we have airlines investing in production of biofuels,” Willie Wlash, the director-general of the International Air Transport Association (IATA), told Euronews.

Hydrogen is the long-term play: Hydrogen-powered aircraft could be the aviation industry’s most promising alternative to fossil fuels. Already, the European Commission has committed some EUR 2 bn into developing these kinds of aircrafts. The airline industry is matching that figure and then some, Cornelius explains. While these developments are encouraging, we’re still a long way away from rolling out hydrogen-powered aircraft and its supporting infrastructure at a large enough scale. We could be looking at another eight years before we see a hydrogen passenger plane hit the market.

In the interim, improving navigation could be a useful step: “By improving the use of space and the way aircrafts take off and land, we could "reduce emissions of CO2 by 15% in the coming years,” said Edward Arkwright, deputy CEO of Groupe Aéroports de Paris (ADP).

How would this work? By having aircrafts approach the runway closer to the ground rather than go through a gradual, engine-intensive landing process, aircrafts could require less fuel. Reducing the time aircraft spend idling on runways would also help. The problem is that these options would require costly investments and a considerable degree of coordination between lots of countries.

What about scrapping flight all together? Getting people to fly less might be a quick way to scale back emissions this decade, according to environmental nonprofit Transport and Environment, but it might be logistically difficult to actually do so quickly — especially considering the interconnectedness of the modern world.

Having said that: Less than 1% of global trade is conducted via air freight and only 11% of people around the world set foot on a plane in 2018.

Still, scaling back air travel could be a big help: Reducing air travel dramatically would serve as yet another interim measure to help curb the industry’s damaging effects. When possible, trains and high speed railways could come to substitute many domestic travel needs while reconsidering international travel for a staycation wouldn’t hurt either.

📆 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.

MAY

27 May-3 June (Friday-Friday): El Gouna International Squash Open 2022.

JUNE

1-4 June (Wednesday-Saturday): The Islamic Development Bank will hold its 2022 annual meetings in Sharm El Sheikh.

2-3 June (Thursday-Friday): Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) will hold two high-level parallel meetings on climate action and digital transformation during IsDB’s 2022 annual meetings in Sharm.

5-7 June (Sunday-Tuesday): Africa Health ExCon, Al Manara International Conference Center, Egypt International Exhibitions Center, and the St. Regis Almasa Hotel, new administrative capital.

5 June (Sunday): GB Auto is hosting an extraordinary general assembly meeting (pdf).

7 June (Tuesday): Technology conference Tech Invest 4, Grand Nile Hotel, in Cairo.

9 June (Thursday): European Central Bank monetary policy meeting.

9 June (Thursday): Digital Transformation Summit, The Nile Ritz-Carlton, Cairo

14-15 June (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15-18 June (Wednesday-Saturday): St. Petersburg International Economic Forum (SPIEF), St. Petersburg.

16 June (Thursday): EU-Egypt Sustainable Food Value Chain conference, Grand Nile Tower Hotel, Cairo.

16 June (Thursday): End of 2021-2022 academic year for public schools.

21-22 June (Tuesday-Wednesday): Aswan Forum for Sustainable Peace and Development, Cairo.

21-23 June (Tuesday-Thursday): Commonwealth Business Forum, Kigali, Rwanda.

23 June (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

26 June (Sunday): The deadline for private companies to pre-register ahead of bidding for the second phase of the PPP national project to establish and operate 1k language schools.

27 June-3 July (Monday-Sunday): World University Squash Championships, New Giza.

30 June (Thursday): June 30 Revolution Day, national holiday.

30 June (Thursday): Deadline for bids for National Democratic Party HQ redevelopment contract.

June: Egypt will launch a unified ticketing system for all means of transport at the Adly Mansour Interchange Station.

June: Polish President Andrzej Duda will visit Egypt to coordinate ways to ship Ukrainian wheat to Egypt amid the war in Ukraine.

JULY

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

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

1 July (Friday): FY 2022-2023 begins.

1 July (Friday): Official rollout of e-receipt system begins.

8 July (Friday): Arafat Day.

9-13 July (Saturday-Wednesday): Eid Al Adha, national holiday.

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.

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

SEPTEMBER

September: Egypt will display its first naval exhibition with the title Naval Power.

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

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: Fuel pricing committee meets to decide quarterly fuel prices.

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, Washington, DC, chaired by CBE Governor Tarek Amer

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.

7-18 November (Monday-Friday): Egypt will host COP27 in Sharm El Sheikh.

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.

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

2Q2022: The Sovereign Fund of Egypt will invest in two companies in the financial inclusion and non-banking financial services sectors.

End of 2Q2022: The Financial Regulatory Authority’s new Ins. Act should be approved.

End of 2Q2022: Door for bidding for the contract to redevelop the site of the former National Democratic Party HQ to close.

1H2022: Target date for IDH to close its acquisition of 50% of Islamabad Diagnostic Center.

1H2022: e-Finance’s digital healthcare service platform, eHealth, will launch its services.

1H2022: The government will respond to private companies’ bids to build desalination plants.

1H2022: Egypt’s second corporate green bond issuance expected to be announced.

End of 1H2022: Emirati industrial company M Glory Holding and the Military Production Ministry will begin the mass production of dual fuel pickup trucks that can run on natural gas.

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.

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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