AM — CFC Group to build USD 400 mn industrial complex in Qena

Good morning, friends, and happy hump day. It’s a truly slow newsday (we are, indeed, in the dog days of summer), but the big news here at home is CFC Group’s USD 400 mn investment in a greenfield industrial complex in Qena. The facility is part of that USD 10 bn Egypt / UAE / Jordan / Bahrain investment pact and smartly looks to capture more of the manufacturing value chain here at home while driving regional economic integration. Details in this morning’s news well, below.

HAPPENING TODAY- Public consultations on the government’s state ownership policy document continue today, with higher education players voicing their thoughts on the privatization strategy. The government holds workshops every Sunday, Tuesday, and Thursday to see how its plans will affect specific industries. You can find more details on the schedule of the meetings here.

The next round of talks is scheduled for this Thursday, 11 August with experts and think tanks.

WATCH THIS SPACE-

The Central Bank of Egypt (CBE) is creating a platform for making contactless phone payments à la Apple and Samsung Pay, CBE Assistant Sub-Governor for Banking Operations and Payment Systems Ehab Nasr said during a conference, according to Hapi Journal. The institution is working with international partners on the platform, Nasr said.

Mobile wallets are catching on: The number of payments made via mobile wallets more than doubled y-o-y to 212 mn in 1H 2022, while the value of transactions rose to EGP 250 bn, up from just EGP 96 bn the same time last year, Nasr said. The country’s new national digital payments app, InstaPay, has been used to make 1.33 mn transactions since its launch in March.

As is online shopping: The value of online purchases in Egypt rose 34% y-o-y, with consumers spending some EGP 22.3 bn during the six-month period, Nasr said. The number of POS transactions rose by almost 50% to EGP 108.7 bn.

THE BIG STORY ABROAD-

Casa de Donald just got raided by the feds: FBI agents raided Donald Trump’s Mar-a-Lago estate in Florida yesterday and broke into his safe, the former president said yesterday. “These are dark times for our Nation, as my beautiful home … is currently under siege, raided and occupied” by FBI agents, Trump said in a statement posted by an affiliated Twitter account. The reason for the raid is still to be confirmed, but US media outlets are reporting it was part of a federal investigation into Trump’s handling of classified information during his time in office. (AP | Reuters | NYT | Washington Post | Bloomberg | FT | WSJ | CNBC)

Kenyans are heading to the polls today to decide who will succeed outgoing president Uhuru Kenyatta. It’s looking like a close-run thing between the two front-runners — opposition leader and Kenyatta-backed Raila Odinga and Deputy President William Ruto. Polls will close at 4pm CLT and vote-counting will begin shortly after.

COP27 WATCH- Recapping last week’s Egypt- and UN-led regional climate roundtable in Ethiopia, which brought together African climate negotiators, lenders and global officials to discuss how to channel finance into climate projects. During the three days, participants analyzed and assessed more than 140 potential projects in Africa that are in need of finance, and discussed them in six themed sessions that addressed issues such as food security, water use and digital transformation, UN Climate Change High-Level Champion for COP27 and special envoy of the UN Secretary General Mahmoud Mohieldin said in an emailed statement. The roundtable marked the first in a series of efforts to compile and present African climate projects with potential for financing ahead of COP27, Mohieldin said.

There are four more regional roundtables coming up, with the next taking place in Bangkok, Thailand, on 25 August.

IN MEMORIAM-

Grease star and pop icon Olivia Newton-John has died at age 73, her husband, John Easterling, announced on social media yesterday. The cause of death was not made public, but the British-Australian singer had been suffering from breast cancer for years and has a fund dedicated to breast cancer research in her name. The four-time Grammy winner led a long, successful career in showbiz — Physical was one of the biggest singles of the 1980s, and her breakout performance in Grease alongside John Travolta is making the rounds this morning.

Obits rolled in through the night for Newton-John: BBC | CNN | The Guardian | NYT | The Independent | AP | WSJ.

CIRCLE YOUR CALENDAR-

Inflation data for July should land on Wednesday, 10 August.

