Wind Energy Equipment in Egypt: A Strategic Reference, 2007

Wind Energy Equipment in Egypt: A Strategic Reference, 2007

Edited by

Philip M. Parker, Ph.D. Eli Lilly Chair Professor of Innovation, Business and Society INSEAD (Fontainebleau & Singapore)

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About Icon Group International, Inc. Icon Group International, Inc.’s primary mission is to assist managers with their international information needs. U.S.-owned and operated, Icon Group has field offices in Paris, Hong Kong, and Lomé, Togo (West Africa). Created in 1994, Icon Group has published hundreds of multi-client databases, and global/regional market data, industry and country publications. Global/Regional Management Studies: Summarizing over 190 countries, management studies are generally organized into regional volumes and cover key management functions. The human resource series covers minimum wages, child labor, unionization and collective bargaining. The international law series covers media control and censorship, search and seizure, and trial justice and punishment. The diversity management series covers a variety of environmental context drivers that effect global operations. These include women’s rights, children’s rights, discrimination/racism, and religious forces and risks. Global strategic planning studies cover economic risk assessments, political risk assessments, foreign direct investment strategy, intellectual property strategy, and export strategies. Financial management studies cover taxes and tariffs. Global marketing studies focus on target segments (e.g. seniors, children, women) and strategic marketing planning. Country Studies: Often managers need an in-depth, yet broad and up-to-date understanding of a country’s strategic market potential and situation before the first field trip or investment proposal. There are over 190 country studies available. Each study consists of analysis, statistics, forecasts, and information of relevance to managers. The studies are continually updated to insure that the reports have the most relevant information available. In addition to raw information, the reports provide relevant analyses which put a more general perspective on a country (seen in the context of relative performance vis-à-vis benchmarks). Industry Studies: Companies are racing to become more international, if not global in their strategies. For over 2000 product/industry categories, these reports give the reader a concise summary of latent market forecasts, pro-forma financials, import competition profiles, contacts, key references and trends across 200 countries of the world. Some reports focus on a particular product and region (up to four regions per product), while others focus on a product within a particular country.

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Table of Contents 1

INTRODUCTION & METHODOLOGY.............................................................................1

1.1

What Does This Report Cover?

1

1.2

How to Strategically Evaluate Egypt

1

1.3

Latent Demand and Accessibility in Egypt

3

2

WIND ENERGY EQUIPMENT IN EGYPT ........................................................................5

2.1

Latent Demand and Accessibility: Background

5

2.2

Latent Demand: Market Composition

5

2.3

Latent Demand: Market Data

5

2.4

Latent Demand: Leading Segments

6

2.5

Key Suppliers

6

2.6

Prospective Buyers

6

2.7

Accessibility: Market Entry

6

2.8

Market Issues and Obstacles

7

2.9

Key Contacts

7

3 FINANCIAL INDICATORS: STEAM, GAS AND HYDRAULIC TURBINES AND TURBINE GENERATOR SET UNITS .......................................................................................9 3.1 Overview 9 3.1.1 Financial Returns and Gaps in Egypt ....................................................................................................... 10 3.1.2 Labor Productivity Gaps in Egypt............................................................................................................ 13 3.1.3 Limitations and Extensions ...................................................................................................................... 13 3.2 Financial Returns in Egypt: Asset Structure Ratios 14 3.2.1 Overview .................................................................................................................................................. 14 3.2.2 Assets – Definitions of Terms .................................................................................................................. 14 3.2.3 Asset Structure: Outlook .......................................................................................................................... 16 3.2.4 Large Variances: Assets ........................................................................................................................... 17 3.2.5 Key Percentiles and Rankings .................................................................................................................. 20 3.3 Financial Returns in Egypt: Liability Structure Ratios 39 3.3.1 Overview .................................................................................................................................................. 39 3.3.2 Liabilities and Equity – Definitions of Terms .......................................................................................... 39 3.3.3 Liability Structure: Outlook ..................................................................................................................... 41 3.3.4 Large Variances: Liabilities ..................................................................................................................... 42 3.3.5 Key Percentiles and Rankings .................................................................................................................. 45 3.4 Financial Returns in Egypt: Income Structure Ratios 60 3.4.1 Overview .................................................................................................................................................. 60 3.4.2 Income Statements – Definitions of Terms .............................................................................................. 60 www.icongrouponline.com

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Income Structure: Outlook ....................................................................................................................... 62 Large Variances: Income.......................................................................................................................... 63 Key Percentiles and Rankings .................................................................................................................. 66

3.5 Financial Returns in Egypt: Profitability Ratios 84 3.5.1 Overview .................................................................................................................................................. 84 3.5.2 Ratios – Definitions of Terms .................................................................................................................. 84 3.5.3 Ratio Structure: Outlook .......................................................................................................................... 86 3.5.4 Large Variances: Ratios ........................................................................................................................... 87 3.5.5 Key Percentiles and Rankings .................................................................................................................. 90 3.6 Productivity in Egypt: Asset-Labor Ratios 112 3.6.1 Overview ................................................................................................................................................ 112 3.6.2 Asset to Labor: Outlook ......................................................................................................................... 113 3.6.3 Asset to Labor: International Gaps......................................................................................................... 114 3.6.4 Key Percentiles and Rankings ................................................................................................................ 117 3.7 Productivity in Egypt: Liability-Labor Ratios 136 3.7.1 Overview ................................................................................................................................................ 136 3.7.2 Liability to Labor: Outlook .................................................................................................................... 136 3.7.3 Liability and Equity to Labor: International Gaps.................................................................................. 137 3.7.4 Key Percentiles and Rankings ................................................................................................................ 140 3.8 Productivity in Egypt: Income-Labor Ratios 155 3.8.1 Overview ................................................................................................................................................ 155 3.8.2 Income to Labor: Outlook ...................................................................................................................... 155 3.8.3 Income to Labor: Gaps ........................................................................................................................... 156 3.8.4 Key Percentiles and Rankings ................................................................................................................ 159

4 4.1

MACRO-ACCESSIBILITY IN EGYPT...........................................................................177 Executive Summary

177

4.2 Economic Fundamentals and Dynamics 177 4.2.1 Direction and Composition of Trade ...................................................................................................... 177 4.2.2 Economic Cooperation ........................................................................................................................... 178 4.3 Political Risks 179 4.3.1 Economic Relationship with the United States ...................................................................................... 179 4.3.2 Political System...................................................................................................................................... 179 4.3.3 Political Violence ................................................................................................................................... 179 4.4 Marketing Strategies 180 4.4.1 Distribution Channel Options................................................................................................................. 180 4.4.2 Agents and Distributors.......................................................................................................................... 181 4.4.3 Franchising Activities............................................................................................................................. 182 4.4.4 Direct Marketing Options....................................................................................................................... 183 4.4.5 Joint Ventures and Licensing Options.................................................................................................... 183 4.4.6 Organizational Structure and Management in Egypt.............................................................................. 184 4.4.7 Creating a Sales Office........................................................................................................................... 184 4.4.8 Selling Strategies.................................................................................................................................... 184 4.4.9 Advertising and Trade Promotion .......................................................................................................... 185 4.4.10 Selected Media List ................................................................................................................................ 186 4.4.11 Pricing Issues.......................................................................................................................................... 188

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Contents 4.4.12 4.4.13 4.4.14 4.4.15

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Public Sector Marketing......................................................................................................................... 188 Defense Trade ........................................................................................................................................ 191 Public Sector Marketing......................................................................................................................... 194 Procurement Opportunities..................................................................................................................... 195

4.5 Import and Export Regulation Risks 196 4.5.1 Trade Barrier Risks ................................................................................................................................ 196 4.5.2 Valuations on Imports ............................................................................................................................ 198 4.5.3 Import Tariffs and License Requirements .............................................................................................. 198 4.5.4 Licenses Required for Imports ............................................................................................................... 199 4.5.5 Controls on Exports................................................................................................................................ 199 4.5.6 Entering Temporary Imports .................................................................................................................. 199 4.5.7 Additional Trade Issues.......................................................................................................................... 200 4.5.8 Labeling Issues....................................................................................................................................... 203 4.5.9 Requirements for the Importation of Food ............................................................................................. 203 4.5.10 Restrictions on Imports .......................................................................................................................... 207 4.5.11 Local Standards ...................................................................................................................................... 207 4.5.12 Free Trade Zone Options........................................................................................................................ 207 4.6 Investment Climate 209 4.6.1 Openness to Foreign Investment ............................................................................................................ 209 4.6.2 Additional Incentives and Measures....................................................................................................... 209 4.6.3 Restrictions on and Barriers to Foreign Investment ............................................................................... 211 4.6.4 Conversion and Transfer Policies........................................................................................................... 212 4.6.5 Expropriation and Compensation ........................................................................................................... 213 4.6.6 Dispute Settlement ................................................................................................................................. 213 4.6.7 Performance Requirements and Incentives ............................................................................................ 213 4.6.8 Right to Private Ownership and Establishment ...................................................................................... 215 4.6.9 Transparency of the Regulatory System................................................................................................. 216 4.6.10 Capital Market Risks .............................................................................................................................. 217 4.6.11 Political Violence ................................................................................................................................... 218 4.6.12 Corruption .............................................................................................................................................. 218 4.6.13 Bilateral Investment Agreements ........................................................................................................... 218 4.6.14 OPIC and Other Investment Insurance................................................................................................... 219 4.6.15 Labor ...................................................................................................................................................... 219 4.6.16 Free Trade Zone Options........................................................................................................................ 220 4.7 Trade and Project Financing 220 4.7.1 The Banking System .............................................................................................................................. 220 4.7.2 Foreign Exchange Control Risks............................................................................................................ 221 4.7.3 General Financing Availability .............................................................................................................. 221 4.7.4 Financing Export Strategies ................................................................................................................... 221 4.7.5 Egyptian Financial and Insurance Mechanisms ..................................................................................... 222 4.7.6 Financing Projects .................................................................................................................................. 222 4.8 Travel Issues 226 4.8.1 Local Business Practices ........................................................................................................................ 226 4.8.2 Travel Advisory and Visas ..................................................................................................................... 227 4.8.3 Transportation ........................................................................................................................................ 232 4.8.4 Language and Communications ............................................................................................................. 233 4.8.5 Housing .................................................................................................................................................. 233 4.8.6 Food........................................................................................................................................................ 233 4.9

Key Contacts

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Contents 4.9.1 4.9.2 4.9.3 4.9.4 4.9.5 4.9.6 4.9.7 4.9.8 4.9.9 4.9.10 4.9.11

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U.S. Contacts in Egypt ........................................................................................................................... 234 Egyptian Government Cabinet ............................................................................................................... 235 Egyptian Government Agencies............................................................................................................. 239 Egyptian Trade Associations.................................................................................................................. 243 Egyptian Chambers of Commerce.......................................................................................................... 244 Other Chambers of Commerce in Egypt ................................................................................................ 248 Egyptian Chambers of Industries ........................................................................................................... 248 Egyptian Market Research Firms ........................................................................................................... 250 U.S. Embassy Trade Personnel .............................................................................................................. 251 Contacts in Washington D.C. ................................................................................................................. 252 Other U.S. and Egyptian Organizations and Entities ............................................................................. 253

DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS .........255

5.1

Disclaimers & Safe Harbor

255

5.2

Icon Group International, Inc. User Agreement Provisions

256

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1 1.1

INTRODUCTION & METHODOLOGY WHAT DOES THIS REPORT COVER?

The primary audience for this report is managers involved with the highest levels of the strategic planning process and consultants who help their clients with this task. The user will not only benefit from the hundreds of hours that went into the methodology and its application, but also from its alternative perspective on strategic planning relating to wind energy equipment in Egypt. As the editor of this report, I am drawing on a methodology developed at INSEAD, an international business school (www.insead.edu). For any given industry or sector, including wind energy equipment, the methodology decomposes a country’s strategic potential along four key dimensions: (1) latent demand, (2) micro-accessibility, (3) proxy operating pro-forma financials, and (4) macro-accessibility. A country may have very high latent demand, yet have low accessibility, making it a less attractive market than many smaller potential countries having higher levels of accessibility. With this perspective, this report provides both a micro and a macro strategic profile of wind energy equipment in Egypt. It does so by compiling published information that directly relates to latent demand and accessibility, either at the micro or macro level. The reader new to Egypt can quickly understand where Egypt fits into a firm’s strategic perspective. In Chapter 2, the report investigates latent demand and micro-accessibility for wind energy equipment in Egypt. In Chapters 3 and 4, the report covers proxy operating pro-forma financials and macro-accessibility in Egypt. Macro-accessibility is a general evaluation of investment and business conditions in Egypt.

1.2

HOW TO STRATEGICALLY EVALUATE EGYPT

Perhaps the most efficient way of evaluating Egypt is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance to wind energy equipment are “latent demand” and “market accessibility”. The figure below summarizes the key dimensions and recommendations of such an approach. Using these two composites, one can prioritize all countries of the world. Countries of high latent demand and high relative accessibility (e.g. easier entry for one firm compared to other firms) are given highest priority. The figure below shows two different scenarios. Accessibility is defined as a firm’s ease of entering or supplying from or to a market (the “supply side”), and latent demand is an indicator of the potential in serving from or to the market (the “demand side”).

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Introduction & Methodology

2

Framework for Prioritizing Countries Demand/Market Potential Driven Firm

High

Highest Priority

High Priority Latent Demand

Moderate Priority Low Priority

Low

Lowest Priority Low

High Relative Accessibility

Accessibility/Supply Averse Firm High Highest Priority High Priority Latent Demand

Moderate Priority Low Priority Lowest Priority

Low High

Low Relative Accessibility

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Introduction & Methodology

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In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market – neither a market-driven nor a costdriven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities (e.g. a Canadian firm may have higher accessibility in Canada than a German firm).

1.3

LATENT DEMAND AND ACCESSIBILITY IN EGYPT

This report provides a detailed overview of factors driving latent demand and accessibility for wind energy equipment in Egypt. Latent demand is largely driven by economic fundamentals specific to wind energy equipment. This topic is discussed in Chapter 2 using work carried out in Egypt on behalf of American firms and authored by the United States government (typically commercial attachés or similar persons in local offices of the U.S. Department of State). I have included a number of edits to clarify the information provided. Latent demand only represents half of the picture. Chapter 2 also deals with micro-accessibility for wind energy equipment in Egypt. I use the term “micro” since the discussion is focused specifically on wind energy equipment. Chapter 3 is also a stand-alone report that I have authored. It covers proxy pro-forma financial indicators of firms operating in Egypt. I use the word “proxy” because the provided figures only cover a “what if” scenario, based on actual operating results for firms in Egypt. The numbers are only indicative of an average firm whose primary activity is in Egypt. It covers a vertical analysis of the maximum likelihood balance sheet, income statement, and financial ratios of firms operating in Egypt. It does so for a particular Standard Industrial Classification (SIC) code. That code covers “steam, gas and hydraulic turbines and turbine generator set units”, as defined in Chapter 3. Again, while “steam, gas and hydraulic turbines and turbine generator set units” does not exactly equate to “wind energy equipment”, it nevertheless gives an indicator of how Egypt compares to other countries for a proxy adjacent category along various dimensions. Chapter 4 deals with macro-accessibility and covers factors that go beyond wind energy equipment. A country may at first sight appear to be attractive due to a high latent demand, but it is often less attractive when one considers at the macro level how easy it might be to serve that entire potential and/or general business risks. While accessibility will always vary from one company to another for a given country, the following domains are typically considered when evaluating macro-accessibility in Egypt: •

Openness to Trade in Egypt

•

Openness to Direct Investment in Egypt

•

Local Marketing and Entry Strategy Alternatives

•

Local Human Resources

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Introduction & Methodology •

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Local Risks

Across these domains, a number of not-so-obvious factors can affect accessibility and risk. These are covered in the Chapter 4, which is a general overview of investment and business conditions in Egypt. Chapter 4 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Egypt. This chapter is also authored by local offices of the U.S. government, as is Chapter 2. Likewise, I have included a number of edits to clarify the provided information as it relates to the general strategic framework mentioned earlier.

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2 2.1

WIND ENERGY EQUIPMENT IN EGYPT LATENT DEMAND AND ACCESSIBILITY: BACKGROUND

With 7% annual increase in electricity requirements in addition to pollution exposure from gas power generation, the Egyptian government is under strong pressure to expand in alternative power generation resources. The New and Renewable Energy Authority is a government entity primarily concerned with such issues and currently runs a number of wind farms. It is also mandated to satisfy 14% of the domestic demand by 2022. Therefore, plenty of demand is expected to arise for international companies in the coming years.

2.2

LATENT DEMAND: MARKET COMPOSITION

In 1986 the New and Renewable Energy Authority (NREA) was formed to act as the national focal point for expanding efforts to develop and introduce renewable energy technologies to Egypt on a commercial scale together with the implementation of related energy conservation program. NREA is a government entity reporting directly to the Egyptian Minister of Electricity. NREA is mandated to satisfy the Egyptian Renewable Energy requirement in line with the current national strategy plan stating a total of 3% of the national energy demands to be generated from renewable energy by the year 2010 and up to 14% by 2022 (including wind). The current total demand of the local market in terms of electricity requirements is 15.6 Gigawatts (according to the latest available statistics) with an annual increase of 7%. NREA requirements from international suppliers do not stop at the implementation of renewable energy projects, but also include resource assessment, consultancy, training and technology transfer. Large subsidies are being provided by the Egyptian government on fuels and electricity, which sometimes reach up to 40%. The government announced plan is to reduce those subsidies and free prices to reach international levels in phases. Commercial and residential demand exists on a minor scale; however, this is expected to increase once the subsidies are lifted and thus making all types of renewable energy feasible.

2.3

LATENT DEMAND: MARKET DATA

The market size for all types of renewable energy, including wind, is equivalent to the cost of producing 2.9 Megawatts. Wind energy makes up 0.14 Megawatts of this. There is no specific dollar value for the cost of building such wind generation stations which is highly dependant on the location and the equipment used, however, they yield $8.5 million in revenues to the Egyptian government. A number of Egyptian firms already provide wind turbines for private use, mainly on farms and small industrial sites. The Egyptian government’s long term planning is to open up electricity generation and distribution to private operators. No reliable market data exists related to commercial renewable energy in Egypt and the future portion of wind power generated is expected to be negligible in light of total energy needs; however, there is a room for private enterprises to get into this industry.

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Wind Energy Equipment

2.4

6

LATENT DEMAND: LEADING SEGMENTS

For U.S. companies interested in doing business in Egypt, the following list represents the most lucrative fields in the Egyptian market: •

Feasibility studies for potential winds farms in Egypt.

•

Wind farms machinery and equipments.

•

Wind generation new technologies.

•

Spare parts and consumables.

2.5

KEY SUPPLIERS

Wind farms currently exist in limited numbers in Egypt. These farms can be found along the red sea coast in Zafarana and Hurghada, as well as along the Mediterranean coast near Matrouh. All locations were supported by international donors organizations. The Danish International Development Agency and German Governmental Bank being two of the main donors. Also equipment was supplied by international manufactures mainly from U.S., Germany and Spain.

2.6

PROSPECTIVE BUYERS

The Egyptian government represented by NREA, part of the Egyptian Ministry of Electricity, is considered to be the main end-user. Future commercial buyers will be allowed into the market based upon the government’s regulations which are expected to stretch and allow for private investors in the arena of power generation. There also exist a number of local companies who possess the capabilities to produce under license from the Government or act as system integrators and may also be considered as prospective buyers either in purchasing licenses or products.

2.7

ACCESSIBILITY: MARKET ENTRY

Several optimal locations for future wind farms exist within Egypt. Locations along the Gulf of Suez are considered to be particularly conducive to wind power. According to the wind atlas there exist a number of locations with wind speeds averaging in excess of 10 m/s, which makes it an optimum location for wind farms. Therefore, it is foreseen for American companies interested in the Egyptian market to focus on areas not only for their feasibility but also because they will play major parts in NREA’s expansion plans. The Egyptian Ministry of Electricity is not only the regulatory body, but also manages all forms of power generation, distribution and sales nationwide. Therefore, it is foreseen that all major future projects will be under their umbrella and involving NREA in the case of wind power generation. Financing is one of the main obstacles NREA faces as they are continuously searching for funding sources to plan for and implement new projects related to power generation, including wind.

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Wind Energy Equipment

2.8

7

MARKET ISSUES AND OBSTACLES

Public sector entities generally require a performance bond equal to 10% of the contract, which should be released on completion of the contract. To avoid delays in obtaining release of the performance bond, the contract must be formally amended if the buyer requests any change in delivery terms or specifications. U.S. firms should be aware that while the purchasing company may simply accept the lowest bid meeting the specifications, the purchaser might also attempt to bargain with one or more of the lowest bidders to negotiate better terms. Therefore, U.S. firms should be prepared to empower their agents to take measures to increase competitiveness. On major contracts, it is advisable to have an American representative present for such bargaining. Again, in this specific case, NREA would expect a flexible working relationship with its contractors and would expect to add minor requirements along the implementation of any contract. Therefore, American companies are encouraged to build in their proposals a financial buffer to accommodate possible requests. Working directly with the government is time consuming and bureaucratic, and the tender announcement process is sometimes not fully transparent. Continued and direct contact with Egyptian government authorities is highly encouraged to monitor ongoing activities and remain current on posted tenders. There are no strict language requirements in Egypt. English is acceptable; Arabic is official. Working with the government is secured in terms of payments; however, due to bureaucracy, delays can occur.

2.9

KEY CONTACTS

Ministry of Electricity and Energy Eng. Hassan Ahmed Youness, Minister 8 Emtidad Ramsis St., Abbassia Sq., Nasr City, Cairo – Egypt Tel: +20 (2) 401-7845 Fax: +20 (2) 401-2365 www.moee.gov.eg/ New and Renewable Energy Authority (NREA) Eng. Samir Mahmoud Hassan, Executive Chairman Ext. Addass El-Akkad St., El-Hay El-Sades, Nasr City Cairo – Egypt Tel:+ 20 (2) 271-3176 Fax: +20 (2) 271-7173 E-mail: [email protected] New and Renewable Energy Authority (NREA) Eng. Bothayna A. Rashed, GM Planning and Follow-up Ext. Addass El-Akkad St., El-Hay El-Sades, Nasr City Cairo – Egypt Tel:+ 20 (2) 271-3176 Fax: +20 (2) 271-7173 E-mail: [email protected]

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Wind Energy Equipment

8

New and Renewable Energy Authority (NREA) Eng. Ramadan A.Rahman Basha, Vice Chairman for Projects and Operations Ext. Addass El-Akkad St., El-Hay El-Sades, Nasr City Cairo – Egypt Tel:+ 20 (2) 271-0031 Fax: +20 (2) 271-0031

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3

3.1

FINANCIAL INDICATORS: STEAM, GAS AND HYDRAULIC TURBINES AND TURBINE GENERATOR SET UNITS OVERVIEW

Is Egypt competitive? With the globalization of markets, the increased mobility of corporate assets, and the need for productive human resources, this question has become all the more complex to answer. The financial indicators section was prepared to tackle this question by focusing on certain fundamentals: financial performance and labor productivity. Rather than focus on the economy as a whole, the analysis presented here considers only one sector: steam, gas and hydraulic turbines and turbine generator set units. We are essentially interested in the degree to which firms operating in Egypt have fundamentally different financial structures and performance compared to firms located elsewhere. With respect to this view of competitiveness, if one were to invest or operate in Egypt, how would the firm’s asset structure likely vary compared to a firm operating in some other country in Africa or average location in the world? In Egypt, do firms typically hold more cash and other short term assets, or do they concentrate their assets in physical plant and equipment? On the liability side, do firms operating in Egypt have a higher percent of payables compared to other firms operating in Africa, or do they hold a higher concentration of long term debt? The structure of the income statement is also telling. Do firms operating in Egypt have relatively higher costs of goods sold, operating costs, or income taxes compared to firms located elsewhere in the region or the world in general? Are returns on equity higher in Egypt? Are profit margins greater? Are inventories held longer? The financial indicators section was designed to answer these and similar questions that naturally affect one’s decision to invest or operate in Egypt. Again, we are particularly interested in steam, gas and hydraulic turbines and turbine generator set units, and not the economy as a whole. In many instances, people make all the difference. In addition to financial competitiveness, we consider the extent to which labor deployment and productivity in Egypt differs from regional and global benchmarks. In this case, we are interested in the amount of labor required to operate a typical business in Egypt and the likely returns on this human investment. What is the typical ratio of short-term and long-term assets to employee (employed in steam, gas and hydraulic turbines and turbine generator set units operations)? What are typical capital-labor ratios? How different are these ratios to those in Africa in general and the world as a whole? What are the average sales and net profits per employee in Egypt compared to regional benchmarks? The goal of this section is to assist managers in gauging the competitive performance of Egypt at the global level for steam, gas and hydraulic turbines and turbine generator set units. With the globalization of markets, greater foreign competition, and the reduction of entry barriers, it becomes all the more important to benchmark Egypt against other countries on a worldwide basis. Doing so, however, is not an obvious task. This report generates international benchmarks and measures gaps that might be revealed from such an exercise. First, data is collected from companies across all regions of the world. For each of these firms, data are standardized into comparable categories (assets, liabilities, income and ratios), by country, region and on a worldwide basis. From there, we eliminate all currency effects by standardizing within each category. Global benchmarks are then compared to those estimated for steam, gas and hydraulic turbines and turbine generator set units in Egypt. Though we heavily rely on historical performance, the figures reported are not historical but are forecasts and projections for the coming fiscal year.

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Financial Indicators

3.1.1

10

Financial Returns and Gaps in Egypt

The approach used in this report to evaluate operating performance for steam, gas and hydraulic turbines and turbine generator set units in Egypt is called "vertical analysis." For those unfamiliar with this type of analysis, frequently taught in graduate schools of business, the reader is recommended Jae K. Shim and Joel G. Siegel’s recent book titled Financial Management.1 In their discussion of financial statement analysis and ratios, Skim and Siegel (p. 4243), describe common-size statement (vertical analysis) as follows: A common-size statement is one that shows each item in percentage terms. Preparation of common-size statements is known as vertical analysis, in which a material financial statement item is used as a base value and all other accounts on the financial statement are compared to it. In the balance sheet, for example, total assets equal 100 percent, and each individual asset is stated as a percentage of total assets. Similarly, total liabilities and stockholders’ equity are assigned a value of 100 percent and each liability or equity account is then stated as a percentage of total liabilities and stockholders’ equity, respectively. … For the income statement, a value of 100 percent is assigned to net sales, and all other revenues and expense accounts are related to it. It is possible to see at a glance how each dollar of sales is distributed among various costs, expenses, and profits. The authors suggest that vertical analyses involve industry-based comparisons. Such a comparison “allows you to answer the question, ‘How does a business fare in the industry?’ You must compare the company’s ratios to… industry norms.” (p. 43-44) This approach is extended to country competitiveness (in this case Egypt) for a particular sector (in this case steam, gas and hydraulic turbines and turbine generator set units). This involves calculating country, regional and global norms. This introduction will describe the seven-stage methodology used to perform this analysis. Each stage should be seen as a working assumption behind the numbers presented in later chapters. Stage 1. Industry Classification. This stage begins by classifying the company into an industry. For this, we have relied on a combination of the North American Industry Classification System (NAICS pronounced “Nakes”), a relatively new system for classifying business establishments, and the older Standard Industrial Classification (SIC) system. Adopted in 1997, NAICS codes are the new industry classification codes used by statistical agencies of the United States. NAICS was developed jointly by the U.S., Canada, and Mexico to provide comparability in statistics about business activity across North America. After 60 years of service, the outdated SIC system was retired on October 1, 2000, leaving only the NAICS codes for official use. The NAICS classification system adds some 350 new industries and represents a revision to over 60% of the previous SIC industries. Despite its official retirement, the SIC system is still commonly used (and often reported in firm’s financial statements). For most companies in the world, classification within either the new NAICS or older SIC systems is a rather straight forward exercise. For some, however, it can be problematic. This is true for several reasons. The first being that the SIC or NAICS classification systems are rather broad for many product and industry categories (a firm’s products or services may be only a minor aspect of the classification’s definition). The second is that some firms’ activities span multiple codes. Finally, it is possible that a firm is classified by one source using its SIC code, and by another using its NAICS code, and by a third using both. Furthermore, some sources do not report either code, but instead use qualitative statements of the firm’s activities. Nevertheless, if one wishes to pursue a vertical analysis, some classification needs to take place which selects a peer group. In making this classification, one can rely on a number of sources. In some countries, firms must “self” classify in official periodic reports (e.g. annular reports, 10Ks, etc.) to public authorities (such as the Securities and Exchange Commission). These reports are then open for public scrutiny (e.g. EDGAR filings). In other cases, commercial data vendors or private research firms provide SIC/NAICS codes for specific companies. These include: •

Bloomberg - www.bloomberg.com

1

Skim and Siegel (2000), Financial Management published by Barron’s Educational Series, Inc. (BARON’S BUSINESS LIBRARY Series), ISBN: 0-7641-1402-6. www.icongrouponline.com

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Financial Indicators •

11

Datastream (Thomson Financial) - www.datastream.com

•

Dun & Bradstreet - www.dnb.com

•

Hoovers - www.hoovers.com

•

HarrisInfoSource - www.HarrisInfo.com

•

InfoUSA - www.infousa.com

•

Investext (Thomson Financial) - www.investext.com

•

Kompass International Neuenschwander SA. – www.kompass.com

•

Moody's Investors Service - www.moodys.com

•

Primark (Thomson Financial) - www.primark.com

•

Profound (The Dialog Corporation – A Thomson Company) - www.profound.com

•

Reuters - www.reuters.com

•

Standard & Poor's - www.standardandpoors.com

It is interesting to note that commercial vendors often report different qualitative descriptions and industrial classifications from one to another. These descriptions and classifications may also be different from those reported by the firm itself. Anyone hoping to perform a benchmarking study, therefore, has to make a judgment call across these various sources in order to determine a reasonable classification. In this report, we have decided a metaanalytic process, by combining various sources (including linking a classification’s keywords to qualitative descriptions of the firm’s product line). In cases of inconsistency, the most recent or globally comparable available is chosen. Again, the overall goal is to classify firms, which either produce similar products, offer similar services, or are in the same stage of the value chain for a particular industrial classification. In the case of this report, the SIC code selected is: 3511 which is defined as “steam, gas and hydraulic turbines and turbine generator set units”. This classification should be seen as a working assumption. In order to obtain a more detailed discussion of this classification, the reader is referred to the Web sites developed by the U.S. Census Bureau: http://www.census.gov/epcd/www/naics.html. Basic definitions and descriptions are provided at: http://www.census.gov/epcd/www/drnaics.htm#q1. A full correspondence table between SIC and NAICS codes, and detailed definitions are given at http://www.census.gov/epcd/www/naicstab.htm. Stage 2. Firm-Level Data Collection. A global search was conducted across over 20,000 companies in over 40 major economies, including Egypt, for those that report financials (balance sheet and income statements) and that are involved in steam, gas and hydraulic turbines and turbine generator set units. It should be noted that the publicdomain financials can be either historic or projections. It should also be noted that even historic figures can be modified in the future and often represent “estimates” of performance. Stage 3. Standardization. Once collected, public domain financial figures of firms identified in Stage 2 are standardize into comparable categories (assets, liabilities, and income). Again, these are limited to firms involved in some aspect of steam, gas and hydraulic turbines and turbine generator set units (i.e. are members of the value chain). From there, we eliminate all currency effects by standardizing within each category (creating ratios). In order to maintain comparability over time and across countries, vertical analysis is used. In the case of a firm’s assets, we treat the total assets as equaling 100, irrespective of the value of the local currency. All other assets are then calculated as a percent of total assets. In this way, the structure of the firm’s assets can be easily interpreted and compared with international benchmarks. For liabilities, total liabilities and equity are indexed to equal to 100. For the income statement, total revenue is indexed to equal 100, and all other figures are calculated as a percent of these figures. Stage 4. Filtering. Not all the firms selected in Stage 2 or the ratios calculated in Stage 3 are used for the country, regional or global benchmarks, as a number of companies are purposely dropped from the analysis. This is justified by the “outlier” phenomenon that plagues such analysis. The problem lies in that any given company in the benchmarking pool may be facing some exceptional event or may be organized in an exceptional way so as to make

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Financial Indicators

12

its ratios vastly different from the norm. By including such firms, the global benchmarks can be overly skewed. In many countries, firms are organized into holding groups. These groups nominally have very few employees (e.g. 4 to 25 employees), but have extremely large assets, liabilities, or revenues. As such, the inclusion or exclusion of firms having this form of management can affect the ratios and benchmarks reported. Likewise, some firms have no net sales, no assets, no liabilities, or ratios. Others have ratios that appear implausible for a normal or viable company. In order to not allow these firms to affect the global benchmarks, only those firms with reasonable financials have been chosen. Finally, in some countries, detailed financials are not available or are not comparable to either the company in question or the global norm (e.g. various forms of depreciation). In this case, only those which exist and are comparable are reported. The details, therefore, that comprise a given ratio or set of ratios may not be reported. This may lead to the addition of several ratios, not summing to the whole. Stage 5. Calculation of Global Norms. Once the filtering process has eliminated outliers, a final list of companies included is compiled. Based on this list, the ratios discussed in Stage 3 are calculated for every firm, and then averaged to create country, regional and global benchmarks. The world average is calculated using each country’s population as a weight. Stage 6. Projection of Deviations. The goal of this report is not only to estimate raw ratios or averages, but also to present the difference between Egypt and projected global averages for that same ratio. Furthermore, it can be insightful to know the location of each ratio within the distribution of the countries represented in Stage 5. These deviations, in fact, can be seen as projections or likely scenarios for the future. This is often true for two reasons. First, while a company’s financials change from year to year, its ratios are often stable. This is especially true for the country, regional and global benchmarks which represent averages across companies. From a purely Bayesian sense, the difference between the company’s recent ratios and the benchmarks are a reasonable prior for future deviations. This is true, even if the entire industry is hit by an external or exogenous shock, such as an oil crisis or economic slowdown. In other words, we assume that the structure of the variance in the industry’s financials remains stable. Second, many of the data are based on preliminary reports that might be changed in future filings. As forecasts, therefore, the numbers derived from these are also forecasts of past and future performance (with associated uncertainties). The calculation of the difference between a country’s ratios and the global benchmarks is meant to yield roughly approximate forecasts, or "useful measures". In general, more developed countries have more reliable source data. For many, ratios are econometrically extrapolated using models that use country characteristics (e.g. income per capita) as independent variables (i.e. countries having similar economic structures are assumed to have similar operating ratios). Again, the forecasts are based on the assumption of relative stability. This assumption has proven extremely robust in previous applications of this methodology (i.e. today’s weather is a good predictor of tomorrow’s weather, but not the weather three years from now). The results reported should be viewed as those for a “proto-typical” firm operating in Egypt whose primary activity is steam, gas and hydraulic turbines and turbine generator set units. Stage 7. Projection of Ranks and Percentiles. Based on the calculation of deviations, relative ranks and percentiles are calculated across the firms used in the benchmarks. The percentile estimates the percent of a representative sample of countries in the world having values of the ratio lower than Egypt. It is important to note that a percentile being high (or low) does not mean good (or bad) past, present or future financial performance. The reader must draw this conclusion on their own. The estimates provided were created to provide managerial insight, and not a recommendation with respect to particular investments within any country. We graphically report, for each part of the financial statement, the larger structural differences between Egypt and the regional and global benchmarks, and provide a summary table of ranks and percentiles. These are estimates for firm which would be involved in steam, gas and hydraulic turbines and turbine generator set units. A deviation from the global norm need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or perhaps signal a country's relative strength or weakness for the coming fiscal year.

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Financial Indicators

3.1.2

13

Labor Productivity Gaps in Egypt

In the case of labor productivity measures, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. The seven stage approach given above is used in a similar manner. We then report, for each part of the financial statement, the larger labor productivity gaps that Egypt has vis-à-vis the worldwide average (for steam, gas and hydraulic turbines and turbine generator set units). Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.

3.1.3

Limitations and Extensions

Shim and Siegal (p. 60) stress that “while ratio analysis is an effective tool for assessing a company’s financial condition,” operating Egypt or any other country, “its limitations must be recognized.” They find that (p. 59) “no single ratio or group of ratios is adequate for assessing all aspects of a company’s financial condition” operating in a particular country. The authors note the following limitations associated with ratio analyses which apply to the global benchmarking and vertical analysis presented here (p.60): •

Accounting standards or policies may limit useful comparisons across companies

•

Management accounting practices across companies and countries may not be performed in the same style

•

Ratios are static and do not reveal future trends

•

Ratios do not indicate the quality of the components used to calculate the ratios (i.e. ratios have ambiguous interpretations)

•

Reported ratios may not reflect real values

•

Companies may be highly diversified, limiting the comparability of their ratios to others

•

Industry averages or norms are approximate; finer industry definitions may be required for certain interpretations or comparisons

•

Financial statements and resulting ratios often mean different things to different people depending on their points of view or motivations.

Again, all figures reported here are estimates, so due caution is required. The above caveats, and the fact that statements made in this report are forward-looking, requires that this point be emphasized. A number of intervening factors can have material effect on the ratios and variances forecasted. These include changes in a company's management style, exchange rate volatility, changes in accounting standards, the lack of oversight or comparability in accounting standards, changes in economic conditions, changes in competition, changes in the global economy, changes in source data quality, and similar factors.

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Financial Indicators

3.2 3.2.1

14

FINANCIAL RETURNS IN EGYPT: ASSET STRUCTURE RATIOS Overview

In this chapter we consider the asset structure of companies involved in steam, gas and hydraulic turbines and turbine generator set units operating in Egypt benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of assets is then presented for companies operating in Egypt and the average global benchmarks (total assets = 100 percent). For ratios where there are large deviations between Egypt and the benchmarks, graphics are provided (sometimes referred to as a financial “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis asset ratios are highlighted across countries in the comparison group.

3.2.2

Assets – Definitions of Terms

The following definitions are provided for those less familiar with the asset-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of assets, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Accumulated Depreciation - Transportation Equipment. Accumulated depreciation of transportation equipment is commonly understood to be contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of transportation equipment.

•

Accumulated Depreciation -Machinery & Equipment. Accumulated depreciation of machinery and equipment is commonly understood to be contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of machinery and equipment.

•

Cash. Cash is typically defined as money on hand, on deposit with chartered bank, or held in the form of eligible securities.

•

Current Assets. Current assets are generally defined to be resources which are available, or can readily be made available, to meet the cost of operations or to pay current liabilities.

•

Finished Goods. Finished goods generally comprise the ready-for-sale inventory.

•

Machinery & Equipment. Machinery and equipment is commonly defined as a fixed asset classification which typically includes tangible property (other than land, buildings, and improvements other than buildings) with a life of more than one year. Such assets typically include office equipment, furniture, machine tools, and motor vehicles. Equipment may be attached to a structure for purposes of securing the item, but unless it is permanently attached to an integral part of the building or structure, it will generally be classified as equipment and not buildings. Equipment is generally defined as tangible property other than land, buildings, or improvements other than buildings, which is used in operations. Examples include machinery, tools, trucks, cars, furniture, and furnishings.

•

Progress Payments. Progress payments are commonly defined as periodic payments to a supplier, contractor, or subcontractor for work as it is completed as desired, in order to reduce working capital requirements.

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Financial Indicators

15

•

Property Plant and Equipment - Gross. Gross property, plant and equipment generally consists of the gross book value (rather than the more commonly-used measures of fixed capital stocks in current or real value), of all commercial buildings, associated land and equipment used therein that are owned by the company and that are either used or operated by the company or leased or rented to others.

•

Property Plant and Equipment - Net. Net PP&E equals the original cost of property, plant, and equipment (PP&E), less accumulated depreciation, depletion and amortization (DD&A).

•

Raw Materials. Raw materials are materials which will be converted by a manufacturer into a finished product.

•

Receivables (Net). Net receivables are defined as the net amount due to the company from private persons, businesses, agencies, funds, or governmental units which is expected to be collected in the form of moneys, goods, and/or services.

•

Short Term Investments. Short-term investments are investments which can be typically liquidated in less than one year.

•

Tangible Other Assets. Other tangible assets are commonly understood to be something substantial or real that is capable of being given an actual or approximate value (market or estimated), not classified elsewhere.

•

Total Assets. Total assets are defined as the financial representation of economic resources, the beneficial interest in which is legally or equitably secured to a particular organization as a result of a past transaction or event.

•

Total Inventories. Total inventories are defined as the total amount of goods on hand.

•

Transportation Equipment. Transportation equipment is equipment used for the transportation of goods for sale.

•

Work in Process. Work in progress includes goods which have been started but are not yet ready for sale.

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Financial Indicators

3.2.3

16

Asset Structure: Outlook

Using the methodology described in the introduction, the following table summarizes asset structure benchmarks for firms involved in steam, gas and hydraulic turbines and turbine generator set units in Egypt. To allow comparable benchmarking, a common index of Total Assets = 100 is used. All figures are current-year projections for companies operating in Egypt based on latest financial results available. Asset Structure Egypt Africa World Avg. _________________________________________________________________________________________________________

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Work in Process Finished Goods Progress Payments & Other Other Current Assets Current Assets - Total Property Plant and Equipment - Net Property Plant and Equipment - Gross Machinery & Equipment Transportation Equipment Other Property Plant & Equipment Accumulated Depreciation - Total Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Tangible Other Assets Total Assets

9.13 3.37 5.76 29.20 11.89 11.35 0.81 0.42 -0.69 0.19 50.42 34.28 74.54 66.34 0.25 7.95 40.25 36.48 0.13 3.64 0.18 0.18 100.00

9.53 3.33 6.14 21.10 14.08 5.54 1.60 3.40 0.62 2.09 47.41 21.58 49.00 33.77 0.79 3.72 27.09 21.44 0.53 1.72 6.43 1.14 100.00

11.41 5.50 5.35 27.15 16.97 5.25 3.51 5.61 0.54 1.23 57.46 25.30 51.05 31.90 0.91 5.20 27.21 19.93 0.56 2.34 4.21 0.61 100.00

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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Financial Indicators

3.2.4

17

Large Variances: Assets

The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large asset structure gaps between firms operating in Egypt and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Total Inventories 20 15

11.89

14.08

16.97

10 5 0 -5

-5.08

-10 Egypt

Africa

World Average

Gap

Gap: Raw Materials 12

11.35

10 8

5.54

6

5.25

6.1

4 2 0 Egypt

Africa

World Average

Gap

Gap: Finished Goods 5.61

6

3.4

4 2

0.42

0 -2 -4

-5.19

-6 Egypt

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Africa

World Average

Gap

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Financial Indicators

18

Gap: Current Assets - Total 60

50.42

57.46 47.41

40 20 0

-7.04

-20 Egypt

Africa

World Average

Gap

Gap: Property Plant and Equipment - Net 40

34.28

30

21.58

25.3

20 8.98

10 0 Egypt

Africa

World Average

Gap

Gap: Property Plant and Equipment - Gross 80

74.54

60

49

51.05

40

23.49

20 0 Egypt

Africa

World Average

Gap

Gap: Machinery & Equipment 80

66.34

60 33.77

40

31.9

34.44

20 0 Egypt

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Africa

World Average

Gap

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Financial Indicators

19

Gap: Other Property Plant & Equipment 8

7.95 5.2

6 3.72

4

2.75

2 0 Egypt

Africa

World Average

Gap

Gap: Accumulated Depreciation - Total 50 40

40.25 27.09

30

27.21

20

13.04

10 0 Egypt

Africa

World Average

Gap

Gap: Accumulated Depreciation -Machinery & Equipment 40

36.48

30

21.44

20

19.93

16.55

10 0 Egypt

Africa

World Average

Gap

Gap: Other Assets 8 6 4 2 0 -2 -4 -6

6.43 4.21 0.18

-4.03 Egypt

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Africa

World Average

Gap

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Financial Indicators

3.2.5

20

Key Percentiles and Rankings

We now consider the distribution of asset ratios for steam, gas and hydraulic turbines and turbine generator set units using ranks and percentiles. What percent of countries have a value lower or higher than Egypt (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of asset structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical asset ratios are highlighted in additional tables. Asset Structure

Egypt

Rank of Total

Percentile

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Work in Process Finished Goods Progress Payments & Other Other Current Assets Current Assets - Total Property Plant and Equipment - Net Property Plant and Equipment - Gross Machinery & Equipment Transportation Equipment Other Property Plant & Equipment Accumulated Depreciation - Total Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Tangible Other Assets Total Assets

9.13 3.37 5.76 29.20 11.89 11.35 0.81 0.42 -0.69 0.19 50.42 34.28 74.54 66.34 0.25 7.95 40.25 36.48 0.13 3.64 0.18 0.18 100.00

36 of 53 33 of 46 19 of 42 21 of 53 46 of 53 8 of 46 43 of 46 46 of 46 42 of 44 43 of 47 43 of 53 9 of 53 6 of 49 4 of 46 33 of 38 12 of 45 7 of 49 5 of 43 34 of 35 15 of 42 53 of 53 24 of 35

32.08 28.26 54.76 60.38 13.21 82.61 6.52 0.00 4.55 8.51 18.87 83.02 87.76 91.30 13.16 73.33 85.71 88.37 2.86 64.29 0.00 31.43

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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Financial Indicators

21

Cash & Short Term Investments Countries

Value (total assets = 100)

Rank

Percentile

22.46 22.29 22.10 20.17 19.72 19.10 18.47 17.20 16.72 16.48 16.28 15.53 15.50 14.82 14.36 14.17 12.80 12.66 12.64 12.39 11.85 11.41 11.40 11.25 10.76 10.72 10.48 9.83 9.66 9.45 9.31 9.13 8.53 6.36 6.27 5.03 4.50 4.42 3.68 3.02 2.94 0.74 0.70 0.50 0.50 0.40

1 2 3 4 5 6 8 9 10 11 12 14 15 16 17 19 20 21 22 23 24 25 26 27 28 29 31 32 33 34 35 36 37 38 39 41 43 44 45 46 47 48 49 50 51 53

98.11 96.23 94.34 92.45 90.57 88.68 84.91 83.02 81.13 79.25 77.36 73.58 71.70 69.81 67.92 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 22.64 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 0.00

Region

_________________________________________________________________________________________________________

Hong Kong Israel Ireland South Africa Indonesia Australia China South Korea Norway Singapore Japan USA Russia Canada Spain France Malaysia Taiwan Greece Switzerland Finland the United Kingdom Pakistan Czech Republic Philippines Luxembourg Argentina Belgium Italy Germany India Egypt Sweden Austria Thailand Denmark Hungary Netherlands Poland Peru New Zealand Brazil Chile Turkey Mexico Portugal

Asia the Middle East Europe Africa Asia Oceana Asia Asia Europe Asia Asia North America Europe North America Europe Europe Asia Asia Europe Europe Europe Europe the Middle East Europe Asia Europe Latin America Europe Europe Europe Asia Africa Europe Europe Asia Europe Europe Europe Europe Latin America Oceana Latin America Latin America the Middle East Latin America Europe

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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Financial Indicators

22

Cash & Short Term Investments (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total assets = 100)

Rank

Percentile

South Africa Botswana Mauritius Zimbabwe Mayotte Mauritania Comoros Reunion Lesotho Libya Guinea Sudan Central African Rep Benin Liberia Ghana Togo Zambia Equatorial Guinea Congo Morocco Djibouti Senegal Ivory Coast St. Helena Angola Kenya Egypt Cape Verde Burkina Faso Sierra Leone the Gambia Rwanda Western Sahara Sao Tome E Principe Nigeria Niger Uganda Mali Tanzania Zaire Tunisia Madagascar Chad Guinea-Bissau Burundi

20.17 18.88 18.60 18.56 17.40 16.09 15.66 15.53 15.37 15.01 13.92 12.77 12.76 12.47 12.47 12.32 12.21 12.18 10.92 10.70 10.60 10.30 10.07 10.01 10.00 9.50 9.49 9.13 8.90 8.83 8.33 8.20 8.13 8.07 8.07 7.92 7.82 7.57 7.19 6.56 6.00 5.89 5.80 5.78 5.52 5.30

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

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Financial Indicators Countries in Africa

23

Value (total assets = 100)

Rank

Percentile

5.05 4.29 3.77 3.28 3.03 2.90 2.74 2.53 2.44 0.62

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Malawi Somalia Gabon Ethiopia Eritrea Mozambique Namibia Swaziland Cameroon Algeria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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Financial Indicators

24

Receivables (Net) Countries

Value (total assets = 100)

Rank

Percentile

48.48 47.07 40.55 39.45 37.74 37.64 37.09 36.10 35.58 34.41 33.62 33.54 32.87 32.60 31.81 30.71 30.57 30.43 30.27 29.20 28.75 28.25 28.08 27.97 27.45 27.38 27.24 26.16 26.11 25.65 25.20 25.08 25.07 24.40 24.35 22.74 22.62 22.21 21.94 21.69 21.23 21.15 19.07 18.76 18.35 15.60

1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 40 41 42 43 44 45 46 47 51

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 3.77

Region

_________________________________________________________________________________________________________

Spain Portugal Greece India Turkey Mexico France Czech Republic Italy Philippines Argentina Netherlands Israel Ireland Malaysia Pakistan Austria the United Kingdom South Africa Egypt Denmark Sweden Norway Germany Japan Belgium Peru Finland New Zealand Brazil Singapore Switzerland Taiwan Chile South Korea Canada Hong Kong USA Russia Luxembourg China Thailand Hungary Indonesia Australia Poland

Europe Europe Europe Asia the Middle East Latin America Europe Europe Europe Asia Latin America Europe the Middle East Europe Asia the Middle East Europe Europe Africa Africa Europe Europe Europe Europe Asia Europe Latin America Europe Oceana Latin America Asia Europe Asia Latin America Asia North America Asia North America Europe Europe Asia Asia Europe Asia Oceana Europe

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

25

Receivables (Net) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total assets = 100)

Rank

Percentile

Kenya Burkina Faso Sierra Leone the Gambia Rwanda Western Sahara Sao Tome E Principe Nigeria Niger Senegal Uganda Ivory Coast Mali South Africa Equatorial Guinea Egypt Botswana Mauritius Tanzania Zaire Namibia Madagascar Chad Guinea-Bissau Swaziland Burundi Cameroon Reunion Algeria Malawi Libya Tunisia Somalia Zimbabwe Mayotte Gabon Mauritania Comoros Lesotho Ethiopia Guinea Eritrea Mozambique Sudan Central African Rep Benin

