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Read our exclusive interview
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 ORASCOM
"A Commitment To Local & International Excellency"
Manager:
Mr. Onsi Sawiris, President Orascom
Mr. Naguib Sawiris, Chairman of Orascom Technologies
Contact:
160,26th July St.
P.O. Box 1191
Agouza,
Cairo , A.R.E.
Tel. (20) 2 302-6930 (multiple line )
Fax: (20) 2 344-0201 / (20) 2 346-1133
Telex: 92768 ORSCM UN
E-mail : naguib@orascom.com
Web site : http://www.orascom.com
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Orascom for projects & Touristic Development creates world class resort communities in harmony with Egypt's natural beauty. Orascom Technologies delivers "state of the art' computer products and telecom services to the people of Egypt. Orascom Construction Industries builds the infrastructure and provides the materials for a growing nation.
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Strategy
 Introduction
Our commitment to providing first rate results and reliability for our clients has produced consistent, steady growth, which is anticipated to continue well into the twenty first Century .
For nearly 50 years, ORASCOM has delivered top – quality turnkey projects, products and services to private companies and government organizations throughout Egypt and the Middle East. This blend of local and international expertise is a key component of our success. As a result of competing in both the regional and international marketplaces, we have acquired a unique knowledge of international business, as well as first-hand understanding of local and regional market conditions. Combining our exceptional local resources with global understanding helps our clients avoid problems while improving their competitive edge. Whether you represent a private company or government organization, based anywhere in the world, we invite you to discover more aboutORASCOM , your world class Partner in Egypt, the Middle East and Africa. "We make a world of difference"
Structure
Under the leadership of holding company ORASCOM for Investment & Development , the diversified ORASCOM group of companies has strategically expanded its interrelated business to better serve a growing client base. At the same time, these deliberates efforts have positioned the company to achieve sustainable growth.
Firmly rooted in Egyptian activities since 1950 and currently recognized for its formidable network of international relationships, ORASCOM has systematically expanded into complementary business. This has helped the company steadily progress beyond its historical expertise in construction, trade and distribution into highly specialized manufacturing and service industries .
As a result, ORASCOM is uniquely qualified to bring global visions to its ongoing efforts to gain additional market share in its existing enterprise, as well As to capitalize on emerging opportunities in a variety of vertically integrated turnkey projects. In This respect, Orascom’s wealth of experience continues to make a world of difference
Activities
Orascom Onsi & Company : Construction and Trading
Orascom Foods : Food
Egyptian Cement Company : Manufacturing
National Pipe Co. : Manufacturing
Oras : Construction and Trade
OpenSoft : Technology , Information and Processing
Multimedia Megastores : Computer and Electronics Retail
Orascom Touristic Developments : Tourism
Swiss Premium Ice Cream : Food
National Steel Fabrication Company : Manufacturing
Orascom of America : Construction and Trading
InTouch : Technology and Information Processing
Egyptian Cultural Investment Company : Culture and Art
Top of page
INTERVIEW WITH
Mr. NAGUIB SAWIRIS
CHAIRMAN OF ORASCOM TECHNOLOGIES
MONDAY 30th NOVEMBER 1998
1/Q: Mr. Sawiris, Orascom was founded in 1950. Due to its rapid rate of growth the group has diversified and operates in many different fields of activities. Could you give our readers a brief background of the group today?
We operate today mainly in three directions: 1) Construction and construction related industries, 2) Tourist development, hotels and restaurants, 3) Technology, which is IT Computers and Communications. These are the three major areas that we are working in today. We have an investing arm which is a passive investor in many other industries like banks, insurance and some other industrial projects but only as an investor and not as managers. Here, we are mainly working as entrepreneurs. The other arm is only an investor. You have Orascom Construction Industries, Orascom Tourist Development and Orascom Technologies. Then, you have Orascom for Investment and Development, which is merely the investing arm.
2/Q: OCI is the main investor in the Suez Industrial Development Company for the industrial development of the region of Suez. Still, competition will be extremely hard. What are you doing in order to attract future investor into your allocated space?
We are the best. There is no strategy. People always ask about the best and that is who they go to because the best will provide the best quality, commitment and safe contacting relations. This does not mean that the other bidders are not safe or good. But, we are better.
-Have any companies shown interest yet into your project?
Yes. Many companies have shown interest. I think that we are the only company right now that has six or eight lots that are already sold.
-Any American companies?
No. They are mainly joint ventures of Egyptian investors with foreign investors. We do not have a single multinational yet. We have a plant that manufactures fertilizers, another that manufactures buses, a third that manufactures cars. We have a pre-mixed concrete project. There is a steel structure project.
-Are you looking for specific investors?
