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Thursday, 8 December 2022

Mansour Automotive’s Ankush Arora on why renewables could be our best shot to boost exports

We recently had breakfast with 20 top CEOs to talk about why exports and FDI are key to our economy going forward. After reading our five-step recipe for turning Egypt into a global export hub and FDI magnet, participating CEOs agreed to answer two questions on the record for our latest CEO Poll.

We’ve already heard from: GSK’s Mohamed El Dababy | McKinsey’s Jalil Bensouda | Somabay’s Ibrahim El Missiri | ALC Alieldean Weshahi & Partners’ Bahaa Alieldean | HSBC Egypt’s Todd Wilcox | Actis’ Sherif El Kholy | Amazon’s Omar El Sahy | BII’s Sherine Shohdy.

TODAYAnkush Arora (LinkedIn) is president and CEO of Al Mansour Automotive, one of the biggest automotive distributors in Egypt. Starting with its partnership with General Motors, it has since scaled up to manufacture cars, trucks and pickups, and owns franchises for multiple global car brands. Arora was appointed as the company’s CEO last year, after serving as its director of operations for seven years. Arora’s experience in the automotive industry spans 30 years and includes former leadership roles at General Motors and India’s Tata Motors.

ENTERPRISE- Which industry would you put on a focused short list — and why?

AA- When you need to really narrow down the industries that should be the areas of focus, you have to look at a couple of things. The first is, what is your natural resource capability? Second, what is your human capital capability? Third, what is the long-term opportunity that this capability can offer to the country? When you find the right match between the three, it tells you what industry you need to focus on. I could choose two or three, but if I had to pick a single industry — apart from my own — that would be renewable energy.

We have the natural resources, gas and wind. We have the technical capability, the knowhow, and the talent, who are either ready or can be trained over the years. We have a strategic location where we can be a supplier to our neighbors. The proximity of Egypt to Europe, the GCC, and Africa makes it very easy for it to become a renewable energy source. Some of it is already happening today, but we can do more.

More importantly, you also have a >100 mn consumer population. If you are able to fulfill the needs of that base first, you can reduce your energy bill, and then top it up with exports — which could be multiple times higher than where we are today. Emerging markets, which are low-cost producing markets, are becoming the next source of renewable energy. The renewables market today is about USD 1 tn globally, and it is estimated to grow to USD 2 tn by 2030. Gas is a huge opportunity, especially with the current geopolitical crisis. People are looking at alternative, cheaper sources.

E: Why are exports and FDI the way forward?

I'm a big fan of your five-point strategy. I believe this is the right recipe. There are many success stories, and of course, as with anything, there’ll be some failure. But failure should not deter us, especially if the successes are bigger. In order to build a stable, prosperous economy, industrialization is key. The advantage of a high domestic consumption rate also gives you the strong foundation required for any industry to prosper, and then you add export to that — it's the icing on the cake.

I’m not really worried about the EGP devaluation. Devaluation is a function of market forces and the geopolitical situation. It's a function of your net trade deficit. The question is, can we withstand these shocks of devaluation and still prosper? To do that, we have to become self-sufficient and self-reliant.

Take India as an example. India's currency has weakened by 12-15% over the last five to six months. But the economy is still growing at a 6.5-7.0% clip. Why? Because over the last decade to 15 years, they have been making themselves self-sufficient with the Make in India program. It’s the same story with Vietnam. Currencies will play up and down based on the market forces, but the point is: What can you digest and still continue to move forward?

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