40.20 37.42 35.28 34.75 34.45 34.22 34.22 33.57 33.15 32.20 32.08 32.00 30.47 30.27 29.43 29.20 28.33 27.90 27.80 25.45 24.73 24.59 24.49 23.42 22.83 22.45 22.05 21.99 21.71 21.38 21.26 19.86 18.18 17.65 16.55 15.95 15.31 14.89 14.62 13.90 13.24 12.83 12.30 12.15 12.14 11.86

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

26

Value (total assets = 100)

Rank

Percentile

11.86 11.72 11.61 11.58 3.56 3.53 3.43 3.33 3.16 2.96

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Liberia Ghana Togo Zambia Congo Morocco Djibouti St. Helena Angola Cape Verde

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

27

Total Inventories Countries

Value (total assets = 100)

Rank

Percentile

39.81 39.65 36.42 31.72 29.43 29.36 28.95 27.32 26.04 25.68 25.57 25.46 25.35 24.70 24.51 24.33 21.52 21.50 21.05 20.66 18.50 18.26 18.25 17.67 17.52 17.47 16.81 16.23 15.53 15.46 15.31 15.28 15.27 14.91 14.52 14.45 14.00 13.99 13.88 13.46 12.49 11.89 9.94 8.25 7.20 7.18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 28 29 31 32 33 34 35 36 37 38 40 41 42 43 45 46 49 50 51 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 47.17 45.28 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 20.75 18.87 15.09 13.21 7.55 5.66 3.77 1.89

Region

_________________________________________________________________________________________________________

Pakistan Peru South Africa Denmark Australia Portugal Italy New Zealand Germany Israel Brazil Ireland Netherlands France Finland Chile Sweden the United Kingdom Norway Thailand China USA Austria Switzerland Hong Kong Spain Belgium Greece South Korea Singapore Japan Luxembourg Hungary India Canada Czech Republic Philippines Russia Indonesia Argentina Poland Egypt Malaysia Taiwan Turkey Mexico

the Middle East Latin America Africa Europe Oceana Europe Europe Oceana Europe the Middle East Latin America Europe Europe Europe Europe Latin America Europe Europe Europe Asia Asia North America Europe Europe Asia Europe Europe Europe Asia Asia Asia Europe Europe Asia North America Europe Asia Europe Asia Latin America Europe Africa Asia Asia the Middle East Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

28

Total Inventories (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total assets = 100)

Rank

Percentile

Equatorial Guinea South Africa Namibia Botswana Mauritius Swaziland Cameroon Algeria Tunisia Kenya Burkina Faso Reunion Libya Sierra Leone the Gambia Senegal Zimbabwe Ivory Coast Rwanda Sao Tome E Principe Western Sahara Gabon Nigeria Niger Mayotte Uganda Egypt Congo Morocco Mali Djibouti Mauritania St. Helena Comoros Lesotho Tanzania Angola Cape Verde Guinea Zaire Madagascar Chad Sudan Central African Rep Guinea-Bissau Benin

38.16 36.42 36.00 34.09 33.57 33.23 32.09 21.65 19.40 15.20 14.15 14.02 13.55 13.34 13.14 13.11 13.07 13.03 13.02 12.93 12.93 12.78 12.69 12.53 12.25 12.13 11.89 11.83 11.72 11.52 11.39 11.33 11.06 11.03 10.82 10.51 10.51 9.84 9.80 9.62 9.30 9.26 8.99 8.98 8.85 8.78

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

29

Value (total assets = 100)

Rank

Percentile

8.78 8.68 8.60 8.58 8.49 8.08 6.87 5.25 4.85 4.65

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Liberia Ghana Togo Zambia Burundi Malawi Somalia Ethiopia Eritrea Mozambique

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

30

Current Assets - Total Countries

Value (total assets = 100)

Rank

Percentile

86.90 83.62 82.93 82.17 80.55 76.94 76.42 75.70 71.16 70.76 69.08 67.43 66.94 65.90 65.79 64.46 64.18 63.35 62.69 62.23 62.21 60.13 60.12 60.06 59.39 59.01 58.46 58.29 57.88 57.61 56.81 56.68 56.05 55.66 54.70 54.01 53.99 53.70 52.68 51.37 50.42 49.83 45.44 45.32 38.85 31.77

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 41 42 43 44 45 46 51 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 22.64 20.75 18.87 16.98 15.09 13.21 3.77 0.00

Region

_________________________________________________________________________________________________________

South Africa Israel Ireland Pakistan Spain Portugal France Italy Greece Peru Denmark Norway Germany the United Kingdom India Finland Netherlands Czech Republic Hong Kong Japan Australia USA China Sweden Philippines Argentina South Korea Singapore Taiwan Switzerland New Zealand Austria Indonesia Canada Malaysia Belgium Brazil Thailand Russia Chile Egypt Luxembourg Turkey Mexico Hungary Poland

Africa the Middle East Europe the Middle East Europe Europe Europe Europe Europe Latin America Europe Europe Europe Europe Asia Europe Europe Europe Asia Asia Oceana North America Asia Europe Asia Latin America Asia Asia Asia Europe Oceana Europe Asia North America Asia Europe Latin America Asia Europe Latin America Africa Europe the Middle East Latin America Europe Europe

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

31

Current Assets - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total assets = 100)

Rank

Percentile

South Africa Botswana Mauritius Equatorial Guinea Kenya Namibia Burkina Faso Swaziland Sierra Leone the Gambia Rwanda Cameroon Western Sahara Sao Tome E Principe Nigeria Senegal Niger Ivory Coast Uganda Reunion Zimbabwe Libya Mali Tunisia Egypt Mayotte Tanzania Mauritania Algeria Comoros Lesotho Zaire Madagascar Chad Guinea Guinea-Bissau Congo Morocco Djibouti Burundi St. Helena Sudan Central African Rep Malawi Benin Liberia

86.90 81.34 80.11 78.76 67.04 64.24 62.41 59.30 58.84 57.95 57.44 57.27 57.06 57.06 55.99 55.60 55.27 55.25 53.49 52.78 52.75 51.02 50.82 50.43 50.42 49.45 46.36 45.74 45.71 44.51 43.68 42.44 41.01 40.83 39.56 39.05 38.93 38.57 37.47 37.44 36.38 36.30 36.27 35.66 35.44 35.44

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

32

Value (total assets = 100)

Rank

Percentile

35.03 34.70 34.62 34.56 32.49 32.38 30.31 23.18 21.40 20.50

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Ghana Togo Zambia Angola Gabon Cape Verde Somalia Ethiopia Eritrea Mozambique

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

33

Property Plant and Equipment - Net Countries

Value (total assets = 100)

Rank

Percentile

60.82 49.74 42.66 40.91 40.59 40.39 35.78 35.48 34.28 33.50 32.37 30.55 29.91 29.40 29.17 28.69 28.27 28.01 27.84 27.32 27.30 26.60 25.17 24.64 24.45 24.30 23.31 23.18 22.56 22.36 21.41 20.81 17.57 16.34 15.64 15.45 14.57 14.37 11.74 11.73 9.11 9.04 7.99 6.76 5.72 5.71

1 2 3 4 5 6 7 8 9 11 13 15 16 18 19 20 21 22 23 24 25 26 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 79.25 75.47 71.70 69.81 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 47.17 45.28 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89

Region

_________________________________________________________________________________________________________

Hungary Poland Brazil Thailand Chile Philippines Singapore Indonesia Egypt Malaysia South Korea China Canada New Zealand Russia Netherlands Switzerland Taiwan Peru Australia Japan Austria the United Kingdom Sweden Luxembourg Hong Kong Denmark Finland Germany India USA Portugal Greece Norway Czech Republic Spain Argentina Italy Pakistan France Israel Ireland Belgium South Africa Turkey Mexico

Europe Europe Latin America Asia Latin America Asia Asia Asia Africa Asia Asia Asia North America Oceana Europe Europe Europe Asia Latin America Oceana Asia Europe Europe Europe Europe Asia Europe Europe Europe Asia North America Europe Europe Europe Europe Europe Latin America Europe the Middle East Europe the Middle East Europe Europe Africa the Middle East Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

34

Property Plant and Equipment - Net (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total assets = 100)

Rank

Percentile

Gabon Tunisia Senegal Ivory Coast Algeria Egypt Zimbabwe Mayotte Reunion Mauritania Libya Comoros Lesotho Namibia Guinea Congo Morocco Djibouti Swaziland St. Helena Sudan Central African Rep Kenya Cameroon Benin Liberia Ghana Angola Togo Zambia Burkina Faso Cape Verde Sierra Leone the Gambia Rwanda Western Sahara Sao Tome E Principe Nigeria Niger Uganda Mali Tanzania Zaire Madagascar Chad Guinea-Bissau

50.87 38.42 37.81 37.57 36.12 34.28 33.40 31.31 29.23 28.96 28.25 28.18 27.66 25.27 25.05 24.76 24.53 23.84 23.33 23.14 22.98 22.96 22.78 22.53 22.44 22.44 22.18 21.99 21.97 21.92 21.21 20.60 20.00 19.69 19.52 19.39 19.39 19.03 18.78 18.18 17.27 15.75 14.42 13.94 13.88 13.27

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

35

Value (total assets = 100)

Rank

Percentile

12.72 12.12 11.25 10.30 7.88 7.27 6.97 6.76 6.33 6.23

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Burundi Malawi Equatorial Guinea Somalia Ethiopia Eritrea Mozambique South Africa Botswana Mauritius

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

36

Accumulated Depreciation - Total Countries

Value (total assets = 100)

Rank

Percentile

81.92 76.67 72.95 58.66 47.42 43.93 40.25 38.09 38.01 34.66 32.91 30.96 29.08 27.56 27.56 27.13 26.77 26.47 25.42 25.31 23.44 21.19 21.05 20.55 20.05 20.00 18.90 18.66 18.44 16.87 16.81 16.22 15.85 15.72 15.15 9.65 9.63 9.02 7.19 6.40 5.96 5.29

1 2 3 4 5 6 7 8 9 11 13 14 16 17 18 19 20 21 23 24 25 26 27 28 29 30 32 33 34 36 37 38 39 40 41 42 43 44 46 47 48 49

97.96 95.92 93.88 91.84 89.80 87.76 85.71 83.67 81.63 77.55 73.47 71.43 67.35 65.31 63.27 61.22 59.18 57.14 53.06 51.02 48.98 46.94 44.90 42.86 40.82 38.78 34.69 32.65 30.61 26.53 24.49 22.45 20.41 18.37 16.33 14.29 12.24 10.20 6.12 4.08 2.04 0.00

Region

_________________________________________________________________________________________________________

Peru Brazil Chile Belgium Philippines Thailand Egypt Japan Germany India Austria Switzerland Netherlands New Zealand Indonesia Australia Luxembourg Sweden USA the United Kingdom France China Denmark Finland Canada Singapore Norway South Korea Spain Italy Russia Malaysia Israel Ireland Hong Kong Turkey Mexico South Africa Greece Czech Republic Argentina Taiwan

Latin America Latin America Latin America Europe Asia Asia Africa Asia Europe Asia Europe Europe Europe Oceana Asia Oceana Europe Europe North America Europe Europe Asia Europe Europe North America Asia Europe Asia Europe Europe Europe Asia the Middle East Europe Asia the Middle East Latin America Africa Europe Europe Latin America Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

37

Accumulated Depreciation - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total assets = 100)

Rank

Percentile

Namibia Swaziland Cameroon Algeria Senegal Ivory Coast Tunisia Egypt Kenya Burkina Faso Sierra Leone the Gambia Rwanda Congo Western Sahara Sao Tome E Principe Morocco Nigeria Djibouti Niger St. Helena Uganda Angola Mali Zimbabwe Cape Verde Tanzania Mayotte Mauritania Zaire Comoros Madagascar Chad Lesotho Guinea-Bissau Burundi Guinea Malawi Sudan Central African Rep Benin Liberia Ghana Togo Zambia Reunion

74.37 68.65 66.30 64.91 44.39 44.11 41.26 40.25 35.31 32.87 30.99 30.52 30.26 30.25 30.06 30.06 29.97 29.49 29.12 29.12 28.27 28.18 26.86 26.77 25.93 25.16 24.42 24.31 22.49 22.35 21.88 21.60 21.51 21.48 20.57 19.72 19.45 18.78 17.85 17.83 17.42 17.42 17.22 17.06 17.02 16.85

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.15 96.30 94.44 92.59 90.74 88.89 87.04 85.19 83.33 81.48 79.63 77.78 75.93 74.07 72.22 70.37 68.52 66.67 64.81 62.96 61.11 59.26 57.41 55.56 53.70 51.85 50.00 48.15 46.30 44.44 42.59 40.74 38.89 37.04 35.19 33.33 31.48 29.63 27.78 25.93 24.07 22.22 20.37 18.52 16.67 14.81

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

38

Value (total assets = 100)

Rank

Percentile

16.28 15.97 12.21 11.27 10.80 9.02 8.44 8.31

47 48 49 50 51 52 53 54

12.96 11.11 9.26 7.41 5.56 3.70 1.85 0.00

_________________________________________________________________________________________________________

Libya Somalia Ethiopia Eritrea Mozambique South Africa Botswana Mauritius

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.3 3.3.1

FINANCIAL RETURNS RATIOS

IN

39

EGYPT: LIABILITY STRUCTURE

Overview

In this chapter we consider the liability structure of firms operating in Egypt benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of liabilities and shareholder equity is then presented for the proto-typical firm operating in Egypt and the average global benchmarks (sometimes referred to as a financial “gap” analysis). The figure reflect firms involved in steam, gas and hydraulic turbines and turbine generator set units in Egypt. For ratios where there are large deviations between Egypt and the benchmarks, graphics are provided (total liabilities and equity = 100 percent). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis liability ratios are highlighted.

3.3.2

Liabilities and Equity – Definitions of Terms

The following definitions are provided for those less familiar with the liability-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of liabilities and equity, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Accounts Payable. Accounts payable are defined as amounts owed on open account to private persons or organizations for goods or services received.

•

Capital Surplus. Capital surplus is commonly defined as an amount of equity which is directly contributed capital in excess of the par value.

•

Common Equity. Common equity is defined to equal the company's net worth. It typically comprises capital stock, capital surplus, retained earnings, and, in some cases, net worth reserves. Common equity is the portion of total net worth belonging to the common stockholders. Synonyms which are often used for common equity are “common stock” and “net worth”.

•

Common Stock. Common stock is defined as the securities which represent the company's ownership interest. Common stockholders typically assume greater risk than preferred stockholders; although common stockholders maintain greater control and generally greater dividends and capital appreciation. Common stock can be used interchangeably with the term capital stock when the company has no preferred stock.

•

Current Liabilities - Total. Total current liabilities are defined as the total amount of obligations which would require the use of current assets or other current liabilities to pay.

•

Current Portion of Long Term Debt. The current proportion of long term debt is typically defined as debt which is payable in more than one year.

•

Retained Earnings. proprietary funds.

•

Shareholders Equity. Shareholders equity is commonly defined to be the amount of total equity reserved for common and preferred shareholders.

www.icongrouponline.com

Retained earnings is an equity account reflecting the accumulated earnings of

©2007 Icon Group International, Inc.

Financial Indicators

40

•

Short Term Debt. Short term debt is generally defined as debt payable within one year.

•

Total Liabilities. Total liabilities are generally defined to include all the claims against a corporation. Liabilities include accounts and wages and salaries payable, dividends declared payable, accrued taxes payable, fixed or long-term liabilities such as mortgage bonds, debentures, and bank loans.

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.3.3

41

Liability Structure: Outlook

Using the methodology described in the introduction, the following table summarizes liability and equity structure benchmarks for firms involved in steam, gas and hydraulic turbines and turbine generator set units in Egypt. To allow comparable benchmarking, a common index of Total Liabilities & Shareholders Equity = 100 is used. All figures are current-year projections for companies operating in Egypt based on latest financial results available. Liability Structure Egypt Africa World Avg. _________________________________________________________________________________________________________

Accounts Payable Short Term Debt & Current Portion of Long Term Debt Other Current Liabilities Current Liabilities - Total Total Liabilities Common Equity Common Stock Capital Surplus Retained Earnings Total Liabilities & Shareholders Equity

17.49 4.83 2.41 24.72 24.72 60.16 12.33 23.49 24.34 100.00

12.19 5.72 8.49 27.25 34.44 40.49 11.94 8.54 12.56 100.00

12.85 10.39 11.64 36.82 45.11 46.61 12.23 12.32 7.24 100.00

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.3.4

42

Large Variances: Liabilities

The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large liability structure gaps between firms operating in Egypt and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Accounts Payable 20

17.49

15

12.19

12.85

10 4.64

5 0 Egypt

Africa

World Average

Gap

Gap: Short Term Debt & Current Portion of Long Term Debt 15 10 5

10.39 4.83

5.72

0 -5

-5.56

-10 Egypt

Africa

World Average

Gap

Gap: Other Current Liabilities 15

11.64 8.49

10 5

2.41

0 -5 -10 Egypt

www.icongrouponline.com

Africa

World Average

-9.23 Gap

©2007 Icon Group International, Inc.

Financial Indicators

43

Gap: Current Liabilities - Total 36.82

40 30

24.72

27.25

20 10 0 -10

-12.1

-20 Egypt

Africa

World Average

Gap

Gap: Total Liabilities 60 40

24.72

34.44

45.11

20 0 -20.39

-20 -40 Egypt

Africa

World Average

Gap

Gap: Common Equity 80 60

60.16 40.49

40

46.61

13.55

20 0 Egypt

Africa

World Average

Gap

Gap: Common Stock 15

12.33

11.94

12.23

10 5 1.00E-01

0 Egypt

www.icongrouponline.com

Africa

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

44

Gap: Capital Surplus 25

23.49

20 12.32

15 8.54

10

11.17

5 0 Egypt

Africa

World Average

Gap

Gap: Retained Earnings 25

24.34

20

17.1 12.56

15 10

7.24

5 0 Egypt

Africa

World Average

Gap

Gap: Total Liabilities & Shareholders Equity 100

100

100

100

80 60 40 20

0

0 Egypt

www.icongrouponline.com

Africa

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.3.5

45

Key Percentiles and Rankings

We now consider the distribution of liability ratios for steam, gas and hydraulic turbines and turbine generator set units using ranks and percentiles. What percent of countries have a value lower or higher than Egypt (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of liability structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical liability ratios are highlighted in additional tables. Liability Structure

Egypt

Rank of Total

Percentile

Accounts Payable Short Term Debt & Current Portion of Long Term Debt Other Current Liabilities Current Liabilities - Total Total Liabilities Common Equity Common Stock Capital Surplus Retained Earnings Total Liabilities & Shareholders Equity

17.49 4.83 2.41 24.72 24.72 60.16 12.33 23.49 24.34 100.00

10 of 50 46 of 53 52 of 53 48 of 53 52 of 53 9 of 53 23 of 46 5 of 41 9 of 48

80.00 13.21 1.89 9.43 1.89 83.02 50.00 87.80 81.25

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

46

Accounts Payable Countries

Value (total liabilities & equity = 100)

Rank

Percentile

31.84 24.17 22.32 20.60 20.15 19.56 18.99 18.07 17.49 15.66 15.51 15.18 14.89 14.85 14.78 14.52 13.84 13.66 13.56 13.26 13.18 13.15 12.44 12.35 11.85 11.72 11.53 11.19 10.99 10.84 10.30 9.38 9.10 9.02 8.97 8.95 8.78 8.71 8.18 7.33 7.01 7.00 2.06

1 2 3 4 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 28 29 30 31 32 34 36 37 38 39 40 42 43 44 46 47 48 50

98.00 96.00 94.00 92.00 90.00 88.00 86.00 82.00 80.00 78.00 76.00 74.00 72.00 70.00 68.00 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 46.00 44.00 42.00 40.00 38.00 36.00 32.00 28.00 26.00 24.00 22.00 20.00 16.00 14.00 12.00 8.00 6.00 4.00 0.00

Region

_________________________________________________________________________________________________________

Belgium Italy Spain Philippines India France Brazil Chile Egypt Japan Hong Kong Singapore Greece Taiwan Netherlands the United Kingdom New Zealand Canada Norway Czech Republic Denmark South Korea Sweden Argentina Russia Australia Thailand Austria Indonesia Switzerland China Luxembourg Germany USA Hungary Malaysia Israel Ireland Finland Poland Turkey Mexico Peru

Europe Europe Europe Asia Asia Europe Latin America Latin America Africa Asia Asia Asia Europe Asia Europe Europe Oceana North America Europe Europe Europe Asia Europe Latin America Europe Oceana Asia Europe Asia Europe Asia Europe Europe North America Europe Asia the Middle East Europe Europe Europe the Middle East Latin America Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

47

Accounts Payable (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total liabilities & equity = 100)

Rank

Percentile

Kenya Senegal Ivory Coast Burkina Faso Congo Morocco Sierra Leone the Gambia Djibouti Rwanda Egypt Western Sahara Sao Tome E Principe Nigeria St. Helena Niger Uganda Angola Algeria Mali Cape Verde Tanzania Zaire Madagascar Chad Guinea-Bissau Reunion Libya Burundi Malawi Tunisia Zimbabwe Mayotte Somalia Mauritania Comoros Lesotho Guinea Gabon Sudan Central African Rep Ethiopia Benin Liberia Ghana Togo

20.53 19.29 19.17 19.11 18.28 18.11 18.02 17.75 17.60 17.59 17.49 17.47 17.47 17.15 17.09 16.93 16.38 16.23 16.08 15.56 15.21 14.20 13.00 12.56 12.50 11.96 11.87 11.48 11.47 10.92 10.83 10.34 9.69 9.28 8.97 8.72 8.56 7.75 7.50 7.11 7.11 7.10 6.95 6.95 6.87 6.80

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.08 96.15 94.23 92.31 90.38 88.46 86.54 84.62 82.69 80.77 78.85 76.92 75.00 73.08 71.15 69.23 67.31 65.38 63.46 61.54 59.62 57.69 55.77 53.85 51.92 50.00 48.08 46.15 44.23 42.31 40.38 38.46 36.54 34.62 32.69 30.77 28.85 26.92 25.00 23.08 21.15 19.23 17.31 15.38 13.46 11.54

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

48

Value (total liabilities & equity = 100)

Rank

Percentile

6.78 6.55 6.28 1.87 1.72 1.66

47 48 49 50 51 52

9.62 7.69 5.77 3.85 1.92 0.00

_________________________________________________________________________________________________________

Zambia Eritrea Mozambique Namibia Swaziland Cameroon

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

49

Current Liabilities - Total Countries

Value (total liabilities & equity = 100)

Rank

Percentile

60.54 58.44 57.60 52.51 52.20 49.47 48.47 47.78 45.62 44.98 42.99 42.62 41.74 41.66 41.58 41.02 40.85 40.74 40.61 40.11 39.05 37.83 37.20 36.79 36.11 35.29 34.60 33.26 33.15 33.01 32.94 31.08 31.01 30.90 30.83 29.13 28.86 28.55 27.30 26.03 25.68 25.51 25.28 24.72 23.73 23.18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 28 30 31 32 33 34 35 36 37 38 39 40 41 42 45 46 47 48 50 51

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 56.60 54.72 52.83 50.94 49.06 47.17 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 15.09 13.21 11.32 9.43 5.66 3.77

Region

_________________________________________________________________________________________________________

Brazil Spain Chile South Africa Pakistan Italy Portugal Taiwan Greece France Norway the United Kingdom Austria China India Denmark Turkey Mexico Czech Republic Belgium Netherlands Argentina Japan South Korea Finland Hungary Hong Kong Sweden Russia Switzerland Germany Israel Thailand Singapore Ireland Philippines Poland Luxembourg Peru USA Malaysia Australia Canada Egypt New Zealand Indonesia

Latin America Europe Latin America Africa the Middle East Europe Europe Asia Europe Europe Europe Europe Europe Asia Asia Europe the Middle East Latin America Europe Europe Europe Latin America Asia Asia Europe Europe Asia Europe Europe Europe Europe the Middle East Asia Asia Europe Asia Europe Europe Latin America North America Asia Oceana North America Africa Oceana Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

50

Current Liabilities - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total liabilities & equity = 100)

Rank

Percentile

South Africa Algeria Equatorial Guinea Botswana Mauritius Kenya Burkina Faso Sierra Leone the Gambia Rwanda Sao Tome E Principe Western Sahara Nigeria Niger Uganda Reunion Mali Libya Gabon Tanzania Tunisia Senegal Ivory Coast Zaire Congo Madagascar Morocco Chad Djibouti Namibia Egypt Guinea-Bissau St. Helena Burundi Angola Swaziland Malawi Cameroon Zimbabwe Cape Verde Mayotte Somalia Mauritania Comoros Lesotho Guinea

52.51 51.26 50.03 49.15 48.41 42.37 39.44 37.18 36.62 36.30 36.06 36.06 35.38 34.93 33.80 33.22 32.11 32.11 29.52 29.30 29.12 27.26 27.09 26.82 26.09 25.92 25.84 25.80 25.11 24.79 24.72 24.68 24.38 23.66 23.16 22.88 22.54 22.10 21.82 21.70 20.45 19.15 18.92 18.41 18.07 16.36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

51

Countries in Africa

Value (total liabilities & equity = 100)

Rank

Percentile

Sudan Central African Rep Benin Liberia Ethiopia Ghana Togo Zambia Eritrea Mozambique

15.01 15.00 14.66 14.66 14.65 14.49 14.35 14.32 13.52 12.96

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

52

Total Liabilities Countries

Value (total liabilities & equity = 100)

Rank

Percentile

67.94 67.25 67.09 66.15 64.53 64.47 63.76 63.36 61.47 60.67 60.17 60.05 58.24 57.68 57.21 57.04 56.88 56.64 56.35 53.05 52.06 51.92 51.65 50.71 50.38 49.75 49.19 48.53 45.83 45.42 45.32 44.29 43.73 41.26 40.01 39.43 38.81 37.78 37.07 35.30 35.01 31.52 30.75 29.75 29.13 24.72

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 32 34 35 38 39 40 42 43 44 45 46 47 48 49 51 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 43.40 41.51 39.62 35.85 33.96 28.30 26.42 24.53 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 3.77 1.89

Region

_________________________________________________________________________________________________________

Portugal Belgium Austria Spain Italy Germany Brazil Netherlands Sweden Chile Denmark Norway France Finland Taiwan New Zealand Switzerland South Africa the United Kingdom Pakistan Turkey Mexico India Thailand Japan Greece Luxembourg South Korea China USA Hungary Czech Republic Russia Argentina Australia Canada Hong Kong Singapore Poland Israel Ireland Indonesia Peru Malaysia Philippines Egypt

Europe Europe Europe Europe Europe Europe Latin America Europe Europe Latin America Europe Europe Europe Europe Asia Oceana Europe Africa Europe the Middle East the Middle East Latin America Asia Asia Asia Europe Europe Asia Asia North America Europe Europe Europe Latin America Oceana North America Asia Asia Europe the Middle East Europe Asia Latin America Asia Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

53

Total Liabilities (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total liabilities & equity = 100)

Rank

Percentile

South Africa Algeria Botswana Kenya Mauritius Equatorial Guinea Burkina Faso Tunisia Sierra Leone the Gambia Rwanda Sao Tome E Principe Western Sahara Nigeria Reunion Congo Niger Morocco Libya Uganda Djibouti St. Helena Mali Angola Gabon Tanzania Cape Verde Zaire Madagascar Chad Guinea-Bissau Zimbabwe Burundi Malawi Namibia Mayotte Senegal Ivory Coast Swaziland Mauritania Comoros Cameroon Egypt Lesotho Somalia Guinea

56.64 53.98 53.02 52.63 52.22 50.85 48.99 47.62 46.19 45.49 45.09 44.79 44.79 43.95 43.82 43.50 43.39 43.09 42.36 41.99 41.87 40.65 39.89 38.62 37.91 36.39 36.18 33.31 32.19 32.05 30.65 29.67 29.39 28.00 27.91 27.81 27.26 27.09 25.76 25.73 25.03 24.88 24.72 24.57 23.80 22.25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

54

Countries in Africa

Value (total liabilities & equity = 100)

Rank

Percentile

Sudan Central African Rep Benin Liberia Ghana Togo Zambia Ethiopia Eritrea Mozambique

20.42 20.40 19.93 19.93 19.70 19.51 19.47 18.20 16.80 16.10

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

55

Common Equity Countries

Value (total liabilities & equity = 100)

Rank

Percentile

70.87 69.29 69.25 64.70 64.69 64.17 60.19 60.16 59.97 59.11 56.07 54.68 53.58 50.89 50.04 49.10 48.70 48.32 47.94 47.81 46.95 45.09 44.72 44.36 42.27 42.12 42.01 41.92 41.54 40.96 39.82 39.57 39.49 38.36 36.79 36.37 36.33 34.89 34.43 34.23 34.03 32.76 32.56 32.09 32.06 31.17

1 2 3 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 25 26 28 29 30 31 32 33 35 36 37 38 39 41 42 43 44 45 46 47 48 49 50 51 52

98.11 96.23 94.34 92.45 90.57 88.68 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 52.83 50.94 47.17 45.28 43.40 41.51 39.62 37.74 33.96 32.08 30.19 28.30 26.42 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89

Region

_________________________________________________________________________________________________________

Philippines Malaysia Peru Israel Indonesia Ireland Singapore Egypt Australia Hong Kong Canada Hungary USA China South Korea Thailand Japan India Turkey Mexico Pakistan Russia Poland Greece South Africa the United Kingdom Switzerland Taiwan New Zealand France Denmark Finland Czech Republic Norway Argentina Sweden Luxembourg Italy Brazil Germany Netherlands Chile Belgium Spain Portugal Austria

Asia Asia Latin America the Middle East Asia Europe Asia Africa Oceana Asia North America Europe North America Asia Asia Asia Asia Asia the Middle East Latin America the Middle East Europe Europe Europe Africa Europe Europe Asia Oceana Europe Europe Europe Europe Europe Latin America Europe Europe Europe Latin America Europe Europe Latin America Europe Europe Europe Europe

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

56

Common Equity (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total liabilities & equity = 100)

Rank

Percentile

Senegal Ivory Coast Namibia Zimbabwe Egypt Swaziland Mayotte Cameroon Mauritania Comoros Lesotho Kenya Tunisia Burkina Faso Gabon Guinea Reunion Equatorial Guinea Libya Sierra Leone the Gambia South Africa Rwanda Sao Tome E Principe Western Sahara Sudan Central African Rep Nigeria Liberia Benin Niger Ghana Togo Zambia Botswana Uganda Mauritius Mali Tanzania Congo Zaire Morocco Djibouti Madagascar Chad St. Helena

66.34 65.93 62.87 60.89 60.16 58.03 57.08 56.05 52.80 51.37 50.42 49.24 46.11 45.83 45.74 45.66 45.18 45.01 43.68 43.21 42.56 42.27 42.19 41.90 41.90 41.90 41.86 41.12 40.91 40.91 40.59 40.43 40.05 39.96 39.57 39.28 38.97 37.32 34.05 31.29 31.16 31.00 30.12 30.12 29.99 29.24

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

57

Value (total liabilities & equity = 100)

Rank

Percentile

29.15 28.68 27.78 27.50 26.19 26.03 22.26 17.02 15.71 15.06

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Algeria Guinea-Bissau Angola Burundi Malawi Cape Verde Somalia Ethiopia Eritrea Mozambique

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

58

Retained Earnings Countries

Value (total liabilities & equity = 100)

Rank

Percentile

37.15 36.85 31.67 29.75 28.68 26.69 26.15 24.75 24.34 22.61 21.44 20.02 19.99 19.49 18.96 18.27 18.13 17.25 15.74 14.98 14.58 14.41 13.06 12.51 11.18 10.38 9.45 8.36 7.53 6.84 6.54 5.97 3.83 3.71 2.72 0.92 -1.89 -2.03 -2.28 -2.46 -2.47

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 17 18 19 20 21 22 23 25 26 28 30 31 32 34 35 36 37 38 39 40 41 43 44 45 47 48

97.92 95.83 93.75 91.67 89.58 87.50 85.42 83.33 81.25 79.17 77.08 75.00 72.92 70.83 68.75 64.58 62.50 60.42 58.33 56.25 54.17 52.08 47.92 45.83 41.67 37.50 35.42 33.33 29.17 27.08 25.00 22.92 20.83 18.75 16.67 14.58 10.42 8.33 6.25 2.08 0.00

Region

_________________________________________________________________________________________________________

Israel Ireland South Africa USA Philippines Hong Kong Switzerland Japan Egypt Luxembourg Malaysia Canada Indonesia the United Kingdom Finland Singapore Brazil Chile Austria Norway Australia Thailand New Zealand Denmark Spain Germany Netherlands South Korea Russia France Sweden Italy Portugal Taiwan China Peru Argentina Czech Republic Greece Mexico Turkey

the Middle East Europe Africa North America Asia Asia Europe Asia Africa Europe Asia North America Asia Europe Europe Asia Latin America Latin America Europe Europe Oceana Asia Oceana Europe Europe Europe Europe Asia Europe Europe Europe Europe Europe Asia Asia Latin America Latin America Europe Europe Latin America the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

59

Retained Earnings (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total liabilities & equity = 100)

Rank

Percentile

South Africa Botswana Mauritius Senegal Ivory Coast Egypt Zimbabwe Mayotte Mauritania Comoros Lesotho Algeria Guinea Tunisia Sudan Central African Rep Liberia Benin Ghana Togo Zambia Reunion Libya Namibia Swaziland Cameroon Congo Morocco Djibouti St. Helena Angola Cape Verde

31.67 29.65 29.20 26.84 26.68 24.34 18.81 17.64 16.31 15.87 15.58 15.35 14.11 13.53 12.94 12.93 12.64 12.64 12.49 12.37 12.34 7.55 7.30 0.84 0.77 0.75 0.16 0.16 0.16 0.15 0.15 0.14

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

96.88 93.75 90.63 87.50 84.38 81.25 78.13 75.00 71.88 68.75 65.63 62.50 59.38 56.25 53.13 50.00 46.88 43.75 40.63 37.50 34.38 31.25 28.13 25.00 21.88 18.75 15.63 12.50 9.38 6.25 3.13 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.4 3.4.1

FINANCIAL RETURNS RATIOS

IN

60

EGYPT: INCOME STRUCTURE

Overview

In this chapter we consider the income structure of companies operating in Egypt benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of income is then presented for the proto-typical firm involved in steam, gas and hydraulic turbines and turbine generator set units operating in Egypt and the average global benchmarks (total revenue = 100 percent). For ratios where there are large deviations between Egypt and the benchmarks, graphics are provided. Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis income ratios are highlighted across countries in the comparison group.

3.4.2

Income Statements – Definitions of Terms

The following definitions are provided for those less familiar with the income-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of income, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Amortization. Amortization generally refers to the depreciation, depletion, or charge-off to expense of intangible and tangible assets over a period of time. Amortization is commonly understood to be the taking as an expense (writing off) of the loss of value of an intangible asset such as a copyright, a patent, or a mailing list, in an accounting period.

•

Cost of Goods Sold (excluding depreciation). For retail companies, cost of goods sold is generally defined as the equivalent of starting inventory plus purchases minus ending inventory. In manufacturing, cost of goods sold is defined to equal the starting inventory plus the cost of goods manufactured minus ending inventory. Most pure service firms do not generally have cost of goods sold.

•

Current Domestic Income Tax. Current domestic income taxes are commonly defined as compulsory charges levied by the government where the company is located on current income.

•

Depletion. Depletion is commonly defined to be included as one of the elements of amortization, and is understood to be the portion of the carrying value (other than the portion associated with tangible assets) prorated in each accounting period for financial reporting purposes.

•

Depreciation. Depreciation generally is defined as the expiration in the service life of fixed assets, other than depletable assets, attributable to wear and tear, deterioration, action of the physical elements, inadequacy and obsolescence. Depreciation is commonly defined as the portion of the cost of a fixed asset charged as an expense during a particular period. In accounting for depreciation, the cost of a fixed asset, less any salvage value, is prorated over the estimated service life of such an asset, and each period is charged with a portion of such cost. Through this process, the cost of the asset is ultimately charged off as an expense.

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Financial Indicators

61

•

Earnings Before Interest and Taxes (EBIT). EBIT is a financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and non-operating profit before the deduction of interest and income taxes.

•

Gross Income. Gross income is commonly defined as all the money, goods, and property received by the company that must be included as taxable income.

•

Income Taxes. Income taxes are defined to include those taxes levied by state, federal, and local governments on the company's reported accounting profit. Income taxes generally include both deferred and paid taxes. They are generally determined after the interest expense has been deducted.

•

Interest Expense on Debt. Interest expenses on debt are those which are spent on current debt and added to the net income so avoid underestimating interest coverage.

•

Net Income Available to Common. Net income available to common is defined as the net income available to common stockholders.

•

Net Income Before Preferred Dividends. Net income before preferred dividends is generally calculated as the difference between total revenues and total expense prior to the granting of preferred dividends.

•

Net Sales or Revenues. Revenues or net sales are defined as payments made to and received by an entity. May take the form of taxes, user fees, fines, fees for service, and so on.

•

Operating Income. Operating income is generally defined to equal operating revenues less operating expenses. It typically excludes items of other revenue and expense such as equity in earnings of unconsolidated companies, dividends, interest income and expense, income taxes, extraordinary items, and cumulative effect of accounting changes.

•

Pretax Income. Pretax income is generally defined as income before tax deductions.

•

Selling, General & Administrative Expenses. Selling, general and administrative expenses are expenses independent from cost of sales for the purpose of illustrating the amount of the company's selling and administrative costs. Generally included in this figure are the costs of employees' salaries, commissions, and travel expenses; company payroll and office costs; and advertising and promotion.

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©2007 Icon Group International, Inc.

Financial Indicators

3.4.3

62

Income Structure: Outlook

Using the methodology described in the introduction, the following table summarizes income structure benchmarks for firms involved in steam, gas and hydraulic turbines and turbine generator set units in Egypt. To allow comparable benchmarking, a common index of Net Sales or Revenues = 100 is used. All figures are current-year projections for companies operating in Egypt based on latest financial results available. Income Structure Egypt Africa World Avg. _________________________________________________________________________________________________________

Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Other Operating Expenses Operating Income Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Current Domestic Income Tax Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common

100.00 76.92 5.90 2.06 0.79 83.61 1.27 0.47 1.74 0.18 1.55 0.01 0.01 1.55 1.55 1.55

100.00 62.56 4.26 11.11 8.69 66.92 5.95 1.16 7.45 1.32 6.14 1.94 2.11 3.70 4.14 3.70

100.00 69.36 4.50 16.64 9.33 78.12 6.55 1.48 9.61 3.64 6.00 1.70 1.56 4.29 4.43 4.29

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.4.4

63

Large Variances: Income

The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large income structure gaps between firms operating in Egypt and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Cost of Goods Sold (Excluding Depreciation) 80

76.92 62.56

69.36

60 40 20

7.56

0 Egypt

Africa

World Average

Gap

Gap: Gross Income 16.64

20 10

11.11 2.06

0 -10

-14.58

-20 Egypt

Africa

World Average

Gap

Gap: Selling, General & Administrative Expenses 8.69

10 5

9.33

0.79

0 -5 -8.54

-10 Egypt

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Africa

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

64

Gap: Other Operating Expenses 100

83.61

80

66.92

78.12

60 40 20

5.49

0 Egypt

Africa

World Average

Gap

Gap: Operating Income 8 6 4 2 0 -2 -4 -6

5.95

6.55

1.27

-5.28 Egypt

Africa

World Average

Gap

Gap: Earnings Before Interest and Taxes (EBIT) 10 5

7.45

9.61

1.74

0 -5 -7.87

-10 Egypt

Africa

World Average

Gap

Gap: Interest Expense on Debt 3.64

4 1.32

2 0.18 0 -2

-3.46

-4 Egypt

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Africa

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

65

Gap: Pretax Income 8 6 4 2 0 -2 -4 -6

6.14

6

1.55

-4.45 Egypt

Africa

World Average

Gap

Gap: Net Income Before Extra Items/Prefer Dividends 6 3.7

4 2

4.29

1.55

0 -2

-2.74

-4 Egypt

Africa

World Average

Gap

Gap: Net Income Before Preferred Dividends 6

4.14

4.43

4 2

1.55

0 -2

-2.88

-4 Egypt

Africa

World Average

Gap

Gap: Net Income Available to Common 6 3.7

4 2

4.29

1.55

0 -2

-2.74

-4 Egypt

www.icongrouponline.com

Africa

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.4.5

66

Key Percentiles and Rankings

We now consider the distribution of income ratios for steam, gas and hydraulic turbines and turbine generator set units using ranks and percentiles. What percent of countries have a value lower or higher than Egypt (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of income structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical income ratios are highlighted in additional tables. Income Structure

Egypt

Rank of Total

Percentile

Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Other Operating Expenses Operating Income Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Current Domestic Income Tax Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common

100.00 76.92 5.90 2.06 0.79 83.61 1.27 0.47 1.74 0.18 1.55 0.01 0.01 1.55 1.55 1.55

15 of 52 17 of 53 52 of 52 46 of 46 37 of 46 49 of 53 33 of 53 51 of 53 53 of 53 43 of 53 47 of 47 35 of 35 40 of 53 40 of 53 40 of 53

71.15 67.92 0.00 0.00 19.57 7.55 37.74 3.77 0.00 18.87 0.00 0.00 24.53 24.53 24.53

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

67

Cost of Goods Sold (Excluding Depreciation) Countries

Value (total revenue = 100)

Rank

Percentile

90.62 89.40 88.70 88.31 87.88 85.34 83.94 82.83 80.14 79.88 78.96 77.69 77.62 76.92 76.49 76.48 76.47 75.55 74.93 74.02 73.34 73.18 73.11 72.79 72.53 72.22 71.69 70.30 70.28 70.19 69.67 69.56 69.10 68.44 68.41 67.89 67.33 67.16 64.58 63.43 63.25 62.95 62.88 62.58 58.30

1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 50

98.08 96.15 94.23 92.31 90.38 88.46 86.54 84.62 80.77 78.85 76.92 75.00 73.08 71.15 69.23 67.31 65.38 63.46 61.54 59.62 55.77 53.85 51.92 50.00 48.08 46.15 44.23 40.38 38.46 36.54 34.62 32.69 30.77 28.85 26.92 25.00 23.08 21.15 19.23 17.31 15.38 13.46 11.54 9.62 3.85

Region

_________________________________________________________________________________________________________

Philippines Belgium New Zealand Portugal Taiwan Denmark India France South Korea Spain Hungary South Africa Norway Egypt Austria Finland Australia Singapore Indonesia Canada Germany China Brazil Switzerland Peru Russia Japan Greece Netherlands Thailand Sweden Chile the United Kingdom Hong Kong Malaysia Israel Ireland Italy Poland Turkey Mexico Luxembourg USA Czech Republic Argentina

Asia Europe Oceana Europe Asia Europe Asia Europe Asia Europe Europe Africa Europe Africa Europe Europe Oceana Asia Asia North America Europe Asia Latin America Europe Latin America Europe Asia Europe Europe Asia Europe Latin America Europe Asia Asia the Middle East Europe Europe Europe the Middle East Latin America Europe North America Europe Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

68

Cost of Goods Sold (Excluding Depreciation) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total revenue = 100)

Rank

Percentile

Kenya Senegal Ivory Coast Congo Morocco Burkina Faso Djibouti South Africa Egypt St. Helena Sierra Leone the Gambia Rwanda Angola Western Sahara Sao Tome E Principe Botswana Reunion Mauritius Nigeria Zimbabwe Niger Libya Cape Verde Uganda Mayotte Gabon Tunisia Namibia Mali Algeria Mauritania Swaziland Comoros Tanzania Cameroon Lesotho Zaire Guinea Madagascar Chad Guinea-Bissau Sudan Central African Rep Burundi Benin

85.53 84.83 84.30 82.14 81.37 79.62 79.07 77.69 76.92 76.77 75.07 73.93 73.28 72.93 72.79 72.79 72.73 72.36 71.62 71.43 70.52 70.52 69.95 68.32 68.24 66.12 66.04 65.92 65.84 64.83 61.90 61.16 60.78 59.50 59.14 58.70 58.40 54.14 52.89 52.32 52.09 49.82 48.53 48.48 47.77 47.38

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.18 96.36 94.55 92.73 90.91 89.09 87.27 85.45 83.64 81.82 80.00 78.18 76.36 74.55 72.73 70.91 69.09 67.27 65.45 63.64 61.82 60.00 58.18 56.36 54.55 52.73 50.91 49.09 47.27 45.45 43.64 41.82 40.00 38.18 36.36 34.55 32.73 30.91 29.09 27.27 25.45 23.64 21.82 20.00 18.18 16.36

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

69

Value (total revenue = 100)

Rank

Percentile

47.38 46.83 46.39 46.28 45.50 38.67 29.57 27.30 26.16

47 48 49 50 51 52 53 54 55

14.55 12.73 10.91 9.09 7.27 5.45 3.64 1.82 0.00

_________________________________________________________________________________________________________

Liberia Ghana Togo Zambia Malawi Somalia Ethiopia Eritrea Mozambique

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

70

Selling, General & Administrative Expenses Countries

Value (total revenue = 100)

Rank

Percentile

28.49 28.26 26.51 26.27 25.90 25.12 22.54 21.79 20.82 19.42 18.12 18.08 17.87 17.85 17.15 16.96 16.58 16.50 15.50 14.65 14.27 13.83 12.73 12.54 11.16 10.41 10.40 10.21 9.92 9.39 9.27 8.72 8.51 8.37 8.35 8.29 7.97 6.46 0.93 0.79

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 22 23 24 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 42 45 46

97.83 95.65 93.48 91.30 89.13 86.96 84.78 82.61 80.43 78.26 76.09 73.91 71.74 69.57 67.39 65.22 60.87 58.70 56.52 52.17 50.00 47.83 43.48 41.30 39.13 36.96 34.78 32.61 30.43 28.26 26.09 23.91 21.74 17.39 15.22 13.04 10.87 8.70 2.17 0.00

Region

_________________________________________________________________________________________________________

Israel Ireland Netherlands Peru USA the United Kingdom Sweden Italy Japan South Africa Turkey Mexico Thailand Finland Germany Canada Hong Kong Switzerland China France Luxembourg Malaysia Norway Greece Czech Republic Hungary Argentina Denmark Austria Australia South Korea Taiwan Poland Brazil Russia Singapore Chile Indonesia Philippines Egypt

the Middle East Europe Europe Latin America North America Europe Europe Europe Asia Africa the Middle East Latin America Asia Europe Europe North America Asia Europe Asia Europe Europe Asia Europe Europe Europe Europe Latin America Europe Europe Oceana Asia Asia Europe Latin America Europe Asia Latin America Asia Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

71

Selling, General & Administrative Expenses (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total revenue = 100)

Rank

Percentile

Namibia Swaziland Cameroon South Africa Botswana Mauritius Tunisia Gabon Reunion Libya Algeria Zimbabwe Mayotte Mauritania Comoros Lesotho Guinea Sudan Central African Rep Liberia Benin Ghana Togo Zambia Senegal Ivory Coast Egypt

23.85 22.01 21.26 19.42 18.18 17.91 16.79 8.71 8.37 8.09 7.09 6.08 5.70 5.27 5.13 5.04 4.56 4.18 4.18 4.09 4.09 4.04 4.00 3.99 0.87 0.86 0.79

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

96.30 92.59 88.89 85.19 81.48 77.78 74.07 70.37 66.67 62.96 59.26 55.56 51.85 48.15 44.44 40.74 37.04 33.33 29.63 25.93 22.22 18.52 14.81 11.11 7.41 3.70 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

72

Operating Income Countries

Value (total revenue = 100)

Rank

Percentile

13.67 11.79 11.49 11.22 11.15 11.12 11.05 9.82 8.69 8.64 8.46 7.86 7.83 7.64 7.42 7.41 7.00 6.96 6.87 6.52 6.45 6.40 6.27 6.10 5.94 5.61 5.30 5.16 4.51 3.95 3.86 3.72 3.67 3.52 3.17 2.78 2.54 2.12 1.73 1.50 1.39 1.27 0.95 0.69 -2.29 -2.31

1 2 3 4 5 6 7 10 11 12 13 15 16 17 18 19 20 21 22 23 24 25 27 28 29 30 31 32 34 35 36 38 39 40 42 43 44 45 46 47 48 49 50 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 81.13 79.25 77.36 75.47 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 45.28 43.40 41.51 39.62 35.85 33.96 32.08 28.30 26.42 24.53 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Spain Brazil Indonesia Chile Turkey Mexico Hong Kong Singapore South Africa India Malaysia Greece Netherlands New Zealand USA Canada Czech Republic South Korea Pakistan Argentina the United Kingdom Italy Russia France Belgium Sweden China Norway Thailand Japan Finland Portugal Switzerland Austria Luxembourg Denmark Germany Hungary Poland Philippines Taiwan Egypt Australia Peru Ireland Israel

Europe Latin America Asia Latin America the Middle East Latin America Asia Asia Africa Asia Asia Europe Europe Oceana North America North America Europe Asia the Middle East Latin America Europe Europe Europe Europe Europe Europe Asia Europe Asia Asia Europe Europe Europe Europe Europe Europe Europe Europe Europe Asia Asia Africa Oceana Latin America Europe the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

73

Operating Income (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total revenue = 100)

Rank

Percentile

Zimbabwe Mayotte Algeria Mauritania Comoros Lesotho Kenya South Africa Burkina Faso Botswana Guinea Mauritius Sierra Leone the Gambia Rwanda Western Sahara Sao Tome E Principe Sudan Central African Rep Nigeria Benin Liberia Niger Ghana Togo Zambia Uganda Mali Equatorial Guinea Reunion Tanzania Libya Zaire Madagascar Chad Guinea-Bissau Burundi Congo Morocco Djibouti Malawi St. Helena Angola Tunisia Cape Verde Somalia

