doing business in egypt | 09 september 2016

Simon Hamilton MLAMinister for the Economy

Rt. Hon. Sir Jeffrey DonaldsonUK Trade Envoy - Egypt

Jason IvoryDirector of Investment & Trade

Department of International TradeCairo, Egypt

Egypt and the Opportunity

• Political Overview• Economic Issues• Commercial Opportunities• Challenges v Opportunities

Liz McCroryUK Export Finance

Doing Business in EgyptFinancing the Opportunity

ACCESSING UK EXPORT FINANCE SUPPORT

Liz McCroryExport Finance Adviser, Northern Ireland

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How Does UKEF Support Exporters?• UKEF’s support falls into two broad categories

Mid/Long Term Products and services that support the overseas buyer

•Providing guarantees to banks on the loans they give to overseas buyers to purchase goods and services from UK based companies

•Providing lending directly

•Support in the Capital Markets

Short TermProducts and services that support the exporter

•Reducing or removing the risk of non – payment from the overseas buyer through insurance products

•Helping to support the bonding requirements of the contract

•Assisting with working capital needs

Egypt - Current Cover Policy and Risk Appetite

CountryMarket risk appetite (£million)

Cash or short term cover

Medium or long term cover

Consensus category

Egypt£250 million - £500 million

Yes Yes Two

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Egypt

Sectors UKEF have Supported in Egypt

• Aerospace/Asset Based Guarantees'

• Chemicals/Organic matter for pharmaceutical manufacturing

• Energy/Lubricants and Pumps

• Consumer goods and service/Wallpaper and Furniture

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Short Term Products Overview• We are now able support exporters of all sizes and sectors,

including exporters of services

• Provide guarantees to banks to support short-term trade finance

– Bond Support Scheme

– Export Working Capital Scheme

• Issue Export Insurance Policies to cover payment risk

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Bonding Requirements For Exporters

Contracts in Egypt

• When an exporter signs a contract with an overseas buyer, the exporter may be asked to provide a bank bond

• There are several types of bonds:

– Advance payment bond

– Performance bond

– Warranty bond

– Bid bond

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Banks often ask exporters to provide cash to issue the bond and cover the risk

= Leave small companies without the working capital they

need

Banks will limit the total value of bonds they’ll issue for a company

=You might exceed this limit if you win several export

contracts and they all require bonds

Bonding Issues

UKEF Bond Support Scheme• We provide government guarantees to participating banks who

issue bonds on behalf of UK exporters

• Support extends to all bonds related to an export contract (e.g. performance, warranty, advance payment, bid bonds)

• Cover up to 80% of the bond value; no minimum or maximum contract values or duration

Eligibility• UK based exporter

• 20% Minimum UK content

Benefits• The bank is able to issue the bond

• Sharing the risk with your bank enables it to issue more bonds on your behalf or to issue a bond without requiring as much of your cash or collateral - improves your working capital

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Export Working Capital Scheme • We provide government guarantees to participating banks providing

trade finance loan facilities to UK exporters to fund export contracts

• Specific contract

• Covering up to 80% of the loan value

Eligibility • UK based exporter


Benefits• The principal benefit for the UK exporter is that it is able to obtain the

necessary working capital finance from its lender to support an export transaction in circumstances where its lenders may not have had sufficient risk appetite for the full facility amount.

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Export Insurance - Egypt• We insure exporters against the risk of not getting paid by overseas

buyers or of not being able to perform a contract due to specific events (e.g. war, political or economic events)

• Specific contract

• No minimum contract / Premium starts from £ 250

• All sectors, up to 95% cover

• Not for EU / Rich OECD markets below 2 year risk horizon

Eligibility• UK based exporter / Customer based overseas

• Exporter must have been unable to obtain insurance from private sector


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Trade Finance Risk Management

Understanding Exporters’ Risk

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Egypt Bank SectorTo edit click View>Header and Footer 19

Rank BankAssets

(US$m)Equity (US$m)

Balance Sheet Date S&P Moody's

Ownership (main sharehoders)

1 National Bank of Egypt 63,839 3,528 30.06.14 B- Caa1 100% State owned2 Banque Misr SAE 38,367 2,808 30.06.14 B- Caa1 100% State owned3 Commercial International Bank