There are no specifics because the area is divided into heavy, middle and lightweight industries. So, the area is structured to accommodate all kinds of activities. The heavy industries are located closer to the sea because they need cooling water. The middleweight industries are located in the middle of the area whereas the lightweight industries like IT or semiconductors and those industries that do not need heavy machinery, are in the end, towards the road.
-Do you know when those companies will be ready to start operating?
The problem is that we can not go out and sell the land rapidly more than we are progressing with the infrastructure. The challenge is first to provide the infrastructure, which is electricity, water, sewage, roads and communications. The challenge is to finish the infrastructure very rapidly now.
3/Q: In the telecommunications field, Egypt will be welcoming a new competitor. Mr. Logan, CEO of MisrFone, announced an innovative pricing plan; no more waiting list, and they added that they do not want to steal customers but to grow the market as a whole. What are your plans to face this new competitor and to maintain your market share with Mobinil?
Telecom is a growing market. Competition utlimately expands the market, which is healthy and beneficial to all. The market in Egypt has room for more than one company. As far as facing competition, we are not worried. First, we have to wait and see whether they will succeed or not. Success is not a matter of words. Until now we have not been worried by their performance. We have not seen any extraordinary performance. They have been late in rolling out their network, they have started with a very reduced network and we are not convinced with their strategy of prepaid cards. We are not convinced with their communications skills either. I am speaking, not as the Chairman of the competing company but as a normal subscriber. They have not done anything yet to make us worry. We have our plans but we will not be announcing them to the press. We will announce them in the right time. They publicized in the newspapers that by March ’99 they would have matched our current coverage. Judging their performance, it took them from February to November, that is 9 months, just to cover Cairo with less than 60 sites. We have 250 sites today. So, it took them 9 months to cover 60 sites and according to their announcement, they intend to cover the rest, which are 190 sites, in three months. However, at the rate with which they are going it should take them 18 months. The subscriber has a strong memory. If they publish something and do not live up to it…. So, we will wait and see. |
4/Q: Orascom Technologies is considered as one of the foremost information technology companies in Egypt. Are you developing new projects so as to maintain your position in the market?
We have no new projects because we have covered most of the areas. At IT we represent almost everyone. We represent every international name. We represent Hewlett Packard, Compaq, Microsoft, Oracle, Lucent Technologies, most companies on the Nas Daq index. When we discuss activities, we are involved in every single activity. We are the major shareholder and the biggest internet provider in Egypt. We have the biggest distribution company for IT. We have implementation companies for financial software like Oracle. We have networking companies that are mainly doing networking only like CISCO and DELL. We have a company, which is providing services to the mobile company and building the networks. So, we have mainly covered most of the areas. Our challenge is only to hold on to our position as we have the largest market share in most of our activities. In Microsoft, we have 50% of the market share, 65% with Hewlett Packard, at least 40% with Compaq. With MobiNil we have 100% of the market share up till now. We started late in some of the companies, so we are not yet where we want to be. So, we have to see what other areas that we need to develop. We have a company now that is very young and it provides software solutions to clients. Our challenge is to see such companies grow. We are restraining ourselves from expanding any further. We prefer to expand our market share now.
5/Q: Tourism is a booming sector in Egypt, especially for tourism investment in construction. Orascom projects have taken advantage of this situation and are currently building the prestigious Conrad, the Marriott Resort…… What are the other ongoing projects?
We are practically building now the only two new hotels in Egypt that came in the 90s and are now being built by Orascom. One is Conrad, which will open in January, and the other is the Meridien, which will be completed by the end of the next year. They are the two tallest hotels as well. We are working now on a completely new project called Nile City, which is going to be the next financial center of Cairo and we hope that all the financial institutions will occupy office space there because there is a problem with office space. There will be a new hotel there that will be serving mainly business people. It is also on the Nile and it will be next to the World Trade Center and Conrad. We hope to create the first Manhattan look alike piece of plot in Egypt. We are heavily developing the whole area.
-Have you applied for other bids?
We have got a contract now with CCC for a very big real estate project in Nasr City called Heliopolis Stars. The contract is for L.E.700 million only for electro-mechanicals. It is a huge contract. We have a contract now to build a new steel facility in Aswan; Aswan Steel Project. We are building an Egyptian fertilizer plant in Suez now. We are building the first bridge over the Suez Canal. This is the biggest swing bridge in the world. It is also a prestigious project.
6/Q: Orascom pioneered the concept of "Self-Contained Tourism Development". Can you tell us more about this concept?
We are only building the hotels. We go to a plot of land that is just desert and we build power stations, supply water, build roads and sewage networks. Then, we build houses and make a city. We also build hotels and airports. It is like what Agha Khan did in Sardinia. We created El Gouna. Now we are moving to Taba. In Taba we are doing the same. We are not into tour operating. We are not heavily into aviation. We have a small airline that has only one plane. You have to watch out not to compete with your clients. The tour operators provide us with services.