10.81 10.14 9.99 9.38 9.12 8.95 8.80 8.69 8.19 8.13 8.11 8.01 7.72 7.61 7.54 7.49 7.49 7.44 7.43 7.35 7.26 7.26 7.26 7.18 7.11 7.10 7.02 6.67 6.59 6.28 6.09 6.07 5.57 5.38 5.36 5.13 4.91 4.91 4.86 4.73 4.68 4.59 4.36 4.23 4.08 3.98

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

74

Value (total revenue = 100)

Rank

Percentile

3.04 2.81 2.69 1.77 1.40 1.39 1.27 0.62 0.58 0.56

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Ethiopia Eritrea Mozambique Gabon Senegal Ivory Coast Egypt Namibia Swaziland Cameroon

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

75

Earnings Before Interest and Taxes (EBIT) Countries

Value (total revenue = 100)

Rank

Percentile

35.95 35.85 27.11 25.79 13.70 13.08 11.65 11.48 10.85 10.78 10.66 9.91 9.81 9.08 8.82 7.99 7.82 7.73 7.59 7.56 7.53 7.39 7.34 7.32 6.82 6.68 6.66 6.61 6.36 6.06 5.61 5.49 4.89 4.71 4.07 3.73 3.16 3.04 3.00 2.78 2.71 2.45 2.04 1.74 -1.63 -1.65

1 2 4 5 6 7 8 9 10 11 12 14 15 16 18 19 20 22 23 24 25 26 27 28 29 31 32 33 35 36 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53

98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 73.58 71.70 69.81 66.04 64.15 62.26 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 39.62 37.74 33.96 32.08 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Brazil Chile Spain Greece Czech Republic India Argentina Indonesia Malaysia Singapore Hong Kong New Zealand South Africa Italy Netherlands Thailand USA Canada France China South Korea Norway the United Kingdom Pakistan Sweden Russia Finland Taiwan Germany Austria Portugal Switzerland Luxembourg Belgium Denmark Australia Hungary Japan Peru Poland Philippines Egypt Ireland Israel

the Middle East Latin America Latin America Latin America Europe Europe Europe Asia Latin America Asia Asia Asia Asia Oceana Africa Europe Europe Asia North America North America Europe Asia Asia Europe Europe the Middle East Europe Europe Europe Asia Europe Europe Europe Europe Europe Europe Europe Oceana Europe Asia Latin America Europe Asia Africa Europe the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

76

Earnings Before Interest and Taxes (EBIT) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total revenue = 100)

Rank

Percentile

Algeria Kenya Burkina Faso Sierra Leone Zimbabwe the Gambia Rwanda Sao Tome E Principe Western Sahara Nigeria Niger Mayotte Uganda Congo Morocco Mali South Africa Mauritania Djibouti Comoros St. Helena Lesotho Botswana Mauritius Tanzania Angola Guinea Cape Verde Zaire Tunisia Madagascar Chad Sudan Central African Rep Liberia Benin Guinea-Bissau Ghana Togo Zambia Reunion Burundi Libya Equatorial Guinea Malawi Somalia

22.95 11.69 10.88 10.26 10.14 10.11 10.02 9.95 9.95 9.76 9.64 9.51 9.33 9.02 8.93 8.86 8.82 8.80 8.68 8.56 8.43 8.40 8.26 8.13 8.09 8.01 7.61 7.50 7.40 7.26 7.15 7.12 6.98 6.97 6.81 6.81 6.81 6.74 6.67 6.66 6.62 6.53 6.40 6.40 6.22 5.29

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

77

Value (total revenue = 100)

Rank

Percentile

4.04 3.73 3.58 2.51 2.46 2.27 2.19 1.91 1.90 1.74

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Ethiopia Eritrea Mozambique Gabon Namibia Swaziland Cameroon Senegal Ivory Coast Egypt

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

78

Pretax Income Countries

Value (total revenue = 100)

Rank

Percentile

15.44 14.69 13.06 11.91 10.76 9.67 9.58 9.47 9.21 9.11 8.92 7.87 7.25 6.56 6.43 6.27 6.02 5.99 5.76 5.73 5.72 5.45 5.07 5.04 4.74 4.57 4.34 4.29 4.15 3.43 3.39 3.35 2.97 2.46 2.14 1.83 1.55 1.39 1.30 1.29 1.25 1.05 -1.98 -1.99 -6.48 -6.50

1 2 3 4 5 6 7 8 9 10 11 14 15 16 18 19 20 21 22 23 24 25 27 28 30 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 73.58 71.70 69.81 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 43.40 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

Brazil Chile Spain Hong Kong Greece India Czech Republic Malaysia Singapore Indonesia Argentina South Africa New Zealand Canada USA Thailand France Italy Netherlands Norway the United Kingdom Pakistan South Korea China Sweden Russia Finland Germany Austria Switzerland Portugal Taiwan Luxembourg Belgium Japan Philippines Egypt Denmark Australia Hungary Peru Poland Ireland Israel Mexico Turkey

Latin America Latin America Europe Asia Europe Asia Europe Asia Asia Asia Latin America Africa Oceana North America North America Asia Europe Europe Europe Europe Europe the Middle East Asia Asia Europe Europe Europe Europe Europe Europe Europe Asia Europe Europe Asia Asia Africa Europe Oceana Europe Latin America Europe Europe the Middle East Latin America the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

79

Pretax Income (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total revenue = 100)

Rank

Percentile

Algeria Kenya Burkina Faso Sierra Leone Zimbabwe the Gambia Rwanda Sao Tome E Principe Western Sahara Nigeria Niger Congo Mayotte Morocco South Africa Uganda Djibouti St. Helena Mali Mauritania Botswana Mauritius Comoros Angola Lesotho Tanzania Cape Verde Guinea Zaire Madagascar Chad Sudan Central African Rep Tunisia Benin Liberia Guinea-Bissau Ghana Togo Zambia Burundi Malawi Equatorial Guinea Reunion Somalia Libya

13.07 9.85 9.17 8.65 8.57 8.52 8.44 8.38 8.38 8.23 8.12 8.05 8.04 7.97 7.87 7.86 7.75 7.52 7.47 7.44 7.36 7.25 7.23 7.15 7.10 6.81 6.69 6.43 6.24 6.03 6.00 5.90 5.89 5.89 5.76 5.76 5.74 5.69 5.64 5.63 5.50 5.24 5.23 4.58 4.45 4.43

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

80

Value (total revenue = 100)

Rank

Percentile

3.41 3.14 3.01 1.71 1.70 1.55 1.14 1.08 1.05 1.01

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Ethiopia Eritrea Mozambique Senegal Ivory Coast Egypt Namibia Gabon Swaziland Cameroon

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

81

Income Taxes Countries

Value (total revenue = 100)

Rank

Percentile

5.16 4.60 4.28 4.19 4.09 3.89 3.09 3.05 2.82 2.81 2.51 2.23 2.12 2.09 2.01 1.90 1.85 1.76 1.72 1.50 1.39 1.38 1.35 1.29 1.24 1.24 1.23 1.08 1.08 1.06 0.91 0.87 0.83 0.79 0.74 0.42 0.42 0.26 0.17 0.01 0.01

1 2 3 4 5 6 8 9 10 11 13 14 15 16 18 19 20 21 22 23 24 25 26 27 29 30 31 32 33 34 35 36 37 38 39 42 43 44 45 46 47

97.87 95.74 93.62 91.49 89.36 87.23 82.98 80.85 78.72 76.60 72.34 70.21 68.09 65.96 61.70 59.57 57.45 55.32 53.19 51.06 48.94 46.81 44.68 42.55 38.30 36.17 34.04 31.91 29.79 27.66 25.53 23.40 21.28 19.15 17.02 10.64 8.51 6.38 4.26 2.13 0.00

Region

_________________________________________________________________________________________________________

Greece Czech Republic Argentina Spain Brazil Chile Italy India Malaysia Indonesia South Africa Belgium France USA Norway the United Kingdom Sweden Canada Netherlands Austria Singapore South Korea Germany Finland New Zealand Russia Japan Hong Kong Portugal Switzerland Luxembourg Australia Thailand Denmark China Israel Ireland Taiwan Peru Philippines Egypt

Europe Europe Latin America Europe Latin America Latin America Europe Asia Asia Asia Africa Europe Europe North America Europe Europe Europe North America Europe Europe Asia Asia Europe Europe Oceana Europe Asia Asia Europe Europe Europe Oceana Asia Europe Asia the Middle East Europe Asia Latin America Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

82

Income Taxes (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value (total revenue = 100)

Rank

Percentile

Congo Algeria Morocco Djibouti St. Helena Kenya Angola Burkina Faso Cape Verde Sierra Leone the Gambia Rwanda Zimbabwe Sao Tome E Principe Western Sahara Nigeria Niger South Africa Mayotte Uganda Mali Botswana Mauritius Mauritania Comoros Lesotho Tanzania Guinea Zaire Madagascar Chad Sudan Central African Rep Guinea-Bissau Liberia Benin Ghana Togo Zambia Burundi Malawi Somalia Reunion Libya Ethiopia Eritrea

3.46 3.46 3.43 3.33 3.24 3.11 3.07 2.89 2.88 2.73 2.69 2.66 2.65 2.64 2.64 2.59 2.56 2.51 2.48 2.48 2.35 2.35 2.32 2.29 2.23 2.19 2.15 1.98 1.97 1.90 1.89 1.82 1.82 1.81 1.78 1.78 1.76 1.74 1.74 1.74 1.65 1.40 1.25 1.20 1.07 0.99

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.15 96.30 94.44 92.59 90.74 88.89 87.04 85.19 83.33 81.48 79.63 77.78 75.93 74.07 72.22 70.37 68.52 66.67 64.81 62.96 61.11 59.26 57.41 55.56 53.70 51.85 50.00 48.15 46.30 44.44 42.59 40.74 38.89 37.04 35.19 33.33 31.48 29.63 27.78 25.93 24.07 22.22 20.37 18.52 16.67 14.81

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

83

Value (total revenue = 100)

Rank

Percentile

0.95 0.78 0.15 0.14 0.14 0.01 0.01 0.01

47 48 49 50 51 52 53 54

12.96 11.11 9.26 7.41 5.56 3.70 1.85 0.00

_________________________________________________________________________________________________________

Mozambique Tunisia Namibia Swaziland Cameroon Senegal Ivory Coast Egypt

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.5 3.5.1

84

FINANCIAL RETURNS IN EGYPT: PROFITABILITY RATIOS Overview

In this chapter we consider additional financial ratios estimated for firms involved in steam, gas and hydraulic turbines and turbine generator set units operating in Egypt benchmarked against global averages. The chapter begins by defining relevant terms. Estimates are then presented for the proto-typical firm operating in Egypt compared to average global benchmarks. For ratios where there are large deviations between the average firm in Egypt and the benchmarks, graphics are provided. Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key ratios are highlighted across countries in the comparison group.

3.5.2

Ratios – Definitions of Terms

The following definitions are provided for those less familiar with financial ratio analysis. As this chapter deals with the global benchmarking of ratios, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Accounts Receivables Days. The number of days' receivable sales generally correlates to the amount of the accounts receivables to the average daily sales on account. Accounts receivables days is often determined by dividing the gross receivables by (net sales/365).

•

Cash Earnings Return On Equity (%). Cash earnings return on equity generally measures the return of revenues to the shareholders. This ratio is generally calculated by dividing (net income before nonrecurring items minus preferred dividends) by the average common equity.

•

Cash Flow. Cash flow is generally defined as being equal to the company's net income plus the charge-off amounts for depreciation, depletion, amortization, extraordinary charges to reserves. These are bookkeeping deductions which are not paid out as cash.

•

Current Ratio. The current ratio is generally defined as a ratio of liquidity measuring the ability of a business to pay its current obligations when due. The current ratio is generally calculated by dividing total current assets by total current liabilities. Managers and lenders often want the current ratio to be 2.00 or greater. This ratio is often seen as an indication of short-term debt-paying ability. The higher the ratio, the more liquid the company.

•

Dividend Payout (% Earnings) - Total Dividends (%). The dividend payout ratio is generally used to measure the amount of current earnings per common share which are paid out in dividends. This ratio is generally determined by dividing dividends per common share by diluted earnings per share.

•

Fixed Charge Coverage Ratio. The fixed charge coverage ratio is generally seen as an indication of the company's ability to cover its fixed charges. This ratio is typically determined by dividing recurring earnings excluding interest expense, tax expense, equity earnings, and minority earnings plus interest from rentals by interest expense including capitalized interest and interest from rentals.

•

Gross Profit Margin (%). The gross profit margin is typically defined to equals the difference, in percent, between net sales revenue and the cost of goods sold.

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Financial Indicators

85

•

Inventories (# of Days) Held. Inventory days held is generally determined by dividing the ending inventory by (the cost of goods held/365). The number of days held results in the average daily cost of goods held.

•

Inventory Turnover (%). Inventory turnover is used as a measure of the balance of inventory. It generally compares the amount of inventory with the total sales for the year. The ratio can reflect both on the quality of the inventory and the efficiency of management. Typically, the higher the turnover rate, the greater the likelihood that profits would be larger and less working capital bound up in inventory.

•

Net Margin (%). The net margin is the ratio of net income dollars generated by each dollar of sales.

•

Operating Profit Margin (%). Operating profit margin percent is the ratio of operating profit to net sales. Operating profit (loss) is income or loss before taxes calculated by the difference between total revenues and total expense disregarding the effects of any extraordinary transactions.

•

Quick Ratio. The quick ratio, also commonly known as the “acid test ratio”, is a refined current ratio and is often seen as a more conservative measure of liquidity. The quick ratio is generally determined by dividing cash and equivalents plus trade receivables by total current liabilities. The ratio shows the degree to which a company's current liabilities can be covered by the most liquid current assets. Financial management texts generally conclude that any value of less than 1 to 1 implies a reciprocal dependency on inventory or other current assets to liquidate short-term debt.

•

Reinvestment Rate - Total (%). The reinvestment rate is typically defined as the rate at which an investor assumes interest payments made on a debt security can be reinvested over the life of that security.

•

Return on Assets (%). Return on assets is generally used to measure a company's ability to use assets to create profit.

•

Return on Equity - Total (%). The return on total equity ratio is often seen to reflect the profitability of the company's operations after income taxes. Return on equity is often considered to be a good measure of the company's profitability. Tax laws and tax loss carryovers can affect the net income and therefore can also affect the return on equity.

•

Return on Invested Capital (%). The ratio of return on invested capital is typically defined as an evaluation of earnings performance without regard to the method of financing. This ratio measures the earnings on investment and is an indication of how well the company utilizes its asset base. Return on investment is a type of return on capital, therefore this ratio can be an indication of the company’s ability to reward investors who provide long-term funds and to attract future investors.

•

Tax Rate (%). The tax rate is typically defined as the average rate of domestic tax owed to government by the company.

•

Working Capital. Net working capital equals the difference between total current assets and total current liabilities. Working capital often reflects a company's ability to expand volume and meet obligations. Since growth is usually one goal, the amount of working capital on this year's balance sheet should be greater than that of the previous year's. This is an efficiency, or turnover, ratio which benchmarks the rate at which current assets less current liabilities are used by the company in making sales. A low ratio can indicate a less profitable use of working capital in making sales. On the other hand, a very high ratio can indicate the company is wasting current assets which could be more efficiently deployed in production and in increasing sales and profits; or that the company my be undercapitalized, and thus vulnerable to liquidity problems in a period of weak business conditions.

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Financial Indicators

3.5.3

86

Ratio Structure: Outlook

Using the methodology described in the introduction, the following table summarizes ratio structure benchmarks for firms involved in steam, gas and hydraulic turbines and turbine generator set units in Egypt. All figures are currentyear projections for companies operating in Egypt based on latest financial results available. Ratios Egypt Africa World Avg. _________________________________________________________________________________________________________

Profitability Return on Equity - Total (%) Reinvestment Rate - Total (%) Return on Assets (%) Return on Invested Capital (%) Cash Earnings Return On Equity (%) Cash Flow % Sales Cost Goods Sold / Sales (%) Gross Profit Margin (%) Selling, General & Administrative Expense/Net Sales (%) Operating Profit Margin (%) Operating Inc / Total Capital (%) Pretax Margin (%) Tax Rate (%) Net Margin (%) Total Asset Turnover (X) th USD Asset Utilization Inventory Turnover (%) Net Sales % Working Capital Capital Expenditure % Gross Fixed Assets Capital Expenditure % Total Assets Capital Expenditure % Total Sales Accumulated Depreciation % Gross Fixed Assets Leverage Total Debt % Total Capital Equity % Total Capital Fixed Charge Coverage Ratio Dividend Payout (% Earnings) - Total Dividends Fixed Assets % Common Equity Working Capital % Total Capital Liquidity Quick Ratio Current Ratio Cash & Equivalents % Total Current Assets Receivables % Total Current Assets Inventories % Total Current Assets Accounts Receivables Days Inventories (# of Days) Held

5.12 2.44 2.69 4.68 23.92 7.22 76.92 2.06 0.79 1.27 4.03 1.55 0.54 1.55 1.94

11.75 7.25 7.11 10.50 14.66 8.53 62.56 11.11 8.67 5.95 12.18 6.14 22.29 4.14 0.95

11.23 4.31 7.52 11.23 13.86 8.76 69.36 16.64 8.76 6.55 13.01 6.00 22.52 4.43 0.97

9.49 6.40 3.67 3.22 1.41 45.84

5.55 1.57 8.41 3.69 3.82 38.77

5.42 0.95 13.04 4.74 7.07 43.04

6.30 84.88 8.17 44.33 48.37 36.25

15.95 64.38 62.01 23.01 46.25 31.52

23.33 79.34 61.22 27.60 67.16 33.69

1.32 1.73 15.37 49.17 20.01 60.49 27.32

1.04 1.61 16.24 33.12 23.25 66.88 58.17

1.20 1.75 18.14 44.00 27.67 110.57 99.11

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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©2007 Icon Group International, Inc.

Financial Indicators

3.5.4

87

Large Variances: Ratios

The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large ratio structure gaps between firms operating in Egypt and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Cash Earnings Return On Equity (%) 25

23.92

20

14.66

15

13.86 10.06

10 5 0 Egypt

Africa

World Average

Gap

Gap: Gross Profit Margin (%) 16.64

20 10

11.11 2.06

0 -10

-14.58

-20 Egypt

Africa

World Average

Gap

Gap: Operating Inc / Total Capital (%) 15

12.18

13.01

10 5

4.03

0 -5 -8.98

-10 Egypt

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Africa

World Average

Gap

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Financial Indicators

88

Gap: Tax Rate (%) 30

22.29

22.52

20 10

0.54

0 -10 -20

-21.98

-30 Egypt

Africa

World Average

Gap

Gap: Capital Expenditure % Gross Fixed Assets 13.04

15 8.41

10 5

3.67

0 -5 -9.37 Gap

-10 Egypt

Africa

World Average

Gap: Total Debt % Total Capital 30

23.33 15.95

20 6.3

10 0 -10

-17.03

-20 Egypt

Africa

World Average

Gap

Gap: Fixed Charge Coverage Ratio 80 60 40 20 0 -20 -40 -60

62.01

61.22

8.17

-53.05 Egypt

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Africa

World Average

Gap

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Financial Indicators

89

Gap: Dividend Payout (% Earnings) - Total Dividends 50

44.33

40 30

23.01

27.6 16.73

20 10 0 Egypt

Africa

World Average

Gap

Gap: Fixed Assets % Common Equity 80 60

67.16 48.37

46.25

40 20 0 -18.79 Gap

-20 Egypt

Africa

World Average

Gap: Accounts Receivables Days 150 100

110.57 60.49

66.88

50 0 -50.08

-50 -100 Egypt

Africa

World Average

Gap

Gap: Inventories (# of Days) Held 99.11

100 50

58.17 27.32

0 -50

-71.79

-100 Egypt

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Africa

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.5.5

90

Key Percentiles and Rankings

We now consider the distribution of financial ratios for steam, gas and hydraulic turbines and turbine generator set units using ranks and percentiles. What percent of countries have a value lower or higher than Egypt (what is the ratio's rank or percentile)? The table below answers this question with respect to financial ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key financial ratios are highlighted in additional tables. Ratios

Egypt

Rank of Total

Percentile

5.12 2.44 2.69 4.68 23.92 7.22 76.92 2.06 0.79 1.27 4.03 1.55 0.54 1.55 1.94

37 of 53 38 of 53 44 of 53 41 of 53 16 of 53 32 of 53 15 of 52 52 of 52 46 of 46 49 of 53 49 of 53 43 of 53 47 of 47 40 of 53 4 of 53

30.19 28.30 16.98 22.64 69.81 39.62 71.15 0.00 0.00 7.55 7.55 18.87 0.00 24.53 92.45

9.49 6.40 3.67 3.22 1.41 45.84

6 of 53 17 of 53 47 of 49 42 of 53 51 of 53 31 of 49

88.68 67.92 4.08 20.75 3.77 36.73

6.30 84.88 8.17 44.33 48.37 36.25

51 of 53 16 of 53 28 of 53 10 of 46 36 of 53 32 of 53

3.77 69.81 47.17 78.26 32.08 39.62

1.32 1.73 15.37 49.17 20.01 60.49 27.32

19 of 53 29 of 53 35 of 53 14 of 53 45 of 53 46 of 53 53 of 53

64.15 45.28 33.96 73.58 15.09 13.21 0.00

_________________________________________________________________________________________________________

Profitability Return on Equity - Total (%) Reinvestment Rate - Total (%) Return on Assets (%) Return on Invested Capital (%) Cash Earnings Return On Equity (%) Cash Flow % Sales Cost Goods Sold / Sales (%) Gross Profit Margin (%) Selling, General & Administrative Expense/Net Sales (%) Operating Profit Margin (%) Operating Inc / Total Capital (%) Pretax Margin (%) Tax Rate (%) Net Margin (%) Total Asset Turnover (X) th USD Asset Utilization Inventory Turnover (%) Net Sales % Working Capital Capital Expenditure % Gross Fixed Assets Capital Expenditure % Total Assets Capital Expenditure % Total Sales Accumulated Depreciation % Gross Fixed Assets Leverage Total Debt % Total Capital Equity % Total Capital Fixed Charge Coverage Ratio Dividend Payout (% Earnings) - Total Dividends Fixed Assets % Common Equity Working Capital % Total Capital Liquidity Quick Ratio Current Ratio Cash & Equivalents % Total Current Assets Receivables % Total Current Assets Inventories % Total Current Assets Accounts Receivables Days Inventories (# of Days) Held

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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©2007 Icon Group International, Inc.

Financial Indicators

91

Gross Profit Margin (%) Countries

Value

Rank

Percentile

USA Turkey Italy Mexico Israel Ireland the United Kingdom Hong Kong Sweden Netherlands Malaysia Japan Peru Germany Thailand Switzerland South Africa China Canada Brazil Greece Singapore Luxembourg Chile Finland Australia Austria Norway Indonesia Czech Republic Spain South Korea Argentina Russia France India Hungary Denmark Poland Portugal Taiwan Belgium New Zealand Philippines Egypt

32.95 29.28 29.27 29.20 28.66 28.43 27.60 27.47 26.24 25.80 25.29 24.37 24.36 22.73 22.57 22.47 21.38 21.33 21.30 20.35 19.74 19.63 19.43 19.37 19.31 19.19 19.14 18.87 17.67 17.57 17.29 16.48 16.37 14.85 13.40 12.57 12.50 10.84 10.22 10.08 9.82 8.31 7.64 2.42 2.06

1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 32 34 36 37 39 40 42 43 44 45 46 47 48 50 51 52

98.08 96.15 94.23 92.31 90.38 88.46 86.54 84.62 80.77 78.85 76.92 75.00 73.08 71.15 69.23 67.31 65.38 63.46 61.54 59.62 57.69 55.77 53.85 51.92 50.00 48.08 46.15 42.31 40.38 38.46 34.62 30.77 28.85 25.00 23.08 19.23 17.31 15.38 13.46 11.54 9.62 7.69 3.85 1.92 0.00

Region

_________________________________________________________________________________________________________

North America the Middle East Europe Latin America the Middle East Europe Europe Asia Europe Europe Asia Asia Latin America Europe Asia Europe Africa Asia North America Latin America Europe Asia Europe Latin America Europe Oceana Europe Europe Asia Europe Europe Asia Latin America Europe Europe Asia Europe Europe Europe Europe Asia Europe Oceana Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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©2007 Icon Group International, Inc.

Financial Indicators

92

Gross Profit Margin (%) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value

Rank

Percentile

Namibia South Africa Tunisia Swaziland Botswana Cameroon Mauritius Algeria Zimbabwe Mayotte Reunion Mauritania Libya Comoros Lesotho Kenya Guinea Burkina Faso Sudan Central African Rep Sierra Leone Benin Liberia the Gambia Ghana Rwanda Togo Zambia Western Sahara Sao Tome E Principe Nigeria Niger Gabon Uganda Mali Tanzania Zaire Congo Morocco Madagascar Chad Djibouti St. Helena Guinea-Bissau Burundi Angola

22.12 21.38 21.19 20.42 20.01 19.72 19.71 17.23 16.63 15.59 14.88 14.42 14.39 14.03 13.77 12.81 12.47 11.92 11.45 11.43 11.24 11.17 11.17 11.07 11.04 10.97 10.94 10.91 10.90 10.90 10.70 10.56 10.45 10.22 9.71 8.86 8.11 8.01 7.93 7.83 7.80 7.71 7.49 7.46 7.15 7.11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.18 96.36 94.55 92.73 90.91 89.09 87.27 85.45 83.64 81.82 80.00 78.18 76.36 74.55 72.73 70.91 69.09 67.27 65.45 63.64 61.82 60.00 58.18 56.36 54.55 52.73 50.91 49.09 47.27 45.45 43.64 41.82 40.00 38.18 36.36 34.55 32.73 30.91 29.09 27.27 25.45 23.64 21.82 20.00 18.18 16.36

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

93

Value

Rank

Percentile

6.81 6.66 5.79 4.43 4.09 3.92 2.27 2.25 2.06

47 48 49 50 51 52 53 54 55

14.55 12.73 10.91 9.09 7.27 5.45 3.64 1.82 0.00

_________________________________________________________________________________________________________

Malawi Cape Verde Somalia Ethiopia Eritrea Mozambique Senegal Ivory Coast Egypt

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

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©2007 Icon Group International, Inc.

Financial Indicators

94

Pretax Margin (%) Countries

Value

Rank

Percentile

Brazil Chile Spain Hong Kong Greece India Czech Republic Malaysia Singapore Indonesia Argentina South Africa New Zealand Canada USA Thailand France Italy Netherlands Norway the United Kingdom Pakistan South Korea China Sweden Russia Finland Germany Austria Switzerland Portugal Taiwan Luxembourg Belgium Japan Philippines Egypt Denmark Australia Hungary Peru Poland Ireland Israel Mexico Turkey

15.44 14.69 13.06 11.91 10.76 9.67 9.58 9.47 9.21 9.11 8.92 7.87 7.25 6.56 6.43 6.27 6.02 5.99 5.76 5.73 5.72 5.45 5.07 5.04 4.74 4.57 4.34 4.29 4.15 3.43 3.39 3.35 2.97 2.46 2.14 1.83 1.55 1.39 1.30 1.29 1.25 1.05 -1.98 -1.99 -6.48 -6.50

1 2 3 4 5 6 7 8 9 10 11 14 15 16 18 19 20 21 22 23 24 25 27 28 30 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 73.58 71.70 69.81 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 43.40 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

Latin America Latin America Europe Asia Europe Asia Europe Asia Asia Asia Latin America Africa Oceana North America North America Asia Europe Europe Europe Europe Europe the Middle East Asia Asia Europe Europe Europe Europe Europe Europe Europe Asia Europe Europe Asia Asia Africa Europe Oceana Europe Latin America Europe Europe the Middle East Latin America the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

95

Pretax Margin (%) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value

Rank

Percentile

Algeria Kenya Burkina Faso Sierra Leone Zimbabwe the Gambia Rwanda Sao Tome E Principe Western Sahara Nigeria Niger Congo Mayotte Morocco South Africa Uganda Djibouti St. Helena Mali Mauritania Botswana Mauritius Comoros Angola Lesotho Tanzania Cape Verde Guinea Zaire Madagascar Chad Sudan Central African Rep Tunisia Liberia Benin Guinea-Bissau Ghana Togo Zambia Burundi Malawi Equatorial Guinea Reunion Somalia Libya

13.07 9.85 9.17 8.65 8.57 8.52 8.44 8.38 8.38 8.23 8.12 8.05 8.04 7.97 7.87 7.86 7.75 7.52 7.47 7.44 7.36 7.25 7.23 7.15 7.10 6.81 6.69 6.43 6.24 6.03 6.00 5.90 5.89 5.89 5.76 5.76 5.74 5.69 5.64 5.63 5.50 5.24 5.23 4.58 4.45 4.43

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

96

Value

Rank

Percentile

3.41 3.14 3.01 1.71 1.70 1.55 1.14 1.08 1.05 1.01

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Ethiopia Eritrea Mozambique Senegal Ivory Coast Egypt Namibia Gabon Swaziland Cameroon

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

97

Quick Ratio Countries

Value

Rank

Percentile

Australia Hong Kong Malaysia Israel Ireland Indonesia Canada USA Singapore Japan Philippines South Korea Greece Germany Switzerland Norway Egypt France Russia Czech Republic India New Zealand Thailand Sweden Peru Finland Argentina Luxembourg Spain the United Kingdom Italy China Netherlands Denmark Portugal South Africa Belgium Turkey Mexico Austria Taiwan Pakistan Hungary Poland Brazil Chile

12.75 3.86 3.62 2.46 2.44 2.25 2.22 2.17 1.59 1.59 1.55 1.41 1.39 1.36 1.33 1.32 1.32 1.29 1.27 1.23 1.22 1.22 1.22 1.19 1.18 1.15 1.15 1.15 1.09 1.06 1.05 1.05 1.04 1.01 0.98 0.97 0.95 0.94 0.93 0.92 0.87 0.81 0.67 0.55 0.44 0.41

1 2 3 4 5 6 7 8 11 12 13 14 15 16 17 18 19 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 43 44 45 46 48 49 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 18.87 16.98 15.09 13.21 9.43 7.55 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Oceana Asia Asia the Middle East Europe Asia North America North America Asia Asia Asia Asia Europe Europe Europe Europe Africa Europe Europe Europe Asia Oceana Asia Europe Latin America Europe Latin America Europe Europe Europe Europe Asia Europe Europe Europe Africa Europe the Middle East Latin America Europe Asia the Middle East Europe Europe Latin America Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

98

Quick Ratio (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value

Rank

Percentile

Zimbabwe Mayotte Mauritania Comoros Lesotho Guinea Sudan Central African Rep Senegal Ivory Coast Benin Liberia Ghana Togo Zambia Egypt Reunion Kenya Libya Burkina Faso Tunisia Sierra Leone the Gambia Namibia Rwanda Western Sahara Sao Tome E Principe Nigeria Niger Uganda Swaziland South Africa Cameroon Mali Botswana Mauritius Tanzania Zaire Equatorial Guinea Madagascar Chad Guinea-Bissau Burundi Malawi Somalia Gabon

2.12 1.98 1.84 1.79 1.75 1.59 1.46 1.46 1.45 1.44 1.42 1.42 1.41 1.39 1.39 1.32 1.28 1.25 1.23 1.16 1.14 1.10 1.08 1.07 1.07 1.06 1.06 1.04 1.03 1.00 0.99 0.97 0.96 0.95 0.91 0.90 0.86 0.79 0.77 0.76 0.76 0.73 0.70 0.66 0.56 0.56

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

99

Value

Rank

Percentile

0.55 0.55 0.53 0.52 0.49 0.46 0.43 0.40 0.38 0.37

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Congo Morocco Djibouti St. Helena Angola Cape Verde Ethiopia Eritrea Mozambique Algeria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

100

Current Ratio Countries

Value

Rank

Percentile

Australia Hong Kong Malaysia Israel Ireland Indonesia USA Canada Peru New Zealand Germany Japan Singapore Denmark Switzerland Philippines Thailand Sweden France Finland Norway South Korea Greece Luxembourg Netherlands Egypt Russia the United Kingdom Italy South Africa India Czech Republic Portugal China Pakistan Argentina Spain Austria Belgium Taiwan Turkey Mexico Hungary Poland Brazil Chile

13.84 4.39 4.29 3.49 3.46 3.24 3.18 3.02 2.88 2.39 2.34 2.22 2.15 2.07 2.04 2.04 1.98 1.97 1.93 1.92 1.91 1.91 1.84 1.77 1.74 1.73 1.72 1.70 1.69 1.67 1.67 1.64 1.59 1.58 1.57 1.53 1.43 1.40 1.36 1.28 1.11 1.11 1.10 0.90 0.89 0.85

1 2 3 4 5 6 7 9 10 11 12 14 15 16 17 18 19 20 21 22 23 24 25 26 28 29 30 31 32 33 34 36 37 38 39 41 43 44 45 46 47 48 49 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 83.02 81.13 79.25 77.36 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 47.17 45.28 43.40 41.51 39.62 37.74 35.85 32.08 30.19 28.30 26.42 22.64 18.87 16.98 15.09 13.21 11.32 9.43 7.55 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Oceana Asia Asia the Middle East Europe Asia North America North America Latin America Oceana Europe Asia Asia Europe Europe Asia Asia Europe Europe Europe Europe Asia Europe Europe Europe Africa Europe Europe Europe Africa Asia Europe Europe Asia the Middle East Latin America Europe Europe Europe Asia the Middle East Latin America Europe Europe Latin America Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

101

Current Ratio (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value

Rank

Percentile

Zimbabwe Mayotte Mauritania Namibia Comoros Lesotho Swaziland Cameroon Guinea Sudan Central African Rep Benin Liberia Ghana Togo Zambia Senegal Ivory Coast Tunisia Egypt Reunion Kenya Libya South Africa Burkina Faso Botswana Mauritius Equatorial Guinea Congo Morocco Sierra Leone the Gambia Rwanda Djibouti Western Sahara Sao Tome E Principe Nigeria St. Helena Niger Uganda Angola Mali Cape Verde Tanzania Zaire Madagascar

3.05 2.86 2.65 2.62 2.57 2.53 2.42 2.33 2.29 2.10 2.10 2.05 2.05 2.03 2.01 2.00 1.91 1.90 1.86 1.73 1.72 1.70 1.67 1.67 1.58 1.56 1.54 1.51 1.51 1.49 1.49 1.47 1.45 1.45 1.44 1.44 1.42 1.41 1.40 1.35 1.34 1.29 1.25 1.17 1.07 1.04

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

102

Value

Rank

Percentile

1.03 0.99 0.95 0.92 0.90 0.77 0.76 0.59 0.54 0.52

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Chad Guinea-Bissau Burundi Gabon Malawi Somalia Algeria Ethiopia Eritrea Mozambique

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

103

Inventories % Total Current Assets Countries

Value

Rank

Percentile

Peru Australia Pakistan New Zealand Brazil Denmark Chile South Africa Hungary Germany Netherlands Portugal Italy Finland Sweden Thailand the United Kingdom Poland Austria France Switzerland China USA Israel Belgium Ireland Norway Canada Luxembourg South Korea Hong Kong Singapore Indonesia Japan India Russia Philippines Spain Greece Egypt Czech Republic Malaysia Argentina Turkey Mexico Taiwan

56.44 49.39 48.44 48.09 47.35 46.27 45.06 42.47 39.32 39.11 38.32 38.16 37.62 37.10 36.08 34.00 33.43 32.16 32.15 31.98 31.03 30.92 30.79 30.38 30.35 30.13 30.07 27.49 26.84 26.48 26.38 25.75 24.80 24.75 24.10 23.86 23.58 22.32 21.05 20.01 18.74 18.69 17.46 15.84 15.80 14.86

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 25 26 27 28 30 31 32 33 35 36 37 39 40 41 43 44 45 46 47 49 50 51 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 52.83 50.94 49.06 47.17 43.40 41.51 39.62 37.74 33.96 32.08 30.19 26.42 24.53 22.64 18.87 16.98 15.09 13.21 11.32 7.55 5.66 3.77 1.89

Region

_________________________________________________________________________________________________________

Latin America Oceana the Middle East Oceana Latin America Europe Latin America Africa Europe Europe Europe Europe Europe Europe Europe Asia Europe Europe Europe Europe Europe Asia North America the Middle East Europe Europe Europe North America Europe Asia Asia Asia Asia Asia Asia Europe Asia Europe Europe Africa Europe Asia Latin America the Middle East Latin America Asia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

104

Inventories % Total Current Assets (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value

Rank

Percentile

Namibia Swaziland Equatorial Guinea Cameroon South Africa Algeria Botswana Mauritius Gabon Tunisia Congo Morocco Djibouti St. Helena Angola Cape Verde Kenya Reunion Zimbabwe Libya Burkina Faso Senegal Ivory Coast Mayotte Sierra Leone the Gambia Rwanda Sao Tome E Principe Western Sahara Nigeria Niger Mauritania Egypt Comoros Uganda Lesotho Mali Guinea Tanzania Sudan Central African Rep Liberia Benin Zaire Ghana Togo

51.23 47.29 46.44 45.68 42.47 40.09 39.75 39.15 32.89 31.93 30.68 30.40 29.54 28.68 27.24 25.52 24.56 23.91 23.34 23.11 22.86 22.07 21.93 21.88 21.55 21.23 21.04 20.90 20.90 20.51 20.25 20.24 20.01 19.69 19.59 19.33 18.61 17.51 16.98 16.06 16.05 15.68 15.68 15.54 15.50 15.35

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

105

Countries in Africa

Value

Rank

Percentile

Zambia Madagascar Chad Guinea-Bissau Burundi Malawi Somalia Ethiopia Eritrea Mozambique

15.32 15.02 14.96 14.30 13.72 13.06 11.10 8.49 7.84 7.51

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

106

Accounts Receivables Days Countries

Value

Rank

Percentile

Turkey Mexico Malaysia China Italy Greece Japan India Spain Israel Ireland Czech Republic France Argentina Portugal Peru Austria South Korea Singapore Netherlands Switzerland Norway Russia Germany Taiwan Denmark Sweden Hungary Hong Kong the United Kingdom Brazil Thailand Canada Finland Luxembourg Chile Philippines USA Belgium Poland Australia Egypt Indonesia New Zealand South Africa Pakistan

357.98 357.00 174.24 140.37 139.34 133.01 132.06 129.31 123.36 121.19 120.18 118.41 111.00 110.30 97.52 95.11 93.62 93.59 92.69 92.30 87.80 87.10 84.34 84.28 83.15 82.99 82.85 81.65 80.25 79.96 79.39 79.18 79.10 78.40 75.93 75.53 71.26 70.09 70.01 66.78 65.78 60.49 53.09 52.84 50.69 48.79

1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 44 46 47 48 49 51

98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 16.98 13.21 11.32 9.43 7.55 3.77

Region

_________________________________________________________________________________________________________

the Middle East Latin America Asia Asia Europe Europe Asia Asia Europe the Middle East Europe Europe Europe Latin America Europe Latin America Europe Asia Asia Europe Europe Europe Europe Europe Asia Europe Europe Europe Asia Europe Latin America Asia North America Europe Europe Latin America Asia North America Europe Europe Oceana Africa Asia Oceana Africa the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

107

Accounts Receivables Days (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value

Rank

Percentile

Kenya Burkina Faso Sierra Leone the Gambia Rwanda Sao Tome E Principe Western Sahara Nigeria Niger Uganda Mali Tanzania Namibia Reunion Zaire Libya Madagascar Chad Swaziland Cameroon Guinea-Bissau Tunisia Burundi Malawi Gabon Algeria Senegal Ivory Coast Egypt Somalia South Africa Zimbabwe Botswana Mayotte Equatorial Guinea Mauritius Congo Ethiopia Morocco Djibouti Mauritania St. Helena Comoros Eritrea Lesotho Angola

131.76 122.65 115.64 113.89 112.90 112.14 112.14 110.04 108.63 105.13 99.87 91.11 86.34 84.51 83.40 81.69 80.60 80.25 79.70 76.98 76.74 74.36 73.59 70.09 68.30 67.21 66.70 66.29 60.49 59.57 50.69 49.97 47.45 46.85 46.77 46.73 45.80 45.56 45.38 44.09 43.33 42.81 42.16 42.05 41.38 40.67

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

108

Countries in Africa

Value

Rank

Percentile

Mozambique Cape Verde Guinea Sudan Central African Rep Benin Liberia Ghana Togo Zambia

40.30 38.10 37.48 34.39 34.35 33.57 33.57 33.18 32.87 32.79

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

109

Inventories (# of Days) Held Countries

Value

Rank

Percentile

Italy China Peru Israel Ireland Thailand Denmark Netherlands Australia Germany Japan Hong Kong Sweden France Brazil USA Malaysia the United Kingdom Chile Turkey Mexico Finland Switzerland Norway Austria South Korea South Africa Luxembourg Singapore Russia Hungary Spain New Zealand Indonesia Portugal India Pakistan Canada Poland Greece Czech Republic Argentina Taiwan Belgium Philippines Egypt

200.12 198.98 166.34 146.42 145.21 133.49 114.02 110.88 110.72 109.81 107.97 96.49 95.10 94.96 93.99 93.46 91.97 90.97 89.43 89.04 88.80 85.48 83.67 80.42 79.31 78.82 76.82 72.36 71.18 71.03 70.60 69.83 68.57 68.04 67.74 66.69 66.27 60.38 57.74 55.27 49.21 45.84 45.15 40.74 32.19 27.32

1 2 3 4 5 6 7 9 10 11 12 14 15 16 17 18 19 20 21 22 23 24 25 27 28 29 30 31 33 34 35 37 38 39 40 41 42 44 45 46 47 49 50 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 83.02 81.13 79.25 77.36 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 45.28 43.40 41.51 37.74 35.85 33.96 30.19 28.30 26.42 24.53 22.64 20.75 16.98 15.09 13.21 11.32 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Europe Asia Latin America the Middle East Europe Asia Europe Europe Oceana Europe Asia Asia Europe Europe Latin America North America Asia Europe Latin America the Middle East Latin America Europe Europe Europe Europe Asia Africa Europe Asia Europe Europe Europe Oceana Asia Europe Asia the Middle East North America Europe Europe Europe Latin America Asia Europe Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

110

Inventories (# of Days) Held (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value

Rank

Percentile

Namibia Swaziland Cameroon Tunisia Algeria South Africa Botswana Reunion Congo Mauritius Morocco Libya Djibouti Kenya St. Helena Zimbabwe Equatorial Guinea Burkina Faso Angola Mayotte Sierra Leone Gabon Cape Verde the Gambia Rwanda Western Sahara Sao Tome E Principe Nigeria Niger Mauritania Uganda Comoros Lesotho Mali Guinea Tanzania Sudan Central African Rep Liberia Benin Zaire Ghana Togo Zambia Madagascar Chad

151.01 139.39 134.63 125.37 79.58 76.82 71.91 71.17 70.88 70.82 70.22 68.80 68.23 67.95 66.24 64.04 63.52 63.25 62.93 60.03 59.64 59.06 58.95 58.73 58.22 57.83 57.83 56.75 56.02 55.53 54.22 54.03 53.03 51.51 48.03 46.99 44.07 44.03 43.02 43.02 43.01 42.52 42.12 42.02 41.57 41.39

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

111

Countries in Africa

Value

Rank

Percentile

Guinea-Bissau Burundi Malawi Somalia Senegal Ivory Coast Egypt Ethiopia Eritrea Mozambique

39.58 37.95 36.14 30.72 30.13 29.94 27.32 23.49 21.69 20.78

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.6 3.6.1

112

PRODUCTIVITY IN EGYPT: ASSET-LABOR RATIOS Overview

In this chapter, we consider numerous asset-labor ratios for steam, gas and hydraulic turbines and turbine generator set units in Egypt benchmarked against global averages. Productivity and utilization ratios are presented for companies oprating in Egypt and the average global benchmarks for steam, gas and hydraulic turbines and turbine generator set units. For ratios where there are large deviations between Egypt and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain asset-labor ratios are highlighted across countries in the comparison group. In the case of asset-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. We then report the larger asset-labor ratio gaps for steam, gas and hydraulic turbines and turbine generator set units that Egypt has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.

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©2007 Icon Group International, Inc.

