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GYPSUM : The pearl of the Sinai peninsula and how the success story between Egyptians, Greeks and Germans was developed. By :Minas Katanopoulos Economist.

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Presentation on theme: "GYPSUM : The pearl of the Sinai peninsula and how the success story between Egyptians, Greeks and Germans was developed. By :Minas Katanopoulos Economist."— Presentation transcript:

1 GYPSUM : The pearl of the Sinai peninsula and how the success story between Egyptians, Greeks and Germans was developed. By :Minas Katanopoulos Economist President/Board member: Knauf A.B.E.E. - Greece Sakret Zeipekkis Ltd. - Cyprus Knauf Ltd. & Partner - Egypt Knauf LLC & Knauf RAK FZE - UAE Knauf East Africa – Kenya & Tanzania KNAUF and PFT A.Ş. - Turkey / Τουρκία SEV-Athens, 17/10/2014

2 January 2013 1 Knauf Egypt : From 1998 to today Knauf Egypt started, with the support of Knauf Greece, as a Representative Office in 1998 to establish a chain of distribution and to provide distributers, consultants and contractors with the necessary technical assistance. In 2003 Knauf established its limited liability company in Egypt, which included large storage facilities enabling Knauf to familiarize the Egyptian market with its complete building systems and quality products, used for dry wall construction. This successfully resulted to a wider clientele network.

3 January 2013 2 Knauf Egypt : From 1998 to today Knauf Egypt’s strategy broadened in 2010, by building a plasterboard and gypsum plaster factory in the Ataqa Industrial Zone in Suez. The company also developed a gypsum mine in the Sinai peninsula. The total investment reached approximately 50 million USD totally self financed. The factory in Suez was built using almost exclusively German equipment and its production process conforms to German standards, whereas its’ production process creates no waste water or flue gases. It is obvious that the recent political instability affected the time planning of the erection, but nowdays we are happy and proud to notice that the Knauf plasterboard plant in Suez started production since end of August 2014.

4 January 2013 3 Knauf Egypt : From 1998 to today The plant was initially scheduled to start production on July 19 th, 2012, but as mentioned before, the start was postponed, nevertheless not stopping Knauf from overcoming all obstacles.

5 January 2013 Project Overview 4 Key Technical Figures: Capacity: Board Plant15 milllion m²/a Stucco bagged46,000 t/a Filler28,000 t/a Rollforming Line 13 million m/a Size of the Property:133,200 m² Key Financial Figures: Amount Invested:USD 50 million Time planning : Start of Project:Dec 2010 Start of Construction Activities:Oct 2011 Commissioning: August-October 2014 Project: Suez, Plaster Board Plant, Mixing Plant, Rollforming Line for Profiles Arab Republic of Egypt Knauf Suez Plant Industrial Zone, Ataqa

6 January 2013 5 Actual Status on Site

7 January 2013 6 Location 80 km 35 km 125 km Location of plant, quarry and major local markets The Suez location was selected due to its’ industrial zone, distance to the raw material and major local and export markets (Comesa treaty among the neighbouring countries).

8 January 2013 7 The company’s objectives are to produce Egyptian products according to European Standards with competitive prices, employ Egyptian manpower, provide applicators with vocational training in drywall systems installation, introducing sustainable products that are environmentally friendly and to organize seminars to present innovations in drywall systems to meet tomorrow’s requirements. Knauf Egypt’s vision is committing to provide the Egyptian and neighbouring markets with high quality products according to the European Standards and aims to keep its large share in the drywall systems. All activities have always been supported by Greek people (Mr. Sigalas-Managing Director, Mr.Katanopoulos-President). The creation of the plant facilities in conjunction with the commitment and company vision, has not been an extremely simple birth. In certain cases, lack of cooperation between Government Authorities, delayed some progress steps and also affected our market presence. However, Al Hamdulillah, we completed the investment and began production, but still-due to bureaucracy-with no operation lisence. Knauf Egypt : Vision & mission

9 January 2013 8 The success platform This saying is not from a Greek but from a German philosopher (triangle of Georg Wilhelm Friedrich Hegel). What we have learned so far and would like to share

10 January 2013 9 Egypt has a balanced, conservative and traditional business trade and tax regulations environment which is being rapidly improved, facilitated, and modernized according to the European standards and investors’ expectations. Banking regulations and restrictions are almost acceptable (some issues still have to be improved), moderate rules and conditions are existing for transaction in foreign and local currency, inflation rate and foreign currency changes are not catastrophic as opposed to other countries, whereas existence and application of agreements to avoid double taxation with Germany, Greece and other countries, proves that Egypt is well aware of the needs of foreign investors. Changes in the infrastructure, security and energy availability present recently a steady improvement. In Egypt you feel safe and secure. Investors can find personnel with adequate qualification. Certainly there are many topics to be improved. Some of the constrains are being listed in the “cons” section. But it also should be mentioned that the ministries and public institutes like IDA, GAFI etc. have big understanding and knowledge of the existing bureaucracy in several cases and assist the investors (in our case connection to the network or pipe line of Gas, electricity, or obtaining visas for foreign personnel etc.) Though we survived major political and presidential changes, we have been able to complete our investment, with some delay. The understanding of our problems in this respect by the local, central and decentralized authorities was always there, may be sometimes not at the extend we wished to have it. Positive environment for business investments

11 January 2013 10 1.Foreign industrial companies established in Egypt, are not allowed to import merchandises for trading purposes and sell them as trading goods locally. This created a major obstacle towards launching the Knauf products to the Egyptian market. 2.Even after changing the basic activity from trade to industry (production), once again we are not allowed to import and co-sell trading goods, which are part of the Knauf building systems (eg. screws import) 3.Difficulties in obtaining working permits for experienced foreign personnel. 4.Lack of one-key high-level contact person within the Authorities who should have the authority to support investment projects in Egypt. Such an authority would be highly appreciated in order to avoid delays. 5.Shareholder loan from abroad is not possible nor attractive. Such obstacles tend to promote financing through local banks, which is rather expensive. 6.Major difficulties in quarry possesion for foreigners in Sinai. Though we are producers of gypsum products, we are not allowed to become direct owners on quarries or quarry lisences. As in the case of the imported trading goods mentioned above, we once again need to proceed with indirect purchasing procedures. 7.Limited understanding in the completion of the requested documents, when building and operation lisences have to be obtained. Local Risks & problems we are still facing

12 January 2013 11 Let‘s make the long story short Egypt is a promising country. Egypt deserves foreign investments. Foreign investments will make money. The investment status can be improved by making use of past experience (lessons learned) from experienced investors. In this direction, our contact persons in Egypt, are always available to cooperate. Emmanuel Sigalas: Hamdy Shabrawe General Manager, Knauf Ltd & Partner Egypt Plant Manager Mobile: +20 (100) 120 6789Mobile: +20 (100) 999 0769 Address: 6A road 23, 3rd floor New Maadi, Cairo – Egypt Telephone: +202 23 59 55 44 On the 24 th of October, his Excellency, the Prime Minister of Egypt, will pay a visit to the South Sinai Governate and will visit several industries in the Industrial Zone in Ataqa. He is expected to honour us by visiting our plant. However, the official opening ceremony of our plant will take place towards the end of the year, as still some environmental works have to be completed, in order to create the requested by our Group green areas arround and in the plant. Your presence will be an honour to us.

13 January 2013 12 Many attention! your for thanks

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