Egypt, new dimensions, new frontiers

Mr Hussein K. Salem, Chairman of Salem Group
Egypt -

Jolie Ville Hotel

"When it comes to Dreams, You may as well have big ones"

Interview with:

Mr. Hussein K. Salem

Cairo, June 4th, 2000
In your mind, what are the major developments in Egypt's progressing economy?

Under President Mubarak, Egypt is experiencing a renaissance. He is leading the country, and all the successes are attributable to him. Like all my business colleagues, I am enjoying this renaissance, the developments in the economy, and the stability. I used to live abroad, but I have come back to live in Egypt and put my money in Egyptian hands, and I am very happy that I have done this.

We are seeing Egypt developing into an investment hub. What have been the changes that have enabled this to happen?

Egypt is experiencing a new dimension for a new millennium. Per capita income is increasing, there are intensive on-going investments, and huge foreign currency reserves. The private sector is doing well, and the country is developing fast.

We have seen a lot of family run businesses coming to the forefront of Egyptian business in recent years, by taking advantage of the Government's support for private industry, and using technology to increase their efficiency. How would you say the Salem Group fits into this picture?

The Salem Group is one example of successful private enterprise amongst many. The success here is due to economic reforms, and a new found stability. Having said this, the Salem Group has had the chance to become involved in several projects of strategic importance.

For example, in the tourist industry, we have three hotels, with one thousand rooms, and two thousand employees, of which I am very proud. We have two desalination plants, producing ten thousand cubic meters a day, in Sharm El Sheikh. This made the development of Sharm El Sheikh possible, and also had a positive environmental impact as well. Additionally, we have a 193 megawatt power station, which was one of the first private sector power plants. We are also involved in the East Mediterranean Gas Pipeline, known as EMG.

Speaking of the EMG, it has been dubbed the 'peace pipeline'. What are the objectives behind this project?

AYou have spoken with His Excellency the Minister of Petroleum, Eng. Sameh Fahmy. He is the authority on this issue, and these sort of questions should be directed to him. We are like soldiers, working on a plan, but it is the Minister who actually creates that plan.

How are the negotiations with the Israel Electric Corporation going for EMG?

The negotiations are ongoing, and we have a follow-up meeting next week. Things are progressing well on this file.

Looking at the tourism sector, you are very much involved in the development of the golf course and the Jolie Ville resort. How is all this going, and what facilities are you working on?

We have undertaken a great deal of construction in the last year, and we have started operating a new desalination plant which produces three thousand cubic meters a day, in addition to the existing plant producing 7000 cubic meters per day.

In Jolie Ville we have nearly finished a tropical theme park, which is very romantic and beautiful, complete with imported palm trees from the USA. We are attempting to improve the quality of our existing facilities to stay at the forefront of the business. The tourism industry is booming, and this is due in no small part to the economic liberalisation undertaken by the Government, and the efforts of the gracious Minister of Tourism, His Excellency Dr. Mamdouh El Beltagui.

Regarding the golf course, which you are developing to the highest standards, how are you working to attract international tournaments to raise the profile of golf in Egypt?

Mega projects such as the golf course, which is built on 1.2m square meters, the hotel and its surroundings - these are like children. They need to be nurtured and cared for in the early stages, and it is only after a certain amount of time that they will be able to stand on their own feet.

Things are going well, and we are becoming known in the international markets. Our year round average occupancy for the golf course is about one hundred players per day, which is very good. For international competitions, you need sponsorship, and unfortunately I simply do not have time at the moment to solicit sponsorship. Nevertheless, this will definitely happen in the future.

We are seeing a lot of developments in the golf industry here in Egypt, with projects such as the Mirage City & Golf Course in Cairo and the Steigenberger Golf resort in El Gouna. Is this the beginning of a new phenomena in Egypt?
World wide, over US$ 25 billion is spent on the golf industry every year. There are about 60 million golf players, and a similar number of fans. We need to get some of this market for Egypt. We have a good, stable climate, which is an advantage, and there are five or six international quality golf courses in the country now. Golf has a definite part to play in the development of Egyptian tourism.

One of the main sources of revenue for resorts such as Jolie Ville is the conference market. How are you building this side of the business?

There have been many very important conferences held in Egypt recently, and numerous historical conferences have already been held in the Jolie Ville conference hall at Sharm El Sheikh. In this respect, we are confident that we have the facilities to host many more high-level, international events and conferences.

Last year you mentioned that you were considering a project in the Moses Springs area. Is this still under consideration?

Time considerations are always an issue, and we simply have too much business at the moment. I am trying to retire at the moment, and leave things to the new generation!

When we met with the Minister of Tourism, he mentioned the importance of infrastructure - airports, roads, sewage, and of course, water. What are the major areas of infrastructure which still need to be developed?

Dr Beltagui is absolutely right when he talks about the importance of infrastructure - it is vital for every aspect of the Egyptian economy. Instead of talking about what has not been done, let me tell you about what has been done, because this often goes unnoticed.

In Sharm El Sheikh there was no sewage system until recently, and that has been developed. It was a big job, but the Government undertook this very successfully, with some help from the private sector. Another example which comes to mind are two modern hospitals which have been built in order to ensure that tourists receive all the services they need - this really demonstrates the changes which have taken place recently.

A lot of this infrastructure goes unnoticed, and Sharm El Sheikh is really a very good example of this - people do not notice most of these services, hospitals, roads, and sewage systems. It is only when they are missing that they are noticed.

Egypt has nearly five million tourists a year at the moment, and many people say that there is potential to increase this to twenty million. What needs to be done to allow this to happen?

We need to continue improving the infrastructure; more roads, more hotels, and some more airports. We need to tailor the education sector to meet the needs of the tourist industry, so that we can have, for example, a good supply of qualified guides and hotel managers in the future. Things are going well, people are building everywhere, and the infrastructure is continually improving.

Within the context of the tourist boom, what potential is there for investment, or strategic partnerships in the Salem group?

We are a very conservative group, and we have not gone public in any of our activities. We are creating the structures at the moment, which requires a great deal of managerial input, and we have to make sure that we work within our capacity on this front. We need to get the right people, and the right systems in place before we reach out for more capital.

As one of the most dynamic companies in the country, how do you see the future of the Salem Group?

You are asking the wrong person! It is the next generation, my sons, who should be answering this question...

All in all, I am very optimistic, and things are going well. Certainly there are business cycles, and you will not always be at the top, but generally things are going in the right direction.

What has been the biggest challenge of your career?

Moving back to Egypt. I am glad that I took this challenge. I have been here for 23 years, and I am going to live here after retirement, so I can really enjoy the country.

Do you have a final message for Forbes readers?

Yes. Invest in Egypt! You will enjoy good returns, stability, and economic reforms in a strong market of 65 million people.

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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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