Facilitating the growth of the private sector

Since the end of 2016 the government has been taking serious steps towards forming the economy with the ultimate goal of achieving macroeconomic stability. So 2 years after implantation of the first major reforms what is your current assessment of Egypt’s economy?

It’s actually following this reform that there has been noticeable stability, specifically in reform execution relative to the foreign exchange, increasing flexibility of change in the market. The appetite for investment has increased and is continuously improving over time. The Egyptian Cabinet released information showing that total public and private investments reached EGP 721.1 billion in FY 2017-2018 up from EGP 514.3 billion the previous year. The IMF agreement provided business confidence, assuring investors that the country is moving in the right direction relative to the currency, the budget of the government and the economic growth rate.

The current debate now is the country has achieved macroeconomic stability, but will Egypt be able to move to further modernization. What I mean by modernization is real inclusive growth for the entire population so the purchasing power of an average citizen goes up. The current debate is whether the government will step back and let the private sector thrive and be the real generator of jobs and investment to the country. So what is in your opinion on the role of the private sector within Egypt’s economy right now?

The government’s role remains a key pillar of success for private sector growth. Three years ago, Egypt faced infrastructure challenges that hindered the growth of businesses in the private sector. A good example of this is the shortage of electricity supply, the distribution of gas and road works. The government has worked vigorously on these elements in order to provide smooth-sailing business operations in the country, so we can now safely say these challenges have been met.

The government’s efforts are ongoing in facilitating ease of business development in the country. Legislative bodies and policy-makers are increasingly cautious to develop strategic enactments which they’ve set out in “Egypt’s Vision 2030” to set directions for enhanced investment environments in the country. The empowerment of the private sector is important here, to invest and attract foreign partners in Egypt, support the government’s vision by contributing to legislation drafting and assist in overcoming the challenges of business development.

I want to go back to something very interesting. You mentioned the infrastructure because in December the World Bank published a report that says that for the next 20 years, Egypt will require $675 billion investments, and the government will only be able to cover $445 billion, and the gap, which is $230 billion, will have to be covered by the private sector and foreign investors. In terms of competitiveness, how does Egypt compare to other countries in attracting foreign direct investment?

The rates of foreign direct investment have fluctuated a lot in the past, but it is increasing steadily recently, and will continue to increase over the next 3 years. The population size of almost 100 million with the percentage of youth is an attractive bundle for any investor in all sectors. Egypt’s geographical location is unique, a connection between Africa, Europe and the Arab Peninsula which makes it particularly exceptional for businesses.

The partnerships between public and private sectors have been thriving recently, and we have pioneered this process as Polaris Parks. The government has begun to partner more with the private sector to develop industrial areas that have fuelled the growth of key foreign investors; there are now 14 private developers in the scene developing industrial areas.

Regarding the PPPS, I want to expand on one where you’re involved in, which is the Suez Canal economic zone. It was launched in 2015 to create an industrial logistic hub surrounding the Suez Canal, taking advantage of Egypt’s strategic position where you can export from the Red Sea and the Mediterranean. How attractive is Egypt in terms of export-oriented industries?

This is the strategic objective of our company in Egypt, and one in which we take much pride in terms of our accomplishments. We try to prioritize the exporting industries, driven by our insightful understanding of such industries being essential for sustainable economic prosperity for the country on the long-term.

The Suez Canal Economic Zone represents a key location for exporting services, as the geographical location is quite rewarding for investors. There are immense acres of land, manpower, enhanced infrastructure, and free-market practices with limited constraints on exporting conditions and customs.

Polaris Parks is developing a new project over 5.5 million square meters at the SCzone. We want to align ourselves with the macro strategies of the government, and more specifically, promote SMEs. The government is currently building factories for SMEs and we are complementing this strategic approach with high-end SME units which are labeled Bosla and are enhancing opportunities for exports.

This is the goal of our company: to use all the sources in Egypt to drive exports. The export of Egypt is now in the $20 billion, which is very low. We have to multiply that by 2 to 3 times, and we have to do this very soon to keep up with developed countries and economic powers around the world.

If I’m correct, you have a space of 5.5 million square meters in the Suez Canal zone. For the next 15 years, since 2015, you plan to attract investments of EGP 3.5 billion and provide 50 million direct and indirect jobs. So, I’d like to ask you about your development in the Suez Canal.

After the success we attained in 6^th of October industrial park, and since matching our investors with the location that best suits their line of business is our unique selling point, our research team was studying the unique characteristics of the SCzone and found that it was time to add this new project to our portfolio. With its unique geographical location, we bring our clients an industrial park that could provide them with the opportunity to have an export base in the region.

As a company who owns several industrial parks around the world; with a clientele base that includes many of the big  multinational names in the industry, like P&G, Henkel, Schlumberger as well as major Egyptian industrial investors like Mansour, Edita, Hayat Kimya, amongst others, we believe that what attracts clients to invest with us is the variety of locations and the range of services that facilitates the operations and makes the day-to-day running of the business more convenient for them. That is the main reason why we always seek to add projects with attractive characteristics. And now with the Suez Canal Industrial Zone compound and Sadat City Industrial park, Polaris Parks is serving investors in 4 different locations in Egypt catering to the different types of industry and clients size.

You mentioned that you worked with international partners. How important is it for the company to work with international partners compared to domestic, and what role do you play in channeling foreign direct investment in the country?

Polaris Parks and the Egyptian government share a vision of boosting direct foreign investments in the country through attracting more foreign investors. As a foreign investor in the industrial development sector, we aim at facilitating legal land acquiring procedures in addition to providing all possible amnesties for foreign investors establishing projects in Egypt.

Polaris Parks seeks collaborating with committed partners determined to establish outstanding projects that contribute to industrial growth. We support dedicated investors by allowing them to establish their projects and factories on the allocated land within 2-3 years, while partners who are not serious may be subjected to land withdrawal.

You were established as a large joint collaboration between Egypt and Turkey, how does the industrial power allow you to make both countries work in synergy?

Whenever it comes to business, I think the most important thing is the intelligence behind the business. For example, today the company is not Turkish, but rather multinational. It is run by Turkish and Egyptian administration, but the partnership is UK, Egyptian and Saudi Arabian.

Of course in the beginning it was a Turkish-Egyptian partnership developing a project that started with 3 million square meters of land and has reached 7 million square meters today. Polaris Parks has been operating in Egypt for 11 years and business is thriving every day under the collaboration with the Egyptian government.

We are a company of value as we believe in integrity and transparency. Polaris Parks operates according to the regulations set by the community we work in as well as the UN global compact principles.

We believe in supporting the youth and giving opportunities to young entrepreneurs to develop various projects that contribute to the prosperity of societies. We took the first step when we started business in the SMEs sector with small 250-square-meter units in the textile industry. Developing Bosla for SMEs in Egypt is our dream come true. With Bosla we are making huge changes in the community we operate in on the economic and industrial levels.

You define yourself as one of the first ecosystem-friendly parks in Egypt. How important is environmental sustainability for the company?

Polaris Parks is an environmentally conscious developer. We are contributing to Egypt’s Vision 2030 regarding achieving environmental sustainability. We are transforming Polaris industrial parks to be eco-friendly through setting proper waste disposal and pollution control programs, as well as creating more green landscapes.