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 ATIC Holding
Interview with:
Mr. Mounir Ghabbour,
Chairman of ATIC Group
(joined by Mr. Hany Yassa, General Manager of the Mirage City & Golf Course)
Cairo, June 3rd, 2000 |
I understand that the ATIC group was founded in 1961. Could you give us a brief overview of its activities since then?
In 1961 we created ATIC as a broker for the insurance business. Shortly after this, in 1963, all the insurance businesses were nationalised by the Government. Prior to nationalisation there were 168 insurance companies, but then there were only 3 large state-owned companies.
As a result of this, we had to move into different fields of business. We started working as an agent for Nasco, which makes Fiat vehicles. We sold a lot of Fiats for taxis, which was something of a speciality for us. Nasco was the national car manufacturing company. The actual brand name we produced under was Nasr, but the vehicles were actually Fiats.
In 1970 the state began to accept business related importation services, on the condition that you had the hard currency to undertake the trade. In order to get this currency I started Sakkara Tours, which is a travel agency. From this point, I was working a great deal in the tourism business.
Today Sakkara Tours, which is managed by my son, is one the top ten travel companies in Egypt. When we started in 1970 there were not enough hotels for the tourists; there were only 500,000 tourists a year coming to Egypt back then, but there still were not enough hotels.
Egypt has succeeded in increasing the number of tourists to 4.5 million in 30 years, but I am not convinced that these figures are as great as they sound - there is still a lot more potential. The Government is keen to increase this figure to ten or twenty million tourists a year. In my view it is essential to get this number of tourists to put the economy on the right track.
When we came up against the problem of there not being enough hotels, I decided to build one, to accommodate my travel agents' clients. We started with the Sonesta Hotel in 1980. We contracted in 1976, but it only opened in 1980. It used to be the Hyatt, and after two years the name was changed to Sonesta. It is one of the most prestigious and successful hotels in Cairo.
When I started out, the location was not very considered particularly attractive, but it was half way between the airport and the centre of town, which has obvious advantages, and today it is the most expensive district in Cairo! In part this was because the Government decided that Nasr City should be a touristic area, and they put a lot of Governmental buildings there. There have also been a lot of satellite cities built, out beyond Nasr City, and this has helped too.
At the same time we were still involved in the automotive industry, and we became the sole agent for Renault in1973, when the Government concluded that the private sector could form these kind of agencies. Prior to this, it was forbidden for the private sector to form import agencies.
Today we are one of the biggest bus importers and manufacturers in Egypt. We import a lot of Renault buses, and we are soon going to start manufacturing them.
The Government is creating numerous new satellite cities, which I mentioned earlier, so we developed the Mirage City & Golf Course, which is located about 5-10 minutes from the airport. We built a golf course, and villas, and a GW Marriott is under construction, and a spa as well. My collegue, Mr. Hany Yassa, General Manager of the Mirage City, is probably better placed to describe it, since he lives there...
Comments by Mr. Hany Yassa:
Yes, the site is 400 acres, and we started building in April 1996. We have 50 medium sized villas, and 150 large villas, overlooking an 18-hole golf course, designed by Peter Harriden, the Swiss golf course architect. It was officially opened on the 1st of January this year, and we have 120 members. The club house, which is magnificent, was opened by the First Lady on the 30th of October 1999. The hotel is 450 rooms, which includes sixty suites.
Construction started one and a half year ago. At present we have finished all the structural work, and we are putting in the interior fittings. We expect it to open in the first half of next year, and it will be run by Marriott, under the JW Marriott label. It will be the seventeenth JW Marriott world-wide, which is an incredibly prestigious label.
The next phase, which is around 100 acres, will include an equestrian club, with stables for over 100 horses, and 3 international show jumping arenas. There is also going to be a 'Little Venice' project, complete with canals and gondolas, where there will be another fifty villas too.
In construction, it is always a challenge to meet deadlines. Is all the work going according to plan, and on time?
Compared to many other projects we are doing very well indeed. We are not completely on schedule, but very nearly.
Mr. Ghabbour, how did you think of the concept of this "Mirage" in the middle of the desert?
I have been importing tyres from South Korea since 1969, and every time I go to visit the managers there, we meet at the golf course. I found it a very enjoyable way of doing business, and decided to import the concept to Egypt. We asked a lot of golfers what they wanted to see, and made sure that their wishes were taken into consideration during planning. We have one of the best golf courses in the world, and we have had American visitors who have told us that there is nothing of a similar quality in the United States.
There is not a great golfing tradition in this Egypt, so we have opened an academy at the club to encourage people to start. The club has floodlighting, so people can come and practice at night. It is the only floodlit course in Egypt, and although these lights cost a lot of money to run, we feel that there will be a long-term benefit, and people will see that it is a world quality golf course.
How do you market such a hidden treasure?
Well, word of mouth is very important for this kind of project. When guests are impressed with the quality of the facilities, not only do they come back, but they tell their friends and colleagues too. We have done no newspaper advertising, and made no brochures - all our advertising is done by word of mouth. Instead of spending millions of pounds on advertising, we put that money on the ground, in facilities, and we think that it is better spent in this way.
We have already sold 85% of the project, which is exceptional by Egyptian standards. It would be more than this, but we are being very selective about who we sell the properties to, because we want to create the right atmosphere. It is going to be the most sought after quarter of Cairo when it is completed.