Financial Indicators

3.6.2

113

Asset to Labor: Outlook

The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for steam, gas and hydraulic turbines and turbine generator set units in Egypt based on latest financial results available. Labor-asset Ratios ($k/employee) Egypt Africa World Avg. _________________________________________________________________________________________________________

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Work in Process Finished Goods Progress Payments & Other Other Current Assets Current Assets - Total Property Plant and Equipment - Net Property Plant and Equipment - Gross Machinery & Equipment Transportation Equipment Other Property Plant & Equipment Accumulated Depreciation - Total Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Tangible Other Assets Total Assets

1.49 0.55 0.94 4.76 1.94 1.85 0.13 0.07 -0.11 0.03 8.21 5.58 12.14 10.81 0.04 1.30 6.56 5.94 0.02 0.59 0.03 0.03 13.83

8.46 2.91 4.71 15.44 12.06 3.17 1.50 2.64 0.47 2.20 38.51 15.75 32.14 16.70 0.38 2.59 16.62 10.66 0.25 1.23 7.01 0.61 63.21

21.26 10.74 10.51 46.74 23.18 6.13 5.45 9.24 0.71 1.74 93.95 31.94 58.92 34.23 0.98 7.05 27.74 15.72 0.58 2.50 6.15 0.96 162.19

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.6.3

114

Asset to Labor: International Gaps

The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large labor-asset gaps between firms operating in Egypt and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Cash & Short Term Investments ($k/employee) 30

21.26

20 10

8.46 1.49

0 -10 -20 Egypt

Africa

-19.77 Gap

World Average

Gap: Cash ($k/employee) 15

10.74

10 5

0.55

2.91

0 -5 -10

-10.19

-15 Egypt

Africa

World Average

Gap

Gap: Receivables (Net) ($k/employee) 60

46.74

40 20

4.76

15.44

0 -20 -40

-41.98

-60 Egypt

www.icongrouponline.com

Africa

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

115

Gap: Total Inventories ($k/employee) 30

23.18

20

12.06

10

1.94

0 -10 -20

-21.24

-30 Egypt

Africa

World Average

Gap

Gap: Current Assets - Total ($k/employee) 93.95

100 38.51

50

8.21

0 -50 -85.74

-100 Egypt

Africa

World Average

Gap

Gap: Property Plant and Equipment - Net ($k/employee) 40 30 20 10 0 -10 -20 -30

31.94 15.75 5.58

-26.36 Egypt

Africa

World Average

Gap

Gap: Property Plant and Equipment - Gross ($k/employee) 58.92

60 32.14

40 20

12.14

0 -20 -40

-46.78

-60 Egypt

www.icongrouponline.com

Africa

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

116

Gap: Machinery & Equipment ($k/employee) 40 30 20 10 0 -10 -20 -30

34.23 10.81

16.7

-23.42 Egypt

Africa

World Average

Gap

Gap: Accumulated Depreciation - Total ($k/employee) 27.74

30 20 10

16.62 6.56

0 -10 -20

-21.18

-30 Egypt

Africa

World Average

Gap

Gap: Accumulated Depreciation -Machinery & Equipment ($k/employee) 20

15.72

15 10

10.66 5.94

5 0 -5 -9.78 Gap

-10 Egypt

Africa

World Average

Gap: Total Assets ($k/employee) 162.19

200 100

63.21 13.83

0 -100

-148.36

-200 Egypt

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Africa

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.6.4

117

Key Percentiles and Rankings

We now consider the distribution of asset-labor ratios using ranks and percentiles across . What percent of countries have a productivity indicator lower or higher than Egypt (what is the indicator's rank or percentile)? The table below answers this question with respect to asset-labor structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key asset-labor ratios are highlighted in additional tables. Asset Structure ($k/employee)

Egypt

Rank of Total

Percentile

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Work in Process Finished Goods Progress Payments & Other Other Current Assets Current Assets - Total Property Plant and Equipment - Net Property Plant and Equipment - Gross Machinery & Equipment Transportation Equipment Other Property Plant & Equipment Accumulated Depreciation - Total Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Tangible Other Assets Total Assets

1.49 0.55 0.94 4.76 1.94 1.85 0.13 0.07 -0.11 0.03 8.21 5.58 12.14 10.81 0.04 1.30 6.56 5.94 0.02 0.59 0.03 0.03 13.83

50 of 53 44 of 46 33 of 42 53 of 53 53 of 53 45 of 46 46 of 46 46 of 46 38 of 44 45 of 47 53 of 53 53 of 53 49 of 49 46 of 46 38 of 38 41 of 45 49 of 49 43 of 43 35 of 35 41 of 42 53 of 53 33 of 35 53 of 53

5.66 4.35 21.43 0.00 0.00 2.17 0.00 0.00 13.64 4.26 0.00 0.00 0.00 0.00 0.00 8.89 0.00 0.00 0.00 2.38 0.00 5.71 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

118

Cash & Short Term Investments Countries

Value ($K/employee)

Rank

Percentile

75.14 70.27 66.82 65.96 59.44 53.76 51.33 50.91 45.09 41.62 31.76 30.89 25.36 25.22 23.91 23.54 23.26 22.10 21.82 21.32 21.29 20.61 19.83 18.87 15.55 14.68 13.42 12.33 10.82 10.73 8.87 8.08 7.34 6.19 6.17 5.53 3.39 3.31 2.47 2.46 2.01 1.75 1.49 1.06 0.46 0.44

1 2 3 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 29 30 31 32 34 35 37 38 39 41 42 43 46 47 48 49 50 51 52 53

98.11 96.23 94.34 92.45 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 45.28 43.40 41.51 39.62 35.85 33.96 30.19 28.30 26.42 22.64 20.75 18.87 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Taiwan Australia USA South Korea Russia Japan Israel Ireland Norway China Canada Hong Kong Singapore France Greece Italy Germany Finland Switzerland South Africa Czech Republic the United Kingdom Argentina Luxembourg Spain Belgium Malaysia Sweden Indonesia Austria Pakistan Denmark Netherlands Turkey Mexico India Peru Thailand New Zealand Hungary Poland Philippines Egypt Portugal Brazil Chile

Asia Oceana North America Asia Europe Asia the Middle East Europe Europe Asia North America Asia Asia Europe Europe Europe Europe Europe Europe Africa Europe Europe Latin America Europe Europe Europe Asia Europe Asia Europe the Middle East Europe Europe the Middle East Latin America Asia Latin America Asia Oceana Europe Europe Asia Africa Europe Latin America Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

119

Cash & Short Term Investments (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya South Africa Botswana Mauritius Congo Morocco Djibouti St. Helena Angola Cape Verde Zimbabwe Mayotte Mauritania Comoros Equatorial Guinea Lesotho Guinea Sudan Central African Rep Benin Liberia Ghana Togo Zambia Kenya Burkina Faso Sierra Leone the Gambia Rwanda Sao Tome E Principe Western Sahara Nigeria Niger Uganda Mali Tanzania Zaire Madagascar Chad Guinea-Bissau Burundi Tunisia Namibia Malawi Swaziland

59.56 57.58 21.32 19.96 19.66 14.67 14.54 14.13 13.71 13.03 12.21 10.19 9.55 8.83 8.60 8.50 8.44 7.64 7.01 7.00 6.84 6.84 6.77 6.70 6.69 5.63 5.24 4.94 4.87 4.83 4.79 4.79 4.70 4.64 4.49 4.27 3.89 3.57 3.45 3.43 3.28 3.15 3.11 3.08 3.00 2.84

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

120

Value ($K/employee)

Rank

Percentile

2.74 2.55 2.05 1.95 1.80 1.72 1.64 1.63 1.49 0.39

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Cameroon Somalia Gabon Ethiopia Eritrea Mozambique Senegal Ivory Coast Egypt Algeria

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

121

Receivables (Net) Countries

Value ($K/employee)

Rank

Percentile

468.24 466.96 178.16 125.28 102.56 99.19 92.42 90.46 77.51 69.00 64.27 63.99 61.36 59.42 57.06 53.96 53.58 53.51 49.54 45.46 44.90 41.38 41.25 40.51 39.32 39.14 38.94 31.36 31.27 30.96 28.85 27.96 26.99 26.67 23.89 23.42 21.95 17.22 15.96 15.18 10.40 8.53 8.50 7.31 5.60 4.76

1 2 4 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 50 53

98.11 96.23 92.45 90.57 88.68 86.79 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 5.66 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan Portugal South Korea Italy Russia Japan Greece Czech Republic Argentina France Norway Germany Netherlands Israel Spain Ireland Denmark Switzerland Austria USA Sweden Malaysia Luxembourg Finland Belgium South Africa the United Kingdom Singapore Hong Kong Canada Peru China Pakistan India New Zealand Australia Brazil Chile Hungary Thailand Poland Indonesia Philippines Egypt

the Middle East Latin America Asia Europe Asia Europe Europe Asia Europe Europe Latin America Europe Europe Europe Europe the Middle East Europe Europe Europe Europe Europe North America Europe Asia Europe Europe Europe Africa Europe Asia Asia North America Latin America Asia the Middle East Asia Oceana Oceana Latin America Latin America Europe Asia Europe Asia Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

122

Receivables (Net) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya South Africa Botswana Mauritius Namibia Kenya Equatorial Guinea Swaziland Burkina Faso Cameroon Sierra Leone the Gambia Rwanda Sao Tome E Principe Western Sahara Nigeria Niger Uganda Mali Tanzania Zaire Madagascar Chad Guinea-Bissau Algeria Burundi Malawi Somalia Gabon Ethiopia Tunisia Eritrea Mozambique Zimbabwe Mayotte Mauritania Comoros Lesotho Senegal Ivory Coast Guinea Congo Morocco Egypt Sudan

92.61 89.52 31.36 29.36 28.91 24.51 23.86 22.90 22.62 22.21 21.85 20.94 20.62 20.44 20.31 20.31 19.93 19.67 19.04 18.08 16.50 15.10 14.59 14.53 13.90 13.51 13.33 12.69 10.79 8.70 8.25 8.01 7.61 7.30 6.88 6.45 5.96 5.80 5.70 5.25 5.21 5.16 4.88 4.84 4.76 4.73

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

123

Countries in Africa

Value ($K/employee)

Rank

Percentile

Central African Rep Djibouti Liberia Benin Ghana St. Helena Togo Zambia Angola Cape Verde

4.73 4.70 4.62 4.62 4.57 4.56 4.52 4.51 4.34 4.06

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

124

Total Inventories Countries

Value ($K/employee)

Rank

Percentile

89.29 89.04 80.46 78.14 77.12 69.50 63.82 53.05 49.54 45.66 41.73 41.73 39.46 39.14 38.80 38.38 36.62 34.00 31.28 30.97 30.78 30.56 27.27 27.05 26.11 25.85 23.91 23.43 23.25 22.96 21.66 20.54 20.40 19.71 18.28 15.90 15.35 15.13 10.77 8.33 8.03 7.95 6.81 6.20 2.28 1.94

1 2 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 39 40 41 42 43 44 45 46 49 52 53

98.11 96.23 92.45 90.57 88.68 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 7.55 1.89 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Italy Portugal South Korea Russia Taiwan Denmark Japan France Netherlands Germany Israel Ireland Norway South Africa Peru Finland Switzerland Pakistan Sweden USA Austria Luxembourg Greece Australia Belgium China Czech Republic New Zealand Argentina the United Kingdom Singapore Canada Spain Brazil Hong Kong Chile Malaysia Hungary Thailand India Poland Indonesia Philippines Egypt

the Middle East Latin America Europe Europe Asia Europe Asia Europe Asia Europe Europe Europe the Middle East Europe Europe Africa Latin America Europe Europe the Middle East Europe North America Europe Europe Europe Oceana Europe Asia Europe Oceana Latin America Europe Asia North America Europe Latin America Asia Latin America Asia Europe Asia Asia Europe Asia Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

125

Total Inventories (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya South Africa Botswana Mauritius Namibia Swaziland Equatorial Guinea Cameroon Congo Morocco Djibouti St. Helena Angola Cape Verde Algeria Kenya Burkina Faso Tunisia Sierra Leone the Gambia Gabon Rwanda Sao Tome E Principe Western Sahara Nigeria Niger Uganda Mali Zimbabwe Tanzania Mayotte Zaire Mauritania Madagascar Chad Comoros Lesotho Guinea-Bissau Burundi Guinea Malawi Sudan Central African Rep Benin Liberia

69.64 67.31 38.38 35.92 35.38 33.24 30.68 29.68 29.64 16.23 16.08 15.63 15.17 14.41 13.50 13.47 8.10 7.54 7.54 7.11 7.01 6.97 6.94 6.90 6.90 6.77 6.68 6.47 6.14 5.84 5.60 5.47 5.13 5.06 4.96 4.94 4.93 4.84 4.72 4.53 4.38 4.31 4.02 4.01 3.92 3.92

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

126

Value ($K/employee)

Rank

Percentile

3.88 3.84 3.83 3.66 2.80 2.59 2.48 2.14 2.12 1.94

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Ghana Togo Zambia Somalia Ethiopia Eritrea Mozambique Senegal Ivory Coast Egypt

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

127

Current Assets - Total Countries

Value ($K/employee)

Rank

Percentile

563.71 562.18 355.71 251.30 226.46 207.87 204.76 203.78 149.02 147.79 147.63 147.02 137.06 136.69 131.62 121.69 116.22 113.35 109.84 107.82 103.26 98.25 95.65 91.09 89.30 87.67 86.83 84.74 84.64 77.72 77.53 75.30 75.23 67.61 64.85 63.92 47.75 37.98 33.59 31.96 25.65 21.87 21.18 17.33 9.67 8.21

1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 40 41 42 43 44 46 47 50 52 53

98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 20.75 18.87 16.98 13.21 11.32 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan South Korea Russia Italy Portugal Japan Israel Ireland USA Norway France Greece Germany Czech Republic Denmark Argentina Australia Netherlands Switzerland Finland China South Africa Luxembourg Spain Sweden Austria Canada Singapore Belgium the United Kingdom Hong Kong Peru Malaysia Pakistan New Zealand India Brazil Chile Indonesia Thailand Hungary Poland Philippines Egypt

the Middle East Latin America Asia Asia Europe Europe Europe Asia the Middle East Europe North America Europe Europe Europe Europe Europe Europe Latin America Oceana Europe Europe Europe Asia Africa Europe Europe Europe Europe North America Asia Europe Europe Asia Latin America Asia the Middle East Oceana Asia Latin America Latin America Asia Asia Europe Europe Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

128

Current Assets - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya South Africa Botswana Mauritius Namibia Equatorial Guinea Swaziland Cameroon Congo Morocco Djibouti St. Helena Angola Cape Verde Kenya Burkina Faso Sierra Leone the Gambia Rwanda Western Sahara Sao Tome E Principe Nigeria Niger Uganda Mali Algeria Tanzania Zaire Zimbabwe Madagascar Chad Mayotte Guinea-Bissau Burundi Mauritania Malawi Tunisia Comoros Lesotho Guinea Gabon Somalia Sudan Central African Rep Liberia

226.91 219.35 91.09 85.27 83.97 61.38 61.27 56.65 54.72 53.40 52.91 51.41 49.91 47.42 44.42 38.70 36.02 33.97 33.45 33.16 32.94 32.94 32.32 31.91 30.88 29.33 28.44 26.76 24.50 24.14 23.67 23.57 22.64 22.54 21.61 20.94 20.59 20.54 20.37 19.99 18.11 17.72 17.50 16.62 16.60 16.22

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

129

Value ($K/employee)

Rank

Percentile

16.22 16.03 15.88 15.84 13.38 12.35 11.84 9.06 9.00 8.21

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Benin Ghana Togo Zambia Ethiopia Eritrea Mozambique Senegal Ivory Coast Egypt

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

130

Property Plant and Equipment - Net Countries

Value ($K/employee)

Rank

Percentile

149.59 128.39 115.70 81.21 70.98 70.79 66.34 59.06 55.39 55.01 54.74 47.34 44.97 43.98 41.51 40.65 40.57 38.07 37.53 35.70 35.49 34.02 33.99 33.16 33.00 31.76 29.73 27.12 26.54 26.10 25.25 24.71 22.51 20.39 18.60 16.22 14.54 14.19 13.41 13.30 11.91 10.38 9.13 6.58 6.27 5.58

1 2 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 28 29 30 31 32 33 34 35 36 37 38 40 42 43 44 46 47 48 50 51 52 53

98.11 96.23 92.45 90.57 88.68 86.79 84.91 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 20.75 18.87 16.98 13.21 11.32 9.43 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Taiwan South Korea Russia Japan Turkey Mexico Greece Czech Republic Portugal Argentina Switzerland Luxembourg China Germany Australia Malaysia Netherlands Austria USA Canada Finland Denmark Sweden Hungary Norway Italy Singapore Poland Brazil the United Kingdom Chile New Zealand Peru Thailand France Spain Hong Kong Indonesia Israel Ireland Belgium India Pakistan Philippines South Africa Egypt

Asia Asia Europe Asia the Middle East Latin America Europe Europe Europe Latin America Europe Europe Asia Europe Oceana Asia Europe Europe North America North America Europe Europe Europe Europe Europe Europe Asia Europe Latin America Europe Latin America Oceana Latin America Asia Europe Europe Asia Asia the Middle East Europe Europe Asia the Middle East Asia Africa Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

131

Property Plant and Equipment - Net (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya Congo Morocco Djibouti St. Helena Angola Cape Verde Gabon Algeria Namibia Tunisia Swaziland Cameroon Zimbabwe Mayotte Mauritania Comoros Lesotho Kenya Guinea Burkina Faso Sierra Leone Sudan Central African Rep the Gambia Rwanda Western Sahara Sao Tome E Principe Benin Liberia Ghana Nigeria Togo Zambia Equatorial Guinea Niger Uganda Mali Tanzania Zaire Madagascar Chad South Africa Guinea-Bissau Senegal

115.93 112.06 33.97 33.65 32.70 31.75 30.16 28.26 27.74 22.47 20.43 19.15 18.86 18.21 13.35 12.52 11.58 11.27 11.06 10.58 10.01 9.85 9.28 9.19 9.18 9.14 9.06 9.00 9.00 8.97 8.97 8.87 8.83 8.78 8.76 8.75 8.72 8.44 8.02 7.32 6.70 6.47 6.44 6.27 6.16 6.16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

132

Value ($K/employee)

Rank

Percentile

6.12 5.91 5.87 5.78 5.63 5.58 4.78 3.66 3.38 3.24

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Ivory Coast Burundi Botswana Mauritius Malawi Egypt Somalia Ethiopia Eritrea Mozambique

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

133

Accumulated Depreciation - Total Countries

Value ($K/employee)

Rank

Percentile

119.75 119.42 105.74 76.76 76.62 64.68 58.28 55.99 48.42 47.70 45.96 45.38 40.98 39.83 38.47 36.98 36.85 35.70 33.64 33.43 32.33 31.23 30.95 27.55 26.53 26.31 25.66 24.26 23.17 23.14 21.37 19.10 18.02 16.43 14.99 14.39 14.29 13.90 9.30 7.72 6.63 6.56

1 2 4 5 6 7 9 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 46 47 48 49

97.96 95.92 91.84 89.80 87.76 85.71 81.63 79.59 77.55 75.51 73.47 71.43 67.35 65.31 63.27 61.22 59.18 57.14 55.10 53.06 51.02 48.98 46.94 44.90 42.86 40.82 38.78 36.73 34.69 32.65 30.61 28.57 26.53 24.49 22.45 20.41 18.37 16.33 6.12 4.08 2.04 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Japan Germany Belgium South Korea Russia Switzerland Luxembourg Brazil Austria Chile USA Peru Australia Norway Finland Sweden France Netherlands Italy Denmark Greece Czech Republic Israel Ireland Argentina the United Kingdom New Zealand China Canada Spain Malaysia Taiwan Singapore India Indonesia Thailand Hong Kong Philippines South Africa Egypt

the Middle East Latin America Asia Europe Europe Asia Europe Europe Europe Latin America Europe Latin America North America Latin America Oceana Europe Europe Europe Europe Europe Europe Europe Europe Europe the Middle East Europe Latin America Europe Oceana Asia North America Europe Asia Asia Asia Asia Asia Asia Asia Asia Africa Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

134

Accumulated Depreciation - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya Congo Morocco Algeria Djibouti St. Helena Angola Namibia Cape Verde Swaziland Cameroon Kenya Burkina Faso Zimbabwe Tunisia Sierra Leone the Gambia Mayotte Rwanda Western Sahara Sao Tome E Principe Nigeria Niger Uganda Mauritania Comoros Lesotho Mali Tanzania Guinea Zaire Sudan Central African Rep Liberia Benin Madagascar Ghana Chad Togo Zambia Guinea-Bissau Burundi Malawi Senegal Ivory Coast

58.40 56.45 41.50 41.11 40.38 39.95 38.79 36.85 36.16 34.52 33.38 32.24 14.67 13.65 13.45 13.05 12.87 12.68 12.61 12.57 12.48 12.48 12.25 12.09 11.70 11.67 11.35 11.14 11.12 10.14 10.09 9.28 9.26 9.25 9.04 9.04 8.97 8.93 8.93 8.85 8.83 8.54 8.19 7.80 7.23 7.19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.15 96.30 94.44 92.59 90.74 88.89 87.04 85.19 83.33 81.48 79.63 77.78 75.93 74.07 72.22 70.37 68.52 66.67 64.81 62.96 61.11 59.26 57.41 55.56 53.70 51.85 50.00 48.15 46.30 44.44 42.59 40.74 38.89 37.04 35.19 33.33 31.48 29.63 27.78 25.93 24.07 22.22 20.37 18.52 16.67 14.81

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

135

Value ($K/employee)

Rank

Percentile

6.63 6.63 6.56 6.20 6.11 5.07 4.68 4.49

47 48 49 50 51 52 53 54

12.96 11.11 9.26 7.41 5.56 3.70 1.85 0.00

_________________________________________________________________________________________________________

Somalia South Africa Egypt Botswana Mauritius Ethiopia Eritrea Mozambique

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.7 3.7.1

136

PRODUCTIVITY IN EGYPT: LIABILITY-LABOR RATIOS Overview

In this chapter we consider the liability-labor ratios of companies operating in Egypt benchmarked against global averages for steam, gas and hydraulic turbines and turbine generator set units. For ratios where there are large deviations between Egypt and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of productivity ratios is presented in the form of ranks and percentiles. Certain key liabilitylabor ratios are highlighted for steam, gas and hydraulic turbines and turbine generator set units across countries in the comparison group. Definitions of liability statement terms are given in Chapter 3. In the case of liability-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. I then report the larger liability-labor ratio gaps for steam, gas and hydraulic turbines and turbine generator set units that Egypt has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.

3.7.2

Liability to Labor: Outlook

The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for steam, gas and hydraulic turbines and turbine generator set units in Egypt based on latest financial results available. Labor-liability Ratios ($k/employee) Egypt Africa World Avg. _________________________________________________________________________________________________________

Accounts Payable Short Term Debt & Current Portion of Long Term Debt Other Current Liabilities Current Liabilities - Total Total Liabilities Common Equity Common Stock Capital Surplus Retained Earnings Total Liabilities & Shareholders Equity

2.85 0.79 0.39 4.03 4.03 9.80 2.01 3.83 3.97 13.83

9.37 5.48 7.33 22.51 28.76 30.30 7.11 7.49 7.85 63.21

17.12 22.43 19.46 63.27 78.99 79.02 32.29 21.27 9.29 162.19

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.7.3

137

Liability and Equity to Labor: International Gaps

The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large labor-liability gaps between firms operating in Egypt and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Accounts Payable ($k/employee) 17.12

20 10

9.37 2.85

0 -10

-14.27

-20 Egypt

Africa

World Average

Gap

Gap: Short Term Debt & Current Portion of Long Term Debt ($k/employee) 30

22.43

20 10

0.79

5.48

0 -10 -20

-21.64

-30 Egypt

Africa

World Average

Gap

Gap: Other Current Liabilities ($k/employee) 19.46

20 7.33

10 0.39 0 -10 -20 Egypt

www.icongrouponline.com

Africa

World Average

-19.07 Gap

©2007 Icon Group International, Inc.

Financial Indicators

138

Gap: Current Liabilities - Total ($k/employee) 100

63.27

50 4.03

22.51

0 -50

-59.24

-100 Egypt

Africa

World Average

Gap

Gap: Total Liabilities ($k/employee) 78.99

100 28.76

50 4.03 0 -50

-74.96 -100 Egypt

Africa

World Average

Gap

Gap: Common Equity ($k/employee) 79.02

100 50

9.8

30.3

0 -50

-69.22

-100 Egypt

Africa

World Average

Gap

Gap: Common Stock ($k/employee) 32.29

40 20 2.01

7.11

0 -20 -30.28 -40 Egypt

www.icongrouponline.com

Africa

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

139

Gap: Capital Surplus ($k/employee) 30

21.27

20 10

3.83

7.49

0 -10 -17.44

-20 Egypt

Africa

World Average

Gap

Gap: Retained Earnings ($k/employee) 7.85

10 5

9.29

3.97

0 -5

-5.32

-10 Egypt

Africa

World Average

Gap

Gap: Total Liabilities & Shareholders Equity ($k/employee) 162.19

200 100

63.21 13.83

0 -100

-148.36

-200 Egypt

www.icongrouponline.com

Africa

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.7.4

140

Key Percentiles and Rankings

We now consider the distribution of liability-labor ratios using ranks and percentiles across . What percent of countries have a value lower or higher than Egypt (what is the indicator's rank or percentile)? The table below answers this question with respect to liability-labor ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key liabilitylabor ratios are highlighted in additional tables. Liability Structure ($k/employee)

Egypt

Rank of Total

Percentile

Accounts Payable Short Term Debt & Current Portion of Long Term Debt Other Current Liabilities Current Liabilities - Total Total Liabilities Common Equity Common Stock Capital Surplus Retained Earnings Total Liabilities & Shareholders Equity

2.85 0.79 0.39 4.03 4.03 9.80 2.01 3.83 3.97 13.83

49 of 50 51 of 53 53 of 53 53 of 53 53 of 53 53 of 53 46 of 46 34 of 41 40 of 48 53 of 53

2.00 3.77 0.00 0.00 0.00 0.00 0.00 17.07 16.67 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

141

Accounts Payable Countries

Value ($K/employee)

Rank

Percentile

87.40 87.02 86.79 71.13 57.18 52.99 51.53 41.59 32.27 30.19 25.93 25.15 25.00 23.85 22.39 21.64 21.11 20.86 19.28 18.81 18.61 18.34 16.74 16.67 15.82 15.07 13.03 12.19 11.82 11.64 11.56 11.47 11.24 11.22 10.99 8.68 4.89 4.58 4.36 4.00 3.36 2.85 1.00

1 2 3 5 6 7 9 10 11 12 13 14 15 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 44 47 49 50

98.00 96.00 94.00 90.00 88.00 86.00 82.00 80.00 78.00 76.00 74.00 72.00 70.00 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 48.00 46.00 44.00 42.00 40.00 38.00 36.00 34.00 32.00 30.00 28.00 26.00 24.00 22.00 20.00 18.00 16.00 12.00 6.00 2.00 0.00

Region

_________________________________________________________________________________________________________

Taiwan Turkey Mexico Italy South Korea Japan Russia Belgium France Norway Denmark Greece Spain Netherlands Czech Republic Sweden Singapore Argentina Switzerland Germany Hong Kong USA Canada Luxembourg Austria the United Kingdom Finland China Brazil New Zealand Israel Ireland Chile India Australia Malaysia Hungary Indonesia Thailand Poland Philippines Egypt Peru

Asia the Middle East Latin America Europe Asia Asia Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Asia Latin America Europe Europe Asia North America North America Europe Europe Europe Europe Asia Latin America Oceana the Middle East Europe Latin America Asia Oceana Asia Europe Asia Asia Europe Asia Africa Latin America

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

142

Accounts Payable (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya Congo Morocco Djibouti St. Helena Angola Cape Verde Kenya Burkina Faso Sierra Leone Algeria the Gambia Rwanda Western Sahara Sao Tome E Principe Nigeria Niger Uganda Mali Tanzania Zaire Madagascar Chad Guinea-Bissau Burundi Malawi Somalia Zimbabwe Tunisia Gabon Mayotte Ethiopia Mauritania Eritrea Comoros Lesotho Mozambique Guinea Senegal Ivory Coast Sudan Central African Rep Benin Liberia Ghana

51.63 49.91 25.08 24.85 24.15 23.44 22.27 20.86 11.44 10.65 10.04 10.00 9.89 9.80 9.73 9.73 9.55 9.43 9.13 8.67 7.91 7.24 7.00 6.97 6.66 6.39 6.08 5.17 4.31 4.10 4.09 4.04 3.95 3.74 3.65 3.64 3.57 3.50 3.23 3.14 3.12 2.97 2.97 2.90 2.90 2.86

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.08 96.15 94.23 92.31 90.38 88.46 86.54 84.62 82.69 80.77 78.85 76.92 75.00 73.08 71.15 69.23 67.31 65.38 63.46 61.54 59.62 57.69 55.77 53.85 51.92 50.00 48.08 46.15 44.23 42.31 40.38 38.46 36.54 34.62 32.69 30.77 28.85 26.92 25.00 23.08 21.15 19.23 17.31 15.38 13.46 11.54

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

143

Value ($K/employee)

Rank

Percentile

2.85 2.84 2.83 0.91 0.84 0.81

47 48 49 50 51 52

9.62 7.69 5.77 3.85 1.92 0.00

_________________________________________________________________________________________________________

Egypt Togo Zambia Namibia Swaziland Cameroon

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

144

Current Liabilities - Total Countries

Value ($K/employee)

Rank

Percentile

506.75 505.36 226.98 166.02 149.61 141.55 129.00 118.68 87.93 82.29 77.84 73.25 72.19 68.24 65.14 63.90 63.87 61.93 61.10 57.37 57.14 55.81 53.70 51.60 50.72 49.41 48.51 42.51 42.16 40.61 38.86 37.71 37.66 35.84 31.31 30.41 29.23 25.11 21.73 19.95 19.24 15.74 12.06 9.20 4.74 4.03

1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 42 43 44 45 46 49 52 53

98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 7.55 1.89 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan South Korea Russia Italy Portugal Japan Norway Greece France Czech Republic Denmark Argentina China Spain Germany Netherlands Austria Belgium Switzerland South Africa Finland Sweden USA Luxembourg the United Kingdom Israel Ireland Pakistan Singapore Hong Kong Brazil Chile Canada Malaysia Peru Australia India New Zealand Hungary Poland Thailand Indonesia Philippines Egypt

the Middle East Latin America Asia Asia Europe Europe Europe Asia Europe Europe Europe Europe Europe Latin America Asia Europe Europe Europe Europe Europe Europe Africa Europe Europe North America Europe Europe the Middle East Europe the Middle East Asia Asia Latin America Latin America North America Asia Latin America Oceana Asia Oceana Europe Europe Asia Asia Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

145

Current Liabilities - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya South Africa Botswana Mauritius Equatorial Guinea Congo Morocco Djibouti St. Helena Algeria Angola Cape Verde Namibia Swaziland Cameroon Kenya Burkina Faso Sierra Leone the Gambia Rwanda Sao Tome E Principe Western Sahara Nigeria Niger Uganda Mali Gabon Tanzania Zaire Madagascar Chad Guinea-Bissau Burundi Malawi Tunisia Somalia Zimbabwe Mayotte Ethiopia Mauritania Comoros Lesotho Eritrea Mozambique Guinea

149.91 144.91 55.81 52.24 51.45 38.92 35.79 35.45 34.45 33.45 31.89 31.77 29.77 26.54 24.50 23.66 22.14 20.61 19.43 19.14 18.97 18.84 18.84 18.49 18.25 17.66 16.78 16.10 15.31 14.01 13.54 13.48 12.89 12.37 11.78 11.33 10.01 8.66 8.12 7.65 7.51 7.30 7.17 7.07 6.77 6.49

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

146

Countries in Africa

Value ($K/employee)

Rank

Percentile

Sudan Central African Rep Benin Liberia Ghana Togo Zambia Senegal Ivory Coast Egypt

5.96 5.95 5.82 5.82 5.75 5.69 5.68 4.44 4.41 4.03

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

147

Total Liabilities Countries

Value ($K/employee)

Rank

Percentile

645.86 644.10 320.58 219.98 198.23 181.11 180.80 159.41 123.30 120.24 104.91 102.02 100.53 100.09 99.65 98.31 97.45 93.39 90.99 87.00 86.46 86.18 83.27 72.79 68.71 64.07 60.67 53.22 52.78 49.13 47.95 44.43 41.53 41.27 39.67 37.74 37.64 36.21 31.56 25.72 24.71 20.21 19.36 11.90 4.74 4.03

1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 49 52 53

98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 7.55 1.89 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan South Korea Russia Italy Portugal Japan Germany Norway Greece France Denmark Austria Switzerland Belgium Netherlands Czech Republic Sweden Argentina USA Luxembourg Finland Spain China the United Kingdom South Africa Israel Ireland Canada New Zealand Singapore Hong Kong Pakistan Brazil Chile Australia Malaysia Peru India Hungary Poland Thailand Indonesia Philippines Egypt

the Middle East Latin America Asia Asia Europe Europe Europe Asia Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Latin America North America Europe Europe Europe Asia Europe Africa the Middle East Europe North America Oceana Asia Asia the Middle East Latin America Latin America Oceana Asia Latin America Asia Europe Europe Asia Asia Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

148

Total Liabilities (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya South Africa Congo Morocco Djibouti Botswana Mauritius St. Helena Angola Cape Verde Equatorial Guinea Algeria Namibia Swaziland Kenya Cameroon Burkina Faso Sierra Leone the Gambia Rwanda Western Sahara Sao Tome E Principe Nigeria Niger Uganda Gabon Mali Tunisia Tanzania Zaire Madagascar Chad Guinea-Bissau Burundi Malawi Somalia Zimbabwe Mayotte Mauritania Comoros Lesotho Ethiopia Guinea Eritrea Mozambique

198.63 192.01 60.67 59.67 59.11 57.44 56.80 55.94 55.77 52.98 49.63 39.56 33.58 28.65 26.44 26.20 25.54 24.39 23.00 22.65 22.45 22.30 22.30 21.88 21.60 20.91 20.67 19.86 18.18 18.12 16.59 16.03 15.96 15.26 14.64 13.94 11.85 11.20 10.50 9.71 9.45 9.27 9.06 8.40 8.36 8.01

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

149

Countries in Africa

Value ($K/employee)

Rank

Percentile

Sudan Central African Rep Benin Liberia Ghana Togo Zambia Senegal Ivory Coast Egypt

7.70 7.70 7.52 7.52 7.43 7.36 7.35 4.44 4.41 4.03

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

150

Common Equity Countries

Value ($K/employee)

Rank

Percentile

594.71 593.09 283.20 188.26 169.65 158.60 138.81 128.58 127.52 124.76 95.17 94.48 88.58 86.69 86.29 85.33 84.11 82.29 79.71 78.35 77.17 71.16 69.51 68.57 67.27 66.78 63.47 60.03 59.93 52.54 51.16 49.32 46.42 42.59 36.53 34.91 33.55 31.09 29.82 27.55 25.21 24.39 21.42 20.38 11.54 9.80

1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 42 44 45 46 48 50 52 53

98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 20.75 16.98 15.09 13.21 9.43 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan South Korea Russia Japan USA Israel Ireland Australia Norway Greece Malaysia Canada Italy Portugal Czech Republic Switzerland China Argentina France Luxembourg Germany Singapore Finland Hong Kong Denmark Netherlands Peru Sweden Belgium the United Kingdom Austria South Africa Pakistan New Zealand Spain Indonesia Hungary India Thailand Poland Brazil Chile Philippines Egypt

the Middle East Latin America Asia Asia Europe Asia North America the Middle East Europe Oceana Europe Europe Asia North America Europe Europe Europe Europe Asia Latin America Europe Europe Europe Asia Europe Asia Europe Europe Latin America Europe Europe Europe Europe Africa the Middle East Oceana Europe Asia Europe Asia Asia Europe Latin America Latin America Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

151

Common Equity (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya Namibia Swaziland Cameroon Congo South Africa Morocco Djibouti St. Helena Botswana Mauritius Angola Cape Verde Equatorial Guinea Zimbabwe Kenya Mayotte Burkina Faso Mauritania Gabon Comoros Sierra Leone the Gambia Lesotho Rwanda Sao Tome E Principe Western Sahara Tunisia Nigeria Niger Uganda Guinea Mali Sudan Central African Rep Liberia Benin Ghana Tanzania Togo Zambia Algeria Zaire Madagascar Chad

169.99 164.32 54.40 50.22 48.50 42.92 42.59 42.52 41.32 40.11 39.86 39.26 38.11 35.70 35.01 29.26 28.07 27.43 26.13 25.38 24.94 24.69 24.64 24.26 24.23 24.05 23.89 23.89 23.68 23.44 23.14 22.40 21.95 21.28 20.14 20.12 19.66 19.66 19.43 19.41 19.25 19.20 18.13 17.77 17.17 17.10

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

152

Value ($K/employee)

Rank

Percentile

16.35 15.68 14.93 12.69 10.81 10.74 9.80 9.71 8.96 8.59

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Guinea-Bissau Burundi Malawi Somalia Senegal Ivory Coast Egypt Ethiopia Eritrea Mozambique

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

153

Retained Earnings Countries

Value ($K/employee)

Rank

Percentile

86.03 85.32 81.05 61.59 50.09 43.32 37.45 36.18 32.75 31.66 30.41 28.36 27.94 27.55 25.26 25.18 24.59 23.99 23.78 23.04 19.79 18.17 16.10 13.72 11.38 11.28 10.98 10.73 10.18 9.12 8.59 6.57 6.18 4.67 3.97 0.61 -1.93 -2.07 -2.33 -30.51 -30.60

1 2 3 4 5 6 7 8 9 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 34 36 39 40 41 43 44 45 47 48

97.92 95.83 93.75 91.67 89.58 87.50 85.42 83.33 81.25 79.17 77.08 75.00 72.92 70.83 66.67 64.58 62.50 60.42 58.33 56.25 54.17 52.08 50.00 47.92 45.83 43.75 41.67 39.58 37.50 35.42 33.33 29.17 25.00 18.75 16.67 14.58 10.42 8.33 6.25 2.08 0.00

Region

_________________________________________________________________________________________________________

Israel Ireland Japan USA Switzerland Luxembourg Australia Finland Taiwan South Africa Norway Netherlands South Korea Hong Kong Malaysia Russia Austria Canada Singapore the United Kingdom Denmark Germany Italy France Spain Brazil New Zealand Chile Portugal Sweden Indonesia China Thailand Philippines Egypt Peru Argentina Czech Republic Greece Mexico Turkey

the Middle East Europe Asia North America Europe Europe Oceana Europe Asia Africa Europe Europe Asia Asia Asia Europe Europe North America Asia Europe Europe Europe Europe Europe Europe Latin America Oceana Latin America Europe Europe Asia Asia Asia Asia Africa Latin America Latin America Europe Europe Latin America the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

154

Retained Earnings (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

South Africa Botswana Mauritius Reunion Libya Algeria Zimbabwe Mayotte Mauritania Comoros Lesotho Guinea Tunisia Sudan Central African Rep Benin Liberia Ghana Togo Zambia Senegal Ivory Coast Egypt Namibia Swaziland Cameroon Congo Morocco Djibouti St. Helena Angola Cape Verde

31.66 29.64 29.19 25.23 24.39 9.55 8.09 7.58 7.01 6.82 6.70 6.07 5.80 5.57 5.56 5.43 5.43 5.37 5.32 5.31 4.37 4.35 3.97 0.56 0.51 0.50 0.23 0.22 0.22 0.21 0.20 0.19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

96.88 93.75 90.63 87.50 84.38 81.25 78.13 75.00 71.88 68.75 65.63 62.50 59.38 56.25 53.13 50.00 46.88 43.75 40.63 37.50 34.38 31.25 28.13 25.00 21.88 18.75 15.63 12.50 9.38 6.25 3.13 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.8 3.8.1

155

PRODUCTIVITY IN EGYPT: INCOME-LABOR RATIOS Overview

In this chapter we consider the income-labor ratios for steam, gas and hydraulic turbines and turbine generator set units in Egypt benchmarked against global averages. For ratios where there are large deviations between the average firm operating in Egypt and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key income-labor ratios are highlighted across countries in the comparison group. In the case of income-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. We then report the larger income-labor ratio gaps for steam, gas and hydraulic turbines and turbine generator set units that Egypt has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.

3.8.2

Income to Labor: Outlook

The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for steam, gas and hydraulic turbines and turbine generator set units in Egypt based on latest financial results available. Labor-income Ratios ($k/employee) Egypt Africa World Avg. _________________________________________________________________________________________________________

Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Other Operating Expenses Operating Income Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Current Domestic Income Tax Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common

31.55 28.59 2.19 0.76 0.29 31.08 0.47 0.17 0.65 0.07 0.58 0.00 0.00 0.57 0.57 0.57

73.20 59.87 2.90 10.29 7.87 49.25 4.72 0.97 5.94 1.07 4.87 1.52 1.26 2.77 3.38 2.77

128.08 93.24 5.06 25.62 15.38 106.07 9.69 1.13 15.79 9.49 6.36 1.98 1.74 3.98 4.14 3.98

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

3.8.3

156

Income to Labor: Gaps

The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large labor-income gaps between firms operating in Egypt and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Net Sales or Revenues ($k/employee) 128.08

150 100 50

73.2 31.55

0 -50 -96.53 Gap

-100 Egypt

Africa

World Average

Gap: Cost of Goods Sold (Excluding Depreciation) ($k/employee) 93.24

100 50

59.87 28.59

0 -50

-64.65

-100 Egypt

Africa

World Average

Gap

Gap: Gross Income ($k/employee) 25.62

30 20 10

10.29 0.76

0 -10 -20

-24.86

-30 Egypt

www.icongrouponline.com

Africa

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

157

Gap: Selling, General & Administrative Expenses ($k/employee) 20

15.38 7.87

10 0

0.29

-10 -15.09 -20 Egypt

Africa

World Average

Gap

Gap: Other Operating Expenses ($k/employee) 150

106.07

100 50

31.08

49.25

0 -50

-74.99

-100 Egypt

Africa

World Average

Gap

Gap: Operating Income ($k/employee) 9.69

10 4.72

5 0.47 0 -5

-9.22

-10 Egypt

Africa

World Average

Gap

Gap: Earnings Before Interest and Taxes (EBIT) ($k/employee) 15.79

20 5.94

10 0.65 0 -10

-15.14 -20 Egypt

www.icongrouponline.com

Africa

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

158

Gap: Interest Expense on Debt ($k/employee) 9.49

10 5 0

0.07

1.07

-5 -9.42 Gap

-10 Egypt

Africa

World Average

Gap: Pretax Income ($k/employee) 10 5

4.87

6.36

0.58

0 -5

-5.78

-10 Egypt

Africa

World Average

Gap

Gap: Net Income Before Extra Items/Prefer Dividends ($k/employee) 3.98

4 2

2.77 0.57

0 -2 -3.41

-4 Egypt

Africa

World Average

Gap

Gap: Net Income Before Preferred Dividends ($k/employee) 6 3.38

4 2

4.14

0.57

0 -2 -3.57

-4 Egypt

www.icongrouponline.com

Africa

World Average

Gap

©2007 Icon Group International, Inc.

Financial Indicators

3.8.4

159

Key Percentiles and Rankings

We now consider the distribution of income-labor ratios using ranks and percentiles across . What percent of countries have a value lower or higher than Egypt (what is the ratio's rank or percentile)? The table below answers this question with respect to income-labor ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key income-labor ratios are highlighted in additional tables. Income Structure ($k/employee)

Egypt

Rank of Total

Percentile

Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Other Operating Expenses Operating Income Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Current Domestic Income Tax Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common

31.55 28.59 2.19 0.76 0.29 31.08 0.47 0.17 0.65 0.07 0.58 0.00 0.00 0.57 0.57 0.57

53 of 53 52 of 52 46 of 53 52 of 52 46 of 46 46 of 46 50 of 53 37 of 53 51 of 53 53 of 53 47 of 53 47 of 47 35 of 35 46 of 53 46 of 53 46 of 53

0.00 0.00 13.21 0.00 0.00 0.00 5.66 30.19 3.77 0.00 11.32 0.00 0.00 13.21 13.21 13.21

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

160

Cost of Goods Sold (Excluding Depreciation) Countries

Value ($K/employee)

Rank

Percentile

853.22 388.78 306.09 298.54 297.72 275.82 226.16 205.13 195.15 192.75 183.90 181.64 173.87 166.87 154.77 148.01 147.81 144.11 142.21 138.02 130.19 125.85 122.99 121.96 117.95 113.63 108.57 106.86 101.13 100.45 99.62 97.70 90.30 90.09 85.39 58.03 47.81 45.74 45.49 44.83 39.22 37.34 33.69 32.08 28.59

1 2 3 4 5 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 39 40 41 42 43 45 46 47 49 52

98.08 96.15 94.23 92.31 90.38 84.62 82.69 80.77 78.85 76.92 75.00 73.08 71.15 69.23 67.31 65.38 63.46 61.54 59.62 57.69 55.77 53.85 51.92 50.00 48.08 46.15 44.23 42.31 40.38 38.46 36.54 34.62 32.69 30.77 28.85 25.00 23.08 21.15 19.23 17.31 13.46 11.54 9.62 5.77 0.00

Region

_________________________________________________________________________________________________________

Taiwan Portugal South Korea Turkey Mexico Russia South Africa Belgium Japan Norway Australia Italy France Denmark Singapore Germany Sweden Finland Switzerland USA Austria Peru Luxembourg Greece Netherlands New Zealand Czech Republic Spain Argentina Israel Ireland the United Kingdom Canada Hong Kong China Malaysia Brazil India Chile Indonesia Hungary Thailand Philippines Poland Egypt

Asia Europe Asia the Middle East Latin America Europe Africa Europe Asia Europe Oceana Europe Europe Europe Asia Europe Europe Europe Europe North America Europe Latin America Europe Europe Europe Oceana Europe Europe Latin America the Middle East Europe Europe North America Asia Asia Asia Latin America Asia Latin America Asia Europe Asia Asia Europe Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

161

Cost of Goods Sold (Excluding Depreciation) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya South Africa Botswana Mauritius Namibia Swaziland Cameroon Congo Morocco Djibouti St. Helena Angola Cape Verde Kenya Burkina Faso Zimbabwe Sierra Leone Algeria the Gambia Rwanda Western Sahara Sao Tome E Principe Mayotte Nigeria Niger Uganda Mauritania Comoros Mali Tunisia Lesotho Gabon Tanzania Guinea Senegal Ivory Coast Zaire Sudan Central African Rep Egypt Madagascar Chad Benin Liberia Ghana

276.38 267.16 226.16 211.71 208.50 114.25 105.46 101.86 81.98 81.22 78.92 76.62 72.79 68.19 46.61 43.39 42.19 40.91 40.48 40.29 39.94 39.67 39.67 39.55 38.93 38.43 37.19 36.59 35.60 35.33 35.07 34.94 32.80 32.23 31.64 31.53 31.34 29.50 29.03 29.00 28.59 28.51 28.39 28.35 28.35 28.02

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.18 96.36 94.55 92.73 90.91 89.09 87.27 85.45 83.64 81.82 80.00 78.18 76.36 74.55 72.73 70.91 69.09 67.27 65.45 63.64 61.82 60.00 58.18 56.36 54.55 52.73 50.91 49.09 47.27 45.45 43.64 41.82 40.00 38.18 36.36 34.55 32.73 30.91 29.09 27.27 25.45 23.64 21.82 20.00 18.18 16.36

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

162

Value ($K/employee)

Rank

Percentile

27.75 27.69 27.15 26.03 24.79 21.07 16.12 14.88 14.26

47 48 49 50 51 52 53 54 55

14.55 12.73 10.91 9.09 7.27 5.45 3.64 1.82 0.00

_________________________________________________________________________________________________________

Togo Zambia Guinea-Bissau Burundi Malawi Somalia Ethiopia Eritrea Mozambique

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

163

Selling, General & Administrative Expenses Countries

Value ($K/employee)

Rank

Percentile

85.31 85.08 80.20 60.93 55.92 50.19 46.12 43.04 42.68 37.87 35.50 34.27 33.88 33.19 32.31 30.88 30.70 26.55 26.43 26.40 26.26 20.61 20.42 19.08 17.66 17.22 16.99 15.82 15.22 12.28 10.88 9.72 5.47 5.21 5.17 4.25 4.23 3.31 0.34 0.29

1 2 3 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 41 45 46

97.83 95.65 93.48 89.13 86.96 84.78 82.61 80.43 78.26 76.09 73.91 71.74 69.57 67.39 65.22 60.87 58.70 56.52 54.35 52.17 50.00 47.83 45.65 43.48 41.30 39.13 36.96 34.78 32.61 30.43 28.26 26.09 23.91 21.74 19.57 17.39 15.22 10.87 2.17 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan Netherlands USA Japan Italy Israel Ireland Norway Sweden South Korea Finland the United Kingdom Germany Russia Switzerland Luxembourg South Africa France Australia Denmark Canada Greece Austria Hong Kong Czech Republic Argentina China Peru Malaysia Singapore Brazil Chile Hungary Thailand Poland Indonesia Philippines Egypt

the Middle East Latin America Asia Europe North America Asia Europe the Middle East Europe Europe Europe Asia Europe Europe Europe Europe Europe Europe Africa Europe Oceana Europe North America Europe Europe Asia Europe Latin America Asia Latin America Asia Asia Latin America Latin America Europe Asia Europe Asia Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

164

Selling, General & Administrative Expenses (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya South Africa Botswana Mauritius Namibia Swaziland Cameroon Algeria Gabon Tunisia Zimbabwe Mayotte Mauritania Comoros Lesotho Guinea Sudan Central African Rep Liberia Benin Ghana Togo Zambia Senegal Ivory Coast Egypt

30.94 29.91 26.43 24.74 24.37 11.15 10.29 9.94 4.64 4.32 3.99 3.11 2.92 2.70 2.62 2.58 2.33 2.14 2.14 2.09 2.09 2.07 2.05 2.04 0.32 0.32 0.29

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

96.30 92.59 88.89 85.19 81.48 77.78 74.07 70.37 66.67 62.96 59.26 55.56 51.85 48.15 44.44 40.74 37.04 33.33 29.63 25.93 22.22 18.52 14.81 11.11 7.41 3.70 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

165

Operating Income Countries

Value ($K/employee)

Rank

Percentile

52.50 52.36 28.13 25.37 25.35 22.09 18.71 17.95 17.23 16.36 15.88 14.98 13.40 12.72 11.93 11.74 11.12 11.08 10.83 10.17 10.16 9.79 9.52 8.80 8.67 8.61 8.13 7.79 7.71 7.41 7.34 6.99 6.76 6.41 6.24 5.37 3.63 2.69 1.05 0.86 0.56 0.54 0.47 -2.21 -3.72 -3.75

1 2 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 40 42 46 47 48 49 50 51 52 53

98.11 96.23 92.45 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 20.75 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico South Korea Taiwan Russia Netherlands South Africa USA Spain Portugal Norway Italy Greece France Czech Republic Pakistan Argentina Belgium Canada Japan Singapore New Zealand the United Kingdom Hong Kong China Finland Sweden Malaysia Brazil Switzerland Chile Germany Austria Luxembourg Denmark India Indonesia Thailand Hungary Poland Philippines Australia Egypt Peru Ireland Israel

the Middle East Latin America Asia Asia Europe Europe Africa North America Europe Europe Europe Europe Europe Europe Europe the Middle East Latin America Europe North America Asia Asia Oceana Europe Asia Asia Europe Europe Asia Latin America Europe Latin America Europe Europe Europe Europe Asia Asia Asia Europe Europe Asia Oceana Africa Latin America Europe the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

166

Operating Income (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya South Africa Botswana Mauritius Equatorial Guinea Algeria Kenya Burkina Faso Congo Morocco Sierra Leone the Gambia Djibouti Rwanda Western Sahara Sao Tome E Principe St. Helena Nigeria Niger Uganda Angola Mali Cape Verde Tanzania Zaire Zimbabwe Madagascar Chad Mayotte Guinea-Bissau Burundi Mauritania Malawi Comoros Lesotho Guinea Tunisia Somalia Sudan Central African Rep Benin Liberia Ghana Togo Zambia

25.40 24.55 18.71 17.52 17.25 11.26 6.53 5.47 5.09 4.90 4.85 4.80 4.73 4.72 4.69 4.65 4.65 4.58 4.57 4.51 4.36 4.35 4.15 4.07 3.78 3.46 3.41 3.35 3.33 3.20 3.19 3.05 2.96 2.91 2.88 2.83 2.56 2.52 2.47 2.35 2.35 2.29 2.29 2.27 2.25 2.24

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

167

Value ($K/employee)

Rank

Percentile

1.89 1.75 1.67 0.88 0.52 0.52 0.47 -1.79 -1.86 -2.01

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Ethiopia Eritrea Mozambique Gabon Senegal Ivory Coast Egypt Cameroon Swaziland Namibia

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

168

Earnings Before Interest and Taxes (EBIT) Countries

Value ($K/employee)

Rank

Percentile

169.22 168.76 44.85 29.31 26.41 22.51 21.53 20.45 20.42 20.00 19.28 18.96 18.18 17.73 17.18 16.94 16.87 15.00 13.89 12.62 11.63 11.41 11.29 10.92 10.22 9.79 9.78 9.76 9.74 9.68 9.46 9.18 8.30 8.18 7.52 6.98 6.55 3.48 3.28 2.97 1.49 1.22 0.76 0.65 -2.68 -2.70

1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 36 37 38 39 40 41 42 43 48 49 50 51 52 53

98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Taiwan South Korea Russia Netherlands Portugal Norway Greece USA Italy South Africa Czech Republic Brazil Spain Argentina Chile France Germany Finland New Zealand Pakistan Canada Australia Singapore the United Kingdom Austria Sweden Hong Kong China Switzerland Malaysia Belgium Luxembourg Japan India Denmark Thailand Peru Indonesia Hungary Poland Philippines Egypt Ireland Israel

the Middle East Latin America Asia Asia Europe Europe Europe Europe Europe North America Europe Africa Europe Latin America Europe Latin America Latin America Europe Europe Europe Oceana the Middle East North America Oceana Asia Europe Europe Europe Asia Asia Europe Asia Europe Europe Asia Asia Europe Asia Latin America Asia Europe Europe Asia Africa Europe the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

169

Earnings Before Interest and Taxes (EBIT) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya South Africa Botswana Mauritius Algeria Equatorial Guinea Congo Morocco Djibouti St. Helena Angola Cape Verde Kenya Burkina Faso Sierra Leone the Gambia Rwanda Sao Tome E Principe Western Sahara Nigeria Niger Uganda Mali Tanzania Zaire Madagascar Chad Guinea-Bissau Burundi Malawi Tunisia Somalia Namibia Zimbabwe Swaziland Cameroon Mayotte Ethiopia Mauritania Comoros Lesotho Eritrea Mozambique Guinea Sudan

26.47 25.59 18.96 17.75 17.48 15.01 10.94 9.00 8.92 8.66 8.41 7.99 7.49 7.12 6.63 6.25 6.15 6.10 6.06 6.06 5.94 5.87 5.68 5.39 4.92 4.51 4.35 4.33 4.15 3.98 3.79 3.27 3.22 2.98 2.79 2.75 2.65 2.62 2.46 2.42 2.36 2.31 2.27 2.18 2.09 1.92

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

170

Countries in Africa

Value ($K/employee)

Rank

Percentile

Central African Rep Benin Liberia Ghana Togo Zambia Gabon Senegal Ivory Coast Egypt

1.92 1.88 1.88 1.85 1.84 1.83 1.25 0.71 0.71 0.65

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

171

Pretax Income Countries

Value ($K/employee)

Rank

Percentile

34.08 20.39 18.65 18.38 18.09 17.50 16.49 16.47 16.31 14.94 14.68 14.61 13.67 12.10 11.65 10.11 10.09 9.70 9.60 9.54 9.32 9.29 8.98 8.57 8.40 8.23 8.23 7.64 7.12 6.72 6.35 6.26 6.16 6.04 3.35 3.00 2.39 1.24 0.68 0.64 0.58 0.52 -3.20 -3.23 -30.51 -30.60

1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 32 33 34 35 36 37 38 40 44 45 46 47 48 49 50 52 53

98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 16.98 15.09 13.21 11.32 9.43 7.55 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

Taiwan South Korea Netherlands Russia USA Norway Greece South Africa Spain Portugal Czech Republic Italy Argentina France Germany Canada Brazil Finland Chile Singapore Pakistan New Zealand the United Kingdom Australia Hong Kong Malaysia China Austria Switzerland Sweden Belgium India Luxembourg Japan Denmark Thailand Indonesia Peru Philippines Hungary Egypt Poland Ireland Israel Mexico Turkey

Asia Asia Europe Europe North America Europe Europe Africa Europe Europe Europe Europe Latin America Europe Europe North America Latin America Europe Latin America Asia the Middle East Oceana Europe Oceana Asia Asia Asia Europe Europe Europe Europe Asia Europe Asia Europe Asia Asia Latin America Asia Europe Africa Europe Europe the Middle East Latin America the Middle East

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

172

Pretax Income (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

Reunion Libya South Africa Botswana Mauritius Equatorial Guinea Algeria Congo Morocco Djibouti St. Helena Angola Cape Verde Kenya Burkina Faso Sierra Leone the Gambia Rwanda Sao Tome E Principe Western Sahara Nigeria Niger Uganda Mali Tanzania Zaire Madagascar Chad Guinea-Bissau Burundi Malawi Somalia Tunisia Zimbabwe Ethiopia Mayotte Eritrea Mozambique Mauritania Comoros Lesotho Guinea Sudan Central African Rep Benin Liberia

18.41 17.80 16.47 15.41 15.18 8.93 8.55 8.03 7.96 7.73 7.51 7.13 6.68 6.38 5.94 5.60 5.52 5.47 5.43 5.43 5.33 5.26 5.09 4.84 4.41 4.04 3.90 3.89 3.72 3.56 3.40 2.89 2.82 2.25 2.21 2.11 2.04 1.95 1.95 1.90 1.86 1.69 1.55 1.55 1.51 1.51

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.21 96.43 94.64 92.86 91.07 89.29 87.50 85.71 83.93 82.14 80.36 78.57 76.79 75.00 73.21 71.43 69.64 67.86 66.07 64.29 62.50 60.71 58.93 57.14 55.36 53.57 51.79 50.00 48.21 46.43 44.64 42.86 41.07 39.29 37.50 35.71 33.93 32.14 30.36 28.57 26.79 25.00 23.21 21.43 19.64 17.86

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

173

Value ($K/employee)

Rank

Percentile

1.49 1.48 1.48 1.13 1.04 1.01 0.64 0.63 0.58 0.54

47 48 49 50 51 52 53 54 55 56

16.07 14.29 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00

_________________________________________________________________________________________________________

Ghana Togo Zambia Namibia Swaziland Cameroon Senegal Ivory Coast Egypt Gabon

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

174

Income Taxes Countries

Value ($K/employee)

Rank

Percentile

6.83 6.74 6.08 6.07 5.66 5.66 5.64 5.58 5.27 5.19 5.12 5.09 4.75 4.48 4.17 3.36 3.31 3.28 3.21 2.90 2.69 2.67 2.54 2.52 2.41 2.23 2.12 1.90 1.83 1.70 1.61 1.59 1.29 0.95 0.71 0.59 0.58 0.22 0.01 0.00 0.00

1 2 3 4 5 6 7 8 9 10 12 13 14 15 16 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 39 40 42 45 46 47

97.87 95.74 93.62 91.49 89.36 87.23 85.11 82.98 80.85 78.72 74.47 72.34 70.21 68.09 65.96 61.70 59.57 57.45 55.32 53.19 51.06 48.94 46.81 44.68 42.55 40.43 38.30 36.17 34.04 31.91 29.79 27.66 25.53 23.40 21.28 17.02 14.89 10.64 4.26 2.13 0.00

Region

_________________________________________________________________________________________________________

Greece Australia Czech Republic Norway Argentina Italy South Korea South Africa Netherlands Spain Belgium Russia Portugal USA France Taiwan Finland Japan Germany the United Kingdom Sweden Brazil Chile Austria Canada Malaysia Switzerland India Luxembourg Denmark China New Zealand Singapore Hong Kong Indonesia Israel Ireland Thailand Peru Philippines Egypt

Europe Oceana Europe Europe Latin America Europe Asia Africa Europe Europe Europe Europe Europe North America Europe Asia Europe Asia Europe Europe Europe Latin America Latin America Europe North America Asia Europe Asia Europe Europe Asia Oceana Asia Asia Asia the Middle East Europe Asia Latin America Asia Africa

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators

175

Income Taxes (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in Africa

Value ($K/employee)

Rank

Percentile

South Africa Botswana Mauritius Reunion Libya Congo Morocco Djibouti St. Helena Angola Cape Verde Algeria Kenya Burkina Faso Sierra Leone the Gambia Rwanda Sao Tome E Principe Western Sahara Nigeria Niger Uganda Mali Tanzania Zaire Madagascar Chad Guinea-Bissau Burundi Malawi Somalia Ethiopia Zimbabwe Mayotte Eritrea Mozambique Mauritania Comoros Lesotho Guinea Sudan Central African Rep Benin Liberia Ghana Togo

5.58 5.23 5.15 5.10 4.93 3.46 3.42 3.33 3.23 3.07 2.88 2.26 1.94 1.81 1.70 1.68 1.66 1.65 1.65 1.62 1.60 1.55 1.47 1.34 1.23 1.19 1.18 1.13 1.08 1.03 0.88 0.67 0.67 0.63 0.62 0.59 0.58 0.56 0.55 0.50 0.46 0.46 0.45 0.45 0.44 0.44

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

98.15 96.30 94.44 92.59 90.74 88.89 87.04 85.19 83.33 81.48 79.63 77.78 75.93 74.07 72.22 70.37 68.52 66.67 64.81 62.96 61.11 59.26 57.41 55.56 53.70 51.85 50.00 48.15 46.30 44.44 42.59 40.74 38.89 37.04 35.19 33.33 31.48 29.63 27.78 25.93 24.07 22.22 20.37 18.52 16.67 14.81

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com

©2007 Icon Group International, Inc.

