Ahmed Abou Hashima is one of Egypt’s youngest and most successful businessmen, and a firm believer in the future of Egypt. While most investors were hesitant about Egypt in 2011, Hashima was investing hundreds of millions, a calculated risk that is now paying off.
Egypt Optimism: As one of Egypt’s youngest and most successful businessmen, how optimistic are you about the future of this country and the government’s will to achieve real growth?
I am a firm believer in the future of Egypt. My faith in this bright future was manifested through investing 1 billion U.S. dollars in a heavy industry such as steel after the 25th of January Revolution. In my opinion, this was a calculated risk.
The president is exerting an enormous amount of effort to persuade multinational companies, investment associations, and other governments and presidents to invest in Egypt. He has also issued several decrees that on the long run will have a positive impact on the economy such as the gradual removal of subsidies, floating the currency, his persistence in completing the road map to reassure and encourage investors worldwide, and above all completing the unified investment law and adjusting investment regulations before the Egypt Economic Development Conference which will be held in Sharm El Sheikh in March 2015. There’s a lot of trust in the President and his plan for the country’s future. Launching national mega projects such as the new Suez Canal reassured local investors, and collecting the needed funding, which was 60 billion EGP, took less than a week!
International Perception: You have been a major contributor to improving the image of Egypt abroad. How do you see the current international perception of Egypt– What do you feel needs to happen in order to completely eradicate the negative perceptions?
It’s my duty as an Egyptian citizen before being a businessman to correct and improve any misconceptions that could be taken about my country. The campaigns we launched in New York and Davos were the minimum we could have done. I believe Egypt’s image abroad is gradually but steadily improving. But on top of our priority list should be an issue that was pointed out by President El Sisi and King Abdullah, may he rest in peace. They emphasized the importance of fighting terrorism, which could extend to the whole world.
The world also has to understand that Egypt now is in the phase of establishing the basic human rights for all its citizens, such as health, education, and a decent standard of living.
Importance of Manufacturing: The Egyptian manufacturing sector plays an important role in Egypt’s economy making up 15.6% of GDP. As a leader in the manufacturing sector how do you see its potential and its importance in Egypt’s development?
Our success in the upcoming phase will come from raising the slogan “Made in Egypt”. We import worth $65 billion annually and export worth $25-30 billion; this gap will end by empowering the industrial and manufacturing sectors and by developing integrated industries. The government has to protect national industries with appropriate laws and protection fees, and the manufacturer’s duty is to present a product that is competitive in quality and price. When we minimize our imports we will see the positive impact on the inflation rate and the currency.
Perseverance: Established in 2010, Egyptian steel managed to enter the steel market in a time that unknowingly became very challenging; when most investors were packing their bags and leaving the country after January 25th 2011. What gave you the confidence to keep going in a time of such uncertainty for the country?
From a businessman’s point of view, Egypt is a very promising market with extremely high demand. There are 90 million consumers in this country; they might not be rich, but the demand remains high. Egypt has all the qualifications to be a business hub for Africa, which I believe is the future for the world economy. From another point of view, as an Egyptian citizen, I was not only driven by calculating money and investments. This is a historical era for Egypt, and history will always remember who remained to support his country and who chose the easy way out and left.
Protection Fees: On 14 October, Minister of Industry and Foreign Trade, Mounir Fakhry Abdel Nour, issued a decree imposing temporary protection fees on imported steel. How much has this benefited the local steel production in Egypt?
Honestly it did not make much of a difference, as the protection fee was a mere 6.9%. Chinese rebar is subsidized for exporting by their government with 18%! Turkey, which is a main competitor, imposed 40% duties on Chinese steel. The solution is to have an import quota in Egypt combined with a 20% duty on imported steel. That’s the way to protect this strategic national industry, which has 100 billion EGP of investments and employs around 80,000 workers.
Role in EEDC: At the upcoming Egypt Economic Development Summit, the government hopes to attract between $10-12bn between 20 projects; most of which fall into the categories of Infrastructure, Energy, and Housing and Real Estate. What role will Egyptian Steel play in these projects, and which areas do you see most attractive for investment?
The main objective of the summit is to prove to the world that Egypt now has new laws and regulations that make it attractive for investment. Egyptian Steel is currently in a race with time to finish an integration project called Corex in collaboration with Siemens and Mistubishi to produce DRI with coal instead of natural gas due to its scarcity. The project will also produce 140 megawatts of electricity, which means that it will not acquire energy from the government, on the contrary, it will produce energy and the project is eco-friendly as well.
I believe the most attractive sectors for investment will be in the respective order, energy, housing, since we have a shortage of 8 million housing units, and infrastructure.
Vision: A true visionary – What is your vision for Egyptian Steel in the coming five years?
We are aiming to acquire between 20-25% of the local market. We use the latest technology to save power and preserve the environment. We will produce 1,800,000 tons of rebar and coils and after we have completed our projects in Egypt we are looking to duplicate these steel plants in other African countries that have potential. We are also preparing for an IPO at a suitable time in the future. I believe in investing in people. I boast having a team of the highest caliber that I call “The Dream Team” and in the future they will grow with the growth of the company.
We have won an award this year as “Best Industrial Group in Egypt” from Amwal Al Ghad, a prominent Arabic publication in the Arab world; we also received a golden award for “Leading Activities in CSR, Environment Standards, and Sustainable Development” from the Federation of Egyptian Industries and a silver Stevie award in Paris for “Best CSR Program of the Year for Middle East and Africa”. My plan is to keep this standard throughout the next 5 years.
Why Egypt: Your story is truly one of great success and determination – You are a testament of stability and confidence in your country– Why would you encourage an investor to chose Egypt as their next investment destination?
The role of the government right now is crucial, and they will ensure setting the right investment atmosphere through setting attractive laws that would encourage foreign investors. But Egypt also boasts obvious incentives. It has a strategic location, solar energy that could be produced all year long, a strong workforce since 60% of the population are youths below 30 years old. It’s also a perfect hub for business in Africa and the Middle East.