(Egypt) SAE20,113 2,056 31.12.14 B- Caa1 Various private shareholders

4 QNB ALAHLI 14,450 1,664 31.12.14 - - Qatar National Bank5 Arab African International Bank 11,021 1,407 31.12.14 - - various domestic and foreign

financial instituitions 6 Banque du Caire SAE 9,362 1,715 31.12.13 - Caa1 Banque Msir7 HSBC Bank Egypt SAE 8,422 710 31.12.13 - - HSBC Holdings - London

8 Faisal Islamic Bank of Egypt SAE 6,521 520 31.12.13 - - various9 Bank of Alexandria 6,215 656 31.12.14 - Caa1 Intex Sanpalo 80%, Govt of

Egypt 20%

Ratings

Exchange Risk - How to Deal With it:

If the contract with your trading partner is in a currency other than your local currency, there is an exchange risk.

There are a number lf alternatives when dealing with this risk.

• Do not cover the risk• Cover the risk by using a forward contract• Open a Foreign currency ‘Hold’ Account• Use a combination of the above

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Liz McCroryExport Finance Adviser, Northern Ireland

Tel: +44 (0)7435 32 32 31 Email:

[email protected]

General enquiries:internationalenquiries:@ukexportfinance.g

ov.uk

For further information please visit:www.gov.uk/uk-export-finance

mailto:[email protected]


Robin LambEgyptian British Chamber of Commerce

GATEWAY TO EGYPTbilateral trade &

investment

Opportunities in Egypt, Stormont9 September 2016 The Egyptian-British

Chamber of Commerce

NILE VALLEY

SUEZ CANAL> STRATEGIC> TRADE> FOREIGN EXCHANGE

Population90 Million - 50% of population under 25

GDP growth 4.5% in 2015

Workforce28 million

Trade Trade in goods volume with UK £2bn

Egypt’s economy is large & diversified

Did you know..?

CONNECT I EXPORT I INVEST

Egypt’s fundamentals are strong

• Diversified economy with strong manufacturing and agriculture base• Large consumer market, young population • English is widely spoken • Free trade agreements with the EU, COMESA, Arab Region• Free Zones & Investment Zones• Well educated workforce • Good infrastructure

Fiscal stimulus and reforms Successful political transition and global support Increasing transparency

Now is the time to enter the market!

Egypt’s Economy in a Nutshell


Priority Sectors for Trade (& Investment)

The investment programme will address Egypt’s main structural weaknesses and boost the country’s growth potential by stimulating productive sectors

• Investment improves the living conditions of the people• Promotes quick job creation through the development and expansion of labour intensive

sectors• Addresses Egypt’s infrastructure/energy gaps and reduces power and water shortages

• Encourages more diversified and high value added exports

Energy &

MiningHealthcar

eAgricultu

reTourism Retail

& Trade

Transportation & Logistics

Urban Planning

Medium term

growth target:

6%

Education


Egypt’s Development Projects

Major projects• The Suez Canal Area (see below left)• Damietta Grain Hub• North Coast (Mediterranean) Development• The Golden Triangle Mining Project• National Road Construction Project• New Capital City (see below right)

Visit our trade & investment opportunities page on www.theebcc.com


Economic Challenges

Industry

Foreign

Currency

Debt

Tourism

Reforms

FDI

Unemployment


5 Steps To Export

1. MarketFind the right market for your products or services and study the market needs


5 Steps To Export


2. ConnectivityUse the Chamber to find agents and distributors for company in the Egyptian market. The right distributor will assist you with customs queries such as product registration & export documentation


5 Steps To Export


3. Support NetworkVia our Chamber you will have access to a support network in Egypt. We work with DIT, the British Embassy in Cairo, various business organisations & private sector partners in the market



5 Steps To Export


3. Support NetworkVia our Chamber you will have access to a support network in Egypt. We work with UKTI, the British Embassy in Cairo, various business organisations & private sector partners in the market

4. Market PresenceEnsure that you stay connected to your export market and visit your agents and distributors regularly. Egypt is a friendly country and visits will ensure that you maintain a strong relationship with your partners.



5 Steps To Export


3. Support NetworkVia our Chamber you will have access to a support network in Egypt. We work with UKTI, the British Embassy in Cairo, various business organisations & private sector partners in the market

4. Market PresenceEnsure that you stay connected to your export market and visit your agents and distributors regularly. Egypt is a friendly country and visits will ensure that you maintain a strong relationship with your partners.

5. Growth & InnovationKeep yourself informed of changes to legislation and new market opportunities via the Chamber. Continuously work with various distributors to make sure you access different segments of the market.