Financial Indicators Countries in Africa

176

Value ($K/employee)

Rank

Percentile

0.44 0.21 0.01 0.01 0.01 0.00 0.00 0.00

47 48 49 50 51 52 53 54

12.96 11.11 9.26 7.41 5.56 3.70 1.85 0.00

_________________________________________________________________________________________________________

Zambia Tunisia Namibia Swaziland Cameroon Senegal Ivory Coast Egypt

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007

www.icongrouponline.com

©2007 Icon Group International, Inc.

177

4 4.1

MACRO-ACCESSIBILITY IN EGYPT EXECUTIVE SUMMARY

At 70 million, Egypt is by far the largest Arab country by population. It sits in the heart of the Middle East and has a reasonably well-educated labor force. Egypt’s economy, traditionally associated with agriculture (particularly cotton), has become much more diversified than in the past. Its unmatched ancient monuments and spectacular coral reefs have made tourism its single largest foreign exchange earner. It is also a major oil and gas producer, with natural gas production increasing rapidly. The clothing and textile sector is the largest industrial employer and also a major foreign exchange earner. Other major industries include steel, cement, chemicals, pharmaceuticals, and light consumer goods. The U.S. is Egypt’s largest bilateral trading partner. Egypt is the largest single market worldwide for American wheat and a significant importer of other agricultural commodities, machinery, and equipment. The U.S. is also the second largest investor in Egypt, after the United Kingdom. U.S. investment is chiefly (roughly two-thirds of the total) in the oil and gas sector, but also includes investment in areas such as consumer goods, automobile production, and financial services. Given its strategic position in the region, Egypt continues to benefit from strong donor support. The U.S. Government has worked closely with Egypt on its economic reform program, and is its largest bilateral aid donor. Red tape remains a business impediment in Egypt, including a multiplicity of regulations and regulatory agencies, delays in clearing goods through customs, arbitrary decision-making, high market entry transaction costs, and a generally unresponsive commercial court system. At cabinet levels, the government has shown willingness to intervene in favor of private sector concerns and to modify onerous regulations when they are brought to the attention of senior officials. A strategic alliance among the U.S. Embassy, American exporters, and their Egyptian importers, agents, and partners has had some success in combating unfair bureaucratic practices. The petroleum, power generation and transmission, and telecommunications/information-technology sectors represent the most promising investment sectors in Egypt. In addition, expansions in the Red Sea resorts provide increasing opportunities for exporters of hotel equipment and environmental management services. Airports and other infrastructure being built to serve the new resorts also represent additional opportunities for U.S. exports and investment. Tourism is a major growth industry, especially along the Mediterranean and Red Sea coasts, and is attracting U.S. project management expertise and quality U.S. building systems and equipment.

4.2 4.2.1

ECONOMIC FUNDAMENTALS AND DYNAMICS Direction and Composition of Trade

The European Union (EU) as a bloc remains Egypt’s largest trading partner, typically accounting for around 35-40% of imports and exports. When implemented, Egypt’s Partnership Agreement with the EU could result in a significantly larger volume of trade. The U.S. comes next (and is Egypt’s largest trading partner as a country), accounting for around 20% of imports and 10-15% of exports. Asian countries account for around 25% of both imports and exports. Countries in the Middle East take 13% of exports and account for about 6% of imports, while Africa, Latin America, and Australia account for less than 5% each of imports and exports. Egypt’s leading merchandise export is crude oil and petroleum products, followed by finished goods (chiefly textiles and apparel), and raw materials (cotton and other agricultural products). Cement producers have begun to find overseas markets. Leading imports include capital goods, machinery, and agricultural commodities. Although

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Egyptian government officials and the media routinely decry the import of “luxury goods,” consumer goods account for only about one sixth of all imports. Chief U.S. exports to Egypt include agricultural commodities (usually around $1 billion annually), capital goods, and equipment. We caution that Egyptian trade and balance-of-payments data remain confusing and often contradictory. The balance-of-payments figures, for example, include the payments made by the Egyptian government to foreign oil and gas companies for their share of domestic production bought by the government and used in Egypt and thus probably overstate imports in general. They also may include payments for transactions in which the Egyptian participant was a broker for a transaction between two other countries, as in trade figures for Iraq. Finally, balance-of-payment figures may report payments made to financial center banks (such as in New York) rather than recording the ultimate recipient, skewing the individual country trade statistics. Customs figures, on the other hand, appear to understate oil and perhaps other exports. The truth probably lies somewhere between the balance-of-payment statistics (always higher for both imports and exports) and customs figures.

4.2.2

Economic Cooperation

Regional Initiatives In June 2001, Egypt signed an Association Agreement with the European Union. Egypt’s parliament ratified the agreement in March 2003 Egypt has trade agreements with nearly every Arab country. In January 1998, Egypt began implementing agreements reached with Arab League members in connection with the Arab Common Market treaty of the 1960s, which call for phasing out existing tariffs over a 10-year period. Long negative lists impede the effectiveness of almost all of these agreements, however. Egypt has been a member of the Common Market for Eastern and Southern Africa (COMESA) since mid-1998.

U.S.-Egypt Trade and Investment Framework Agreement (TIFA) Egypt and the U.S. signed a Trade and Investment Framework Agreement (TIFA) in 1999. The TIFA provides a mechanism for facilitating the concrete measures needed to continue moving the two countries towards freer trade. It established a Council on Trade and Investment (TIFA Council) composed of representatives of both governments and chaired by USTR and Egypt’s Ministry of Economy and Foreign Trade. The Council first met in November 1999. In June 2002, United States Trade Representative Robert Zoellick and Egyptian Minister of Foreign Trade Youssef Boutros Ghali discussed steps toward liberalizing trade between the United States and Egypt. A TIFA Council meeting followed in October 2002. That meeting resulted in the establishment of four working groups: on government procurement, customs reform and administration, sanitary/phytosanitary issues, and agricultural trade. The working groups held their first sessions in December 2002 and have met regularly since then.

U.S. Economic Assistance The U.S. government has provided Egypt over $25 billion in economic assistance since 1975. USAID has been instrumental in putting into place the foundations for economic growth, such as infrastructure (water, wastewater, power, and telecommunications) and a favorable economic policy environment for private sector development. The recent areas of concentration of the program have included job creation, economic growth and productivity, infrastructure, education, democracy and governance, population, health and nutrition, environment, and natural resource management. USAID adopted in 2000 a new strategy that focuses on expanding the role of Egypt’s private sector to help move Egypt from an assistance-based relationship to a relationship based on trade and investment. New areas of concentration under this program include the development of the information technology sector, www.icongrouponline.com

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strengthening Egypt’s capacity for human resource development, trade policy capacity building, financial sector reform, and continuing efforts to enhance Egypt’s business and export competitiveness. Economic assistance levels averaged over $800 million annually from the time of the Camp David accords (1978) until mid-1998. Food aid averaged over $218 million/year stating in 1975, but ended in 1992 in light of Egypt’s gains in agricultural self-sufficiency. As part of an overall revision in U.S. assistance policy, aid levels have, by mutual agreement with the Government of Egypt, been on a downward glide path since 1999.

U.S. Support for Trade and Investment The Overseas Private Investment Corporation (OPIC), the U.S. Export-Import Bank (Ex-Im Bank), and the Trade and Development Agency (TDA) are committed to supporting the growth of U.S.-Egyptian bilateral trade and investment. These agencies provide loan and insurance products and services, such as support for feasibility studies on major investments involving U.S. inputs. Several business missions from OPIC and Ex-Im Bank visited Egypt in late 2002 and the first half of 2003 to explore possibilities for increasing their activities in Egypt. Information about Ex-Im Bank, OPIC, and TDA programs is available through their head offices in Washington or through the Embassy.

4.3 4.3.1

POLITICAL RISKS Economic Relationship with the United States

The United States and Egypt enjoy a strong and friendly relationship based on shared mutual interest in Middle East peace, regional stability and security, combating international terrorism, strengthening trade relations, and revitalizing the Egyptian economy. Multinational exercises, U.S. assistance to Egypt’s military modernization program (valued at $1.3 billion annually), and Egypt’s role as a contributor to various UN peacekeeping operations continually reinforce the U.S.-Egyptian military relationship. Egypt is our indispensable partner in the quest for regional peace, and it works closely with the U.S. to that end.

4.3.2

Political System

The Egyptian Constitution provides for a strong President empowered to appoint one or more Vice Presidents, the Prime Minister, the Cabinet, and Egypt’s 26 provincial governors. President Hosni Mubarak was reelected in September 1999 to a fourth 6-year term. The bicameral legislature includes the law-making People’s Assembly and a consultative upper house, the Shura Council. People’s Assembly elections were held in late 2000 for a five-year term and elections for one-third of the Shura Council seats were held in May 2001. The National Democratic Party (NDP) has been the ruling party since its foundation in 1978. It effectively controls local and national government. Within its ranks are both members who favor greater economic and political reform as well as members who oppose reforms. There are more than a dozen recognized opposition parties, all of them small. Some of these parties have members in the People’s Assembly and the Shura Council.

4.3.3

Political Violence

There have been no confirmed acts of terrorist violence in Egypt since November 1997, attributable at least in part to the concerted, successful Egyptian Government counterterrorist campaign. Previously, extremist groups have staged

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attacks on Egyptian Government officials, security forces, prominent individuals, and tourists. The violence in Israel and the Palestinian territories since October 2000 has not spilled over into Egypt, although demonstrations have occurred in various parts of the country in response to events there. There were isolated incidents of vandalism of U.S.-linked businesses during anti-Israeli demonstrations in April 2002. There also has been a boycott campaign against American products motivated by perceptions of an American bias towards Israel in the conflict. The campaign had some impact on sales, chiefly of high profile U.S. franchise restaurants and locally produced, U.S.-branded consumer goods. The Government opposes the boycott and has publicly countered it by stressing the negative impact on Egyptian owners and workers. The overall security atmosphere for U.S. firms operating in Egypt remains excellent.

4.4 4.4.1

MARKETING STRATEGIES Distribution Channel Options

Foreign firms can sell directly within Egypt if they are registered to make direct sales. Many do so as part of a manufacturing or assembly operation in Egypt. A few foreign firms use free zones or bonded warehouses to store goods and hire their own employees to sell door-to-door consumer goods, such as vacuum cleaners. Most foreign firms, however, rely on Egyptian companies for wholesale and retail distribution, ensuring their effectiveness through staff training programs in Egypt and abroad, supplying short-term home office personnel to work with the Egyptian firm in Egypt, and making regular visits by marketing and technical support staff. Although the concept of “marketing”, as compared to simply selling, or waiting for the customer to find and come to you, is new to Egypt and weakly practiced, there are a growing number of good Egyptian firms who know what they are doing and how to market the products in which they specialize. Egyptian commercial agents are required for foreign firm bids on most civilian government tenders. By contrast, commercial agents cannot be used to bid on military tenders, although use of Egyptian “consultants” may be allowed if the arrangement is properly structured. Commercial agents are optional when bidding on tenders issued by the petroleum companies, when selling to the private sector, or when selling under USAID-financed programs. There are many choices for distributors, dealers, and agents in Egypt. There are a few firms with modern management, including “profit center” staff responsible for success in specialized departments. There are more traditional “general trader” type companies, some of which have developed a certain specialization (e.g., lumber, building products, canned goods, fresh and frozen meats), and some of which handle “everything”. Also, there are smaller firms specializing in only a few product lines or only a handful of foreign suppliers. Many retailers of consumer goods tend to import their own needs directly, rather than pay high markups to wholesalers - sometimes a suitcase or trunk load at a time. A corollary is that many Egyptians prefer getting quotes directly from the overseas supplier rather than from the local agent, on the theory that the price will be better. This suggests that U.S. principals be sensitive to the role (and presumed cost) of their Egyptian agents. One way to strengthen that role is to refer customer inquiries back to the Egyptian agent, or to a regional representative outside Egypt. Only registered commercial agents can work on government tenders. Often such persons have retired from the government agency to which they are now specialized in selling. This is especially common among persons selling to the military, security, and police agencies. In the extreme, some of these people literally operate out of their homes and have neither office nor staff, but they can be effective.

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In Egypt, as elsewhere, the artistry of appointing a representative requires a blend of many concerns and decisions. Will your product line be prominently featured by the prospective agent, or will it just be added to a dusty shelf along with many other product lines? Is his influence with government decision-makers generational and therefore subject to decline as the years pass? Does he have children or trusted staff being groomed for responsibility? Egyptian law requires that all commercial agents and importers have Egyptian nationality. (If it is a company, the chairman and all members of the board must be Egyptian, and it must be 100% Egyptian-owned.) Agents also must have resided continuously in Egypt for at least five years (with specified exceptions for expatriate Egyptians having an overseas work permit); be certified by a local chamber of commerce or professional association; not be a civil servant or worker in a public sector company (i.e., not moonlighting), nor a member of the People’s Assembly; not be a “first grade relative” (i.e., a member of the immediate family, or uncle, aunt, niece, or nephew) of a civil servant of the rank of Director General or higher or of a member of the People’s Assembly. (This prohibition against agents with family members in government is rarely enforced.) Public sector firms can be agents, as can private firms and individuals. Distributor-type companies with any foreign ownership can market goods, including imported goods, in the following circumstances (although they cannot handle the import operation, per se): •

General Partnership Companies or Limited Partnership Companies: In these types of companies, there may be a foreign partner, provided that the Egyptian partner(s) have at least 51% of the capital and the general manager or head of the company is an Egyptian national. In these instances, such a distributorship company cannot be an “importer” nor act as commercial agent unless it is 100% Egyptian owned and managed.

•

Limited Liability Company: A foreign partner in this type of distributorship company faces no limit on the percentage of ownership, provided that at least one manager of the company is an Egyptian national (there can be one or more managers depending upon the articles of incorporation), there are at least two shareholders or partners, and the capital of the company is not less than LE 50,000 (approximately $8,200). A distributorship company of this type also cannot be an “importer”, nor act as commercial agent.

•

Joint Stock Company: Provided that at least 49% of the shares are offered to Egyptians upon formation, foreign shareholders ultimately can own up to 100% of the company, provided that a majority of the board of directors are Egyptians, the capital of the company is not less than LE 250,000, and there are at least three shareholders. Again, a distributorship company of this type may not import or act as a commercial agent unless it is 100% Egyptian owned and managed.

Foreign firms which form a distributorship as mentioned above often permit the Egyptian partners to form a separate company to act as “importer” or agent. The latter delivers the goods to the distributorship company for marketing within Egypt.

4.4.2

Agents and Distributors

Egyptian law concerning commercial agency agreements is among the most liberal in the Middle East. The law is neutral concerning exclusivity, compensation is not required to cancel an agency and there is no minimum notification period for cancellation. There is no requirement that the agent authorize the import of the foreign principal’s products into Egypt, nor that the importation take place through the agent. (Importers of any product must be separately registered, under another law). Commercial agents must register the existence of their agency with the Ministry of Supply and Trade’s Commercial Registry Department, giving basic facts about the agreement, including the amount of commission to be received on sales. The foreign firm itself faces no local registration requirement. The commercial agency law is also neutral about dispute settlement procedures (leaving this to the parties to decide, preferably in writing at the time of appointment of the agent, and in advance of a dispute) and on the amount of commission due an agent.

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Commission rates vary according to the type of product or service, volume of sales, and effort needed by the agent. The larger the volume of sales, the smaller the commission. for commodities such as rice, wheat, sugar, lumber or cotton, the commission ranges between 1-3%; for chemicals and foodstuffs 3-5%; for medical equipment, earthmoving equipment, office/business equipment, about 10%; and for expensive laboratory and scientific equipment, 15%. for major projects such as a complete civil engineering project, the commission is typically 1-3%. In tenders, the commission is calculated in the quoted bid. If a bidder reduces the bid price, the agent typically is asked to share in the reduction. Commission rates must be reported in bid packages for government tenders, with the government reserving the right to reduce any commission it deems extravagant. Commission rates also must be noted in the Ministry of Supply and Trade’s Commercial Registry documents signed by the Egyptian agent. Agent exclusivity is not required by law; the majority of U.S. firms have one or two Egyptian agents for different products, although a few have more. Agencies can be split geographically and/or by product, although this is generally avoided in a country like Egypt, where activity is centralized around the capital city of Cairo. If there is a geographic split, it is generally Alexandria with or without the Delta cities on one hand, and Cairo and the Nile valley on the other. Agencies also can be split between private and public customers, with one agent specializing in tenders and another handling private sector customers. Agents often appoint subagents to cover smaller cities. There is no special Egyptian secret to finding a partner. It is no more or no less difficult and personal in Egypt as anywhere else. Networking and lengthy investigation by the interested principal are necessary. There are plenty of reputable, dynamic, educated, and far-sighted Egyptian entrepreneurs available in Egypt, and some reside overseas in London, Paris, or the United States. The best are on a par with those of senior management of major U.S. corporations, and they should never be underestimated in evaluating them or in negotiating with them. In this search for an appropriate partner, the U.S. Mission in Egypt can be helpful through its network of contacts developed by the Commercial Service, Foreign Agricultural Service, U.S. Agency for International Development, the Office of Military Cooperation, the Embassy’s Economic-Political office, and others. The International Partner Search (IPS) program, offered by the U.S. Commercial Service, is designed to assist U.S. companies in finding appropriate local agents/distributors for their products. for further information, U.S. business representatives should contact the nearest Department of Commerce Export Assistance Center in the United States or the Commerce Department’s Trade Information Center at 1-800-USA-TRADE (1-800-872-87233). Recommended business networks in Egypt include the American Chamber of Commerce in Egypt (with branch offices now in Alexandria and Washington, DC) and various associations of Egyptian entrepreneurs including the Egyptian Businessmen’s Association, the Alexandria Business Association, the Federation of Egyptian Industries, and the Egyptian Exporters Association. There are investor committees in the large industrial cities of Tenth of Ramadan, Sixth of October, Borg El Arab, and a chamber in Ismailia promoting projects in the Sinai.

4.4.3

Franchising Activities

Franchising in Egypt has become quite popular in a short time, especially in the fast-food sector. Non-food franchises have a large market potential. A limited number of companies in the fields of hotel management, car rental, language education, health and fitness, electronics, and computer training are currently franchised in Egypt. A number of private companies are active in promoting awareness of the concept. The Egyptian Franchise Development Association (EFDA), registered in September 2001, unifies franchisees and, among other activities, seeks to overcome the bureaucratic barriers this industry faces and cooperate on other activities of joint interest, such as training. With the help and participation of Egyptian Government officials, EFDA organizes a large and successful international franchise exhibition.

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Egyptians themselves have begun franchising their own retail businesses to others, particularly clothing stores. This suggests that the franchise business concept, per se, is acceptable within the Egyptian cultural milieu and could be replicated in other business lines by interested firms. Almost all the franchises now operating in Egypt are the result of an Egyptian entrepreneur approaching the foreigner, rather than the result of a marketing effort by the foreign firm. While this may show an entrepreneurial spirit among Egyptian businesspersons, it also highlights an attention gap on the part of foreign businessmen.

4.4.4

Direct Marketing Options

Direct marketing in Egypt such as catalog sales or television sales, tends to be problematic and is just beginning. for one reason, the use of credit cards or checking accounts drawn on foreign banks is not common in Egypt (although it is increasing). In addition, mailing goods into Egypt faces the risks of mail theft, loss in the airport mail warehouse, and arbitrary and high customs duties. Purchasing of goods through the Internet is limited for the same reasons, although the Egyptian Government is interested in e-commerce and is drafting e-commerce legislation.

4.4.5

Joint Ventures and Licensing Options

Egyptian entrepreneurs often prefer to have a foreign partner in a joint venture in Egypt. The foreigner supplies and ensures quality of the technology, as well as the “cachet” necessary to gain customer acceptance. Foreign equity in joint ventures can be as low as a few percentage points, depending upon mutual agreement. Egyptian Law No. 8 (Investment Incentives and Guarantees Law) allows foreign investors to own any amount, up to 100%, in projects in most sectors. The details of joint venture or licensing agreements between Egyptians and their foreign partners are a matter of mutual agreement, defined by their contract, not by special law. Liberalized foreign exchange regulations since 1991 permit the free transfer abroad of profits and dividends. Invested capital may be repatriated without prior approval of the government’s investment authority, the General Authority for Investment and Free Zones (GAFI). Technology licensing that does not involve “investment” in Egypt by the foreigner but that does involve using “process secrets” for manufacturing in Egypt must be approved by the Ministry of Industry’s General Organization for Industrialization (GOFI). Approval is not required for licensing agreements involving trademarks and technical know-how other than “process secrets”. A stiff withholding tax is levied on royalty payments unless a double taxation treaty exists. (There is a U.S.-Egyptian treaty for the avoidance of double taxation, which limits tax on royalty payments to 15% of the gross amount of such royalty.) Numerous government and private companies have licensing agreements with foreign firms under which royalties and other fees are freely transferred abroad pursuant to individual corporate agreements. Examples of licensed production in Egypt include name-brand clothing, personal care products, kitchen utensils, pistols, laser alignment equipment, and military vehicles. Service licenses include diving training, and franchised services including personal care and restaurants. Inadequate patent protection has been so far the biggest barrier to licensing in Egypt. Some U.S. investors have looked to Egypt as an investment site so as to be able to benefit from U.S. Government procurement preferences. Under the U.S. Federal Acquisition Regulations (FAR), Egypt is a “designated country” (among many others) from which certain goods theoretically could be procured by the U.S. Government as if they were made in America. However, this rule does not apply because the FAR requires such countries to sign the GATT/WTO Procurement Code, and Egypt has not done so yet.

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Organizational Structure and Management in Egypt

Most decision-making in Egypt is top-down and generally made by one person or a small handful of top managers. Delegation typically consists of giving and implementing orders. Nonetheless, many middle managers are effective, educated, intelligent, and do not like to be overlooked. They should not be minimized or underestimated. American visitors/negotiators need to greet middle managers politely and enhance their status in front of their superiors. Such efforts pay off in favorable treatment of paperwork and other work processes and reduce bureaucratic obfuscation. Managers of firms in Egypt say they typically spend 30% of their time dealing with Egyptian bureaucracy.

4.4.7

Creating a Sales Office

As in any other country, seek early legal counsel from one or more attorneys and tax counsel from a professional accounting/auditing firm. Lists of such firms are available on the Internet from the Commercial Service Web site in Egypt (www.buyusa.gov/egypt). Bureaucracy has flourished in Egypt since the time of the Pharaohs. A newcomer’s biggest and never-ending challenge is to learn, preferably in advance, what laws affect him/her and how to cope with them. Many of the laws reflect Egypt’s socialist government of the 1950s-1970s and, if interpreted literally, do not favor private enterprise. However, newer laws and the policy of today’s government favor entrepreneurship and the free market economy. Tension between political desire favoring entrepreneurs and bureaucratic reliance on old laws-on-the-books continues. There are two alternative legal routes for a foreign company to invest in Egypt: through Law 159 of 1981 or Law 8 of 1997. Companies Law 159 offers generally fewer privileges to foreign investors than Investment Law 8.

4.4.8

Selling Strategies

Egyptians with whom an American will deal in business are often trilingual (English-French-Arabic), well-traveled individuals who pride themselves on ferreting out good deals at decent prices. Mid-level government officials with whom a foreigner may deal may be less sophisticated and less well traveled, but no less able to negotiate. Cairo is the cultural (as opposed to religious) capital of the Arab world, as well as the political capital of Egypt. Thousands of affluent Arab tourists and investors travel to Cairo often throughout the year, enjoying the cinema, theater, television, live performances, and relaxed lifestyle not generally available in some other Middle East countries. Many of these persons have second or vacation homes and apartments in Egypt, as well as factories and real estate investments. Foreign suppliers/marketers are beginning to take advantage of Egypt as a locale from which to market to its audience of wealthy Arab visitors. Some 18 million of the estimated 70 million Egyptians live in the greater Cairo metropolitan area. Seven million live in Alexandria permanently, and its population increases by 50% in the summer as vacationers flood in. Numerous important secondary cities offer market opportunities for agricultural, industrial, and consumer goods in the Delta (Tanta, Damietta, Mansoura, Mehalla el Kubra, Damanhour, Benha, Zagazig); along the Suez Canal (Port Said, Ismailia, and Suez); and along the Nile south to Upper Egypt (Assiut, Minia, Sohag, Qena, Luxor, Aswan). Negotiations for a sale, whether with a government agency or a private individual, will be bound by certain unspoken Egyptian cultural requirements. One is that there is no final best price that cannot be reduced further by negotiating. A corollary is that only a neophyte would offer one’s best price, or anything close to it, early in negotiations. Government employees are judged on their ability to squeeze the final penny from the lowest bidder. This happens repeatedly, at every level of decision-making, and is the Egyptian version of the “Dutch auction”, called in Arabic “momarsa”. Momarsas have been popular because they give Egyptian officials the appearance of trying to get the best deal for Egypt, and they reduce charges of cronyism. www.icongrouponline.com

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Momarsas, however, are viewed by companies subjected to them as potentially unfair, without clear rules or procedures, and a violation of Tenders Law No. 8’s mandate to negotiate with the lowest qualified bidder only. The U.S. Embassy and some business groups, including the U.S.-Egypt Business Council, have urged the government to ban “momarsas”. A recent positive development is that the practice of “momarsas” has now been prohibited in the new tenders law (Law 8 of 1998), approved in May 8, 1998, and enacted, effective June 9, 1998 (see “Pricing Products”, later in this chapter). A marketing problem in Cairo is that it is often difficult to establish who offers what for sale and where to find them. The city is splayed across the Nile about 15 kilometers (9 miles) in diameter, with several distinct marketing districts that are an hour apart in normally heavy traffic. Yellow pages and the like are not available to the average consumer. As a result people may only find a product they want by attending a trade show or fair, as it is too hard to find the single or handful of outlets maintained by official agents, distributors and dealers. A growing number of trade directories and commercial directories (including “Kompass - Egypt”) have eased the problem of identifying existing companies.

4.4.9

Advertising and Trade Promotion

Strategically placed newspaper and magazine ads can produce good results. Egyptians read newspapers voraciously, and all literate people will see or hear about advertisements placed in the widely circulating Al Ahram daily. Television is watched by all Egyptians, and advertisements reach and influence wide audiences. TV advertising has continued to increase in sophistication and prominence. The emergence of three privately owned television stations has created a new forum for advertisements in addition to the advancements on the public stations. Advertising agencies have begun to host entire programs, focusing on celebrity appearances for marketing purposes. While these programs had traditionally been shown only during Ramadan, they now air year-round. Two partially privatized pop radio stations have also been created and already have captured a large part of the youth market. Now stations broadcast with advertisements. Radio Cairo and three stations are allowed to air advertisements and, in the month of Ramadan, rates increase tremendously. Other forms of advertisement in Egypt consist of roadside billboards, flashing neon signs on building roofs, building walls completely painted with advertising signs, “junk mail” advertisements, faxed advertisements, and messenger/courier-delivered direct mail campaigns. Flyers/stickers plaster Cairo’s walls and lampposts just as in the United States. Street peddlers and hawkers shout the praises and prices of consumer products they offer for sale. Trade promotion is becoming more sophisticated. Trade shows are frequent, aimed either at targeted business audiences or the general public; several take place each month at one or more of the downtown hotels or the Cairo International Conference Center (CICC). Most of these shows consist exclusively of Egyptian distributors/dealers/agents of foreign suppliers, or local manufacturers - not because they purposely exclude foreigners but because of poor marketing and last-minute preparations. The annual Cairo International Trade Fair held in the spring is the historical centerpiece of Egyptian trade promotion events. It has evolved from its beginnings as a “required” government annual event to today’s version of a county fair aimed at consumer purchasers. U.S. firms offering consumer products as diverse as office and business equipment, telephone credit cards, courier services, saunas and swimming pools, satellite dishes, educational toys, car care products, lawn furniture, recreational equipment, mobile phones, and satellite telecommunications have found success at this consumer extravaganza.

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Selected Media List

Daily Newspapers Al Ahram (circulation 750,000 Sunday - Thursday, 1,000,000 Friday) Egypt’s most prestigious daily and most prosperous of the country’s five largest publishing houses. In addition to publishing, the company has interests in many business services including computerization, billing services, and ID card services. Al Akhbar (circulation 750,000) More informal news (crime, human interest) than Al Ahram. Simpler language. Harshly antagonistic toward U.S. policies. Al Gomhouriya (circulation 350,000) Less influential news coverage but with more local and sports news than other dailies. Al Wafd (circulation 120,000 - 180,000) Mouthpiece of the New Wafd Opposition Party. Leading opposition paper, but much smaller and limited in coverage and scope than the major pro-Government dailies above. Egyptian Gazette (circulation 20,000) The English-language daily. Part of the Gomhouriya publishing house. Caters almost exclusively to foreigners living in Egypt and tourists.

Weekly Newspapers and Magazines Akhbar al Yom newspaper (circulation 1,200,000 - 1 million) Saturday edition of Al Akhbar with many special interest sections, particularly women’s and sports. Akher Saa magazine (circulation 50,000) Current events, sports, economics, history, arts, cinema, theater. Rose al Youssef (circulation 50,000) Political magazine with human interest stories. Al Ahram Weekly (circulation 20,000) English-language weekly newspaper from the Al Ahram publishing house. Read by foreigners and the Egyptian elite. Al Ahram Hebdo (circulation 15,000) French-language weekly from the Al Ahram publishing house.

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Al Ahram Al Arabi (circulation 80,000) General interest news magazine from the Al Ahram publishing House. Al Mussawar (circulation 50,000) Launched in 1924, one of Egypt’s oldest publications. Well respected news coverage and political and social commentary. October (circulation 30,000) Popular general interest magazine. Sabah El Kheir (circulation 20,000) Youth-oriented magazine from Rose al Youssef. Nosf al Donia weekly magazine (circulation 50,000) Women’s issues. Hawa’a weekly magazine (circulation 30,000) Egypt’s original women’s magazine, first published in 1892. Al Kawakeb (circulation 30,000) Egypt’s cultural magazine, specializing in cinema, theater, radio and television.

Economic Publications Al Ahram Al Iktisadi weekly magazine (circulation 20,000) Egypt’s leading economic magazine, modeled after the British “Economist”, is read by academics and government economic officials and has numerous readers outside Egypt. Al Alam Al Yom daily newspaper (circulation 10,000 in Egypt, 50,000 in Saudi Arabia). Economic, commercial and Arab affairs. Business Monthly (circulation 5,400) English-language magazine published by American Chamber of Commerce in Egypt. Egypt Today and Business Today (circulation 17,000) Glossy English-language magazines related to social/business life in Egypt published by International Business Associates. Middle East Times (circulation 4,400) English language weekly, part of the Washington Times group, edited in Cyprus and printed in Athens.

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Cairo Times (circulation 10,000) A weekly independent English language paper that covers primarily domestic Egyptian political and social issues and has a large business section. PC World Egypt A monthly English language publication launched in 1998 that focuses on business computing.

4.4.11

Pricing Issues

Egypt traditionally is a price-sensitive market, where quality often takes second place to cost. This is slowly changing. One important example of that change is a new tender law (Law 89 of 1998) which requires compliance with terms, conditions and specifications of the tender, as well as a comparative consideration of technical and financial aspects in arriving at an award decision. Prior to the new law, however, government tender rules had essentially required that the low bid win, regardless of quality. American firms sometimes had not understood this and would mistakenly quote “better value” than was required by tender specifications. This approach was ineffective and generally produced losing bids. Many companies would bid strictly to the specifications, then, as an alternative, would provide a second, optional, value-based bid. In the tender process, specifications are often unclear and poorly written, which allows for a wide divergence in interpretation by bidders as to just what the tender requires. Elaborate bid proposals often fail, passed over for cheaper, practical alternatives. U.S. firms that succeed in Egypt tailor their products to customers’ specific needs. Exceptions to the generalization that “price sells” are sales financed by USAID and other foreign/international donors such as the African Development Bank. When funds are provided by these donors, Egyptian decision-makers can afford (and the foreign donors often require) quality, efficiency, and endurance considerations to weigh heavily in buying decisions. Another exception is consumer goods: people will pay for quality if they perceive it. However, the same affluent Egyptians who may buy a Mercedes car will tend to outfit their new factories with used equipment if they can cheaply transport a “complete” factory from abroad. Supplying U.S. sellers should aim to create and support a sales/service network in Egypt by training their distributors and dealers. Firms that sell directly to government agencies need to do the same thing - ensure training of the workforce using the product or it will fail through ignorance of proper maintenance and the foreign supplier will be blamed for poor quality. Total Quality Management (TQM) interest has skyrocketed among producers in recent years with a number of them now working toward ISO 9000 certification.

4.4.12

Public Sector Marketing

In selling to the Egyptian government, one will of course deal directly with the client agency. Egyptian procurement is either done with national budgetary funds, or by using aid funds from USAID or other donors. In the case of USAID-funded project procurement, announcements are made in the U.S. “Commerce Business Daily”, published in Chicago. This journal publishes U.S. Government procurement needs and is available in hard copy for $324 per year from the Superintendent of Documents, Government Printing Office, Washington, D.C. (202) 402-9371, phone (202) 783-3238, fax (202) 512-2233, or on line from Mead Data Central, Arlington, VA, phone (800) 843-6476.

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Other donor-funded projects open to U.S. bidders are from the Government of Japan’s United Overseas Development Assistance (ODA), which is a scheme of assistance extended by the Government of Japan to other countries, or multilateral assistance from entities such as the World Bank, African Development Bank, or Arab and Islamic development funds. The following pertains to contracting directly with the Egyptian government. It is also relevant for donor-financed projects to the extent that Egyptian law applies to them.

Tenders Law The Tenders Law No. 89/1998 now governs GOE procurement by all civilian and military agencies (“ministries, departments, local government units, and public and general organizations”) unless they are excused from this law. It has replaced the former Law 9 of 1983. The improvement is evident mainly in these areas: •

No negotiation of bids after bid opening (“momarsa,” in Arabic). A tender may not be transferred into a momarsa.

•

No cancellation of an order without reason. Moreover, rejected bids and awarded bids will contain the reasons on which the decision was based.

•

Bid bonds will now be refunded immediately upon expiry of validity of tender.

The law has not changed the following features: •

Open competition with publication for at least 30 days;

•

15% price preference for Egyptian bidders (however, the Ministry of Defense tenders fall under the Reciprocal Defense Procurement Memorandum of Understanding described below). This allows Egyptian companies to compete as U.S. companies on DOD procurements and U.S. companies to compete for MOD tenders as GOE companies. If a U.S. company is competing with GOE companies on an MOD procurement, regardless of funding source, they must be treated the same. If a GOE company gets a 15% price preference, so does the U.S. company. Not all DOD procurement committees are aware of this requirement. In the event of a dispute, please contact the U.S. Embassy’s Office of Military Cooperation to inform it of MOD non-compliance with this provision of the Memorandum of Understanding

•

A two-phase decision-making process: a bid opening committee that convenes a public session to which all bidders are invited and bid prices are read aloud; and a decision-making (settlement) committee that reviews the technical bids and either makes a decision or (if the value is over $50,000) recommends a decision to the minister concerned.

•

Bid bonds of one or two (generally two) percent and a performance bond by the winning firm of (generally) 5%. Preference is given to Egyptian public sector companies and Egyptian cooperatives, both of which are exempted from the bonding requirements, provided they do the work themselves and do not request an advance payment.

•

Fraud, bribery (“either personally or through a third party, directly or indirectly”), or bankruptcy by the contracting party annuls the contract and allows any outstanding bid or performance bond to be confiscated;

•

Sole-source decisions are permitted in special instances: monopoly sources of supply; goods whose import is monopolized; specialized products or services; and goods and services needed urgently.

•

Advance payments are permitted, against a letter of guarantee. U.S. standby letters of credit (which can be insured for political risk by the U.S. Overseas Private Investment Corp.) are acceptable in Egypt.

Practical Problems of the Tenders Law There is no time limit for the decision-making committees to meet, make, or announce their decision. If a bidder withdraws its bid prior to bid opening, it forfeits the bid bond. Bidders often are “held hostage” to a government www.icongrouponline.com

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agency that stalls the bid opening for varied reasons, including running out of funds for the project. Costs of extending bid bonds are borne by the bidders. If a winning firm withdraws from a project before beginning or completing a project, its performance bond similarly will be confiscated. Confiscation has happened when a client has delayed start-up because of budget shortfalls, expecting the contractor/supplier to carry the burden of maintaining the performance bond. Government agencies often delay giving the “final acceptance” of goods or works projects, holding up final payment and final retirement of the performance bond. There are no time limits for making payment from the date of acceptance of a bid, nor any provision for implied or automatic acceptance of a supplied good or service. The client must explicitly acknowledge “final acceptance” before the contractor can receive final payment and retire the performance bond. If award decisions are delayed beyond the validity date specified by a bidder, extra costs incurred by the delay cannot routinely be passed on. If the client adds new requirements to an ongoing contract, any extra monies requested by the supplier/contractor must be endorsed by a special “price study committee” which sometimes takes years to approve them. In the meantime, of course, the supplier/contractor is expected to fulfill the revised contract without delay or complaint. The Tenders Law makes no reference to dispute resolution, which therefore must be negotiated prior to contract signing. Arbitration in Egypt or abroad (the latter can include foreign law and foreign arbitral procedures) is preferred to the court system, although enforcement of arbitral awards is not assured because the losing party can appeal Egyptian or foreign arbitral decisions in Egyptian courts. If no specific dispute settlement procedure is mentioned, any future dispute with a government party will go to the government’s Council of State. This government agency both reviews the constitutionality of proposed laws and regulations and functions as a court for all non-criminal matters to which the government is a party. If the government party does not honor an arbitration decision, the tenders’ law does not permit the winning party to use the arbitration settlement documents to settle claims with other government entities (customs, tax, social insurance, etc.). There is no provision allowing the supplier to delay work if payments are delayed. There is no provision to reduce the performance bond progressively according to the rate of completion of the work. For Letters of Credit/Guarantee offered as a performance bond, it is advisable to have separate L/Cs for each procured commodity or distinct order, to avoid blocking the whole in case of dispute over one item. The Tenders Law has increased the ceiling on direct orders to LE 50,000 (approximately $8,300). In the Tenders Law, tenders and bids are not to be transformed into “momarsa” unless otherwise explicitly mentioned in the tender advertisement. Maintenance and after-sales technical service is to be given significant consideration in deciding and evaluating offers. The job is to be given to the lowest bidder only if the requirements for technical and maintenance support are fulfilled. Amendments to Dispute Settlement Law 27 of 1994 regarding contracts between public enterprises and private (domestic and international) sector suppliers allow both parties to agree to appoint any accepted legal body. In the past, the only body overseeing disputes with public enterprises was the State Council, which was taking years in some cases to settle disputes. Parliament approved these amendments in May 1997. The new laws correct some of the most serious flaws in Egypt’s current government procurement procedures. Egypt is also now playing a positive role in international discussions of procurement practices, including those of the World Trade Organization.

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Other Practical Considerations in Selling to the Government Poorly written specifications may force bidders to guess what the customer wants. U.S. firms must stay in close touch with client agencies to minimize doubts and uncertainties. Do not assume the “best” is desired, since superior features may not be understood or the price may be too high. The law is silent about who writes tender specifications and neither encourages nor discourages hiring of consultants to do so. Foreign firms that are trusted by government officials often voluntarily propose tender specifications to prospective bidders, which gives them a chance to wire the specifications. In the decision-making committee, the technical representative (typically an engineer) must concur in the award decision. Such persons have much influence. Government entities expect performance bonds to cover the full warranty period for the product or work in question, and draw downs proportional to work completed are not usual. U.S. suppliers, by contrast, generally want performance bonds limited to safe delivery and/or set-up. Therein lie grounds for much misunderstanding and complaints over alleged delays in releasing performance bonds. Influence peddling in procurement decisions is a much-discussed phenomenon. What is certain is that decisionmakers must feel comfortable with a supplier. They will not select a low-bidder unknown to them. Personal friendships and frequent visits to decision-makers by foreign principals and their local representatives are important marketing factors. While “sweetheart deals” are known to take place, many Egyptian sources affirm that the majority of decisions are openly competitive and straightforward. While the decision-making process may seem opaque, details of bids are readily obtainable through informal channels.

4.4.13

Defense Trade

Defense and “Defense Conversion” U.S. military aid finances most of Egypt’s big-ticket defense procurements. Military production plants are not scheduled for privatization and are unlikely to be sold. Twenty-six of these plants produce both military and civilian goods, and many managers of these plants are interested in licensing arrangements with foreign firms to enhance their production mix and improve quality. The Egyptian Tank Plant (Military Factory 200) outside Cairo is one of the largest military manufacturing facilities in this region of the world. Its American-trained Egyptian workforce is highly skilled and has access to state-of-the-art production and maintenance machinery. Egypt is currently producing the next increments of M1A1s and M88A2s at this factory. Egyptian authorities, nevertheless, are interested in attracting large-scale medium and heavy industrial producers to produce other products at this excellent facility either under license or in a joint venture (e.g. fire engines, heavy equipment transport trailers, lightweight scoop loaders, medium tactical trucks). Examples of civilian products currently manufactured in Egypt’s military factories include: •

Medical and diagnostic equipment

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Domestic appliances

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Fire extinguishers

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Ammunition

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Machine shop equipment such as lathes, drills, and grinders

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Generating and welding sets

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Electric motors

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Television receivers

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Computers

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Batteries

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Electric and water meters

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Agricultural machines

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Kitchen equipment

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Mobile water purifiers

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Circuit boards

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Calibration equipment

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Chrysler Jeep-brand vehicles

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Laser alignment instruments

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Microscopes

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Military goods produced in Egypt include: •

Small caliber and heavy ammunition

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Mortars, mines, grenades and other explosives

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Antitank rockets

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Rocket motors

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Radars and electronic equipment

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Smoke and pyrotechnic devices, rifles, pistols (Beretta licensee), and machine guns

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Jet trainer aircraft (Alpha and Tucano)

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Armored personnel carriers

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Alpha jet engines

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Field and aircraft communications equipment

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Gazelle helicopters and engines

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Gyroscopes

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Weapon sights

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Binoculars

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Periscopes

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Tanks

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MLRs

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Artillery pieces

Three Entities Responsible for Military Production Plants The Ministry of Military Production 5 Ismail Abaza Street, Cairo, Egypt

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Phone 20-2-795-3063, Fax: 20-2-795-3617 Supervises 20 factories of which 14 also produce civilian goods. The Arab Organization for Industrialization (AOI) P.O. Box 770, Cairo, Egypt Phone: 20-2-282-2087, Fax: 20-2-282-6010 Nine factories produce civilian and military goods. In late 1994, AOI became a wholly Egyptian Government owned entity when the governments of Saudi Arabia, Qatar, and the United Arab Emirates withdrew from the joint venture. The National Service Projects Organization (NSPO) 10 Mahmoud Talaat St., Nasr City, Cairo, Egypt Phone: 20-2-402-0236, 20-2-402-1684, Fax: 20-2-402-4203 Operates three production companies.

U.S. Department of Defense’s Reciprocal Defense Procurement Memorandum of Understanding with the Egyptian Ministry of Defense The U.S. Department of Defense maintains a Reciprocal Defense Procurement Memorandum of Understanding (MOU) with the Egyptian Ministry of Defense (MoD). This MOU allows Egyptian companies to compete for DoD procurement as U.S. companies and for U.S companies to compete for MoD procurements as Egyptian companies. Any advantages provided to Egyptian companies on MoD tenders (such as the 15% price preference for Egyptian companies) must also be extended to U.S. companies. MoD procurement committees are not always aware of this requirement, but generally comply when it is brought to their attention. In the event of a dispute on discrimination of a procurement by MoD or one of its buying offices, please contact the Office of Military Cooperation to notify it of the problem and request assistance. DoD periodically reviews Egyptian compliance with this MOU. Areas of concern by DoD include: inability to locate publication notices on upcoming procurements; difficulty in obtaining solicitations in a timely manner; inadequate response time for offers; issues associated with application of customs duties; buy-national practices that favor other than U.S. industry; imposition of offset requirements; inability to obtain debriefing information; inability to protest source selection decisions, and protection of proprietary information as well as any other discriminatory practice that needs to be addressed. A copy of the MOU and any annexes and amendments can be located at the following Web site: http://www.acq.osd.mil/dp/fc.