Ghazl El Mahalla IPO: The retail portion of Ghazl El Mahalla’s mini-IPO will wrap next Sunday, 14 August.

MNHD shareholders have the final word on SODIC takeover bid: Madinet Nasr Housing and Development will hold a general assembly meeting on Tuesday, 16 August, to decide whether to allow SODIC to conduct due diligence ahead of a potential takeover.

Interest rates: The Central Bank of Egypt will meet to discuss interest rates next Thursday, 18 August.

National Dialogue: The board of trustees overseeing the National Dialogue will hold its next meeting on 27 August. On the agenda: Choosing the rapporteurs for all of the committees and subcommittees of the social, political and economic tracks, and preparing the agenda and topics of discussion for the dialogue.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

*** It’s Going Green day — your weekly briefing of all things green in Egypt: Enterprise’s green economy vertical focuses each Tuesday on the business of renewable energy and sustainable practices in Egypt, everything from solar and wind energy through to water, waste management, sustainable building practices and how you can make your business greener, whatever the sector.

In today’s issue: Enterprise sits down with one of the climate experts who helped craft Egypt’s new emissions targets. Amr Abdel Aziz is an unpaid advisor to Environment Minister Yasmine Fouad and chairman of Cairo-based environmental consulting firm Integral Consult, which helped develop Egypt’s new national climate strategy and updated nationally determined contributions (NDCs). We talk with Abdel Aziz on the thinking behind our new emissions targets, what would make the COP27 climate summit a success in his eyes, and why more climate finance from developed nations is key to halting global warming.

Emirati fertilizer company CFC Group will establish an industrial complex in Qena Governorate under the new joint industrial partnership between Egypt, the UAE, Jordan and Bahrain, senior figures in the company told us yesterday, confirming information originally reported by Al Mal.

About the Qena complex: The firm will invest USD 400 mn in the project, which will create 1.5k new jobs as it produces 200k tons of fertilizers, 400k tons of animal feed and 700k tons of phosphoric acid each year, Group CEO Ahmed Khalifa told us. Construction is scheduled to begin in 1Q 2023 in Qena’s Al Haw industrial area, with production set to start in 1Q 2025, Khalifa said.

CFC will self-finance the project: CFC Group is putting up the USD 400 mn capital for the project, which will be designed by German company ThyssenKrupp, Thierry Sansonetti, CFC Fert’s managing director, told us. Local fertilizer firm Evergrow — where Khalifa serves as vice chairman — is onboard as a technical advisor.

The company has set up an Egypt arm specifically for the project: The Dubai-based group has been around since 2016 but has set up its Egyptian subsidiary, CFC Fert, to build the new complex, Sansonetti said.

This is the first project chosen under the industrial partnership between Egypt, Jordan, the UAE, and Bahrain, and was selected because it meets the objectives of all four countries involved, Group CEO Ahmed Khalifa told us.

REFRESHER- The partnership will facilitate bns of USD of investment to develop industrial production in the four countries. The UAE is contributing USD 10 bn to the initiative, which will be managed by Abu Dhabi sovereign wealth fund ADQ, while other projects will be financed by the private sector. The countries in July identified a number of projects in the food, agriculture, pharma and fertilizers sectors that will receive USD 3.4 bn of investment in the first phase of the partnership.

Jordan + Egypt will supply the raw materials: Jordan will provide 200k tons of potash — a raw material used in the manufacture of fertilizers — while Egypt will supply 1 mn tons of phosphate, Khalifa said. “Instead of exporting the phosphate [as a raw material], the project enables us to continue the production cycle for the raw material and create a final product at an affordable cost that we can export at better prices,” he added.

The products will head to Egypt, the UAE, Bahrain and elsewhere: A fifth of the complex’s output will be earmarked for the Egyptian market and the remainder will be exported, with priority given to the UAE, Bahrain and Jordan. Calcium chloride produced at the facility will be exported to the UAE and Bahrain, to meet the two countries’ oil and gas sectors’ needs.