How Can The Chamber Help You? Chamber Activities • Access to business events and receptions hosted

by the Chamber and associated institutions• B2B events and matchmaking • Subsidized trade missions • Receipt of newsletters and bulletins• Legal translations Arabic-English & English-

Arabic• Business promotion within the Chamber network

Chamber Services

Export &

Import

To learn more about what the Chamber can

do for your business, please speak to a

member of staff directly.





Chamber Services • Assistance with finding partners and agents• Consultancy service to evaluate the market

opportunities and help strategic development• Help with identifying investment

opportunities and preparing submissions to the relevant authorities

• Access to the latest economic and commercial intelligence

• Access to trusted network of legal and financial consultants

Export &

Import








Chamber Services • Assistance with finding partners and agents• Consultancy service to evaluate the market

opportunities and help strategic development• Help with identifying investment

opportunities and preparing submissions to the relevant authorities

• Access to the latest economic and commercial intelligence

• Access to trusted network of legal and financial consultants

Export &

Import

• Help with identifying agents and customers• Express service for export documentation• Free amendments to your export documents• Company checks in Egypt• Quarterly provision of trade in goods statistics





• No. 991: 30 December 2015Provides the list of certain finished products - largely for retail purposes – that need to be registered with the Egyptian authorities (full list & product codes are available upon request)• No. 43: 16 January 2016Factories need to register the finished products listed in decree 991 above – with the General Organisation for Import & Export Control. Exporters need to submit a copy of the factory license, certificate stating the legal entity of the factory & its products, the trademark of the product, the list of factories that are producing this trademark, and an internationally recognized quality control certificate for the factory• 202: 17 November 2015The exporter is legally obliged to provide the importer/agent with a certified invoice (by your local Chamber of Commerce) and legalised certificate of origin (by the EBCC and Egyptian Consulate in London). The invoice should comply with Article 8 of Egypt’s Importation Regulations as part of its Customs Law

New Trade Regulations for Export to EgyptMinisterial Decrees


For certain products, your export documents can no longer be delivered direct to your customer in Egypt. The documents need to be delivered to your local UK bank. The UK bank will send it to your customer’s bank in Egypt where they can be collected. The following products are exempt from this new instruction:

• All imports of all foreign companies with a presence in Egypt (i.e. branches)• All live animals and poultry• Raw materials, intermediate products and spare parts for factories shipped by air

freight• All commodities and products shipped by air freight• All computer programmes, applications, equipment and its peripherals

The following items are exempt from the 100% finance coverage:• Essential food commodities and supplies including infant powder and infant milk• Capital goods, instruments and spare parts, intermediate products and raw materials• Medical equipment• Computer applications and programmes• Medicine, vaccinations and all their related chemical products

Above exempted items still need to have all legalised trade documentation in place

Bank-to-Bank ProceduresCentral Bank of Egypt


Thank you

www.theebcc.com

[email protected] 020 7499 3100



Elaine CurranInvest Northern Ireland

Next StepsSupporting Companies to Export – Egypt

Elaine CurranInvest Northern Ireland

www.investni.com

N Ireland Exports to Egypt

NI Manufacturing Exports to Egypt - £16m( HMRC 12 month rolling period ending Mar 16)

Majority of Exports from the Machinery & Transport sector – 69%

Major sectors of for existing NI exporters:Agri EngineeringFoodLife & Health Sciences

Invest NI – India, Middle East & Africa Team

IMEA Team - Dubai & JeddahIMEA Team - Belfast

Invest NI – North Africa - Egypt

Barry Clarke Head of Territory

IMEA - Dubai

Wissam SaadiRegional Director

Jeddah

Noel JohnstonRegional Manager

Frontier Markets Belfast

Elaine CurranIMEA Territory

ManagerBelfast

Invest NI - PartnersRt Hon Sir Jeffrey Donaldson MP – Prime Ministers Trade Envoy to Egypt

www.exportingisgreat.gov.uk/opportunities

Trade Support o Enhanced support for

Export Market Visitso Introduction of Meet the

Buyer Events & Study Visits

o Enhanced support for Solex (exhibition support)

o Enhanced support for Trade Advisory Service

www.investni.com/trade-accelerator-plan

Next Steps - Egypt• Market visits by Invest NI in-market Teams• Scoping and identification of opportunities• Promotion of opportunities to visit the

market through our partners – Missions, Sector visits or Exhibitions

• Plan for Invest NI market study visit to Egypt in 2017