Defense Opportunities U.S. Government-financed procurement through the Foreign Military Sales (FMS) program in Egypt is published in “Commerce Business Daily”, available by subscription from the: Superintendent of Documents U.S. Government Printing Office Washington, D.C. 20402-9371 Tel: 202-783-3238 Fax: 202-512-2233 On-line from: Mead Data Central Arlington, VA Tel: 800-843-6476

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Information on non-FMS, i.e., commercial sales, to the Egyptian military that are funded by U.S. military aid may be obtained in the United States from the: Egyptian Office of Military Procurement Embassy of the Arab Republic of Egypt 5500 16th St. N.W., Washington, D.C. 20011-6823 Defense Security Cooperation Agency, MEAN Directorate 1111 Jefferson Davis Highway, Suite 303, East Tower, Arlington, Virginia 22202 Tel: 703-604-6627 The American Embassy’s Office of Military Cooperation helps U.S. firms arrange meetings with Egyptian military offices in Cairo to understand Egyptian purchasing requirements, both under FMS and commercial contracts. This office’s Defense Industrial Coordinator is Lt. Col. David Seely available at tel: 797-2850. Additional information about the Office of Military Cooperation may be found at the following Web site: http://www.omceg.centcom.mil/. Information for both FMS and commercial sales may be found at the following Web site: http://www.dsca.osd.mil. Details of USDA credit programs may be seen on the FAS Web site: www.fas.usda.gov.

4.4.14

Public Sector Marketing

The United States Agency for International Development (USAID) began its program in Egypt in 1974 during a period when Egypt was facing extreme economic and political challenges. The economy was at a standstill; much of its physical infrastructure had deteriorated; technical and scientific ties and relationships with the West had broken down; agriculture productivity was low; and basic health and welfare services were poor. A few years later in 1979, following the Camp David Accords and recognizing Egypt’s moderating role in the Middle East, Egypt became one of the United States’ largest economic assistance program partners in the world. Early assistance focused on the immediate needs of the economy, including clearing, repairing, and reopening the Suez Canal to restore to Egypt and the world this important trade artery. Egypt’s infrastructure also claimed early attention. Expanded electric power, water and wastewater, grain storage, telecommunications, and port facilities became targets of assistance. Professional and institutional ties between Egypt and the United States were rebuilt. By the end of the 1970s, USAID had broadened its assistance to give greater attention to agriculture, health and basic education, addressing quality of life problems facing Egypt’s people, particularly those in the rural areas, and promoting local development. USAID also began helping Egypt rebuild its industrial and commercial base through U.S. imports of commodities, equipment, and intermediate goods. Working with the Egyptian government on structural adjustment and policy reforms opened up a greater role for the private sector and touched many enterprises both great and small. Whether the immediate target was regulatory changes and privatization or greater access to credit by small and micro entrepreneurs, the bottom line has been to facilitate market entry and increase the number of productive jobs. Some results of these investments include dependable electricity, clean water, significantly improved health care, more schools, reliable telecommunications, improved village infrastructure and services, new technologies to build a more efficient and diversified agriculture base, and expanded farmer access to credit, seeds, and fertilizer. The portfolio of activities has shifted and grown, responding to Egypt’s changing development needs based on the mutual goal of increasing both economic growth and the quality of life of Egypt’s people.

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Procurement Opportunities

There are two main sources of information about procurement opportunities related to USAID programs in Egypt: •

Commerce Business Daily, a U.S. Department of Commerce publication in which all USAID direct and USAIDfinanced Egyptian Government procurement is advertised;

•

USAID’s on-line Web site (http://www.usaid.gov/). This on-line service also has background on the AID program and its relevance to U.S. interests at home and abroad.

Most commodity procurement is done under subcontract or by Egyptian Government arrangements, rather than directly by USAID.

Commodity Import Program (CIP) USAID/Egypt sponsors the Private Sector Commodity Import Program (CIP) that makes dollars available to Egyptian private sector importers through some 31 Egyptian banks. The program provides attractive financing whereby the importers pay for the dollars in Egyptian pounds after an interest-free grace period. Imports are financed through the issuance of commercial letters of credit, and the transactions generally follow normal commercial practice. Eligible commodities under the program include most non-luxury, non-consumer items that are not related to military or police activities. U.S. exporters may consult with Egyptian customers to see if CIP funds are available. Mailing Address from the U.S.: Commodity Import Program USAID Cairo Unit 64902 APO AE 09839-4902 Physical Address: USAID Commodity Import Program Plot 1/A off El Laselki Street New Maadi, Cairo Tel: 522-6620 Fax: 516-4652 USAID Alexandria 36 Beny El Abbas Street, behind National Security Tel/Fax: 20-3-486-8458/9301 Ministry of Foreign Affairs International Cooperation Sector Department of Economic Cooperation with USA 48-50 Abdel Khalek Sarwat, Cairo Tel: 390-5100/5125 Fax: 393-8187 Information given to Egyptian buyers as to how the private sector CIP program works: •

Apply for a credit facility at any Egyptian participating bank.

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Fulfill all the bank requirements.

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•

Get quotations from a reasonable number of U.S. suppliers, or one offer can be submitted if you are an agent, representative or distributor for the supplier, and fill out the transaction form.

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After the approval of your credit facilities by your participating bank, your transaction form and related documents are sent to USAID/Cairo to be reviewed and approved.

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Once assured that all requirements have been fulfilled, USAID/Cairo sends a letter to your bank, usually within 48 hours, authorizing the issuance of a letter of credit.

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A letter of credit is opened by your bank and advised by the U.S. correspondent bank to the U.S. supplier.

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The interest-free grace period starts from the date the payment is made to the U.S. supplier.

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The exchange rate is fixed at the time the letter of credit is opened.

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You can qualify for a maximum limit of $8 million per year, according to the type of transaction.

4.5 4.5.1

IMPORT AND EXPORT REGULATION RISKS Trade Barrier Risks

Since 1991, under the economic reform program developed in conjunction with the IMF and the World Bank, the Government of Egypt has reduced most tariff rates to between 5 and 40%, although several types of goods, including larger cars, tobacco, alcoholic beverages, and other “luxury items”, are subject to higher tariffs. Egypt’s average weighted tariff rate is 27.5%. In February 1994, Egypt implemented the Harmonized System (HS), which replaced the previously used CCCN (Customs Commodity Classification Nomenclature). On January 1, 1998, the textile import ban was lifted, replaced by a 54% tariff and burdensome non-tariff barriers that serve to exclude textile imports from the Egyptian market. On January 1, 2002, in accordance with its WTO obligation, the Government of Egypt (GOE) lifted the last item on the import ban list: ready-made clothing. However, the Government imposed tariff fees on more than 1,000 categories of clothing (reaching $300 per piece for some items), leading to protests from Egypt’s trading partners including the U.S. The decree also levied a 1% duty on semi-refined oil. In May 2002, a decree was issued to exempt most “accessory items” of ready-made clothes. In 2002, the Ministry of Health and Ministry of Agriculture and Water Irrigation ended a temporary ban on American meat imports after reviewing the “halal” (slaughter) procedures. In 2002, the Ministry of Finance lowered the effective tax rate on soft drink manufacturers. The Ministry of Agriculture and Land Reclamation issues quarterly decrees banning the import of live cows, meat, and its products, from the European countries. Exception to that ban is frozen boneless beef meat that may be imported from some European countries that have taken veterinary procedures allowing import according to specific outlined conditions. Presidential Decree No. 63 for 2003 was issued amending the Customs Tariff by imposing a Customs duty of 1% of the value of the goods imported by factories licensed to produce preparations of infant formula milk. Another 5% levied on the value of requisites, components and spare parts imported by companies affiliated to the Arab Organization for Industrialization for overhaul of railway locomotives turbine engines.

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Prime Minister’s decree No. 611 for 2003 added new amendments to the executive statutes of the Investment Guarantees and Incentives Law No. 8/1997 that should reflect a better environment for foreign investors. The main modifications include: making one authority responsible for investor incentives and guarantees - the General Authority for Free Zones and Investment (GAFI); granting tax exemption on R&D spending; and exemption of capital equipment from sales tax and notarization fees. In 2003, the GOE has assisted USG efforts to resolve the “TRIPS and public health” issue in the WTO regarding the supply of patented medications to the poorest countries most threatened by epidemic diseases. In June 2003, the parliament approved three major amendments to the anti-money laundering law that was passed in May 2002. The first amendment allows the prime minister to apply the law to non-financial institutions, the second adds fraud to the list of crimes included in the law, while the third gives an amnesty to whistle-blowers if their actions result in the arrest of perpetrators.

Representative Tariff Rates A list of representative tariff rates for some major imports follows. The list is neither exhaustive nor detailed. Numerous exceptions and sub-categories apply, as with all countries. •

Most whole grains: 1-5%

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Rice: 20%

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Processed foods, fruits, nuts, vegetables: Generally 30-40%

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Poultry: 80%

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Beer: 1200%

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Wine: 600-3000%

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Spirits and liquors: 3000%

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Processed tobacco (cigars, cigarettes): 85%

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Unmanufactured tobacco: LE 6.10/kg

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Textiles (woven fabrics): 54% (tariff fees reaching $300/piece imposed on some ready-made clothing items)

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Mechanical machinery:

•

Industrial mechanical machinery: 5-10%

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Household mechanical machinery: Up to 43%

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Computers, computer equipment, and software: 5%

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Other electrical machinery: 5-40%

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Aircraft: 5%

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Passenger cars

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Passenger cars up to 1,000 cc engine size: 40%

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Passenger cars with engine size 1001-1500 cc: 55-100%

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Passenger cars with engine size 1501-1600 cc: 100%

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Passenger cars with engine size above 1600 cc: 135%

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Different rates apply to trucks, military vehicles, and other specialized vehicles.

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Valuations on Imports

Customs procedures, designed to eliminate trading loopholes, are still cumbersome and rigid in areas such as duty rates. They are subjective when it comes to identifying whether a commodity fits in one tariff category or another. Although on July 1, 2001, the Egyptian Customs Authority officially announced beginning of implementation of the invoice-or transaction value-based procedures in accordance with the WTO valuation agreement, the system is not yet being implemented, and customs agents have great discretion in valuating incoming shipments. As under-invoicing is prevalent in Egypt as a means of tax-avoidance by local businesses, the Customs Authority has a tough policy regarding commercial invoices. Tariff valuation is based on either the worldwide price list received annually from foreign producers/distributors, or if that is not available, they take the highest price available in the local market. In cases where customs officials suspect under-invoicing, they usually add from 10 to 30% (called improvement percentage) to the invoice value. Importers have the right to take legal action against Custom Authorities in the event of a dispute regarding appropriate valuation, including arbitration which takes fifteen days or more. During that time, the disputed shipments are withheld and the importer has to pay fees as deposit until arbitration is over. Customs officials suspect under-invoicing when legitimate sellers low-ball introductory prices of samples, then send larger quantities at higher prices; offer one price for a few items, and a quantity discount for subsequent shipments; or introduce a new product at a basic cost much cheaper than similar products previously imported from other sources. The GOE has established a “white list” of importers who, under some conditions, are able to avoid full inspection of their shipments. The ability to fulfill local content requirements is no longer required to obtain an approval to set up an assembly project. However, assembly industries must meet a minimum local content requirement of 45% in order to benefit from customs tariff reductions on imported industrial inputs. A decree on computerized customs procedures has been issued for imported goods. The Customs Authority has begun applying a Computerized Customs Declaration Form (Bill of Entry) which intends to facilitate and simplify importers’ dealings with the Customs Authority and to avert problems or differences in customs evaluation.

4.5.3

Import Tariffs and License Requirements

Egypt’s General Sales Tax was converted to a true value-added tax effective July 2001. To counterbalance a reduction in tariffs, the government levies a service fees on the value of imported shipments in return for inspection, listing, classification and reexamination of shipments. A fee of 1% on commodities with a customs rate up to 4%; 2% on commodities with a customs rate between 5% and 30%; and 3% on commodities with a customs rate above 30%. The 4% charge for inspection has now been abolished. In addition to the customs tariff, imports are subject to sales tax ranging from 5% to 25%. In July 2001, the sales tax was extended to the retail level, but both before and after July 2001 it was and still is charged on all imports. Every importer is required to pay the tax and also to register for sales tax. Although like a VAT in many ways, the sales tax is not a full VAT. for example, no credit is paid for tax on inputs (e.g., on import of computers) unless the commodity subject to the charge is physically embodied in the output on which output sales

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tax is charged. Therefore, if the computer hardware and software is sold onwards, a credit will be given for the tax paid on input. If the computers are retained for use in the business, even if the importer is registered, no credit will be given. The Sales Tax Department confirms that the tax will be 10% on both hardware and software.

4.5.4

Licenses Required for Imports

Egypt no longer requires import licenses for most products, although licenses are still required for some products, such as animal products.

4.5.5

Controls on Exports

Egypt is not subjected to special sanctions (such as those imposed on Libya and Iran). Nevertheless, there are three aspects of U.S. export control regulations that should be considered in doing business with Egypt. First, the U.S. has stringent antiboycott regulations. American companies may not aid or abet the boycott against Israel that the Arab League has had on the books for years. for instance, American companies are not allowed to certify that their products do not come from Israel. If there appears to be any request that might be in support of boycotts, companies should contact the Bureau of Industrial Security in the U.S. Department of Commerce. Second, there are numerous companies and individuals that have been blacklisted by the U.S. government as a result of past violations of export regulations. The BIS has a Denied Persons List and the Office of Foreign Assets Control has a Specially Designated Nationals List. Both of these lists can be checked on line to ensure that the prospective business partner does not have anything against him. Third, individual items may require specific export licenses. In principle all exports require a license, though in practice the vast majority of our exports fall under a so-called general license that allows export without getting permission from the BIS. for a number of items, a specific license is required. These include products whose high-tech nature implies that export may involve a national security risk. Again, contacting BIS will enable an exporter to determine whether or not his specific items require a license. If a specific license is required, one of the considerations will be the reliability of the end-user. Government agencies and companies with a solid business reputation are more likely to be granted a license. All Egyptian products can be exported without obtaining export approvals. Quality control of exports is voluntary. An export duty is imposed on certain commodities produced locally in accordance with specified rates listed in Schedule (B) of the Custom Tariff promulgated by Law 351/86. All other kinds of goods are exempted from export duty.

4.5.6

Entering Temporary Imports

Imports may be admitted into the country under the temporary admission system and released from Customs under the drawback program. Rules governing temporary import of goods require that importers should cover 5% of the import’s value in addition to customs, fees and sales tax. •

Article 98 (Temporary Admission): Basic materials and intermediate goods imported for manufacture, as well as production requirements of exported goods, are temporarily exempted from customs and other fees. The temporary exemption is issued in return for an insurance deposit (guarantee) with the due customs and fees value. In addition, these goods and materials are exempted from import rules listed in the imports & exports law. Importers can use these goods and materials for other purposes after paying due custom fees, plus an extra tax of 2% for each month.

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•

Article 102 (Drawback System): Customs and service fees on foreign materials used in manufacturing local exported goods are refunded provided that they get transferred to a free zone area, re-exported, or sold to taxfree outlets within a period of 2 years from release date (renewable), by a Finance Minister’s decree. Value of customs partial exemption is immediately refunded if sale is made to tax-reduced outlets.

•

Article 103: Defines the rules and regulations for the drawback system and other fees on foreign materials used in the production of exported goods, the manufacturing process, percentages and requirements, all through a Prime Minister’s decree.

Although the new adjustments were aimed at fixing impediments in the current Customs Law, businessmen state that there are a number of other problems still deforming the existing Customs Law which need to be fixed, including, customs tariff discrepancies, application of exemptions, arbitration, valuation, wastage goods, preference agreements, export problems, slowness of guarantees and deposits procedures, cumbersome customs procedures, customs expediters and representatives problems, cancellation of immediate audits, and administrative problems. Imports may be released from Customs under the drawback program. This procedure is different from the temporary admission system in that full customs duties are paid on the imported materials and the manufacturer does not fill out a special form with Customs. However, there is a one-year time requirement to re-export these imports as part of a final product in order to have the right to reclaim the full amount of the duties paid as well as other taxes such as the sales tax. This procedure is cumbersome and refunding may take up to six months for processing. The agencies administering the program are tasked with the responsibilities of determining and then repaying the drawback amount. The Industrial Surveillance Authority carries out the first task; the Customs Authority carries out the second. A delegate from Customs has to be present during the manufacturing process. To refund the amount paid, several administrative requirements must be satisfied: •

Details, such as quantities and materials used in manufacturing a unit of the exported products, must be provided to enable Customs to calculate the drawback rate

•

Proof of duties paid on the imported quantities must be furnished

•

In order to collect an allowance in the drawback rate for wastage and scrap, quantities of such must be verified

In addition, the following documents must be provided: customs import release certificate, certificate of export of product, an export permit, a registered deed of sale from the original importer, and a customs clearance certificate. To speed up the reimbursement process, the GOE introduced in October 1999 a new “tax rebate” system, by means of which exporters could be reimbursed according to pre-specified rates for each industry. The tax rebate system currently covers more than half of the major exported commodities.

4.5.7

Additional Trade Issues

Health Issues According to a January 2002 GOE decree, the importation of used and refurbished medical equipment and supplies to Egypt is banned. The ban does not differentiate between the most complex computer-based imaging equipment and the most basic of supplies. This ban is clearly stated in Import Certificates issued by the Egyptian Ministry of Health (MOH) for any product. Specifically, the Customs and the Pharmaceutical Politics Department of MOH, from which any importer (company or individual) must obtain approval to release medical goods from customs, will not approve clearance of used or refurbished medical equipment. At present, even new medical equipment must be tested in the country of origin and proven safe before it will be approved for importation into Egypt. The above regulations also apply to medical equipment that is being donated, not sold for profit. www.icongrouponline.com

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Investment Investment Law 8 of 1997 (which replaced Investment Law 230 of 1989, except for the requirement for annual distributions to employees of not less than 10% of profits) made one authority responsible for investor incentives and guarantees--the General Authority for Free Zones and Investment (GAFI). It also grouped some 20 exemptions and incentives under one law, and specified activities that would automatically benefit from them. Law 8 allows 100% foreign ownership of ventures and guarantees the right to remit income earned in Egypt and to repatriate capital. Companies Law 3 of 1998 (which amended Companies Law 159 of 1981) streamlined the procedures for establishing a new company. It continues to cover investors in any sector not covered by Law 8 of 1997, including shareholder, joint stock, and limited liability companies and representative and branch offices. Law 3 allows for automatic registration of a company upon presentation of the application to the Companies Department at the Ministry of Economy and Foreign Trade and for acquisition of legal status 15 days after appearance in the Commercial Register, with some exceptions. These exceptions include noncompliance with procedures or violation of other laws; or lack of qualifications requisite to operating a business. Founders of joint stock and limited liability companies must submit a bank certificate showing a 10% deposit of the issue capital to the Companies Department. The amendment also provides for the right of petition for denial of incorporation, removes the restriction that 49% of shareholders be Egyptian, allows 100% foreign representation on the board of directors, and strengthens accounting standards.

Important Documentation for Importers and Exporters Importers should possess the following documents: •

An Import Card which is issued by the General Authority for Import/Export Quality Control at the Ministry of Foreign Trade.

•

Taxation Card, which is obtained from the Taxation Authority or any of its offices.

•

Three forms of Annex (11) of the import/export executive regulations issued by Ministerial Decree 275/91. Annex (11), the application to finance imports with convertible currencies, includes information on the type, quantity, price and country of origin of the imported commodities. The importer retains one copy which he/she submits to Customs to release the shipment, the second copy is submitted to the Foreign Trade Sector at the Ministry of Foreign Trade and the third copy is kept with the bank to follow-up on payment. The pro-forma invoice or final invoice should be stamped by the bank.

The following documents should be presented to customs to release imports: •

Bill of lading.

•

Original invoice.

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Packing lists.

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Certificate of origin (authenticated and legalized).

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Form (EX), which is a bank form, applicable in cases where the bank finances the importation transaction. This form is not required if the importer self-finances the transaction.

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Content analysis of the commodity, if required.

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Delivery order from the carrier in return for the bill of lading.

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Custom procedural certificate, which is a customs form that lists information and data including source and country of origin of imports, name of importer, type of product, port of delivery, value, and quantity of the shipment.

Exporters should possess the following documents: www.icongrouponline.com

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•

An Export Card, which is issued by the General Authority for Import/Export Quality Control at the Ministry of Foreign Trade.

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Taxation Card, which is obtained from the Taxation Authority or any of its offices.

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Original invoice.

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Custom procedural certificate, which is a customs form that lists information and data on the exported goods.

Ministerial Decree 619 of 1998 - Certification of Origin Ministerial decrees over the past years have had an impact on U.S. trade with Egypt. Ministerial Decree 619 of 1998 required imports to be accompanied by a certification of origin and stipulated that consumer goods (durable and nondurable) be shipped directly from the country of origin. Decree 619 subsequently was adjusted in late 1999 to allow the shipment of imported consumer goods from the main branches of the producing company and its distribution centers. Regulations also were implemented to facilitate the ability of firms to meet the requirement for a certificate of origin. This requirement can now be fulfilled with a company invoice noting the country of origin and bearing the endorsement of an Egyptian overseas commercial office. Since May 1999, the Central Bank of Egypt has required 100% coverage for credit lines opened for goods imported by traders for resale purposes.

The Export Promotion Law In June 2002, a new Export Promotion Law No. 155 was issued through which repeated some of the provisions of Decree 106. The Law primarily includes establishing an Export Promotion and Development Fund (EPDF). Some of the articles stipulate the following: •

The Ministry of Foreign Trade will take the lead to promote exports and to issue any decrees in this regard.

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The EPDF resources will come from: a) the general budget support; b) the administrative fees that will be collected by Ministry of Foreign Trade; c) the administrative fees on imports; d) funds of the compensatory measures and anti-dumping; e) other compensatory collections.

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A central unit will be established, under the joint supervision of the Ministries of Finance and the Ministry of Foreign Trade with branches in all ports/airports, to manage the drawback and temporary admission systems for exporters.

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The General Authority for Export and Import Control (GOEIC) will take the lead in the testing and inspection of all imports and exports.

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No fees will be imposed on exporters except those recommended by the Minister of Foreign Trade, with the Prime Minister informed.

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Fines will be between $200-$1,000 or $400-$4,000 (unclearly stated).

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The former Price Stabilization Fund will be cancelled and all of its assets and liabilities shall be transferred to the EPDF.

The law mainly includes giving authority to Ministry of Foreign Trade without explaining relationships and jurisdictions of other ministries. The law also has many complications such as GOEIC functions on testing and inspection and undermining other ministries involved. The EPDF resources are stated for the fund, however, functions of the fund itself and how it will promote exports are not clear. The law was criticized by business groups as well as members of some liberal parties as not going far enough. Although the law aimed to narrow the trade deficit by streamlining administrative procedures and provide credit facilities to export-oriented industries, businessmen, however, expected tax-breaks for exporters, something that did not materialize. They also point out that more legislation and another government agency to manage things might not be the solution to the trade problem. The Law’s implementing regulations are not yet issued. www.icongrouponline.com

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Labeling Issues

On October 25, 1998, Decree No. 553 of 1998 was issued, addressing the conditions under which imported goods may be stored outside of Customs Zones (the first point of entry of goods into a customs territory and a sort of “holding area” pending determination of origin of the goods and their classification, assessment, and liquidation of applicable duties). This decree amends Law 118 of 1975 and adds two provisions to Article 79 of Ministerial Decree No. 275 of 1991.

Article One The following two clauses are to be added to Article 79*, promulgating the executive regulations for Import and Export Law No. 118 of 1975: •

It is permitted to store products outside customs zones, provided that the shipment is in accordance with all labeling conditions;

•

It is obligatory for the importer to re-export the shipment if the inspection shows products are not in accordance with labeling conditions.

Article 79 The Minister of Foreign Trade or his delegate may permit the storage of the imported perishable consignments or that of special storage preparations, outside the customs zone, in accordance with the rules stipulated in the Customs Law and the decrees implementing it. In such case, the importer will be bound not to dispose of such consignment, up to issuance of a final decision by the concerned authorities regarding its inspection.

4.5.9

Requirements for the Importation of Food

There are certain food import requirements that must be observed and include the following: •

Labeling Requirements

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Multiple Product Samples (changed by Presidential decree 106)

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Restrictions on the Use of Artificial Colors

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Certification

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Shelf-Life Standards and Product Specifications

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Shipping Documents

Labeling Requirements Egypt requires restrictive labeling for imports of food products. All food products should be packed in appropriate packages which should be clean, intact, and odorless so as to preserve the product and not affect its characteristics. Production and expiration dates must be shown on the product’s packaging. Information on the label cannot be erased, scratched or altered in any way. With the exception of the production and expiration dates, information only in English (or other foreign languages) is not allowed. Dates are accepted in English, but the word “production” and “expiry” MUST be in Arabic. Arabic language is mandatory on labels. Labeling must include the following: •

Name and address of manufacturer

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•

Brand or trade mark (if appropriate)

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Country of origin

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Type of product and grade

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Name and address of importer

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Production and expiration dates

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Product use instructions (optional)

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Product ingredients

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Storage instructions or storage temperature

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Net weight

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Gross weight and total number of the packages per case or carton

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If the product contains preservatives, the percentage of each preservative must be indicated

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If the product is me at or poultry, the following statement must appear: “slaughtered according to Islamic ritual” or “Halal slaughtered.”

In November 1997, the Ministry of Trade and Supply issued Decree No. 465, adding new labeling requirements to the importation of meat and poultry products. The decree requires that all products must be packaged in sealed bags. Labels must be inserted inside the package as well as on the outside carton. The information on the label may be in two or more languages, as long as one is Arabic. The label must include the following information: •

Country of origin

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Producer’s name and logo (if any)

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Name of slaughterhouse

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Slaughter date

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Name and address of importer

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Name of entity which issued the “Islamic Slaughter” certification

Such entities must be approved by the Commercial Office of the Egyptian Embassy (or Consulate) in the country of origin. Currently, it is permitted to amend any information on the label. However, amendments must be done inside the Customs Authority. Any amendments can be done on a sticker. However, if dates need to be amended, it must be printed on the package (outer and inner package). Amended stickers for dates are not acceptable.

Multiple Product Samples Before the Presidential decree No. 106, issued in April 2000, as many as four ministries may draw samples depending on the product as follows: •

The Radiation Department of the Ministry of Energy and Electricity

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The Ministry of Health

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The Ministry of Agriculture (Veterinary Office), as appropriate

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The Ministry of Supply (Import and Export Control), as appropriate

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All product samples should be representative of the consignment and should be drawn during the unloading process. With the exception of frozen products, each agency draws its own samples and tests the consignment independently. Samples are drawn for each type of product mentioned on the invoice and for each product with different production and expiration dates, regardless of the size and weight of the products. In many cases, inspectors pulling samples at the port lack the technical expertise in sampling the product. Sometimes they damage the sample, which is why different authorities require a complete sample such as a complete carton to assure a product’s safety.

Presidential Decree 106 Presidential decree 106 was issued in April 2000 to transfer the administrative authority of food inspection to the General Organization for Export and Import Control (GOEIC), according to procedures published in following articles: •

Article (1): Inspection of exports and imports that are subjected to control procedures shall be conducted solely under GOEIC Supervision. The process shall be conducted simultaneously by the concerned authorities including Radiation, Plant Quarantine, Veterinary Quarantine, Sanitary Quarantine (MOH), and control on Artistic works and Publications.

•

Article (2): Representatives of the Inspection and Control authorities shall be annexed to GOEIC’s concerned branch office where a joint headquarters shall be equipped with the necessary laboratories. Those representatives shall be subjected to the administrative supervision of GOEIC. They shall be authorized to assume inspection and certification functions without referral to any higher authority.

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Article (3): GOEIC branch’s chief executive shall constitute the joint committees for inspection by nature of commodity, subject of control, and shall communicate the results to the Customs Authority.

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Article (4): A representative from the Ministries entrusted with inspection and control of exports imports shall be added to GOEIC’s Board of Directors if such a representation has not been in effect on the date of enforcing this Decree.

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Article (5): A Technical Secretariat shall be established with GOEIC by a decision of its Board Chairman. It shall assume the responsibility of coordination and follow-up among the various inspection agencies, in collaboration with their representatives at GOEIC branch offices, referred to in Article (2) above.

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Article (6): The Minister of Economy and Foreign Trade shall, in collaboration with the concerned Cabinet Ministers, issue the necessary decrees for the implementation: the provisions of this decree.

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Article (7): This Decree shall be published in the Official Gazette and shall enter into effect at the date of its publication.

Restrictions on the Use of Food Additives •

Artificial Colors: The Ministry of Health increased the number of artificial colors allowed in food products to 40 colors instead of 11. However, acceptable artificial colors are not necessarily allowed in all food products. The scientific name of the color ingredient and the percentage of concentration must be indicated on the Analysis Certificate. Importers and suppliers should refer to Ministerial Decree No. 411 of 1997 issued by the Ministry of Health.

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Natural Colors: There are some natural colors extracted from fruits and plants considered to be fit for human consumption and approved by the Egyptian authorities. Importers and suppliers should refer to Ministerial Decree No. 411 of 1997 issued by the Ministry of Health.

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Preservatives: All preservatives must be identified along with the allowed concentration as a percentage in parts per million calculated on the acid base. Importers and suppliers should refer to Ministerial Decree No. 478 of 1995 issued by the Ministry of Health which lists all acceptable preservatives and concentrations.

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Flavorings: The Ministry of Health does not have a positive list of approved flavorings. However, all flavorings, which conform under CODEX or WHO, are approved in Egypt.

Certification A number of certificates are required for all imported food products. With the new decree No. 106 of 2000, only one set of certificates will be presented to GOEIC. In the past, importers had to submit copies of all import documents to each clearing agency having an interest in the product. Certificates are still required to be countersigned by the Chamber of Commerce and notarized by the Egyptian Embassy or Consulate in the country of origin, or any other Arab Consulate if there is no Egyptian Embassy or Consulate in the country of origin.

Shelf-Life Standards and Product Specifications The Egyptian Organization for Standardization and Quality Control (EOS) in the Ministry of Industry has sole responsibility for establishing, adopting, and publishing food standards and codes of practice. It is up to the Ministry of Health and Ministry of Trade to apply those standards. Any product that exceeds its established shelf-life is considered no longer fit for human consumption. Manufacturer/processor “use by” or “sell by” dating is not accepted. In 1994, the government decreed that all food products should have at least 50% of the established shelflife remaining at the time of importation into Egypt, otherwise the product would be rejected. Failure to meet Egyptian product specifications constitutes one of the main reasons for product rejection. While the Egyptian Organization for Standardization and Quality Control in the Ministry of Industry sets all product standards, it is the responsibility of the Ministry of Health and the General Organization for Import and Export Control Authority (Ministry of Supply and Trade) to apply those standards. On September 19, 1996, the Ministry of Industry issued Ministerial Decree No. 180/1996 whereby all manufacturers and importers are required to abide by Egyptian product standards. In cases where no mandatory standards exist, the following standards are acceptable: •

Egyptian Product Standards (voluntary)

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International Standards (ISO/IEC)

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European Standards (EN); in the absence of EN standards, British (BS), German (DIN), and French (NF) standards may be applied

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American Standards (ANS)

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Japanese Standards

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Codex Standards

In the absence of an Egyptian or international standard, authorities often will refer to the Analysis Certificate accompanying the product.

Shipping Documents Shipping documents must be authenticated at an Egyptian Embassy or Consulate, in the country of origin, or any other Arab consulate if there is no Egyptian Embassy in the country of origin.

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Restrictions on Imports

Currently there are no items banned from importation into Egypt, except on the import of live cows, meat and its products, from the European countries. On January 1, 2002, the Government of Egypt lifted the last item on the ban list: ready-made clothing. However, heavy import duties were placed on textiles, plus levying tariff fees (reaching $300 per piece for some items) on over 1,000 categories of clothing, leading to protests from Egypt’s trading partners.

4.5.11

Local Standards

Domestic industries must comply with the specifications of Egyptian standard definitions. The Egyptian Organization for Standardization and Quality Control (EOS), affiliated to the Ministry of Industry and Technological Development, is the only competent body responsible for issuing and developing Egyptian standards for raw materials, industrial products, measuring and testing instruments, technical inspection, quality control, calibration and technical classifications and terminology. All Egyptian standards are voluntary except for a few standards related to health and safety which are mandatory in nature. Although adherence to ISO 9000 certification is optional, it is increasingly of interest to Egyptian exporters. Import and export in Egypt are regulated by Law 118 of 1995. Annex (8) of the import/export regulations lists commodities subject to quality control inspection prior to admittance into Egypt. The list consists of about 135 product categories including foodstuffs, spare parts, construction materials, electronic devices, appliances, and many consumer goods. Although Egyptian authorities stress that standards applied to imports are identical to those applicable to domestically-produced goods, according to WTO/TBT agreement, they are more strict in enforcing product standards on imported food products than on local food products. Moreover, importers face the problems of ill-defined or unwritten product standards, and backlogs result from authorities having limited staff or too few inspection machines to conduct their quality inspections. In general, inspection fees range between 0.5 piasters (PT) ($.008) per kilogram to 10 Egyptian pounds ($1.63.00) per container, with an average inspection fee of PT 1 per kilogram. (Note: There are 100 piasters (PT) to a pound.) The inspection fee for goods imported for industrial purposes is lower than that applied to goods imported for retail purposes. Ministerial Decree 99/94 exempts from quality control inspection of industrial inputs imported by factories. In contrast, the same products, if imported for resale, are subject to inspection. Imports for personal or private use are exempt from quality control inspection.

4.5.12

Free Trade Zone Options

The Sadat-era Law 43 of 1974 allowed the establishment of free zones in Egypt. The law was superseded by Investment Law 230. In May 1997, Law 230 of 1989 was canceled and replaced by the investment law known as Law 8 of 1997 which regulates operations in the free trade zones of Egypt. It allows for storage, warehousing, mixing, repacking, assembly, and manufacturing for export; and provision of services to firms located in the free zones. There are seven active free trade zones in Egypt: Cairo (Nasr City, near Cairo Airport), Alexandria, Port Said, Suez, Ismailia, Damietta, and Six of October. New extensions are being added to Damietta, and new zones are planned in North Sinai and the Red Sea. Goods exported from or imported into the free zones are not subject to normal import/export customs procedures, duties, or other taxes and fees. Likewise all instruments, machinery, equipment, and transportation equipment www.icongrouponline.com

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necessary for establishments authorized within the free zones are exempt from customs and taxes. Provisions of the labor law do not apply to companies operating in free zones, nor are they subject to currency transaction controls. Commodities manufactured and/or stored in free zones are considered “imports” subject to full customs duties if they enter Egypt. The Customs Authority supervises both public and private bonded warehouses. The Ministry of Finance authorizes establishment of the warehouses, specifying the site of the bonded area, conditions of storage, storage charges, administrative charges, expenditures, guarantees to be presented, and other conditions relating to warehousing under bond. Warehouse companies are subject to an annual fee of 1% on the imported product’s value, and production and assembly profits are subject to an annual fee of 1% on the exported product’s value. Imported and domestically-produced commodities, which may be bonded in either public or private sector bonded warehouses, may not be withdrawn from bond unless the necessary taxes and fees are paid or a suitable bank guarantee is provided and accepted by Customs.

Customs Contact Information Customs Authority Ministry of Finance Mr. Mahfouz El Ergawy, Chairman 4 El Tayaran St., Cairo Tel: 20-2-403-5557 Fax: 20-2-261-2672 Export and Import Control Authority Ministry of Foreign Trade Mr. Mohamed Abdel Hamid El Banna, Chairman Atlas Building, 1 Ramsis & Maarouf Streets, Cairo Tel: 20-2-578-5716 Fax: 20-2-576-6971

Foreign Trade Contact Information Foreign Trade Sector Ministry of Foreign Trade Mr. As-Sayed Mohammed Abou El Komsan, Chairman 8 Adly Street, Cairo Tel: 20-2-203-7726 Fax: 20-2-203-7383

Standards Contact Information The Egyptian Organization for Standardization and Quality Control Ministry of Industry and Technological Development Dr. Mahmoud Eissa, President 6 Tadreeb El Modarebeen, Ameriya, Cairo Tel: 20-2-603-1349 Fax: 20-2-603-1351

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INVESTMENT CLIMATE

Egypt’s 70-million strong domestic market, proximity to major markets in Europe and the Persian Gulf, and status as the political and cultural center of the Arab world make it a potentially attractive destination for foreign investors interested in production for both the local market and exports. Economic reforms undertaken since 1991 have opened almost all sectors of the economy to private business, including foreign investment. While American investment is overwhelmingly centered in the oil and gas sector, U.S. firms representing almost all sectors of the economy have launched operations in Egypt. Persistent weaknesses in the business environment, however particularly in tariff/import procedures and overall bureaucratic red tape - continue to keep the level of foreign investment well below Egypt’s potential. The government’s decision to float the value of the pound in late January and the pound’s subsequent depreciation have led to an improvement in Egypt’s current account. However, mixed signals by the government have delayed improvements in foreign exchange liquidity and turnover. Petroleum and natural gas, telecommunications/information technology, education/training equipment and services, port development, and environmental equipment and services represent the most promising investment sectors in Egypt.

4.6.1

Openness to Foreign Investment

Increased foreign investment continues to be at the heart of the Government of Egypt’s (GOE) economic strategy for attaining and sustaining high economic growth rates. The General Authority for Free Zones and Investment (GAFI) has statutory responsibility for promoting and regulating foreign investment, but many other ministries and supervisory bodies also play a role in investments in their areas of jurisdiction. Law 8 of 1997 and Law 3 of 1998 are the two key laws governing investment in Egypt. Foreign investors may own up to 100 percent of businesses within the scope of this legislation. Investment Incentives and Guarantees Law 8 of 1997: Law 8 is designed to allocate investment to targeted economic sectors and to promote decentralization of industry from the crowded geographical area of the Nile Valley. The law and its executive regulations and amendments group together over 20 incentives. It allows 100-percent foreign ownership and guarantees the right to remit income earned in Egypt and to repatriate capital. Other key provisions include: guarantees against confiscation, sequestration, and nationalization; the right to own land; the right to maintain foreign-currency bank accounts; freedom from administrative attachment; the right to repatriate capital and profits; and equal treatment regardless of nationality. Under Law 8, qualifying investments in various fields are assured approval, effectively creating a “positive list”. These areas include land reclamation; fish, poultry, and animal production; industry and mining; tourism (covering hotels, motels, tourist villages, and transportation); maritime transportation; refrigerated transportation for agricultural products and processed food; air transportation and related services; housing; real estate development; oil production and related services; hospitals and medical centers that offer 10 percent of their services free of charge; water pumping stations; venture capital; computer software production; projects financed by the Social Fund for Development; and leasing.

4.6.2

Additional Incentives and Measures

Projects in the government-sponsored “Mega-Projects”, including the Toshka and East Oweinat desert reclamation projects in the far southwest of Egypt and the East Port Said port/industrial development project, receive significant

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tax incentives. There are also eleven new industrial zones in satellite cities in the desert areas outside of Cairo and Alexandria and around the cities of Minya, Sohag, and Beni Suef, which benefit from incentives. Some projects still require prior approval from relevant ministries in addition to GAFI, including: investments in the Sinai; all military products and related industries; and tobacco and tobacco products. Law 15 of 1963 prohibits foreign ownership of areas designated as agricultural lands (in the Nile Valley, Delta, and Oases), except for desert reclamation projects.

Companies Law 3 of 1998 This measure applies to investments in sectors not covered by Law 8 of 1997, including shareholder, joint stock, and limited liability companies and representative and branch offices. Law 3 permits automatic company registration upon presentation of an application to the Companies Department (which became part of GAFI in 2002), with some exceptions. These exceptions include denials based upon noncompliance with procedures and laws, as well as insufficient qualifications to operate a business. Founders of joint stock and limited liability companies must submit a bank certificate to the Companies Authority showing that 10 percent of the company’s issued capital has been paid in. The law also provides for the right to petition a denial of incorporation; removes the requirement that at least 49 percent of shareholders be Egyptian; allows 100-percent foreign representation on the board of directors; and strengthens accounting standards. Oil & gas exploration and development are subject to different procedures, with an individual law required for each investment. Companies are initially granted exclusive rights to exploration in a concession area. If commercial discoveries are found, a joint venture with the state-owned Egyptian General Petroleum Company (EGPC) is formed, based on a standard production-sharing agreement that is specified in the law for the concession. Performance standards include the drilling of at least one well in each phase of the exploration period, as defined by the agreement.

Privatization Egypt has an ongoing privatization program under Public Enterprise Law 203 of 1991 for the sale of several hundred wholly or partially state-owned enterprises. The law permits sales to foreign entities and allows majority foreign ownership of banks in Egypt. The Public Enterprise Office (PEO) within the Ministry of Public Enterprise (MPE) holds advisory responsibility for the sale of all such public shares including the public share in at least 660 joint venture companies (JVs - defined as mixed state and private ownership, whether foreign or domestic) previously under the jurisdiction of the Ministry of Foreign Trade. This slowdown in privatization has created doubts in the minds of many investors about the GOE’s commitment to the program. Senior officials, including the Minister of Public Enterprise, continue to emphasize Egypt’s commitment to privatization, however. The PEO has introduced alternative methods for privatization including asset unbundling and leasing with option to buy, and incentives have been announced for the sale of 66 companies that have been identified as distressed or loss makers, including five-year tax exemptions and the removal of real estate value from company valuations. In 2003, the MPE announced a privatization by capitalization program to divest the public stake in companies that are considered less attractive by investors. The program will gradually convert public companies into privately managed entities as a means of relieving the GOE from the financial burden of restructuring. USAID/Cairo assists the GOE in its privatization program through the “Privatization Implementation Program (PIP)”. PIP provides technical assistance in the areas of transaction support, general policy and advisory assistance, public awareness, advocacy and constituency support building, and monitoring and reporting on public enterprises and privatization.

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Key Laws Governing Foreign Investment •

Capital Market Law 95 of 1992: Law 95 and its amendments and regulations govern Egypt’s capital markets. In 1998, the government made significant amendments and changes to Law 95 to strengthen stock market regulations against fraud, price manipulation, and insider trading.

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Special Economic Zones Law 83 of 2002: Law 83 allows the establishment of special zones for industrial, agricultural and service activities that are mainly export-oriented. Firms operating in these zones enjoy incentives and facilities designed to encourage increased local and foreign investment in export-producing sectors. (See Section E below)

•

Banking Law 88 of 2003: Banking Law 88 of 2003, adopted in June 2003, replaced a number of laws that regulated the Central Bank of Egypt and the banking sector, dealing in foreign exchange, accounts secrecy, and private ownership of public sector banks. The new law permits private sector ownership of Egypt’s four public sector banks. The GOE has installed new management teams with foreign experience at the four banks but is yet to announce specific plans for the privatization of those banks.

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Insurance Law 156 of 1998: Law 156 amended Law 91 of 1995. Law 156 removes the 49 percent ceiling on foreign ownership, permits privatization of national insurance companies, and abolishes the ban on foreign nationals serving as corporate officers.

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Law 1 of 1998: Law 1 amended Law 12 of 1964, the General Egyptian Maritime Organization Law. Law 1 permits the private sector, including foreign investors, to conduct most maritime transport activities, including loading, supplying, and ship repair.

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Law 18 of 1998: Law 18 amended Law 12 of 1996 to allow the government to sell minority shares of electricity distribution companies to private shareholders.

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Law 158 of 1998: Allows bookkeepers and companies dealing in central depository instruments to dematerialize shares (i.e. replace physical entries for securities to book entries).

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Tenders Law 89 of 1998: Law 89 amended the Tenders and Bidding Law 9 of 1983 governing foreign companies’ bids on public tenders. It requires the government to consider both price and best value and to issue an explanation for a bid’s refusal. However, the new tender law remains restrictive since Egyptian domestic contractors are accorded priority if their bids do not exceed the lowest foreign bid by more than 15 percent.

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Commercial Law 17 of 1999: Law 17 has more than 700 articles covering general commerce, commercial contracts, banking transactions, commercial papers (including checks), and bankruptcy.

4.6.3

Restrictions on and Barriers to Foreign Investment

Explicit Barriers/Prohibitions A few explicit prohibitions or restrictions on foreign investment exist in the following areas: •

Land/Real Estate: Foreign individual or corporate ownership of agricultural land (defined as traditional agricultural land in the Nile Valley, Delta and Oases) is explicitly prohibited. Foreign individuals can own a maximum of two residences. Companies/Citizens of other Arab countries have customarily received Egyptiannational treatment in this area.

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Commercial Agents and Importation for Resale (i.e., Traders): These activities are explicitly limited to Egyptian nationals.

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Informal and De-Facto Restrictions •

Banking/Insurance: The Central Bank has not issued a new commercial banking license in almost 20 years. In practice, the only way for a new bank, whether foreign or local, to enter the market (except as a representative office) is to purchase an existing bank. The same situation appears generally to be the case with the insurance system.

•

Other obstacles to investment and business include excessive bureaucracy; a shortage of skilled mid-level management; periodic shortfalls in credit facilities; inability of companies to obtain needed foreign exchange; slow and cumbersome customs procedures; and non-tariff trade barriers.

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Pharmaceutical prices remain controlled, although the government has decontrolled prices of other industrial products. The government uses a standard cost-plus formula to determine pharmaceutical prices for new-tomarket products.

4.6.4

Conversion and Transfer Policies

Repatriation of Profits and Capital: Law 38 of 1994 and the executive regulations issued under Ministerial Decree 331 of 1994 regulate foreign exchange transactions in Egypt. Egypt largely eliminated its official foreign-exchange transfer restrictions in 1991. Foreign Currency Law 38 of 1994 further relaxed restrictions on capital transfers and emphasized the right of individuals and companies to transfer foreign exchange out of Egypt. Egyptian law allows individuals and businesses to conduct all normal foreign-exchange transactions, including establishing foreign exchange accounts and transferring foreign exchange in and out of Egypt. Authorized banks may provide the full range of foreign-exchange transactions, including accepting deposits, executing transfers, and opening letters of credit. Law 38 maintains some restrictions on the transfer of real-estate sales proceeds owned by foreigners who are not residing in Egypt, requiring such proceeds to be transferred over a five-year period. Foreign currency is to be made available at banks and foreign-exchange bureaus. In practice, firms continue to report delays ranging from a few days to several months in the processing of their requests to convert Egyptian pounds to foreign currency for imports, loan repayment, and other purposes. In spite of GOE efforts to restrict parallel market transactions, many firms continue to resort to the illegal parallel market in order to meet their foreign-currency needs. Repatriation of profits by foreign-owned companies generally has been affected much less, although occasional delays are reported. Many expected that the GOE’s decision to float the pound would ease the problems of gaining access to foreign exchange, but foreign-exchange liquidity and turnover remain problems.

Bilateral Investment Treaty The 1992 U.S.-Egypt Bilateral Investment Treaty provides for free transfer of dividends, royalties, compensation for expropriation, payments arising out of an investment dispute, contract payments, and proceeds from sales. Transfers are to be made in a “freely convertible currency at the prevailing market rate of exchange on the date of transfer with respect to spot transactions in the currency to be transferred”.

Worker Remittances Law 8 of 1997 stipulates that non-Egyptian employees hired by projects established under Law 8 are entitled to transfer their earnings abroad.

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Royalty Payments Conversion and transfer of royalty payments are permitted when a patent, trademark, or other licensing agreement has been approved under Law 8 of 1997.

4.6.5

Expropriation and Compensation

As noted in section A1, Law 8 of 1997 provides guarantees against nationalization or confiscation of investment projects under the law’s domain. The law further guarantees against seizure requisition, blocking, and placing under custody or sequestration. It also offers guarantees against full or partial expropriation of real estate and investment project property. The U.S.-Egypt Bilateral Investment Treaty, in force since 1992, also provides protection against expropriation.

4.6.6

Dispute Settlement

Egypt acceded to the International Convention for the Settlement of Investment Disputes in 1971. It is a member of the International Center for the Settlement of Investment Disputes (ICSID), which provides a framework for arbitration of investment disputes between the government of the host country and a foreign investor from another member state, provided that the parties agree to such arbitration. Without prejudice to Egyptian courts, Law 8 of 1997 recognizes the right of investors to settle disputes within the framework of bilateral agreements, the ICSID or through arbitration before the Regional Center for International Commercial Arbitration in Cairo. The U.S.-Egypt Bilateral Investment Treaty, in force since 1992, also provides for non-binding, third party arbitration in investment disputes. Egypt’s Dispute Settlement Law 27 of 1994 and its 1997 amendment provide a comprehensive framework for the arbitration of all domestic and international commercial disputes and limited challenges of arbitration award in court. Law 27 was amended in 1997 to include disputes between public enterprises and the private sector. A special order is required to challenge an arbitration award and such orders are only granted if there is a strong case for successfully challenging the award. The law consolidated and streamlined various confusing and conflicting rules that left the enforcement of international and domestic awards in doubt. Egypt adheres to the 1958 New York Convention on Enforcement of Arbitrary Awards; the 1965 Washington Convention on the Settlement of Investment Disputes between States and the Nationals of Other States; and the 1974 Convention on the Settlement of Investment Disputes between the Arab States and Nationals of Other States. Investment disputes involving U.S. persons or companies do exist. Resolution of cases can involve lengthy court proceedings and negotiations, and there have been cases in which Egyptian entities have failed to promptly accept arbitration rulings.