7/Q: Our readers are very much interested in new business opportunities. In which particular areas of Orascom activities are you interested in attracting new investments?
It is very simple. Any new investment has to be in our area of expertise. It has to be either in tourism, computer and communications, construction industries or construction material or in services. For example, we are the partner of British Gas for gas distribution because it involves a lot of services and construction and so forth. We have a very simple rule: if there is a big, reputable multinational company that decides to come to the Egyptian market and wants a partner, who is an investor, a contractor or a representative, an importer or a distributor, we are the right choice only if it is in our line of business. For example, let us assume that a big Swiss cheese manufacturer wants to start a cheese factory in Egypt, we are not the right partner for them or if a television manufacturer wants to come to Egypt. But, if Intel wants to come to Egypt and manufacture chips, we are the partner for them. We know the product and we can distribute it. In addition, we can build the factory, invest in it and finalize all the needed logistics. Our policy is always to attract multinationals and create partnerships with them. Even when we went into the food business we had a partnership with McDonalds. We can provide what is locally needed and they provide the management, expertise and know-how.
8/Q: As we say in the United States, contacts often mean contracts. What are you doing to encourage greater contacts?
We do nothing but work. When you work very hard and your work comes into the light you are acknowledged by the people and from the government because your work speaks for you. There are two types of businessmen. There are those who build their contacts through their own work and others who have contacts and try to work later on. We like to belong to the first group.
9/Q: During the last years, the Government has adopted a liberal attitude. What should the government do in order to stimulate the economy even further?
We have never had a better government in the history of Egypt. We were one of the biggest critics of the government three or four years ago. This new government came with a completely new attitude and this is to solve the problems that were hampering investments, to try to work on the problems of bureaucracy. It is not yet finished. We still have a lot but there is no comparison with the way things were four years ago, beginning with the airports, customs and taxation policies as well as permits. It is still not like Europe but also in Europe they do not make 30% or 40% or 50% profits like people do here. We have these big margins but we also have some big problems. But, it is getting better every day. In the past we used to have a status quo where nothing happened for one, two or three years. Now, we have a government that is moving in many directions. There are some directions in which you still need to see improvements like privatization, which is going slow. Privatization should go much faster.
10/Q: What was your most satisfying personal achievement since you have been appointed chairman of your company?
I think that up till now in my career it was to get the license of Mobinil. It was one of my biggest challenges. I think that it was not an easy one. I am very proud of it. When we got the license we were unfairly attacked from alldirections. I am very proud that in a very short time we managed to improve the quality of the network, move with our roll out plan without any delay, sustain our subscribers and increase the number of our subscribers and run a very profitable and one of the most prestigious companies of the country now. It is the biggest company on the stock exchange. Our company makes 40% to 50% of the movement on the stock exchange. Our share price has tripled in value since we took over.
11/Q: How confident are you in the future of Egypt?
I can easily answer that question. We think that there is no other family that has the amount of investment in Egypt like we have. I can tell you that 99.5% of our total networth is in Egypt. We have a company in Washington D.C. All our investments are here. So, this shows you how confident we are in the future of our country.
12/Q: Keeping in mind that Forbes magazine reaches more than 4 million readers, what will your final message to them be?
My final message to them would be to come to Egypt before it is too late. Everyone will come now and decide to come and start their activities in Egypt. The right time is now and not in 3 or 5 years. Making money becomes more difficult in more stable economies or stabilized areas. Look at how many people made money in the Far East twenty years ago. Here, there is a very big development process that is coming. You have a country where the government and the President are pushing in the same direction of the economy. They know that this is their challenge now. We feel that we have created peace. We have no more problems with Israel. We are helping the Palestinians and we are trying to soothe the elements in the area. As far as we are concerned in Egypt, we have finished this problem. What we have in Egypt is different. In Indonesia, for instance, the people did not like the regime because the regime was corrupted to the maximum. Here, it is a different situation. Our president is liked by the poor people and the rich as well which is not common in many countries. The President is personally pushing the economy. He is visiting the new investments and new sites. He interferes when there is a problem. He is sending the right message to everyone. The same applies to the Prime Minister. Since he came into office he issued laws to decrease the intrusion of the government and the bureaucracy. He has weekly meetings to push the major projects that will open up the country, create new industrial zones, create new urban areas so that the population is not concentrated in Cairo.
In addition, Egypt has a unique position. We have a population of 60 million people, we are in the situated in the middle between Asia an Africa. We have three waterways, the Red Sea, the Mediterranean and the Nile River. The people are peaceful and calm. So don’t wait ! |
© World INvestment NEws, 1998.
This is the electronic edition of the special country report on Egypt published in FORBES Magazine,
May 31st issue.
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EGYPT