One of the big revenue generators are conferences. Are you going to provide conference facilities in the hotel?
We are going to have the largest conference facility in Egypt, with seating for fifteen hundred people. The latest audio-visual facilities will be available, along with another four conference rooms on top of that. The large ball room can be split into smaller rooms too.
| We intend on using this as a selling point - we have facilities for both business and leisure; there is a whirlpool, as well as the golf course, absolutely everything. There is also some land adjacent to the hotel where we intend to build a water park, which is presently being designed by a top American architect.
There are several other residential projects being built around Cairo, such as Beverly Hills, Sunset Hills and Al Rehab City development complexes for example. Would you say that this is something of a new urbanisation trend in Cairo?
Egypt, after the revolution, was orientated very much to meeting the most basic needs of the poor. In the rush to provide housing, buildings were often poorly designed and badly constructed, and now they are no longer desirable places to live. In 1952, before the revolution there were 18 Million Egyptians, and now there are 65 Million! So you can see where the problem stems from. The Government is encouraging these quality housing projects, because they know that they are needed - wealthy people, managers and the upper class society, which Egypt needs, will not live in Cairo if there is no quality accommodation.
Some of the areas that you mentioned are very different from what we are doing. You cannot really compare our development with the other ones you mentioned, although they may appear similar at first glance.
These new cities are creating a lot of employment. We hire sub-contractors, who in turn hire a lot of labour. The salary of an engineer has almost tripled in the last four or five years, because of these development projectors.
Thousands of very beautiful, quality villas were destroyed in Cairo, in order to make room for apartment blocks. This process has been stopped now, and there are, thankfully, a few of these lovely, old French and Italian villas still around - the Baron's palace in Heliopolis, for example.. The fact that these are now protected demonstrates that the Government has had a change of heart, and now realises the importance of quality accommodation.
Mrs. Mubarak has recently launched a project to have one million trees planted in the Heliopolis and another ten million elsewhere. People are thinking differently now, and there is more emphasis on quality and aesthetics than there has been in recent decades.
Yes, we are seeing a lot of change, not just in Cairo, but in other areas too, such as Sala Hashish and Soma bay, for example. Are you involved in any of these projects?
Yes, we are presently building another hotel in Taba, which is the new Riviera of Egypt. We also own some of the best floating hotels on the Nile. The Red Sea is one of the most important tourist areas in Cairo, and to get more tourists there, there needs to be more hotels built, and the Government needs to improve the national infrastructure, by building more roads and airports. In this way we can double or triple the number of tourists, and make sure that they have a good time. By 2010 we are confident that there will be 20 million tourists a year. This is very important, as Egypt needs the foreign revenue that stems from this.
What is your opinion on the Open Skies agreement, is it a good idea?
Yes, of course. There are antiquities tours, diving tours, beach holidays, as well as the Nile valley too, we can cater for all the tourist tastes, as long as the tourists can get here.
There is the 'Holy Family Trail' which is being developed too. This is the route that Mary, Joseph and Jesus followed as they travelled through Egypt. They spent four years here, going from El-Arish to Assiut, which covers most of Egypt. Most people do not know about this, despite the fact that it is written in the scriptures.
I understand that you are involved in developing this "Holy Family Trail". How did you become involved in this?
Dr. Beltagui, the Minister of Tourism, is a good friend of mine, and he discussed the project with me two or three years ago. We formed a charitable organisation to find the funding needed to undertake these restorations, and it is going well. We have restored all the sites in the Nile Delta, and we are now starting on the ones in Upper Egypt. This project is not just of significance to Christians - it is part of the Muslim history and heritage too. The project is a good example of co-operation between different religious groups.
What do you think the future holds for the ATIC Group, and where do you see the group in five or ten years time?
Well, it is hard to predict anything in Egypt, even what will happen tomorrow! We have to consolidate our present operations, and we have no concrete plans for diversification until this has been done. However, this does not mean that we will pass over opportunities if they arise.
We are putting a lot of emphasis on technology at the moment, especially in our automotive plant, in order to increase efficiency. We feel that it is very important to be at the forefront of the market as far as technology is concerned.
Are there some potential investment opportunities within your company, possibly when the Mirage project becomes public?
The Golf course and the city are almost finished now, but the hotel is very expensive, and we would invite any serious investor to provide ten percent of the costs. Our capital in the project is around EGP130m, and the hotel will cost about EGP 300 million. We are not really looking for the financial part - we can provide this, if necessary - but what we are looking for is a strategic partner who can help us develop business. We are not really interested in a sleeping partner.
Since 1961 you have built this company into a tourism and automotive powerhouse. During this time, what has been your greatest achievement?
I think that the Mirage city is one of my greatest achievements, but I am also very proud of the Sonesta Hotel, and the fact that I chose the right location at the right time.
I was the first person to export garlic from Egypt, which I am also proud of, especially when I think of all those French people eating Egyptian garlic! It is special Chinese, rose garlic.
Moreover, my relations with Renault are very good, since I have been doing business with them since 1973. I like doing business with France. I have good relations with the ADI, and last year I received a medal of honour from the French Ambassador. We represent a lot of spare parts companies in France, and we have the best travel agency in Paris, STE voyage which was created in 1972. We send about 40,000 French people to Egypt every year, which is an impressive figure. |
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© World INvestment NEws, 2000.
This is the electronic edition of the special country report on Egypt published in Forbes Global Magazine. August 7th 2000 Issue.
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