4.6.7

Performance Requirements and Incentives

Performance requirements are not specified in Investment Law 8. The ability to fulfill local content requirements is no longer a prerequisite for approval to set up assembly projects. Assembly industries must meet a minimum local content requirement of 45 percent to benefit from customs tariff reductions on imported industrial inputs. Oil and gas exploration companies must drill at least one well in each phase of the exploration period specified in their agreement. Unlike earlier laws, Law 8 does not establish a floor for the percentage of Egyptians employed. The old labor law (Law 137 of 1981) required that foreign workers (aside from managers) account for no more than 10 percent of the workforce and 20 percent of the payroll. www.icongrouponline.com

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Tax Incentives Under Law 8 of 1997, foreign companies enjoy various tax incentives. Law 8 provides a general tax exemption of five years for any project operating in one of the fields covered by the law. Specific incentives of 10 years are granted to projects in new industrial zones, certain urban communities, remote areas, and Social Fund for Development projects. Tax exemptions of 20 years are granted to projects outside the Cairo area. All investment projects are granted exemptions from notarization and notification fees; payment of inheritance tax on 25 percent of heir’s share in invested capital; and income tax on a portion of dividends after the exemptions expire. Companies covered under Law 3 of 1998 can benefit from incentives (notably tax holidays) offered for investments in designated areas set forth in the Communities Law and have access to subsidized fuel and power. In addition, companies on the Commercial Register that have more than 50 employees are eligible for a five-year tax holiday.

Pricing and Customs Preferences The GOE may not intervene to set the prices or profits of companies established under Law 8 except for pharmaceuticals, as noted above. Per Ministry of Finance decree, machinery and equipment imported for projects operating under Law 8 is assessed a flat five percent tariff rate.

Geographical Areas There are no formal legal geographical restrictions on investments. However, the heavy congestion in Cairo often prompts government officials to deny approval for investments in Cairo unless an economic rationale exists. Upon request, however, government officials will assist investors in locating a site for the project, for example, in one of the new industrial sites located outside Cairo and will sometimes provide necessary infrastructure. In addition to new areas surrounding Cairo, the government has targeted Upper Egypt (Upper Egypt refers to governorates in southern Egypt) for development by private investors. Land in the southern industrial zones is offered free-ofcharge. The GOE will provide hookups to infrastructure (water, sewer, electricity, and gas) and transfer land titles to the developer three years after project startup.

Research & Development Projects Large-scale R&D activities in Egypt are modest, with total spending estimated at LE 2.6 billion. The majority of government-funded R&D programs are in the fields of agriculture, health, and, to a lesser extent, in the manufacturing sector. There is no discrimination against U.S. and other foreign firms wishing to participate in R&D programs in Egypt. Most Egyptian R&D programs are established by government initiative to target specific problems and opportunities. The percentage of the government budget dedicated to R&D spending has traditionally been low. Donor support plays an important role in Egypt’s R&D activities, constituting about 15 percent of total R&D spending.

Export and Import Policies Mandatory quality-control standards restrict imports of some products to the Egyptian market, in effect providing preferential treatment for domestic products. Although the GOE stresses that the quality-control standards applied to imports are the same as those applied to domestically produced goods, in practice, imports are scrutinized more rigorously by agencies from a number of government ministries. Moreover, certain food imports are subjected to quality-control standards lacking in technical and scientific justification. for example, Egyptian Standard 1522 of 1991 requires that beef imported for direct consumption contain no more than seven percent fat content, a low level virtually never reached in premium beef exports. Egyptian beef producers are not subject to this fat content requirement. Many U.S. agricultural products also face burdensome import licensing requirements, and Ministerial Decree 1 of 1998 subjects textile fabric to costly and complicated labeling requirements.

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Health food products such as low-calorie foods, diet pills, and vitamins also face informal barriers to trade. These products must obtain a special registration from the Food Institute of the Ministry of Health, which can take months to process. Products with domestic substitutes have experienced substantial delays, some as many as six months to one year. Shelf-life standards also act as an indirect trade barrier. Egypt sets the shelf life of processed foods by regulations that are rigid and do not recognize quality, safety, and technological differences between producers. By government decree, imports (mainly food products) entering Egypt must have 50 percent or more of their shelf life remaining. Egypt also applies shelf life standards to certain non-food products such as syringes and catheters. The import-inspection process remains confusing despite a 1999 Presidential Decree designating the General Organization for Export and Import Control (GOEIC) as the coordinator for all import inspections. Over 130 categories of imports are subject to mandatory quality-control inspections, including foodstuffs, appliances, electrical products, and auto parts. Imported refrigerated containers of foodstuffs typically take 25 days to clear customs. While two-month delays were common in the past, import inspections now typically take three to four weeks. Ministerial Decrees 577 and 580 of 1999 require cars to be imported in the year of production. Ministerial Decree 619 of 1998 required imports to be accompanied by a certification of origin and stipulated that consumer goods (durable and non-durable) be shipped directly from the country of origin. Decree 619 subsequently was adjusted in late 1999 to allow the shipment of imported consumer goods from the main branches of the producing company and its distribution centers. Regulations also were implemented to facilitate the ability of firms to meet the requirement for a certificate of origin. This requirement can now be fulfilled with a company invoice noting the country of origin and bearing the endorsement of an Egyptian overseas commercial office. Since May 1999, the Central Bank of Egypt has required 100 percent coverage for credit lines opened for goods imported by traders for resale purposes.

4.6.8

Right to Private Ownership and Establishment

By law, private Egyptian firms have the right to establish and own business enterprises and engage in all forms of remunerative activity, except for the restrictions on foreign business mentioned above. In practice, private firms sometimes find themselves at a disadvantage when competing for resources with state-owned firms. for example, state-owned firms often have easier access to bank credit and foreign exchange from the state-dominated banking system than do private firms, whether domestic or foreign. The Egyptian legal system provides protection for real and personal property, but laws on real-estate ownership are complex and titles to real property may be difficult to establish and trace. The GOE is moving slowly to modernize the laws on real-estate ownership and tenancy. In 1997 the GOE passed legislation eliminating price controls on commercial space following enactment of a similar law pertaining to agricultural land leases in 1996. The mortgage facility in Egypt is underdeveloped. In June 2001 the People’s Assembly passed Real Estate Mortgage law number 148 for 2001. The law allows both banks and non-bank mortgage companies to issue mortgages and provides, for the first time under Egyptian law, clear procedures for foreclosure on property of defaulting debtors.

Intellectual Property Rights (IPR) Egypt is a signatory to the WTO Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, the Bern Copyright Convention, the Paris Patent Convention, the Paris Convention for Protection of Industrial Property of 1883, the Madrid Convention of 1954, and the Nice Convention for the classification of goods and services. Prior to 2002, Egypt’s protection of intellectual property rights was well below international standards, particularly its commitments under TRIPS.

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Egypt has made progress in strengthening its IPR regime through improvements in its domestic legal framework and enforcement capabilities. In May 2002, Egypt enacted a new comprehensive IPR law (Law 82 of 2002) that met certain key TRIPS requirements, including providing data exclusivity and exclusive marketing rights and enacting a patent mailbox. The law also addressed IPR protection in areas such as patents, copyrights (with enhanced protection for sound and motion-picture recordings and computer software), trademarks, plant varieties, industrial design, and semiconductor chip layout design. Although the law has certain shortcomings, its passage demonstrated a marked improvement in the major facets of Egypt’s IPR regime. As a result of Egypt’s general improvement in patent protection and in copyright protection enforcement, in May 2003 the United States Trade Representative (USTR) moved Egypt from the IPR “Priority Watch List” (a designation that Egypt had retained since 1998) to the “Watch List”. The following paragraphs summarize the law’s provisions on different types of IPR: •

Patents: The law increases the protection period for a patent term to 20 years, and for pharmaceuticals includes provisions on data exclusivity and exclusive marketing rights which had been adopted by Prime Ministerial decree in 2000. Egypt has elected to be treated as a Developing Country for pharmaceuticals and chemicals under the TRIPS Agreement.

•

Copyrights: The new law offers copyright protection to artistic and literary works, computer programs, and audio-visual works. Books and computer programs are provided protection for the author’s lifetime plus 50-70 years. Sound recordings are granted 50 years protection from the recording date. The specified penalty for copyright violations is a fine of LE 5,000-10,000 per infringement or a prison term of not less than one month, or both.

•

Trademarks: The new IPR law offers trademark protection of ten years, in accordance with the Trademark Law Treaty. Penalties have increased to a maximum of 20,000 Egyptian pounds or an imprisonment of not less than two months, or both.

•

Semiconductor Chip Layout Design: The new law incorporates a chapter for protecting semiconductor chip layout design. Previously there was no legislation protecting semiconductor chip layout design, although Egypt had signed the Washington Semiconductor Convention.

Although progress has been made, further steps must be taken to strengthen protection of copyrighted material and confidential test data. High copyright-piracy levels continue to affect many categories of intellectual property, particularly book publishing, entertainment software, music recordings, and motion pictures. Infringement of trademark and industrial designs also remains problematic, although there have been signs of improvement.

4.6.9

Transparency of the Regulatory System

The streamlining of Egyptian investment procedures during recent years, as outlined in other sections of this report, represents a constructive step toward improving Egypt’s business environment. However, considerable room for improvement remains. Significant obstacles continue to hinder private sector investment in Egypt, including the often-arbitrary imposition of bureaucratic impediments and the length of time needed to resolve them. Import clearance remains difficult, as several ministries have overlapping regulatory authority. Quality control inspections also remain a major issue for importers. Enforcement of health and safety regulations is uneven and is complicated by a multiplicity of laws, agencies, and opinions. For example, at least four ministries regulate the operation of restaurants. Egypt’s accounting standards are still not fully consistent with international norms, although government efforts are moving in that direction.

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Law 89 in 1998 amended the Tenders and Bidding Law 9 of 1983 to improve equality and transparency in government procurement. Key provisions of the law include: a prohibition on reopening negotiations after final bids have been received; more transparency in the criteria for bid acceptance and rejection; equality among bidders, contractors, and government agencies; more weight given to the technical aspects of a tender or bid; protection of contractor rights; reduction of insurance fees; immediate return of deposits once the government announces bid or tender results; and the establishment of a Central Office for Complaint Resolution in the Ministry of Finance.

4.6.10

Capital Market Risks

At the start of the 1990s, Egypt’s financial sector consisted almost exclusively of banks and insurance companies (both overwhelmingly dominated by state-owned institutions) and there were virtually no avenues for financing of investment except for commercial bank credit, family resources, or retained earnings. The picture has changed significantly since that time with the development of modern stock-market institutions, the beginning of domestic and international bond issuance, and the erosion of state dominance in the banking and insurance fields through the entry of competitive local and foreign institutions. The industry, particularly the state-owned banks, has faced problems with non-performing loans granted to other state-owned companies and business people that are unlikely to repay. Outside these problem areas, however, credit in the banking system is generally allocated on market principles and interest rates are market-determined. According to GOE estimates, non-performing loans account for roughly 16 percent of all credit assets, but many outside observers put it at 20 percent or more. Foreign investors have equal opportunity access to bank credit. In 1998, the CMA instructed listed companies to adopt international accounting and auditing standards and ruled that directors of securities firms must fulfill expertise requirements. The CMA and the Cairo and Alexandria Stock Exchange (CASE) regularly publish reports on trading and market conditions. The Central Registration and Depository law and its executive regulations have been issued. This law aims at easing and regulating the registration and deposit of securities. The GOE continues to introduce measures to bring Egypt’s capital market closer to international standards. Companies listed on the CASE are required to apply international accounting and disclosure standards. Stocks are delisted from the exchange if not traded for six months. Settlement of transactions now takes three days for dematerialized issues, four days for materialized issues and two days for 14 active stocks that are not bound by the five percent daily price movement ceiling, a significant improvement over the eleven days needed two years ago. USAID/Cairo is working with GOE authorities and the CASE on an ambitious $32 million technical assistance program for the development of the Egyptian capital market. The project is working in four major areas: legal and regulatory reform, automation, institutional development, and debt market development and ended in August 2003. There are no restrictions on foreign investment in the stock exchange. Although Egyptian law and regulations allow companies to adopt bylaws limiting or prohibiting foreign ownership of shares, only one company listed on the stock exchange has such restrictions. A significant number of the companies listed on the exchange are family-owned or dominated conglomerates, and free trading of shares in many of these ventures, while increasing, remains limited. Development of the government and corporate bond market has lagged behind the equity market, but changes are being introduced to encourage bond trading. Since 1994, there have been at least 33 issues of corporate and eight issues of medium-term government bonds. Treasury bonds are traded on the stock market. The GOE has allowed financial institutions to deal in bonds for their accounts provided they maintain a minimum capital of LE 10 million. The Minister of Foreign Trade added in 2002 an additional chapter to the executive regulations of the existing capital market Law 95 of 1992 on margin trading to increase liquidity and trading in the market through brokerage firms and

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financially solvent licensed companies. To date, however, margin trading has not actively pursued in the capital market due to the limited trading activity and therefore profits of most brokerage firms.

4.6.11

Political Violence

There have been no terrorist attacks directed at foreigners since 1997 attacks in Luxor and Cairo. Following the 1997 incidents, Egyptian officials enhanced security at airports, hotels, and tourist sites throughout the country. Effective police operations in recent years and the heightened security posture throughout the country have made it more difficult for extremist groups to conduct operations. However, the threat has not been eliminated. As elsewhere, particularly since September 11, the U.S. Embassy periodically receives information concerning extremists’ intentions. All Americans are urged to be vigilant and exercise good security practices while in Egypt. Following the escalation of violence in Israel and the Palestinian territories there was some limited violence and minor damage done to American-branded fast food restaurants and shops. The outbreak of the war in Iraq led to several large demonstrations in Cairo and Alexandria, but property damage was incidental and foreign businesses and property were not targeted. The GOE has reiterated its interest in foreign investment and its opposition to any boycott of U.S. products, and major threats to foreign investments and entities have not materialized.

4.6.12

Corruption

Corruption in Egypt is considered a criminal act. Two agencies under the authority of the Cabinet of Ministers--the Administrative Control Authority (ACA) and the Illicit Gain Office (IGO)--oversee enforcement of corruption laws in the public sector. In the private sector, there are two types of corruption cases. Commercial disputes are subject to international commercial law and Law 27 of 1994. The district attorney’s office and the civil courts adjudicate civil cases. The ACA and IGO may intervene when corruption occurs in the private sector if public money and the public interest are involved. Egypt is not a signatory of the OECD Convention on Combating Bribery. While U.S. firms occasionally report corruption by lower-leve l government officials, they do not identify corruption as a major obstacle to foreign investment.

4.6.13

Bilateral Investment Agreements

In 1992 the U.S. and Egypt signed a Bilateral Investment Treaty that provides for fair, equitable, and nondiscriminatory treatment for investors of both nations. The treaty includes provisions for international legal standards on expropriation and compensation; free financial transfers; and procedures for the settlement of investment disputes, including international arbitration. Egypt has signed investment agreements with over 40 countries, including the United States, Armenia, Belgium, China, Finland, France, Germany, Greece, Italy, Japan, Libya, Luxembourg, Morocco, the Netherlands, Romania, Singapore, Sudan, Sweden, Switzerland, Thailand, Tunisia, and the United Kingdom. In addition to specific investment agreements, Egypt is also a signatory to a wide variety of agreements covering trade issues. In July 1999, Egypt and the United States signed a Trade and Investment Framework Agreement (TIFA) as a step toward creating freer trade and increasing investment flows between the U.S. and Egypt. In June 2001, Egypt signed an Association Agreement with the European Union. Egypt’s parliament ratified the agreement in March 2003, and five of the fifteen EU member states have also ratified it. The agreement will come into effect once the parliaments of all EU member states have approved it. In January 1998, Egypt began implementing agreements reached with 11 Arab League members in connection with the Arab Common Market treaty of the

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1960’s. These agreements call for phasing out existing tariffs over a 10-year period. Egypt joined the Common Market for Eastern and Southern Africa (COMESA) in June 1998. Further information on Egypt’s investment and trade regimes can be found in the National Trade Estimate Report on Foreign Trade Barriers produced by the U.S. Trade Representative.

4.6.14

OPIC and Other Investment Insurance

Egypt and OPIC signed in July 1999 an updated investment agreement to facilitate the ability of the agency to provide political risk insurance for U.S. private investment as well as for bid, performance, advance payment, and customs bonds and guarantees issued on behalf of U.S. suppliers and contractors in Egypt. Egypt is a member of the World Bank’s Multilateral Investment Guarantee Agency (MIGA).

4.6.15

Labor

A Unified Labor law (Law 12 of 2003) provides comprehensive guidelines on individual labor relations including organization of work and recruitment and termination of employees in Egypt, in addition to vocational guidance, training, health, and safety. The new law establishes a qualified right of employees to strike, as well as rules and guidelines governing mediation, arbitration, and collective bargaining between employees and employers. Nondiscrimination clauses are included, and the employment and training of women and eligible children is regulated by the law in accordance with labor-related International Labor Organization (ILO) conventions. The law creates a national council to discuss and establish a national minimum-wage policy and a national committee that formulates general policies for employment in Egypt. The new law is more flexible, allowing employers and employees to terminate employment contracts under specific circumstances identified by the law and ministerial decrees. Workers in certain fields, especially in public sector companies, remain unfamiliar with the dynamics of market-based economies, and qualified specialists are in short supply. The privatization program in some cases requires a company’s new owner to retain all workers. The government has used privatization proceeds to offer early retirement and/or other separation incentives packages to workers in some privatized companies. Foreign companies frequently pay higher wages to attract workers with valuable skills. Millions of Egyptians traditionally have sought employment abroad on both a temporary and permanent basis. Workers may join trade unions but are not required to do so. A trade union or workers’ committee may be formed if 50 employees express a desire to organize. Most union members, about 27 percent of the labor force, are employed by state-owned enterprises. All trade unions are required to belong to the Egyptian Trade Union Federation (ETUF). The International Labor Organization’s Committee of Experts repeatedly has emphasized that a law requiring all trade unions to belong to a single federation infringes on the freedom of association, but the government has not changed the law. The new law provides statutory authorization for the rights to strike and to engage in collective bargaining. Workers have the right to strike peacefully, provided strikes are organized by the trade union in defense of vocational, economic, and social interests and announced at least ten days in advance, with the employer and concerned administrative notified with the reasons and time frame of the strike. The law prohibits strikes in strategic or vital establishments in which the interruption of work could result in disturbing national security or basic services provided to citizens.

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Collective negotiation is allowed between trade union organizations and employers or their organizations regarding improving labor terms, conditions, and employment provisions, cooperating between labor parties to achieve social development for workers of an establishment and settling disputes between workers and employers. Agreements reached through negotiations will be recorded in collective agreements regulated by the Labor law. The Ministry of Labor sets worker health and safety standards, which also apply in the export processing zones, but enforcement and inspection under the old Labor law were uneven. The law prohibits employers from maintaining hazardous working conditions, and workers have the right to remove themselves from hazardous conditions without risking loss of employment. In April 2002 Egypt ratified the International Labor Organization (ILO) Convention 182 on combating the worst forms of child labor. It was chosen by the ILO as the regional base to launch the first international report on child labor under the auspices of the Egyptian first lady. The new labor law allows employers, for economic reasons, to fully or partially close down or downsize their firms, impacting the size of the employed labor force.

4.6.16

Free Trade Zone Options

Free zones are located within the national territory but are considered to be outside Egypt’s customs boundaries, granting firms doing business within them more freedom on transactions and exchanges as a means of attracting foreign investment. They are subject to Investment Law 8 and are open to investment in any sector. Companies producing largely for export (normally 80 percent or more of total production) may be established in free zones and operate using foreign currency. Foreign investors have equal rights to operate in free zones. Free zones are established by a decree of the Council of Ministers. Companies operating in free zones are exempted from customs duties, sales taxes or taxes and fees on capital assets and intermediate goods. However, warehouse companies are subject to an annual fee of one percent on the imported product’s value, and production and assembly profits are subject to an annual fee of one percent on the exported product’s value. Concession agreements in such areas as petroleum, natural gas, and mineral exploration and exploitation, although not explicitly covered by Investment Law 8, receive many of the privileges of free-zone ventures. Concession agreements must be negotiated separately with the GOE and are subject to legislative approval.

4.7 4.7.1

TRADE AND PROJECT FINANCING The Banking System

With the exception of two banks exempted from Central Bank of Egypt (CBE) control by law or treaty, all banks in Egypt are subject to CBE supervision. The two exempted banks are the Arab International Bank and the National Investment Bank. According to CBE officials, a third bank, Nasr Social Bank, is currently in the process of exemption from CBE supervision. According to the Central Bank of Egypt (CBE), the Egyptian banking system consists of 64 banks: •

28 commercial banks

•

31 investment banks

•

3 specialized banks

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In practice, however, the vast majority of these banks operate as normal commercial banks, although there are a few specialized banks (such as for agriculture and real estate). Four large state-owned banks (National Bank of Egypt, Bank Misr, Banque du Caire, and Bank of Alexandria), dominate the banking sector, with a 50% or larger share of all assets, deposits, and branches. A number of much smaller joint venture (mixed state and private - often foreign ownership) banks are much more efficient and profitable. There also are fully privately held banks and fully owned branches of foreign banks. Banks are, theoretically, free to set their own interest rates, which the CBE closely monitors through a series of formal and informal guidelines. The CBE uses T-Bill auctions and discount rates, in its monetary policy. The CBE regulates the banking system by setting reserve and liquidity requirements and rules for loan classification.

4.7.2

Foreign Exchange Control Risks

The new banking law retains earlier provisions that allow individuals and legal entities to retain and transfer foreign exchange in Egypt and abroad and permit all banks to engage in all foreign exchange transactions. Under a decree issued by the Prime Minister in 2003 (Prime Ministerial decree no. 506 of 2003), exporters and other companies that earn foreign exchange must convert 75% of their foreign exchange earnings to dollars through the banks of their choice, although allowances would be made for companies that needed more than 25% of earnings to service import, debt, or other requirements. This step has been described as a temporary measure to help stabilize the exchange rate. The only foreign exchange restriction is a five-year period for transfer of sales proceeds of real estate in Egypt owned by foreigners residing outside Egypt. Although the law does not specify the terms of transfer of sales proceeds, the assumption is that transfers will be made in equal installments over a five-year period.

4.7.3

General Financing Availability

Banks may not be the only source of finance because of the availability of the emerging securities market, as well as the availability of donor-assistance credit lines, such as USAID and other bilateral aid, EU credits for the private sector, and the Social Fund for Development, which is mainly donor-financed.

4.7.4

Financing Export Strategies

U.S. exporters to Egypt typically rely on letters of credit from Egyptian buyers, arranged by the latter through Egyptian banks, confirmed irrevocably by a U.S. bank. Other financing sources include USAID’s Private Sector Commodity Import Program, which makes available dollars to Egyptian banks which then lends to Egyptian importers; the U.S. Export-Import Bank (EXIM) and, for investors, the U.S. Overseas Private Investment Corporation (OPIC). Multilateral banks and funds do not provide export financing for Egyptian exports. The African Export-Import Bank (AFREXIM) began operation in early 1995 and offers low cost financing for foreign and intra-African trade. For those U.S. companies interested in selling production equipment and raw materials to the Egyptian business sector, a look at the financial environment in which Egyptian manufacturers and exporters operate might be useful. Knowing the financing and insurance programs available to Egyptian manufacturers and exporters can provide both insight into the market and possible tools for helping to penetrate that market. For this reason, we include the following section.

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Egyptian Financial and Insurance Mechanisms

The local banking system and offshore banks operating in Egypt are the main source of finance for Egyptian exports. Export financing is usually short-term and is intended to cover the exporter’s working capital during the production period. The period of financing ranges from between three to four months to as much as one year. Banks decline to finance long-term export contracts. The exporter may use loans to finance imported inputs or locally produced ones. Banks prefer to lend exporters the same currency they will receive in payment for its exports to reduce foreign exchange risk. Banks may finance from 40% to 80% of the value of an export order, based on the form of a contract, shipping documents, insurance documents, or a letter of credit (L/C), and the credibility of the exporter. If the exporter is not well known in the market and does not have a proven track record, banks will request that the importer open an L/C to reduce their risk. Requesting an L/C constitutes an additional cost to the importer, which may reduce the competitiveness of Egyptian exports. On the other hand, creditworthy exporters are offered direct overdraft facilities. Interest rates on export financing range between 1-2% above LIBOR. Banks deduct loan repayments from the export proceeds. In general, export credit is a revolving form of credit. Egypt has one export guarantee company, The Export Credit Guarantee Company of Egypt (ECGC), established by the Export Development Bank of Egypt, National Investment Bank, Misr Insurance Company, Al Shark Insurance Company, and Egyptian National Insurance Company. ECGC started operation in October 1993. It provides guarantees against importer’s risk or political risk to Egyptian or foreign exporters who export products that are totally or partially produced in Egypt. “Importer’s risk” is defined as the importer’s inability to pay for the exported goods or his/her refusal to receive the shipping documents of exported goods, although the exporter fulfilled all obligations. ECGC’s guarantee also covers political risk (non-commercial), which includes the following: cancellation of the importer’s license by his/her country’s authorities; refusal of entry of goods by the importer’s government; denial of permission to transit a country’s territory; seizure or confiscation of exported goods by the importer’s country or the transit country; insolvency of a public-owned importer; or military actions or civil disturbances that affect the importer’s assets. The guarantee, on the other hand, does not cover foreign exchange risk and risks pertaining to the nature of the goods. Whenever ECGC receives a request for guarantee, it investigates the importer thoroughly. Based on the importer’s financial status and estimated country risk, ECGC decides on a coverage limit and informs the exporter. The guarantee can reach up to 80% of the importer’s outstanding debt. ECGC receives 0.5-2% premium depending on the importer’s country and the product exported. The exporter can then sell the guarantee to his/her bank.

4.7.6

Financing Projects

Banks are the main source of finance for projects in Egypt. Although loan demand is high, actual borrowing is not as high because of restrictive collateral requirements and high loan rates. Egypt is currently included in the International Finance Corporation (IFC) index for emerging markets and Morgan Stanley Emerging Market Index. Corporate bonds issued by private sector companies indicate that investors have started to be aware of the importance of bonds as a source of finance. U.S. Export-Import Bank loans and guarantees are available in Egypt. Small investors who lack the right business connections and collateral required by banks find it difficult to start up small-and medium-size projects in Egypt. Both USAID and the Egyptian government’s Social Fund for Development operate credit program for small business through banks and/or NGOs.

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The World Bank The World Bank Group is a multilateral lending agency consisting of four closely related institutions: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). The World Bank provides loans to developing countries to help reduce poverty and to finance investments that contribute to economic growth. Because Egypt is now a middle-income developing country, it is no longer eligible for loans from the World Bank’s “soft” financing arm, the International Development Association, but it is still eligible for regular World Bank (IBRD) loans. Loans are made only to governments or to agencies that can obtain a government guarantee. The IBRD also provides partial risk or partial credit guarantees (with a counter-guarantee from their government) to private lenders on development projects.

The International Finance Corporation (IFC) Is an affiliate of the World Bank that provides project financing for private investment in developing countries. IFC offers long-term loans and equity investments, as well as other financing services. IFC will generally invest up to 25% of the total project cost. In addition to project finance, IFC also provides legal and technical assistance to private enterprises. Unlike the IBRD and IDA, the IFC does not require government guarantees. Egypt is one of the largest users of IFC funds in the world. U.S. companies seeking direct investment funds should contact the IFC.

The Multilateral Investment Guarantee Agency (MIGA) Was established in April 1988 to help investors overcome the problems of political risk. Investors’ concerns about political risk had the effect of slowing down the flow of foreign direct investment which in turn slowed the creation of jobs and the transfer of modern technology. MIGA’s purpose is to promote the flow of foreign direct investment among member countries by insuring investments against non-commercial (political) risk and by providing promotional and advisory services to help member countries create an attractive investment climate. U.S. companies seeking investment guarantees should contact MIGA. For further information and assistance contact the U.S. Commerce Department’s Commercial Service Liaison Staff, Office of the U.S. Executive Director, The World Bank, 1818 H Street NW, Washington DC 20433, USA. Tel: 202458-0118 or 0120, Fax: 202-477-2967.

Multilateral Financing Abroad Multilateral Development Bank Office U.S. Department of Commerce International Trade Administration Room 1107, 14th and Constitution, NW Washington, DC 20230 Tel: 202-482-3399, Fax: 202-273-5179 Brenda Ebeling, Director African Development Bank ADB temporary relocation agency (Tunis) Angle des trois rues Avenue du Ghana, rue Pierre de Coubertin, rue Hedi Nouira BP. 323, 1002 Tunis belvedere, Tunisia Tel: 216-71-333-511, 216-71-103-450, Fax: 216-71-351-933 E-mail: [email protected] International Finance Corporation (IFC) 2121 Pennsylvania www.icongrouponline.com

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Washington, DC 20433 Tel: 202-473-7711, Fax: 202-974-4384 The World Bank Office of the U.S. Executive Director 1818 H Street, N.W. Washington, D.C. 20433 Tel: 202-477-1234, Fax: 202-477-6391

Multilateral Financing in Egypt African Export Import Bank (AFREXIM) Mr. Christopher Edordu, President World Trade Center Bldg., 3rd & 8th Floors 1191 Corniche El Nil, Cairo Tel: 20-2-578-0281 (6 Lines), Fax: 20-2-578-0276/9 African Development Bank Egypt Country Office (EGCO) Mr. Mohamed H’midouche, Resident Representative 1, Al-Gazayer Square, 1st floor, New Maadi, Cairo Tel: 20-2-516-0906, Fax: 20-2-516-0868 International Finance Corporation (IFC) Mr. Sami Haddad, Director Middle East & North Africa World Trade Center, 1191 Corniche El Nil St., 12th Fl., Cairo Tel: 20-2-579-6565, 20-2-579-9900, Fax: 20-2-579-2211

List of Local Banks American Express Bank Mr. Osama Saleh, Acting Manager 777, Lazoghly St. (Isis Bldg.), Garden City, Cairo Tel: 20-2-791-0003 (3 lines), Fax: 20-2-791-4919 Citibank Mr. Michel Accad, Vice President & Country Corporate Officer 4 Ahmed Pasha St., Garden City, Cairo Tel: 20-2-795-1873/4/6, Fax: 20-2-795-7743 Bank of Alexandria Mr. Mahmoud Abdel Latif, Chairman 49 Kasr El Nil St., Down Town, Cairo Tel: 20-2-393-8631/3, 20-2-391-3495, Fax: 20-2-391-9805 Bank of New York (rep. Office) Mr. Tarek El Refaie, Chief Representative 9 Abdel Moneim Riad St., Dokki, Cairo Tel: 20-2-336-5818, Fax: 20-2-336-5816 Banque du Caire Mr. Ahmed El Bardai, Chairman 22 Adly St., Down Town, Cairo www.icongrouponline.com

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Tel: 20-2-390-9575, Fax: 20-2-390-1735 Bank Misr Mr. Mohamed Barakat, Chairman 151 Mohamed Farid St., Cairo Tel: 20-2-391-2263, 20-2-391-4974, Fax: 20-2-391-9779 National Bank of Egypt Dr. Farouk El Okdah, Chairman Cairo Plaza Bldg., 1187 Corniche El Nil, Cairo Tel: 20-2-574-9101, Fax: 20-2-574-8910 Arab International Bank Dr. Mustafa Khalil, Chairman 35 Abdel Khalek Tharwat St., Down Town, Cairo Tel: 20-2-391-6391, 20-2-391-8021, Fax: 20-2-391-6233 BNP Paribas Mr. John Tomozeau, Chairman 3 Latin America St., Garden City, Cairo Tel: 20-2-794-8323/4/5, Fax: 20-2-794-0619 Cairo Barclays Bank Mr. Colin McCormack, Managing Director 12 El Sheikh Youssef Sq., Garden City, Cairo Tel: 20-2-366-2600, Fax: 20-2-366-2810/11 Commercial International Bank (CIB) Mr. Hisham Ezz Al Arab, Chairman Nile Tower Bldg., 4th Fl., 21/23 Charles Degol St., Giza Tel: 20-2-570-3043/22, Fax: 20-2-570-3172 Delta Int’l Bank Dr. Aly Negm, President 1113 Corniche El Nil, Cairo Tel: 20-2-575-3492, Fax: 20-2-576-2851 Egyptian American Bank (EAB) (A joint venture with American Express) Mr. Richard Roderick, Managing Director 6 Hassan Sabri St., Zamalek, Cairo Tel: 20-2-739-1509, Fax: 20-2-738-2993 Hong Kong Singapore Banking Corporation -HSBC Mr. Abdel Salam El Anwar, Deputy Chairman, and Managing Director 3 Aboul Feda St., Zamalek, Cairo Tel: 20-2-736-7425, Fax: 20-2-736-4010 Misr International Bank - MIBank Dr. Kamal Sorour, Deputy Chairman 54 El Batal Ahmed Abdel Aziz St., Mohandessin, Cairo Tel: 20-2-749-4424, 20-2-749-7091, Fax: 20-2-749-8072, 20-2-748-9796 Misr America Int’l Bank www.icongrouponline.com

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Mr. Ahmed El Bardaie, Chairman & Managing Director 12 Nadi El Seid St., Dokki, Cairo Tel: 20-2-761-6634/13/23/24/27, Fax: 20-2-761-6610 Misr Exterior Bank Mr. Wagdy El Rabbat, Chairman Cairo Plaza Bldg., Corniche El Nil, Cairo Tel: 20-2-577-8380, 20-2-577-9522, Fax: 20-2-576-2806

Other Institutions Cairo Regional Center for International Commercial Arbitration Dr. Mohamed Ibrahim Aboul Enein, Director 1 Al Saleh Ayoub St., Zamalek, Cairo Tel: 20-2-735-1333/35/37, 20-2-737-3691/93, Fax: 20-2-735-1336 Commission of the European Communities Delegation in Egypt Amb. Ian Boag, Head of the Delegation 37 Gamet El Dowal St., Mohandessin, Cairo Tel: 20-2-735-8388, Fax: 20-2-735-0385 United Nations Development Program (UNDP) Mr. Antonio Vigilante, Resident Coordinator & Representative 1191 Corniche El Nil, World Trade Center, Cairo Tel: 20-2-578-4840/1/2/3/4/5/6, Fax: 20-2-578-4847

4.8 4.8.1

TRAVEL ISSUES Local Business Practices

Business in Egypt is personal. Egyptian and foreign business community members who have broad experience in the market, give the following suggestions:

Have Patience Unfamiliar paperwork processes and bureaucratic procedures make business conduct somewhat slow in Egypt. Don’t expect to breeze in for a week and leave with a contract. It may take a year or more, but in the end, it is usually profitable.

Get Acquainted With Local Culture Egyptians are a proud people who trace their civilization back 5,000 years. Take time to learn the culture, and develop an appreciation for the Islamic faith. All private business leaders and most high-level government officials have a good command of English. Learn as much Arabic as possible - it pleases Egyptians if you know key phrases in Arabic ... Good Morning (Sabah El Kheir), Good Evening (Messaa El Kheir), etc.

Be Personable When you visit a businessperson, don’t just walk in, shake hands, and get down to business. If you have previously met with the person, chat about common friends, family, children, etc. www.icongrouponline.com

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Do Your Homework The Egyptian market is a complex and highly competitive one. A good Egyptian agent will help you a great deal in directing you to success. Find yourself a good local representative with the help of the U.S. and Foreign Commercial Service at the American Embassy or a reliable business group.

Remain Flexible The Egyptian market, like anywhere in the Middle East, is a changing one. It may not be advisable for the terms of a contract to remain the same during its length. Changing conditions in the market may suggest exploring different markets or changing from partnership to technology transfer or royalty provisions.

Send Your Best Your top experienced executive with knowledge of the area will do a better job with the Egyptian business community. Your young, enthusiastic representative may not be as effective with the local partner, particularly in a culture that respects age and experience.

Business Rules When doing business in Egypt, be prepared to play it in the Egyptian tradition, or you may waste your time. A few foreign firms come to Egypt and give up after a short stay. But most foreign companies, once established with a base here, find the Egyptian market a worthwhile and profitable place to do business.

4.8.2

Travel Advisory and Visas

Country Description Egypt is a developing country with extensive facilities for tourists.

Entry Requirements A passport and visa are required. Travelers can obtain a renewable 30-day tourist visa at any port of entry, except Taba and Rafah, for a $15 fee, payable in U.S. dollars. Visitors arriving overland and/or those previously experiencing difficulty with their visa status in Egypt must obtain a visa prior to arrival. Military personnel arriving on commercial flights are not exempt from passport and visa requirements. Proof of Yellow Fever immunization is required if arriving from an infected area. Evidence of an AIDS test is required for everyone staying over 30 days. Please note that the new Egyptian Labor Law now requires foreigners who plan to work in Egypt to obtain visas and residency for work purposes before obtaining a work permit. for additional entry requirements, U.S. citizens may contact the Embassy of the Arab Republic of Egypt, 3521 International Court, N.W., Washington, D.C. 20008, Tel: 202-895-5400, or the Egyptian Consulates in New York, Chicago, Houston and San Francisco. The Embassy of Egypt’s Web site is http://www.embassyofegyptwashingtondc.org/. In an effort to prevent international child abduction, many governments have initiated procedures at entry/exit points. These often include requiring documentary evidence of relationship and permission for the child’s travel from the parent(s) or legal guardian not present. Having such documentation on hand, even if not required, may facilitate entry/departure.

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Dual Nationality In addition to being subject to all Egyptian laws affecting U.S. citizens, dual nationals may also be subject to other laws that impose special obligations on Egyptian citizens. The Government of Egypt considers all children born to Egyptian fathers to be Egyptian citizens. Even if the children were born in the United States and bear American passports, immigration officials may require proof that the father approves their departure before children under the age of twenty-one will be allowed to leave Egypt. Americans married to Egyptians do not need their spouse’s permission to depart Egypt. They should, however, ensure that their residency visa is current. If a dual national resides in Egypt for extended periods, more than six months, proof of Egyptian citizenship, such as a family I.D. card, is required. Male dual nationals who have not completed military service are not generally required to enlist in the armed forces. However, they must obtain an exemption certificate through the Ministry of Defense Draft Office before they can leave Egypt. This process can take several months and the Egyptian Government will not make exceptions to this requirement. Individuals who may be affected can inquire at an Egyptian consular office abroad before traveling to Egypt. Dual Egyptian-American nationals may enter and leave Egypt on their U.S. passports. Persons with dual nationality who travel to Egypt on their Egyptian passports are normally treated as Egyptian citizens by the local government. The ability to provide U.S. consular assistance to such persons, therefore, is extremely limited. For additional information, see the Dual Nationality flyer on the Consular Affairs home page on the Internet at http://travel.state.gov.

Safety and Security Following an attack by extremists on tourists in the Upper Egypt town of Luxor in November 1997, Egyptian law enforcement and security officials took measures to enhance security at airports, international hotels and tourist sites throughout the country. There have been no attacks on tourists since that time. Effective police operations in the past few years and the heightened security posture throughout Egypt, particularly since September 11, have made it more difficult for extremist groups to conduct terrorist operations. However, the threat has not been eliminated. The U.S. Embassy periodically receives information concerning extremists’ intentions to target American citizens or interests in Egypt. In light of this information, we urge Americans to be vigilant and exercise good security practices while in Egypt. Americans may contact the Consular Section of the U.S. Embassy in Cairo for the most up-to-date information concerning the security situation in Egypt. (Please see contact information in the Registration/Embassy Information section below.) For the latest security information, Americans traveling abroad should regularly monitor the Department’s Internet Web site at http://travel.state.gov where the current Worldwide Caution Public Announcement, Travel Warnings and Public Announcements can be found.

Restricted Areas Those wishing to visit areas near Egypt’s frontiers, including oases near the border with Libya and off-road areas in the Sinai, must obtain permission from the Travel Permits Department of the Ministry of the Interior, located at the corner of Sheikh Rihan and Nubar Streets in downtown Cairo. Travelers should be aware of the possible dangers of off-road travel. Mines left from previous conflicts remain buried in several regions of the country and have caused several deaths, including deaths of Americans. As a rule, all travelers should check with local authorities before embarking on off-road travel. Known minefields are not marked by signs, but are usually enclosed by barbed wire. Travelers should, therefore, avoid areas enclosed by barbed wire. After heavy rains, which can cause flooding in desert areas and the consequent shifting of land mines, travelers should avoid driving through build-ups of sand on roadways.

Medical Facilities There are many Western-trained medical professionals in Egypt. The U.S. Embassy in Cairo can provide a list of local hospitals and English-speaking physicians. This list is also available on the Embassy’s Web site, www.icongrouponline.com

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http://usembassy.egnet.net. Medical facilities are adequate for non-emergency matters, particularly in tourist areas. Emergency and intensive care facilities are limited. Facilities outside Cairo fall short of U.S. standards. Most Nile cruise boats do not have a ship’s doctor, but some employ a medical practitioner of uncertain training. Hospital facilities in Luxor and Aswan are inadequate, and they are nonexistent at most other ports of call. Beaches on the Mediterranean and Red Sea coasts are generally unpolluted. However, persons who swim in the Nile or in canals, walk barefoot along the Nile, or drink untreated river water are at risk of exposure to bacterial infections, hepatitis, and the parasitic disease schistosomiasis (Bilharzias). There is a low risk of exposure to exotic diseases in Egypt such as Rift Valley Fever (RVF). RVF, which flares up in parts of the country from time to time, is a mosquito-borne disease of domestic animals that can infe ct humans. It is safe to eat properly-prepared, thoroughly-cooked meat and vegetables in tourist hotels, on Nile cruise boats, and in tourist restaurants. Eating uncooked vegetables should be avoided because this can cause diarrhea. Tap water is potable, but the pipes it comes through might not be in the best shape. It is best to drink bottled water or water that has been boiled and filtered. Well-known brands of bottled beverages are generally considered safe.

Medical Insurance The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and if it will cover emergency expenses such as a medical evacuation. U.S. medical insurance plans seldom cover health costs incurred outside the United States unless supplemental coverage is purchased. Further, U.S. Medicare and Medicaid programs do not provide payment for medical services outside the United States. However, many travel agents and private companies offer insurance plans that will cover health care expenses incurred overseas, including emergency services such as medical evacuation. When making a decision regarding health insurance, Americans should consider that many foreign doctors and hospitals require payment in cash prior to providing service and that a medical evacuation to the United States may cost well in excess of $50,000. Uninsured travelers who require medical care overseas often face extreme difficulties. When consulting with your insurer prior to your trip, please ascertain whether payment will be made to the overseas healthcare provider or if you will be reimbursed later for expenses that you incur. Some insurance policies also include coverage for psychiatric treatment and for disposition of remains in the event of death. Useful information on medical emergencies abroad, including overseas insurance programs, is provided in the Department of State’s Bureau of Consular Affairs brochure, Medical Information for Americans Traveling Abroad, available via the Bureau of Consular Affairs home page http://travel.state.gov or auto fax: 202-647-3000

Other Health Information Information on vaccinations and other health precautions may be obtained from the Centers for Disease Control and Prevention’s hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747), fax: 1-888-CDC-FAXX (1888-232-3299), or via CDC’s Internet site at http://www.cdc.gov/travel. for information about outbreaks of infectious diseases abroad, consult the World Health Organization’s Web site at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith.

Crime The crime rate in Egypt is low. While incidents of violence are rare, purse snatching, pick pocketing and petty theft are not uncommon. Unescorted women are vulnerable to sexual harassment and verbal abuse. The loss or theft of a U.S. passport abroad should be reported immediately to local police and the U.S. embassy. If you are the victim of a crime in Egypt, in addition to reporting to local police, please contact the U.S. Embassy for assistance. The Embassy staff can, for example, assist you to find appropriate medical care, to contact family members or friends, and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility www.icongrouponline.com

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of local authorities, consular officers can help you to understand the local criminal justice process and to find an attorney if needed. U.S. citizens may refer to the Department of State’s pamphlets, “A Safe Trip Abroad” and “Tips for Travelers to the Middle East and North Africa”, to promote a trouble-free journey. They are available by mail from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, via the Internet at http://www.access.gpo.gov/su_docs, or via the Bureau of Consular Affairs home page at http://travel.state.gov.

Traffic Safety and Road Conditions While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Egypt is provided for general reference only, and it may not be totally accurate in a particular location or circumstance. •

Safety of Public Transportation: Poor

•

Urban Road Conditions/Maintenance: Poor

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Rural Road Conditions/Maintenance: Poor

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Availability of Roadside Assistance: Poor

The roads in Egypt can be hazardous, particularly at night outside major cities. Cars and trucks frequently travel at night without headlights and at a high rate of speed. There are few, if any, areas for a vehicle with mechanical problems to pull off the paved surface and no system for warning other motorists. Wild animals can regularly be found on the roads at night. Traffic regulations are routinely ignored. Roads in Cairo are congested and traffic is badly regulated. With such hazards, it is not surprising that Egypt is one of the world’s leaders in fatal auto accidents. It also strongly suggests that, if available, seatbelts be worn at all times. As an alternative, the Cairo Metro (subway) system is good, but buses and commuter micro-buses are usually extremely crowded and poorly maintained. for those who prefer to go on foot, sidewalks and pedestrian crossings are non-existent in many areas and drivers do not yield the right-of-way to pedestrians. It should also be borne in mind that emergency and intensive care facilities are limited outside Cairo. For additional general information about road safety, including links to foreign government sites, see the Department of State, Bureau of Consular Affairs home page at http://travel.state.gov/road_safety.html. for specific information concerning Egypt’s driving permits, vehicle inspection, road tax and mandatory insurance, please contact the Egyptian National Tourist Organization offices in New York (Egypt Tourist Authority, 630 Fifth Avenue, Suite 1706, New York, NY 10111; telephone (212) 332-2570 or toll-free, (877) 773-4978; Internet Web site: http://www.egypttourism.org; e-mail address: [email protected] or in California at Wilshire San Vicente Plaza, 8383 Wilshire Boulevard, Suite 215, Beverly Hills, CA 90211; telephone 323-653-8815, or in Illinois at 645 N. Michigan Avenue, Suite 829, Chicago, IL 312-280-4666.

Aviation Safety Oversight The U.S. Federal Aviation Administration (FAA) has assessed the government of Egypt’s civil aviation authority as Category 1 - in compliance with international aviation safety standards for oversight of Egypt’s air carrier operations. For further information, travelers may contact the Department of Transportation within the United States at telephone 1-800-322-7873, or visit the FAA’s Internet Web site at http://www.faa.gov/avr/iasa. The U.S. Department of Defense (DOD) separately assesses some foreign air carriers for suitability as official providers of air services. for information regarding the DOD policy on specific carriers, travelers may contact the DOD at telephone (618) 2294801.

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Customs Regulations Egyptian customs authorities enforce strict regulations concerning temporary importation into or export from Egypt of items such as firearms, religious materials, antiquities, medications, business equipment, currency, and ivory. It is advisable to contact the Embassy of Egypt in Washington, D.C., or one of the Egyptian consulates in the United States for specific information regarding customs requirements. Egyptian law allows for the imposition of duties on photographic and video equipment. However, such duties are rarely imposed, except when large quantities of photographic equipment or expensive video equipment are brought into Egypt. Persons bringing in such items should be prepared to comply with certain customs formalities. Personal use items such as jewelry, laptop computers, and electronic equipment are exempt from customs fees. However, Egyptian customs authorities may enforce strict regulations concerning temporary importation into or export from Egypt of items such as computer peripherals, including printers and modems, which are subject to customs fees. for tourists, electronic equipment is annotated in their passport, and the person is required to show the same items upon exiting Egypt. for residents, a deposit, refunded upon departure, may be made in lieu of customs fees. Commercial merchandise and samples require an import/export license issued by the Egyptian Ministry of Trade and Supply in Egypt prior to travel and should be declared upon arrival. It is advisable to contact the Embassy of Egypt in Washington, D.C. or one of Egypt’s consulates in the United States for specific information regarding customs requirements. Travelers are not required to convert foreign currency into Egyptian pounds or submit exchange currency statements on arrival. The maximum amount of Egyptian currency that can be brought in or taken out of Egypt is 1,000 Egyptian pounds.

Criminal Penalties While in a foreign country, a U.S. citizen is subject to that country’s laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Egyptian laws, even unknowingly, may be expelled, arrested or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Egypt are strict, and convicted offenders can expect jail sentences and heavy fines. The death penalty may be imposed on anyone convicted of smuggling or selling marijuana, hashish, opium, LSD, or other narcotics. Law enforcement authorities prosecute and seek fines and imprisonment in cases of possession of even small quantities of drugs.

Consular Access U.S. citizens are encouraged to carry a copy of their U.S. passport with them at all times, so that, if questioned by local officials, proof of identity and U.S. citizenship are readily available. In accordance with Article 36 of the Vienna Convention on Consular Relations, to which Egypt is a party, competent authorities in the host country must notify a consular post of the arrest of one of its citizens without delay if requested to do so by the foreign citizen.

Photography Restrictions There are restrictions on photographing military personnel and sites, bridges, and canals, including the Suez Canal. Egyptian authorities may broadly interpret these restrictions to include other potentially sensitive structures, including embassies, other public buildings with international associations, and some religious edifices. Visitors should refrain from taking photographs that include uniformed personnel.

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Children’s Issues For information on international adoption of children and international parental child abduction, please refer to our Internet site at http://travel.state.gov/children’s_issues.html or telephone the Overseas Citizens Services call center at 1-888-407-4747. The OCS call center can answer general inquiries regarding international adoptions and will forward calls to the appropriate country officer in the Bureau of Consular Affairs. This number is available from 8:00 a.m. to 8:00 p.m. Eastern Standard Time, Monday through Friday (except U.S. federal holidays). Callers who are unable to use toll-free numbers, such as those calling from overseas, may obtain information and assistance during these hours by calling 1-317-472-2328.

Embassy Location and Registration U.S. citizens living in or visiting Egypt are encouraged to register at the Consular Section of the U.S. Embassy in Egypt and obtain updated information on travel and security within Egypt. The American Citizens Services office of the U.S. Embassy is located at 5 Latin America Street, Garden City, Cairo and is open to the public from 8:00 a.m. until 12:00 noon. The workweek in Egypt is Sunday through Thursday. Telephone calls are accepted from 8:00 a.m. until 4:30 p.m. The mailing address from the United States is: Consular Section, Unit 64900, Box 15, APO AE 09839-4900; in Egypt, it is 8 Kamal el-Din Salah Street, Garden City, Cairo. The main Embassy telephone number is 20-2-7973300. The Consular Section telephone number is 20-2-797-2301, the fax number is 20-2-797-2472, and the e-mail address is [email protected]. Consular information is available via the Internet at http://www.usembassy.egnet.net. Once a month, American citizen services are available at the American Center, 3 Pharana Street, Azarita, Alexandria from 11:00 a.m. - 2:00 p.m. Please check the Embassy Web site for a schedule of upcoming dates. Every 5-10 weeks, American citizen services are available at the Cairo American College, Room 600, Maadi, from 11:30 a.m. to 1:30 p.m. Please check the Embassy Web site for dates and details of services available. The workweek in Egypt is Sunday through Thursday.

