Amid the economic fluctuations in 2016, and the prospects of 2017, Xerox Egypt stands firm in its optimism about what the future holds for its business and the Egyptian economy. Mark Duffelen, vice president and general manager of Xerox Middle East and Africa, believes that Egypt will continue to expand in different sectors, considering it a major hub for Xerox in the entire region.
Duffelen sat down with Daily News Egypt in a joint interview with Haitham Abdou, the general manager of Xerox Egypt, and revealed the company’s strategy for 2017. They both shared their opinions and views about the current state of the economy as well as their expectations for Xerox Egypt throughout the few upcoming months, with a general state of excitement about what the future brings.
What business strategy will Xerox adopt in 2017?
Duffelen: First of all, it is worth noting that Xerox has been the top company in the sector worldwide in terms of revenues for seven years, for each quarter in a row with a revenue share of around 22%. We have a plan to continue to grow across the world in four key areas.
First, the A4 Multi-function printer, which we are already doing very well with here in Egypt, and marrying this with the managed print services, which we are number one in worldwide, will result in a great leap for growth.
The second area is the production market, which is growing by about 5%, and within that, inkjet printing is growing by about 10%. We have developed a range of inkjet devices to grow the size of the inkjet market, not just to grow our business in inkjet. This was especially true after we acquired IMPIKA company. We were able to take Xerox’s expertise in print outputs and marry that with the engines that IMPIKA has.
The third area is increased market coverage. We are doing a good job covering the market here but we are going to get even better at it. We are changing our distribution model here, and focusing on different product groups rather than a number of distributors. We will engage two major distributors, Raya and Aptech, who can cover two different product groups. We signed a contract with the two companies a couple of weeks ago to become one of our main distribution arms.
The fourth area is our document outsourcing proposition where we rationalise and control costs as well as create mobility and security.
Xerox has recently separated from Conduent Incorporated. In what way does this impact Xerox globally and in Egypt?
Duffelen: While this split had no impact on Xerox Egypt, we consider it very positive for Xerox in general, as it created two market-leading, publicly-traded companies. This allows Xerox to be completely focused on documents, workflow, and making the lives of our customers simpler, eventually enabling better workflows that drive down costs and improve processes. Now, there is a massive focus on Xerox technology. All the investments in Xerox will be directed towards Xerox technology and document outsourcing.
Where does Xerox Egypt stand in the region and on a global level?
Duffelen: With 89 countries in the Middle East and Africa (MEA), Xerox Egypt is the only company directly operated by Xerox, while other Xerox companies in the region are managed by our distributors, so Xerox Egypt certainly stands out and is a strategic hub for the entire region. We always make sure that Xerox Egypt is well-prepared to support anything that happens in the MEA region.
In fact, the regions of Europe and North America are now copying the Xerox Egypt model. The way we operate here is now being replicated across the rest of the Xerox world, which is a testament to how successful we have been here.
Xerox Egypt has the number one market share across virtually most parts of the portfolio. It is the market leader in the digital printing and graphic communications sector. We have almost 74% of the market share with production printers, as well as almost 34% market share in the Egyptian industry for A3 devices for small- and medium-sized businesses. We have acquired the largest share of sales in the third quarter (Q3) of 2016, nearing 31%.
Abdou: Xerox Egypt also accounts for about 90% of the managed printing services in the banking sector; some of these banks include Emirates NBD and the Arab African International Bank (AAIB).
Duffelen: On a more general level, Xerox is leading multifunction printers (MFPs), which we plan to focus on more over the upcoming period, and get multi-function devices to become part of the process rather than an output device.
What is Xerox Egypt’s target growth rate for 2017?
Abdou: Xerox Egypt is targeting a growth rate of 10% in 2017.
What are the sectors that Xerox Egypt is currently present in and plans to expand in?
Abdou: Xerox Egypt is currently investing in new business solutions and applications that help improve productivity and simplify the work process for a number of sectors, focusing mainly on the banking, health, hospitality, telecommunications, and governmental sectors.
How does Xerox Egypt contribute to these sectors?
Abdou: In the banking sector, Xerox provides innovative solutions, which we call “smart paper solutions,” in order to facilitate banking transactions, including deposits, withdrawal, opening bank accounts, and credit card services.
In the health sector, Xerox introduced “radiology” which was a major success. Our solutions and devices can carry out very accurate printing of X-rays on paper rather than the traditional film, cutting down costs for laboratories and hospitals. We have sold over 50 of the machines that offer this in 2016, while the average is usually within the range of 10 to 15. We saw a tremendous growth in this area and we expect more growth in 2017. Xerox has also launched several other services and solutions for the hospitality sector, including the automation of admission processes, including patient files and content management.
In the telecommunications sector, we offer new solutions for securely automating the purchase of telecommunication services.
We have also invested in new Arabic user interface features, which mainly target the sectors that highly depend on the Arabic language in their business, such as the governmental sector and small- and medium-sized enterprises (SMEs).
Are there other sectors you seek to enter in the near future?
Abdou: Yes, in fact, Xerox Egypt is planning to launch 29 new products this year. We also have a new focus on a programme in 2017 in the education sector, whether for universities or schools. We also plan to expand our business in the oil and gas sector, as well as in the manufacturing business through some new solutions. We see a lot of potential for growth in these sectors. We will certainly continue to expand in the governmental sector as well.
How has the flotation of the Egyptian pound affected your business?
Duffelen: There was a growth in the number of units we sold and managed print services contracts, as well as a growth in the business supplies, but we are not immune to the currency flotation of course.
Our revenues in Egyptian pounds increased, but they get reported in US dollars because we are a US corporation. From what the corporation sees as a contribution from Egypt, it is less than it was a year ago. This is inevitable. However, we have a highly experienced team that is incredibly good at managing the issues of currency availability, serving customers, and making sure they are properly looked after. While there may be a financial impact as we go through this, we remain very well positioned, and we believe the storm is only temporary.
What does Xerox offer to its clients to cope with the current economic conditions in Egypt?
Abdou: “Managed print services” is one of our main offerings, where we convert the upfront capital expenditure of large organisations into an operational cost, and that is perfect for such an economy. This is why we have the 90% market share in the banking sector for example. We manage bank’s printing environment over five-year contracts rather than upfront purchases. That has been very successful for us and has expanded in 2016 even in the turbulent economic environment.
Duffelen: Our proposition is generally designed to help people streamline their processes and reduce cost. Customers work with us because we enhance their proposition whether for their organisations or taking it to the market, so they may be willing to spend more money to find a better output to sell or use within their organisations. And of course, the currency rates here are clearly a challenge, but we are still optimistic.
How do you see the future of the Egyptian economy?
Abdou: We are generally very optimistic about 2017 and the years after. It is a long journey, but we expect that starting from the second half of 2017, all the government initiatives will start to pay off and we will start to see an upside in the economy; perhaps because of many factors , such as the International Monetary Fund’s (IMF) loan. We will start seeing an increase in inbound tourism, some stability in the dollar rates, and an overall uplift with the new investment law. We are very excited about 2017, especially after being able, as a business, to sustain and grow in 2016. This only leaves us expecting 2017 to be better. We strongly believe the new economic reforms were right decisions that should have been made years ago.