IN CONTEXT- Fertilizer production has long been a key local industry — and it’s never been more important. The regional industrial partnership aims to bolster the countries involved against supply chain disruptions and spiraling prices, after global economic challenges exacerbated by war in Ukraine sent fertilizer prices soaring and put food security concerns in the spotlight. We’re already a key global producer of fertilizer, allowing the partnership to leverage our existing expertise and infrastructure in the sector.

The newly-established Arab Alloys Company is investing EGP 1 bn to build a ferroalloys industrial complex in the Suez Canal Economic Zone, Hapi Journal reports. The facility will produce several types of metal alloys and will be the largest of its kind in the SCZone, Chairman Medhat Nafei reportedly told the newspaper.

In detail: The complex will produce 48k tons of ferrosilicon alloy each year in addition to silicon manganese and silicon metal. It will be built over a five-year period, with the first two phases to be completed by 2024. The company is currently conducting an environmental impact assessment for the project and working on securing the needed furnaces, Nafei said.

Not much is known about the company: Established only a few weeks ago, Arab Alloys describes itself as the “first privately-owned company in Africa for the production of ferroalloys” though the identities of the shareholders are not known. It appointed Nafei as its chairman in late July and held its first board meeting on Sunday.

Also working on the project: Ziad Bahaa Eldin Law Office is providing legal advice on the project while EGEC has been hired as a consultant.

The International Finance Corporation (IFC) has offloaded its entire 14% stake in National Printing Company in an EGP 175.9 mn transaction, Al Mal reports, citing sources familiar with the matter. The multilateral lender reportedly sold 10% back to the company and the other 4% to majority shareholder and Qalaa Holdings subsidiary Grandview, the people said. The IFC has been a shareholder in the company since 2010 when it invested USD 10 mn to back the construction of a cardboard factory.

Background: National Printing Company was set up by Grandview and Shorouk Group founder Ibrahim El Moallem in 2006. Grandview now owns around 57% of the company following the transaction and the remainder is owned by Moallem, according to the newspaper.

No agreement on building violation regs: The Madbouly government is still working to resolve differences of opinion over amendments to the law for reconciling building violations, cabinet said yesterday. Ministers have not reached a consensus regarding several “controversial” points of the legislation which are being contested by “various stakeholders,” the statement said, without providing further details. Cabinet wants to finalize a draft in the coming weeks so it can pass the amendments to the House of Representatives for discussion when MPs return from summer recess in October.

The original law had some issues: Ministers are working on amendments to address shortcomings in the original legislation which was passed in an effort to combat illegal construction. To legalize informal settlements and illegal buildings, the government in 2020 required property owners to pay fines (“reconciliation fees”) and ended up receiving around 2.8 mn requests. The problem is that the government has reportedly only responded to a fraction of these, and many fines remain unpaid. And a lack of unified rules has meant that various governorates around the country have been implementing the law differently.

So far, the government has received just 25% of what it’s owed, Rep. Ahmed El Seginy said on Ala Mas’ouletty last night (watch, runtime: 5:03). Property owners and the New Urban Communities Authority have paid somewhere in the region of EGP 22 bn to the state, he said.

Government officials in recent months have pledged to adopt a zero-tolerance stance towards new illegal construction and announced several controversial policies to crack down on violators. These include the removal of food subsidies and the referral of people who illegally build on the Nile to military prosecution.

ALSO FROM THE CABINET-

You can now legally snap a selfie in Egypt’s streets under a new decree from the cabinet that allows Egyptians and foreigners to use cameras for personal use without needing to obtain a permit or pay fees, according to a Tourism Ministry statement. The — very welcome — recommendations were first greenlit by the cabinet in July.

There are still some restrictions: Photographers will still need permits to take pictures of ministries, legislative councils, government facilities, police stations, buildings and any site affiliated with the military. They are also banned from shooting scenes considered “offensive” to the country, and from filming adults and children without their consent. Professional photography — including photography for cinematic, television, documentary and commercial purposes, as well as photojournalism, media, advertising, or professional photography — will still require a permit as well.