4.8.3

Transportation

Air and Sea Egypt is an important air terminus for the Middle East, and Cairo is served by many major airlines. Currently, Egypt Air is the only airline serving Egypt non-stop from/to the U.S., with United involved under a code-sharing agreement with Lufthansa, Northwest with KLM, and Delta with Air France. Other major international airlines represented in Cairo include: Air France, Alitalia, British Airways, Japan Airlines, and Swissair. Shipping lines serving Port Said and Alexandria (the largest port on the Mediterranean) are Adriatica, Farrel, Lykes, Ogden, Prudential, and American President Lines. Egypt has its own merchant fleet.

Local Using Cairo’s black-and-white taxis effectively requires some basic Arabic phrases and practice. If going to an area you do not know well, a map may help both you and the driver, who won’t have one. Negotiating the fare is best done before the trip. Although taxis have meters, the official rate is so low, the obligation to pay something realistic is clear. Other variables are your familiarity with the city, the driver’s demeanor, and the taxi’s physical attributes. Its age and size count. While newer, larger taxis command higher fares, the cost is very reasonable, much less than in the U.S.

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The Cairo Metro is a light rail system, partly underground. One line is now running from al-Marg in the north through the center of the city to Maadi and on to Helwan. Another line is now running from Shoubra El Kheima, north of Cairo, to Ramses Station in the city center. A new line now runs from Tahrir Square passing by the Cairo Opera House and ending at Cairo University in Giza.

Regional Alexandria and Cairo are connected by both the Western Desert Highway, a high-speed toll road and the busier Delta Road. Buses take 3½ hours, with a rest stop. A non-stop Turbino train takes just over 2 hours.

4.8.4

Language and Communications

Arabic is the common language. Colloquial Cairene Arabic is expressive and rich in words of Coptic, European, and Turkish origins. The written language differs from the spoken. Modern standard Arabic, based on the language of the Koran, is heard on radio, TV, and in formal speeches. About 90% of Egyptians are Muslim, and Islam is the state religion. Most others are Christian, either Copts, Greek Orthodox, Roman Catholic, or Anglican Protestants. Indigenous minorities include four to six million Copts, Nubians, Bedouin, and a small Jewish community. Coptic has remained the liturgical language of the Coptic Church.

4.8.5

Housing

Representative costs (per month) for acceptable furnished housing in Cairo and Alexandria are indicated below: •

2 bedroom apartment: $1,000 and up

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3 bedroom apartment: $1,500 and up

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4 bedroom apartment: $2,000 and up

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5 bedroom apartment: $3,000 and up

•

Single Family House: $4,000 and up

Egyptian law allows a landlord to charge higher rents if apartments are “furnished”; therefore, almost all rental units are of this type. The amount and quality of furnishings vary greatly. Kitchen equipment and appliances provided often are inadequate. Landlords prefer to rent their premises “furnished” even if only minimally so, and may insist on keeping some items in the apartment or villa for legal reasons. However, it is our experience that they are willing to compromise on this issue. The rental market is competitive and rent deposits are not usually required. Most landlords list their properties with Real Estate agents to get the best price for their property and the widest showing. Rental payments are usually made quarterly in advance, and on rare occasions annually in advance.

4.8.6

Food

Egyptian cuisine features a wide variety of vegetables, fruits, grains, breads and pastas, both domestic and imported. The primary meat products are chicken, beef and lamb. Fresh and frozen seafood from the Red Sea and the

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Mediterranean is also available. for religious reasons, pork and products containing pork are sold only in special shops. Popular beverages are hot tea (sweetened and often served in a glass), Turkish coffee, fresh fruit beverages and carbonated drinks. Local and imported bottled water, both still and sparkling, is available, as are locally produced wine and beer. U.S. business travelers are encouraged to obtain a copy of the “Key Officers of Foreign Service Posts: Guide for Business Representatives” available for sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402; Tel: 202-512-1800; Fax: 202-512-2250. Business travelers to Egypt seeking appointments with U.S. Embassy Cairo officials should contact the Commercial Section in advance. The commercial section may be reached by telephone at 20-2-797-2340, fax at 20-2-795-8368, or e-mail at: [email protected]

Country Data •

Population: 69.2 million

•

Population Growth Rate: 1.99%

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Religions: Muslim 90%; Christian 10%

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Government System: Presidential

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Languages: Arabic

•

Work Week: Sat.-Wed. (Government); Sun.-Thurs. (Business)

4.9

KEY CONTACTS

(Note: From the United States, dial international long-distance access, then Country Code: 20, and City Code: 2 for Cairo, or 3 for Alexandria. When dialing from within Egypt, dial 02 for Cairo, 03 for Alexandria.)

4.9.1

U.S. Contacts in Egypt

American Mideast Educational & Training Services, Inc. (AMIDEAST) Mr. Theodore Kattouf, Country Director 23 Mossadak St., Dokki, Giza Tel: 20-2-337-8265, Fax: 20-2-795-2946 American Research Center in Egypt (ARCE) Mr. Bob Springbord/Director 2 Kasr El Doubara Sq., Garden City, Cairo Tel: 20-2-794-8239, 20-2-795-8683, Fax: 20-2-795-3052 American University in Cairo (AUC) Mr. David Arnold, President 113 Kasr El Aini St., Cairo Tel: 20-2-794-2964 (9 lines), Fax: 20-2-795-7565 Community Services Association (CSA) Ms. Leslie Ellarby, Executive Director 4 Road 21, Maadi

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Tel: 20-2-768-8232, 20-2-358-5284, Fax: 20-2-768-8319 Ford Foundation Dr. Humphrey Davies/Regional Rep. for Middle East & North Africa 1 Osiris St., Garden City, Cairo Tel: 20-2-795-2121, 20-2-794-4450, 20-2-794-9635, Fax: 20-2-795-4018 Fulbright Commission Ms. Ann B. Radwan/Executive Director 1081 Corniche El Nil St., Belmont Bldg., Cairo Tel: 20-2-794-4799, 20-2-794-8679, Fax: 20-2-795-7893 International Executive Service Corps. (IESC) Mr. Spencer King/Chief of Party Al Boustan Commercial Center, Suite 1, 10th Fl. Al Boustan St., Bab El Louk, Cairo Tel: 20-2-390-3232, Fax: 20-2-390-2929 Project Hope Dr. Hoda Zaki/Program Director 86 Mohi El Din Aboul Ezz St., Mohandessin, Cairo Tel: 20-2-348-0915, 20-2-360-6295, Fax: 20-2-360-6295 Women’s Association 21 Boulos Hanna St., Dokki, Cairo Tel: 20-2-760-3457

4.9.2

Egyptian Government Cabinet

Prime Minister H.E. Dr. Atef Mohamed Ebeid Magles El Shaab St., Kasr El Aini St., Cairo Tel: 20-2-795-8025/36/39, 20-2-795-7370/6/8 Fax: 20-2-795-8016, 20-2-795-2048 Ministry of Agriculture, Animals & Fish Wealth & Land Reclamation Affairs H.E. Dr. Youssef Amin Wally Deputy Prime Minister & Minister Nadi El Seid St., Dokki, Cairo Tel: 20-2-337-2566, 20-2-337-3388 Fax: 20-2-749-8128 Ministry of Defense & Military Production H.E. Field Marshal Mohamed Hussein Tantawy, Minister Khalifa Al Ma’amoun St., Heliopolis, Cairo Tel: 20-2-263-5681, 20-2-260-2566, 20-2-260-2466 Fax: 20-2-291-6227 Ministry of Information H.E. Mr. Safwat El-Sherif, Minister Maspero, Corniche El Nil, Cairo www.icongrouponline.com

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Tel: 20-2-574-8984/6 Fax: 20-2-575-8781 Ministry of Foreign Affairs H.E. Mr. Ahmed Maher El Sayed, Minister Maspero, Corniche El Nil, Cairo Tel: 20-2-574-9816/7, 20-2-574-9820 Fax: 20-2-574-9533, 20-2-574-8822 Ministry of Justice H.E. Counselor Farouk Seif El Nasr, Minister Lazoughly Sq., Justice & Finance Bldg., Cairo Tel: 20-2-795-1176, 20-2-795-8103, 20-2-795-5700 Fax: 20-2-795-8103 Ministry of Culture H.E. Mr. Farouk Hosny, Minister 2 Shagaret El Dor St., Zamalek, Cairo Tel: 20-2-738-0761/2 Fax: 20-2-735-6449 Ministry of Education H.E. Dr. Hussein Kamel Baha’ El Din, Minister 4 Ibrahim Naguib St., Garden City, Cairo Tel: 20-2-578-7643/4 Fax: 20-2-796-2952 Ministry of Foreign Trade H.E. Dr. Youssef Boutros Ghali, Minister 8 Adly St., Down Town, Cairo Tel: 20-2-391-9661 Fax: 20-2-390-3029, 20-2-395-9015 People’s Assembly & Shura Council Affairs H.E. Mr. Kamal El-Shazli, Minister of State Magles El Shaab St., Cairo Tel: 20-2-794-3855, 20-2-794-7750 Fax: 20-2-795-7681 Ministry of Tourism H.E. Dr. Mamdouh El-Beltagui, Minister Abbassia Square, Borg Misr Travel, Cairo Tel: 20-2-282-8439, 20-2-284-1707 Fax: 20-2-685-9551 Ministry of Administrative Development H.E. Dr. Mohamed Zaki Abou Amer, Minister of State Leadership Development Center, Next to Central Auditing Agency, Salah Salem Road, Heliopolis, Cairo Tel: 20-2-402-4152/67 Fax: 20-2-261-4126 Ministry of Housing, Utilities & New Communities H.E. Dr. Mohamed Ibrahim Sulaiman, Minister 1 Ismail Abaza St., off Kasr El Aini St., Cairo www.icongrouponline.com

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Tel: 20-2-792-1384/85, 20-2-792-1403/5 Fax: 20-2-792-1387 Ministry of Manpower & Immigration H.E. Mr. Ahmed Ahmed Al Ammawy, Minister 3 Youssef Abbas St., Nasr City, Cairo Tel: 20-2-404-2910/1/2 Fax: 20-2-260-9891 Ministry of Awqaf (Religious Trusts) H.E. Dr. Mahmoud Hamdi Zaqzouq, Minister Sabry Abou Alam St., Bab El Louk, Cairo Tel: 20-2-392-9403, 20-2-393-3011 Fax: 20-2-393-6335 Ministry of Health & Population H.E. Dr. Mohamed Awad Tag Eldin, Minister Magles El Shaab St., Cairo Tel: 20-2-794-1507, 20-2-794-3462, 20-2-794-0526 Fax: 20-2-795-3966 Ministry of Higher Education & Scientific Research Affairs H.E. Dr. Mufeed Shehab, Minister and Minister of State for Scientific Research Affairs 4 Ibrahim Naguib St., Garden City, Cairo Tel: 20-2-795-6962, 20-2-795-2155 Fax: 20-2-796-2952, 20-2-794-2163 Ministry of Public Works and Water Resources H.E. Dr. Mahmoud Abu Zeid, Minister El Nil St., Embaba, Cairo Tel: 20-2-312-3309, 20-2-312-3315 Fax: 20-2-312-3257 Ministry of Environmental Affairs H.E. Dr. Mamdouh Riad Tadros, Minister of State 30 Misr-Helwan Agricultural Road, Behind Sofitel Hotel, Maadi, Cairo Tel: 20-2-525-6465/85/70/72 Fax: 20-2-525-6461 Ministry of Interior H.E. Gen. Habib Al Adly, Minister El Sheikh Rihan St., Bab El Louk, Cairo Tel: 20-2-795-7500, 20-2-795-2300, 20-2-795-7286 Fax: 20-2-795-8068 Ministry of Local Development H.E. Gen. Mustafa Abdel Kader Minister of State 4 Shooting Club St., Dokki, Cairo Tel: 20-2-749-7470, 20-2-749-7656 Fax: 20-2-749-7788 Ministry of Social Affairs and Insurance H.E. Dr. Amina Al Guindy, Minister www.icongrouponline.com

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19 El Maraghy St., Agouza, Cairo Tel: 20-2-337-5404, 20-2-337-0039 Fax: 20-2-591-7799 Ministry of Industry & Technological Development H.E. Dr. Ali Al Sei’dy, Minister, Minister 2 Latin America St., Garden City, Cairo Tel: 20-2-792-1168/70 Fax: 20-2-795-5025 Ministry of Electricity and Energy H.E. Dr. Hassan Younis, Minister Abbassia, Nasr City, Cairo Tel: 20-2-261-6514, 20-2-261-6317 Fax: 20-2-260-2888 Ministry of Military Production H.E. Dr. Sayed Meshaal, Minister of State 5 Ismail Abaza St., Cairo Tel: 20-2-795-2428, 20-2-795-3822 Fax: 20-2-794-8739 Ministry of Transportation H.E. Eng. Hamdi Abdel Salam El Shayeb, Minister 105 Kasr El Aini St., Cairo Tel: 20-2-795-5562/3 Fax: 20-2-795-5564 Ministry of State for Foreign Affairs & International Cooperation H.E. Dr. Fayza Aboulnaga, Minister Maspero, Corniche El Nil, Cairo Tel: 20-2-574-9806 Fax: 20-2-574-9533 Ministry of Youth H.E. Dr. Aley El Din Hilal Dessouki, Minister Supreme Council of Youth, 26th July St., Sphinx Square, Mohandessin, Cairo Tel: 20-2-346-1113, 20-2-346-8859 Fax: 20-2-346-9025 Ministry of Supply & Domestic Trade H.E. Dr. Hassan Ali Khedr, Minister 99 Kasr El Aini St., Cairo Tel: 20-2-795-7606/13, 20-2-795-7598 Fax: 20-2-795-6387 Ministry of Planning H.E. Dr. Ahmed Mahrous El Darsh, Minister Salah Salem Road, Nasr City, Cairo Tel: 20-2-401-4719, 20-2-401-4516 Fax: 20-2-401-4733 Ministry of Public Business Sector www.icongrouponline.com

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H.E. Dr. Mokhtar Abdel Moneim Khattab, Minister Magles El Shaab St., Cairo Tel: 20-2-795-8026, 20-2-795-0164 Fax: 20-2-795-5882 Ministry of Finance H.E. Dr. Medhat Hassanein, Minister Lazoughly Square, Justice & Finance Bldg., Cairo Tel: 20-2-795-7027, 20-2-795-7176, 20-2-794-1055 Fax: 20-2-795-1537 Ministry of Communication and Information Technology H.E. Dr. Ahmed Nazeef, Minister 1 Hossary St., off Ahmed Orabi St., Mohandessin, Cairo Tel: 20-2-344-4544 Fax: 20-2-344-6088 Ministry of Civil Aviation H.E. Marshal Ahmed Shafik, Minister Ministry of Aviation, Airport Road, Heliopolis, Cairo Tel: 20-2-2667-610/2/5/8/9 Fax: 20-2-633-3409, 20-2-633-0351 Ministry of Petroleum H.E. Eng. Sameh Fahmi, Minister El Mokhayyam El Da’em St., Nasr City, Cairo Tel: 20-2-263-1000, 20-2-263-2000 Fax: 20-2-263-6060 Cairo Governorate H.E. Dr. Abdel Reheim Shehata, Governor of Cairo Abdin, Cairo Tel: 20-2-390-7754/63 Fax: 20-2-390-4620 Alexandria Governorate H.E. Mr. Abdel Salam Al Mahgoub, Governor of Alexandria 60 El-Horreya Rd., Alexandria Tel: 20-3-484-8345

4.9.3

Egyptian Government Agencies

Arab Organization for Industrialization (AOI) Ret. Marshal Magdi Hatata, Chairman 2D Midan E l Abbassia, Cairo Tel: 20-2-482-3377/94 Fax: 20-2-482-6010 Capital Market Authority Mr. Abdel Hamid Ibrahim, Chairman 20 Emad El Din St., Cairo www.icongrouponline.com

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Tel: 20-2-574-1000, 20-2-574-3111 Fax: 20-2-575-5339, 20-2-575-5749, 20-2-575-4156, 20-2-574-5598 Central Agency for Public Mobilization & Statistics (CAPMAS) Mr. Ahab Elwy, President Salah Salem St., Nasr City, Cairo Tel: 20-2-402-0574 Fax: 20-2-402-4099 Central Bank of Egypt Dr. Mahmoud Abul Eyoun, Governor 31 Kasr El Nil St., Cairo Tel: 20-2-392-6211, 20-2-392-6108 Fax: 20-2-392-5045, 20-2-392-6361 Commercial Representation Office Mrs. Safeya El Shayal, Commercial Minister-Plenipotentiary 96 Ahmed Orabi St., Mohandessin, Cairo Tel: 20-2-347-1890/6 Fax: 20-2-344-4398 Customs Authority Mr. Mahfouz El Ergawy, Director General 4 El Tayaran St., Nasr City, Cairo Tel: 403-5557 Fax: 261-2672 EgyptAir Holding Company Gen. Abdel Fattah Kato, Chairman Cairo Int’l Airport, Cairo Tel: 20-2-267-4500, 20-2-267-7001/2 Fax: 20-2-418-3715 Egyptian Aviation Holding Company Gen. Eng. Ibrahim El Manaa Ministry of Civil Aviation Bldg., Airport Road, Heliopolis, Cairo Tel: 20-2-635-3955, 20-2-635-2442 Fax: 20-2-635-0933 Egyptian Environmental Affairs Agency (EEAA) Dr. Ibrahim Abdel Gelil, Chairman 30 Misr-Helwan Agricultural Road, behind Sofitel Hotel, Maadi, Cairo Tel: 20-2-525-6442/52 Fax: 20-2-525-6454/90 Egyptian Export Promotion Center (EEPC) Mr. Mohamed El Sayed Saleh, Executive Director 106 Gameat El Dowal El Arabia St., 5th Fl., Mohandessin, Giza Tel: 20-2-749-3919/20/21/22 Fax: 20-2-748-4142, 20-2-748-4056 Egyptian General Petroleum Corp. (EGPC) Eng. Mohamed Tawela, Chairman www.icongrouponline.com

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Palestine St., 4th Sector, New Maadi, Cairo Tel: 20-2-518-4960 Fax: 20-2-518-4963 Egyptian Radio & TV Union (ERTU) Mr. Abdel Rahman Hafez, President TV Bldg., Corniche El Nil, Cairo Tel: 20-2-579-8494/5 Fax: 20-2-574-6989 Egyptian Tourist Authority (ETA) Mr. Adel Abdel Aziz, Chairman Misr Travel Bldg., Abbassia, Cairo Tel: 20-2-683-9968, 20-2-685-4509 Fax: 20-2-685-4363, 20-2-685-4658 General Authority for Export & Import Control (GOEIC) Mr. Mohamed Abdel Hamid El Banna, Chairman 1 El Sheikh Maarouf St. (Corner of Ramses St.) Down Town, Cairo Tel: 20-2-575-6130, 20-2-575-6095/31 Fax: 20-2-576-6971, 20-2-575-8195 General Organization for Int’l Exhibitions & Fairs (GOIEF) Mr. Mohamed Said Saleh, Chairman Fair Grounds, Nasr City, Cairo Tel: 20-2-260-7810/1/5 Fax: 20-2-260-4548/21 General Authority for Investment & Free Zones (GAFI) Dr. Mohamed El Ghamrawy Dawoud, Executive Director 8 Adly St., Down Town, Cairo Tel: 20-2-390-4611, 20-2-390-6163, 20-2-390-3776, 20-2-391-5627 Fax: 20-2-390-7315 The Egyptian Organization for Standardization and Quality Control Dr. Mahmoud Eissa, President 6 Tadreeb El Modarebeen, Ameriya, Cairo Tel: 20-2-603-1349/51 Fax: 20-2-259-3480 General Authority for Supply Commodities Mr. Mohamed Abdel Razek Abdel Rahman, Vice Chairman 99 Kasr El Aini St., Cairo Tel: 20-2-796-0766, 20-2-796-0677 Fax: 20-2-796-1255 General Organization for Industrialization (GOFI) Eng. Mohamed Said Saleh, Vice Chairman 6 Khalil Agha St., Garden City, Cairo Tel: 20-2-260-7811/19 Fax: 20-2-260-7845/8 Immigration & Egyptians Abroad Administration www.icongrouponline.com

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Mr. Sohail Mohamed Lashin 96 Ahmed Orabi St., Mohandessin Tel: 20-2-303-4439/41, 20-2-303-6431 Fax: 20-2-303-5332 Information & Decision Support Center (IDSC) Dr. Raafat Radwan, Chairman Cabinet Bldg., Magles El Shaab St., Cairo Tel: 20-2-795-1551, 20-2-795-6077 Fax: 20-2-795-1716 New Community Authority Eng. Hussein Hosny Housing Bldg., 1 Ismail Abaza St., Cairo Tel: 20-2-792-1409 Fax: 20-2-792-1406 Public Enterprise Office (PEO) Mr. Fouad Abdul Wahab, Director 2 Latin America St., Garden City, Cairo Tel: 20-2-795-9288/81 Fax: 20-2-795-9233 Sales Tax Authority Mr. Mahmoud Mohamed Ali, Director 4 El Tayaran St., Nasr City, Cairo Tel: 20-2-401-2692/21/22/23/24 Fax: 20-2-401-6681 Social Fund for Development (SFD) Dr. Hany Seif Al Nasr, Secretary General Hussein Hegazy St. & Kasr El Nil St., Cairo Tel: 20-2-794-8339 Fax: 20-2-795-0628, 20-2-796-1660 Cairo Alexandria Stock Exchange Mr. Sameh El Torgoman, Director 4A El Sherifien St., Down Town, Cairo Tel: 20-2-392-1402/47 Fax: 20-2-392-4214 Suez Canal Authority Marshall Ahmed Ali Fadel, Chairman 6 Lazoghly St., Garden City, Cairo Tel: 20-2-794-0746/7/8/9 Fax: 20-2-795-1592 Taxation Authority Mr. Talaat Hammam, Chairman 5 Hussein Hegazi St., Cairo Tel: 20-2-792-0767/68, 20-2-795-2128 Fax: 20-2-792-0757

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Telecom Egypt Eng. Akil Hamed Beshir, Chairman Ministry of Transport, Communications & Civil Aviation, Ramses St., Cairo Tel: 20-2-577-7551, 20-2-578-1414 Fax: 20-2-579-3444

4.9.4

Egyptian Trade Associations

Alexandria Business Association (ABA) Mr. Mohamed Ragab, President C/o Ragab Export. & Import Company 52 Avenue El Horria St., Alexandria Tel: 20-3-487-2206 Fax: 20-3-487-2411 Assiut Business Association (ASBA) Dr. Mohamed Gamal El Din Abdel Mettal Chairman Al Shark Insurance Tower, El Geish St., Assiut Tel: 20-88-341-766 Fax: 20-88-341-755 Borg El Arab Business Association Eng. Mohamed Farag Amer First Industrial Zone, Borg El Arab, Alexandria Tel: 20-3-459-2079, 20-3-459-3650, 20-3-459-3075 Fax: 20-3-459-2044 Egyptian American Friendship Association Dr. Ibrahim Fawzi 83 Ramses St., 2nd Floor, Cairo Tel: 20-2-575-2211 Egyptian Businessmen’s Association (EBA) Mr. Mohamed Youssef, Secretary General 21 Giza St., Nile Tower, Giza, Cairo Tel: 20-2-573-6030, 20-2-572-3855 Fax: 20-2-573-7258 Egyptian Federation for Consumer Protection Associations (EFCA) Prof. Hassan Gemei, Secretary General Faculty of Law, Cairo University 14 Nagi Farid St., off Mohy El Din Abo El Ezz, Mohandessin, Cairo Tel/Fax: 20-2-760-1558, 20-2-336-8442 Egyptian Junior Businessmen Group Mr. Hassan Abdalla 2 Sherif St., El Lewa Bldg., 5th Fl., Apt. 58, Cairo Tel: 20-2-393-2203 Fax: 20-2-392-4089

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Egyptian Small Enterprise Development Mr. Hussein Enan, Chairman 13 Salem Salem St., El Agouza, Giza, Cairo Tel: 20-2-336-3980/1/2/4/5 Fax: 20-2-336-3983 Egypt’s International Economic Forum Ms. Nadia M. Lamloum, Manager Mr. Shafik Gabr, Chairman Semiramis InterContinental Hotel, Suite 405, Corniche El Nil, Garden City, Cairo Tel: 20-2-797-1761 Fax: 20-2-797-1757 Sadat City Business Association Mr. Ahmed Ezz, President 8 El Sad El Aali St., Dokki, Cairo Tel: 20-2-760-0150/4, 20-49-601-614 Fax: 20-2-760-0154, 20-49-601-468 Sharkeya Business Association (SBA) Mr. Hamdy El Koronfoly, Chairman 1 Salma St. (Corner Talaat Harb St.,) Zagazig Tel: 20-55-232-6407/08, 20-55-231-1821/3 Fax: 20-55-232-8308 Sixth of October Investors Association Mr. Saleh Gheith, Chairman 6th of October, Quarter 5, Central Avenue, Villa # 64 Tel: (20-11) 338-326/7 Fax: (20-11) 335-687 Small Enterprise Development Association (SEDA) Eng. Ali Ali Soliman, Chairman El Bareed Bldg., El Geish & Mohamed Mahmoud St., Port Said Tel: 20-66-336-452 Fax: 20-66-336-454 Tenth of Ramadan Business Association Mr. Mahmoud Soliman, Chairman 10th of Ramadan City, Banks District, Kafrawy Garden, P.O. Box 73 Tel: 20-15-363-654, 20-15-372-750/1/2 Fax: 20-15-363-413 The Egyptian Exporters Association (EXPOLINK) Mr. Sherif El Maghraby, Executive Director 23 El Esraa St., Mohandessin, Cairo Tel: 20-2-304-6886 Fax: 20-2-304-6889

4.9.5

Egyptian Chambers of Commerce

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(Affiliated with the Federation of Egyptian Chambers of Commerce) Federation of Egyptian Chambers of Commerce Mr. Khaled Abou Ismail, President 4 Falaky Square, Cairo Tel: 20-2-395-8367/8/9 Fax: 20-2-395-8371 Alexandria Chamber of Commerce Mr. Mostafa Yakout EL Naggar, President 31 Chamber of Commerce St., Alexandria Tel: 20-3-480-8779 Fax: 20-3-480-8993 Assiut Chamber of Commerce Mr. Ibrahim Abou El Eyoun, President 23rd July St., Assiut Tel: 20-88-332-082 Fax: 20-88-346-044 Aswan Chamber of Commerce Mr. Mostafa Abdel Kerim Mohamed, President Cornish El Nil St., Aswan Tel & Fax: 20-97-301-177 Beni Suef Chamber of Commerce Mr. Ragy Abdel Fattah Abdel Reheem, President Mamdouh Fissal St., Mokebel District, Beni Suef Tel: 20-82-322-094, 20-82-319-047 Fax: 20-82-322-094 Cairo Chamber of Commerce Mr. Abdel Halim Nawara, President 4 Midan El Falaki St., Cairo Tel: 20-2-795-8261/2 Fax: 20-2-796-3603 Dakahleya Chamber of Commerce Mr. Hamd El Touhamey Hassanien, President El Bahr St., Midan Saleh Ayoub, El Mansoura Tel: 20-50-322-720, 20-50-312-720 Fax: 20-50-320-670, 20-50-310-670 Damietta Chamber of Commerce Mr. Mostafa Kamal Arafi, President Saad Zaghloul St., Damietta Tel: 20-57-322-799, 20-57-323-177 Fax: 20-57-320-632 El Arish Chamber of Commerce Mr. Mohamed Hamdy Gouda, President El Saha El Shabiya St., El Arish, Sinai Tel: 20-68-340-327 www.icongrouponline.com

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El Beheira Chamber of Commerce Mr. Fouad Ahmed Ellakkani, President Midan El Seah, El Gomhouria St., Damanhour Tel: 20-45-322-207 Fax: 20-45-317-531 El Fayoum Chamber of Commerce Mr. Mohamed Abdel Rehman El Gahed, President El Sad El Aley St., El Fayoum Tel: 20-84-322-148 El Giza Chamber of Commerce Dr. Ahmed Bahgat, President 6 El Ghorfa El Tegarya St., Giza, Cairo Tel: 20-2-572-1761 Fax: 20-2-568-3971 El Kaliobia Chamber of Commerce El Moderia St., Midan Saad Zaghloul, Banha Tel: 20-13-222-177 Fax: 20-13-232-477 El Menia Chamber of Commerce Mr. Ahmed Shehata Ahmed, President El Tegara St., El Menia Tel: 20-86-363-232 Fax: 20-86-323-232 Menofia Chamber of Commerce Mr. Adel El Ebiarey, President Ibn El Fared St., Shebeen El Koum Tel & Fax: 20-48-221-511 El Wadi El Gedid Chamber of Commerce Eng. Gad Mohamed Hamedallah, President Port Said St., El Khargah Tel: 20-92-921-548 Fax: 20-92-921-528 Gharbeya Chamber of Commerce Eng. Aly Mohamed Ahmed, President 7 El Geish St., Tanta Tel: 20-40-330-4090 Fax: 20-40-330-3793 Ismalia Chamber of Commerce Mr. Abdel Rehman El Faramawy, President 163 Saad Zaghloul St., Ismailia Tel: 20-64-321-663/325-974 Fax: 20-64-325-974 Kafr El Sheikh Chamber of Commerce www.icongrouponline.com

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Mr. Abdel Shafie El Bahrawey, President El Zawy Bldg., Kafr El Sheikh Tel: 20-47-234-191 Fax: 20-47-232-916 Kena Chamber of Commerce Mr. Ismail Youssef Weshahy, President El Goumhouria St., Kena Tel & Fax: 20-96-332-690 Matrouh Chamber of Commerce Mr. Kassem Taher Eissa, President Marsa Matrouh Tel: 20-46-935-864 Fax: 20-46-930-985 Port Said Chamber of Commerce Mr. Mohamed Abdel Fattah Elmasri, President Chamber of Commerce Building, Mohamed Ali St., Port Said Tel: 20-66-222-733. 20-66-236-141, 20-66-344-841 Fax: 20-66-236-141, 20-66-345-542 Sharkia Chamber of Commerce Mr. Reda Alla Helmy, President 18 Gala St., El Zagazig Tel: 20-55-349-744 Sohag Chamber of Commerce Mr. Ahmed Khalil Badawi, President El Kesaria El Sharki St., Sohag Tel & Fax: 20-93-323-036 Suez Chamber of Commerce Mr. Samer Farouk Ismail, President 47 Salah Eldin Elayoubi St., Suez Tel: 20-62-331-351, 20-62-227-783 Fax: 20-62-223-456 The Red Sea Chamber of Commerce Mr. Sidi Ahmed Ibrahim, President Old City Council Bldg., Hurghada Tel: 20-65-549-298 Fax: 20-65-548-494 South Sinai Chamber of Commerce Mr. Gamal Abdel Wahab Omer El Tour City Tel: 20-62-773-331

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248

Other Chambers of Commerce in Egypt

American Chamber of Commerce in Egypt (Alexandria Office) Ms. Sherine El Kharadly, Administrative Manager 36 Bani Abbas, Alexandria Tel: 20-3-484-4415 Fax: 20-3-484-4413 American Chamber of Commerce in Egypt Mr. Tahar Helmy, President 33 Soliman Abaza St., Dokki, Cairo Tel: 20-2-338-1050 Fax: 20-2-338-1060 German-Arab Chamber of Commerce in Egypt 3 Abul Feda St., Zamalek, Cairo Tel: 20-2-736-3664/2 Fax: 20-2-736-3663 Greek-Arab Chamber of Commerce in Egypt 17 Soliman El Halabi St., Cairo Tel: 20-2-574-1190 Fax: 20-2-575-4970 Italian-Arab Chamber of Commerce in Egypt 33 Abdel Khalek Tharwat St., Down Town, Cairo Tel: 20-2-392-2275 Fax: 20-2-391-2503 < BR>Japanese Foreign Trade Organization World Trade Center, 1191 Corniche El-Nil, Bolak, Cairo Tel: 20-2-574-1111 Fax: 20-2-756-966

4.9.7

Egyptian Chambers of Industries

(Members of the Federation of Egyptian Industries) Federation of Egyptian Industries Dr. Abdel Moneim Seoudi, Chairman 26A Corniche El Nil, 2nd floor, near WTC Tel: 20-2-579-6590/1/2 Fax: 20-2-579-6593/4 Chamber of Building Materials Industries Mr. Samir Allam, President 23 Sherif St., Down Town, Cairo Tel & Fax: 20-2-392-8820 Chamber of Grains & Related Products Mr. Mahmoud Ghanem Diab, President

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65 El Horria Avenue, Alexandria Tel & Fax: 20-3-391-6121 Chamber of Chemical Industries Dr. Mahmoud Fouad Mahmoud, President 26A Sherif St., Immobilia Bldg., Cairo Tel: 20-2-393-5436 Fax: 20-2-390-0063 Chamber of Cinema Industry Mr. Monib Mahmoud Shafei, President 33 Orabi St., Downtown, Cairo Tel: 20-2-574-1677/38 Fax: 20-2-575-1583 Chamber of Engineering Industries Eng. Aly Fahmy El Sawah, President 13 Sherif St., 5th Floor, Cairo Tel: 20-2-392-1238 Fax: 20-2-391-8099 Chamber of Food Industries Eng. Ismail Baligh Sabry, President 26A Sherif St., Immobilia Bldg., Cairo Tel: 20-2-392-5767, 20-2-392-6170 Fax: 20-2-392-6170 Chamber of Leather Industry Eng. Salama Mostafa Hamza, President 26A Sherif St., Immobilia Bldg., Cairo Tel: 20-2-393-8294, 20-2-392-8140 Fax: 20-2-390-8016 Chamber of Metallurgical Industries Eng. Mohamed Abdel Aziz Khattab, President 13 Sherif St., 5th Floor, Cairo Tel: 20-2-392-1238 Fax: 20-2-391-8099 Chamber of Petroleum & Mining Dr. Eng. Hamed Hassanein Amer, President 8 Batel Ahmed Abdel Aziz St., off Fatma Rushdi St., Abdin, Cairo Tel: 20-2-392-6462 Fax & Tel: 20-2-393-0098 Chamber of Printing, Binding and Paper Products Mr. Ahmed Atef Abdel Rahman, President 19 Mariet St., Abdel Moneim Riad Sq., El Tahrir, Cairo Tel: 20-2-574-4343 Fax & Tel: 20-2-578-6709 Chamber of Pharmaceutical, Cosmetics and Medical Appliances Industries www.icongrouponline.com

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Dr. Mohamed Galal Ghorab, President 26A Sherif St., Immobilia Bldg., Cairo Tel: 20-2-393-7270 Fax: 20-2-393-7260 Chamber of Tanning, Leather & Fur Industries Mr. Mamdouh Thabet Mekki, President 26A Sherif St., Immobilia Bldg., Cairo Tel: 20-2-395-9143, 20-2-393-0872 Fax: 20-2-393-4098 Egyptian Textile Manufacturers Federation “ETMF” Mr. El Motaz Bellah Abdel Maksoud, President 43 Sherif St., Down Town, Cairo Tel: 20-2-392-6932, 20-2-395-2239 Fax & Tel: 20-2-390-0005 Chamber of Woodworking Industries Mr. Redalla Mohamed Helmy, President 23 Sherif St., 3rd Floor, Cairo Tel & Fax: 20-2-393-5920

4.9.8

Egyptian Market Research Firms

Shortcuts Institutional Business Development Mrs. Lamia Hamdy, Managing Director 42 Eden St., Mohandessin, Cairo Tel: 20-2-336-4297, 20-12-210-4368, Fax: 20-2-336-0560 E-mail: [email protected] Rada Research & Public Relations Co. Mrs. Loula Zaklama, President 1 Mostafa El Wakil Street, Heliopolis, Cairo Tel: 20-2-291-7956, 20-2-291-5437, Fax: 20-2-291-7563 Transcentury Mr. Anis Aclimandos, President 20 Adly Street, Kodak Passage, Cairo Tel: 20-2-393-6425, Fax: 20-2-393-6425 ProMark Corp. Ltd. Mr. Medhat El Madany, Managing Director 41 El Horreya St., Heliopolis, 6th Fl., Cairo Tel: 20-2-418-7793, 20-2-414-3136/7, Fax: 20-2-418-6357 B2LS Mr. Bethoven Abdel Wanis, President 14 Roshdi St., Abdin, Cairo Tel/Fax: 20-2-395-2134, 20-12-325-1501 Intermarkets Advertising www.icongrouponline.com

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Mr. Galal Zaki, President 42 Abdel Moneim Riad Street, Dokki, Cairo Tel: 20-2-360-3017/8, Fax: 20-2-360-3019 Research & Advertising Consultants Dr. Sami Abdel Aziz, President 30 Gameat Al Dowal Al Arabia St., Mohandessin, Cairo Tel: 20-2-360-8439, Fax: 20-2-360-4815 The Economic Studies and Consultancy Department (ESCD) Ms. Sanaa El Shinnawi , President 5 El Borsa El Gedida St. Tel: 20-2-795-9785, 20-2-392-3245, Fax: 20-2-795-9782 International Business Associates (IBA) Mrs. Ann Marie Harrison, Chairman 1079 Corniche El Nil, Garden City, Cairo Tel: 797-1312/72/00, Fax: 20-2-797-1317/18 Marketeers 52 Youssef Abbas St., Nasr City, Cairo Tel: 20-2-262-2810, Fax: 20-2-262-2810 Middle East Marketing Research Bureau 21 Dr. Mohamed Gomaa St., Heliopolis, Cairo Tel: 20-2-240-1799, Fax: 20-2-639-7099 Fiani & Partners Mrs. Josse Dorra Fiani 143 Tahrir Street, Dokki, Cairo Tel: 20-2-748-7353/54/55/56, Fax: 20-2-748-5204 Wafai and Associates El Forsan Bldg., behind Sheraton Heliopolis, Bldg. A, Heliopolis, Cairo Tel: 20-2-267-6681/2, Fax: 20-2-266-9263

4.9.9

U.S. Embassy Trade Personnel

U.S. Commercial Service - American Embassy Cairo Dr. James L. Joy, Counselor for Commercial Affairs Edward Yagi, Commercial Attaché 5 Latin America Street, Garden City, Cairo Tel: 20-2-797-2330, 20-2-797-2426, Fax: 20-2-795-8368 E-mail: [email protected] www.buyusa.gov/egypt U.S. Commercial Service - American Center Alexandria John Abdelnour, Sr. Commercial Specialist Heba Abdel Aziz, Commercial Specialist 3 El Pharaana Avenue, American Center Bldg., Alexandria www.icongrouponline.com

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Tel: 20-3-482-5607, 487-6330, Fax: 20-3-482-9199 U.S. Foreign Agricultural Service (FAS) Dr. Asif Chaudhry, Counselor for Agricultural Affairs Ali Abdi, Agricultural Attaché 8 Kamal El Din Salah St., Garden City, Cairo Tel: 20-2-797-2388/9, Fax: 20-2-796-3989 U.S. Agency for International Development (USAID) Dr. Kenneth Ellis, Director Dr. Mary Ott, Deputy Director Plot 1/A off El Laselki Street New Maadi, Cairo Tel: 20-2-522-7000, Fax: 20-2-516-4652 U.S. Department of State Michael Corbin, Minister-Counselor for Political/Economic Affairs John Desrocher, Counselor for Political/Economic Affairs James Bullock, Counselor for Public Affairs 8 Kamal El Din Salah St., Garden City, Cairo Tel: 20-2-797-2251, Fax: 20-2-797-2181 Office of Economic & Commercial Affairs Embassy of the Arab Republic of Egypt Alaa El Din Shalaby, Minister-Counselor for Economic & Commercial Affairs 2232 Massachusetts Ave., NW Washington, D.C. 20008 Tel: 202-265-9111, Fax: 202-328-4517

4.9.10

Contacts in Washington D.C.

U.S. Department of Commerce Maram Talaat, Egypt Desk Officer MAC/ONE, Room 2029B Washington, D.C. 20230 Tel: 202-482-1860, Fax: 202-482-0878 U.S. Department of Commerce U.S. Commercial Service Bobette Orr, Regional Director - ANESA HCH Bldg., Room 1223 Washington, D.C. 20230 Tel: 202-482-4836, Fax: 202-482-5179 U.S. Department of Agriculture AgExport Services Division Charles T. Alexander, Director Room 4939-S, 14th Independence Ave., SW Washington, D.C. 20250 Tel: 202-720-6343, Fax: 202-690-4374

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U.S. Department of State Alice Wells, Deputy Director Office of Egyptian and North African Affairs NEA/ENA, Room 5250 Washington, D.C. 20520 Tel: 202-647-4261, Fax: 202-736-4458 U.S. Export-Import Bank (EXIM Bank) 811 Vermont Avenue NW Washington, D.C. 20571 Tel: 202-566-8990, 202-566-2117, Fax: 202-566-7524 U.S.-Arab Chamber of Commerce (Pacific) Inc. PO Box 422218 San Francisco, CA 94142 Tel: 415-398-9200, Fax: 415-398-7111 U.S. International Trade Commission (USITC) 500 E Street, SW Washington, D.C. 20436 Tel: 202-252-1000, Fax: 202-252-1798 U.S. Small Business Administration (SBA) 409 3rd St., SW Washington, D.C. 20416 Tel: 202-205-6531, Fax: 202-205-6928 Trade and Development Agency John Richter, Regional Director for Africa & Middle East SA-16, Room 309 Washington, D.C. 20523-1602 Tel: 703-875-4357, Fax: 703-875-4009

4.9.11

Other U.S. and Egyptian Organizations and Entities

American Egyptian Cooperation Foundation (AECF) 330 East 39th Street, Suite 32L New York, NY 10016 Tel: 212-867-2323, Fax: 212-697-0465 Arab-American Business & Professional Association P.O. Box 700 746 Walker Road Great Falls, VA 33066-0700 Tel: 703-759-2235, Fax: 703-759-9300 Consulate General of Egypt 1110 Second Ave., Rm. 201 New York, NY 10022 Tel: 212-759-7120, Fax: 212-308-7643

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Consulate General of Egypt 3001 Pacific Ave. San Francisco, CA 94115 Tel: 415-346-9700, Fax: 415-346-9480 Consulate General of Egypt 1990 Post Oak Blvd., Suite 2180 Houston, TX 77056 Tel: 713-961-4915, Fax: 713-961-3868 Consulate General of Egypt 500 N. Michigan Ave., Suite 1900 Chicago, IL 60611 Tel: 312-828-9162, Fax: 312-828-9167 Egyptian American Businessmen’s Association (EABA) 50 Broad Street, Suite 1609 New York, NY 10004 Tel: 212-797-3474, Fax: 212-344-1050 Embassy of the Arab Republic of Egypt 3521 International Court, NW Washington, D.C. 20008 Tel: 202-895-5400, Fax: 202-244-4319 National U.S.-Arab Chamber of Commerce 1100 New York Avenue, NW East Tower, Suite 550 Washington, D.C. 20005 Tel: 202-289-5920, Fax: 202-289-5938 Overseas Private Investment Corporation 1615 M street, NW Washington, D.C. 20527 Tel: 800-424-OPIC or 202-457-7010, Fax: 202-223-3514 Permanent Mission of Egypt to the United Nations 36 East 67 Street New York, NY 10021 Tel & Fax: 212-879-6300

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5 5.1

DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS DISCLAIMERS & SAFE HARBOR

Summary Disclaimer. This publication ("Report") does not constitute legal, valuation, tax, or financial consulting advice. Nor is it a statement on the performance, management capability or future potential (good or bad) of the company(ies), industry(ies), product(s), region(s), city(ies) or country(ies) discussed. It is offered as an information service to clients, associates, and academicians. Those interested in specific guidance for legal, strategic, and/or financial or accounting matters should seek competent professional assistance from their own advisors. Information was furnished to Icon Group International, Inc. ("Icon Group"), and its subsidiaries, by its internal researchers and/or extracted from public filings, or sources available within the public domain, including other information providers (e.g. EDGAR filings, national organizations and international organizations). Icon Group does not promise or warrant that we will obtain information from any particular independent source. Published regularly by Icon Group, this and similar reports provide analysis on cities, countries, industries, and/or foreign and domestic companies which may or may not be publicly traded. Icon Group reports are used by various companies and persons including consulting firms, investment officers, pension fund managers, registered representatives, and other financial service professionals. Any commentary, observations or discussion by Icon Group about a country, city, region, industry or company does not constitute a recommendation to buy or sell company shares or make investment decisions. Further, the financial condition or outlook for each industry, city, country, or company may change after the date of the publication, and Icon Group does not warrant, promise or represent that it will provide report users with notice of that change, nor will Icon Group promise updates on the information presented. Safe Harbor for Forward-Looking Statements. Icon Group reports, including the present report, make numerous forward-looking statements which should be treated as such. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995, and similar local laws. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's, city's, country's or industry's actual results or outlook in future periods to differ materially from those forecasted. These risks and uncertainties include, among other things, product price volatility, exchange rate volatility, regulation volatility, product demand volatility, data inaccuracies, computer- or software-generated calculation inaccuracies, market competition, changes in management style, changes in corporate strategy, and risks inherent in international and corporate operations. Forward-looking statements can be identified in statements by the fact that they do not relate strictly to historical or current facts. They use words such as "anticipate,'' "estimate," "expect,'' "project,'' "intend,'' "plan,'' "feel", "think", "hear," "guess," "forecast," "believe," and other words and terms of similar meaning in connection with any discussion of future operating, economic or financial performance. This equally applies to all statements relating to an industry, city, country, region, economic variable, or company financial situation. Icon Group recommends that the reader follow the advice of Nancy M. Smith, Director of SEC's Office of Investor Education and Assistance, who has been quoted to say, "Never, ever, make an investment based solely on what you read in an online newsletter or Internet bulletin board, especially if the investment involves a small, thinly-traded company that isn't well known … Assume that the information about these companies is not trustworthy unless you can prove otherwise through your own independent research." Similar recommendations apply to decisions relating to industry studies, product category studies, corporate strategies discussions and country evaluations. In the case of Icon Group reports, many factors can affect the actual outcome of the period discussed, including exchange rate volatility, changes in accounting standards, the lack of oversight or comparability in accounting standards, changes in economic conditions, changes in competition, changes in the global economy, changes in source data quality, changes in reported data quality, changes in methodology and similar factors. Information Accuracy. Although the statements in this report are derived from or based upon various information sources and/or econometric models that Icon Group believes to be reliable, we do not guarantee their accuracy, reliability, quality, and any such information, or resulting analyses, may be incomplete, rounded, inaccurate or condensed. All estimates included in this report are subject to change without notice. This report is for informational purposes only and is not intended as a recommendation to invest in a city, country, industry or product area, or an offer or solicitation with respect to the purchase or sale of a security, stock, or financial instrument. This report does not take into account the investment

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objectives, financial situation or particular needs of any particular person or legal entity. With respect to any specific company, city, country, region, or industry that might be discussed in this report, investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the information in this report. Investing in either U.S. or non-U.S. securities or markets entails inherent risks. In addition, exchange rate movements may have an effect on the reliability of the estimates provided in this report. Icon Group is not a registered Investment Adviser or a Broker/Dealer.

5.2

ICON GROUP INTERNATIONAL, INC. USER AGREEMENT PROVISIONS

Ownership. User agrees that Icon Group International, Inc. ("Icon Group") and its subsidiaries retain all rights, title and interests, including copyright and other proprietary rights, in this report and all material, including but not limited to text, images, and other multimedia data, provided or made available as part of this report ("Report"). Restrictions on Use. User agrees that it will not copy nor license, sell, transfer, make available or otherwise distribute the Report to any entity or person, except that User may (a) make available to its employees electronic copies of Report, (b) allow its employees to store, manipulate, and reformat Report, and (c) allow its employees to make paper copies of Report, provided that such electronic and paper copies are used solely internally and are not distributed to any third parties. In all cases the User agrees to fully inform and distribute to other internal users all discussions covering the methodology of this Report and the disclaimers and caveats associated with this Report. User shall use its best efforts to stop any unauthorized copying or distribution immediately after such unauthorized use becomes known. The provisions of this paragraph are for the benefit of Icon Group and its information resellers, each of which shall have the right to enforce its rights hereunder directly and on its own behalf. No Warranty. The Report is provided on an "AS IS" basis. ICON GROUP DISCLAIMS ANY AND ALL WARRANTIES, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, RELATING TO THIS AGREEMENT, PERFORMANCE UNDER THIS AGREEMENT, THE REPORT. Icon Group makes no warranties regarding the completeness, accuracy or availability of the Report. Limitation of Liability. In no event shall Icon Group, its employees or its agent, resellers and distributors be liable to User or any other person or entity for any direct, indirect, special, exemplary, punitive, or consequential damages, including lost profits, based on breach of warranty, contract, negligence, strict liability or otherwise, arising from the use of the report or under this Agreement or any performance under this Agreement, whether or not they or it had any knowledge, actual or constructive, that such damages might be incurred. Indemnification. User shall indemnify and hold harmless Icon Group and its resellers, distributors and information providers against any claim, damages, loss, liability or expense arising out of User's use of the Report in any way contrary to this Agreement. © Icon Group International, Inc., 2007. All rights reserved. Any unauthorized use, duplication or disclosure is prohibited by law and will result in prosecution. Text, graphics, and HTML or other computer code are protected by U.S. and International Copyright Laws, and may not be copied, reprinted, published, translated, hosted, or otherwise distributed by any means without explicit permission. Permission is granted to quote small portions of this report with proper attribution. Media quotations with source attributions are encouraged. Reporters requesting additional information or editorial comments should contact Icon Group via email at [email protected]. Sources: This report was prepared from a variety of sources including excerpts from documents and official reports or databases published by the World Bank, the U.S. Department of Commerce, the U.S. State Department, various national agencies, the International Monetary Fund, the Central Intelligence Agency, and Icon Group International, Inc.

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END

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