Former investment minister and Masar chairwoman Dalia Khorshid (LinkedIn) has been appointed the new managing director and CEO of Beltone Financial effective today, Hapi Journal reports. The decision was made at a board meeting yesterday called by the company’s new majority shareholder Chimera Investments which acquired a 56% stake last week. Khorshid replaces Ibrahim Karam (LinkedIn) who will remain a non-executive board member.

WATCH THIS SPACE- Beltone will convene its general assembly on 31 August to restructure the board following the change of ownership, the newspaper reports, citing sources familiar with the matter.

ALSO- Aladdin ElAfifi (LinkedIn) has stepped down from his role as non-executive board member at Beltone after assuming a new position as CEO of EFG Hermes’ non-bank financial institutions (NBFI) platform.

Egypt’s role mediating a ceasefire between Israel and Palestinian Islamic Jihad continued to receive attention from the talking heads last night, with Masaa DMC (watch, runtime: 5:26), Salet El Tahrir (watch, runtime: 3:04), and Ala Mas’ouleety (watch, runtime: 2:05) covering the international praise that headed Egypt’s way yesterday for its role in ending the three-day conflict. We have more on this in this morning’s Diplomacy section, below.

Egypt was in contact with Israel, PIJ and Hamas to prevent the violence in Gaza from escalating further, and succeeded in its strategy to prevent Hamas from joining the fighting, Tarek Fahmy, a professor of political science at the National Center for Middle East Studies, told Ala Mas’ouleety (watch, runtime: 12:25). One of Egypt’s biggest responsibilities at the moment is to bring the Israeli-Palestinian conflict back into the international conversation, Fahmy added.

COP27 + climate is back in the foreign press this morning: Reuters says that tensions are rising ahead of the summit, as developing countries increase their demands for wealthy nations to compensate them for losses and damage they endured due climate change. Meanwhile, ESG finance site Capital Monitor talks to the sustainability chiefs at four of Egypt’s biggest banks about sustainable finance in Egypt and COP27.

Human rights is getting attention in the gray lady: Political prisoners in Egypt share stories of the conditions through which they lived in the nation;s prisons in this feature piece by the New York Times.

More than 4.5 mn Egyptians have so far been registered on the Universal Health Ins. System, said Ahmed Sobky, chairman of the General Authority for Healthcare, according to a cabinet statement. The system is being progressively rolled out across the country over the course of this decade and is currently available in Port Said, Luxor and Ismailia. There are currently 21 hospitals and 134 health centers affiliated with the system in the three governorates.

Telecom Egypt (TE) has signed a five-year national roaming agreement with Orange that will allow state-owned (and EGX-listed) TE use Orange’s mobile service infrastructure, according to a joint statement (pdf) out yesterday. TE has had a roaming agreement with Etisalat Misr since 2017; that agreement is set to expire in December, though the two sides recently agreed to work on a more “flexible” mechanism to continue to allow TE to use Etisalat’s network.

ALSO- Huawei inked an MoU with the Information Technology Industry Development Agency (ITIDA) to provide training and open access to Huawei’s cloud services to local tech startups working in AI, data management, gaming and e-commerce. (Press release, pdf)

The clock is ticking in Iran nuclear talks: The EU has drafted a final revised text for bringing the US and Iran back into the 2015 nuclear agreement, and has given the two countries a few weeks to decide whether or not they will re-enter the accord, according to Bloomberg. Talks in Vienna finished yesterday with a draft agreement that must now be approved by the US and Iranian presidents.

The Gaza ceasefire is holding: The truce between Israel and Gaza militants negotiated by Egypt on Sunday held up yesterday, leading to Israel reopening it’s border crossing with Gaza and the Strip’s only power plant restarting operations, the Associated Press reports. Israel’s caretaker prime minister, Yair Lapid, thanked President Abdel Fattah El Sisi for Egypt’s efforts in a phone call yesterday, according to an Ittihadiya statement.

The US is expected to shell out one of its biggest security assistance packages to Ukraine yet, with USD 1 bn in munitions for long-range weapons and armored medical transport vehicles included in the package, three sources briefed on the matter told Reuters on Friday. The package would bring total US aid to Ukraine since the start of the invasion to almost USD 10 bn.