Mohamed Genedy, chairperson of GMC Group for Industrial, Commercial and Financial Investments, and head of the Industrial Investors Association, asserted that company profits witnessed a surge in the first nine months ending in September 2017, due to raising the capital and injecting new investments, in addition to rental revenues from the company’s mall at Al-Haram Street. Moreover, he expected a hike in revenues in 2018.
Furthermore, Genedy revealed that GMC will call for an ordinary general meeting in late January 2018 to make radical decisions that will affect the company in a positive way. He added that GMC will not clinch the acquisition deal of GMC for Engineering Works. In contrast, GMC intends to make other acquisition deals in the coming period.
Genedy assured that it is important to make radical change in the banking sector and financing system. According to GMC’s chairperson, the banking sector’s strategy does not cope with Egyptian people’s ambitions. Moreover, the new investment law does not solve investors’ problems. In fact, the law governing industry contrasts with some items in the investment law, Genedy explained.
What are the reasons for the surge in GMC’s profits in the first nine months ending in September 2017?
We raised the company’s capital to inject new investments, in addition to initiating cooperation with other companies. For instance, the cooperation between Abnaa Masr and GMC for Engineering Industries. Moreover, we rented the mall we possess at Al-Haram Street to Carrefour and Orange. Thus, the company gained great rental revenues. Moreover, I expect a hike in sales which is supposed to lead to a surge in revenues in 2018.
What is the company’s investment plan for 2018?
We will call for a general ordinary meeting in late January to make radical decisions that will affect the company in a positive way. Moreover, we have a target to regain the money invested in Al-Haram mall through profits achieved to then invest in many fields.
What about the acquisition deal of GMC for Engineering Works?
We made a final decision to not clinch the deal.
Is GMC scheduled to have any other acquisition deals?
Yes, we intend to have other acquisition deals in the coming period, but we will let the Egyptian Exchange know first, as I am not authorised to announce them now.
What about updating the company’s website?
EGX asked us to update our website, and we are working on it.
Do you pump investments into the oil sector?
We have not started investing money into that field until now, but we plan to invest in oil during the coming years. Furthermore, we will nominate an oil expert to tackle this task. I think it is a promising field.
How do rising energy costs affect your factories?
Rising energy costs affected our factory revenues negatively, but the floatation of the Egyptian pound supported our profits. To illustrate, it increased local sales because of the surge in importing costs. Moreover, we are the only company all over Arab and African countries that have the know-how of the products we produce as 80% of our products are locally manufactured.
What about GMC’s export plans?
Before I had been banned from travel, we used to export our products to America and some European countries like Sweden, Spain, and Norway. Moreover, we were planning to export to Germany. After the crisis was solved, we are set to regain our external relations with foreign countries, namely African markets. For instance, we export to Senegal, Ghana, and Uganda. Furthermore, we have exporting deals with Arab countries like Jordan, Algeria, Libya, Yemen, Morocco, and Iraq. In 2018, we target doubling our exports and regaining our relations with European countries, so that we can export our products to them.
What about car manufacturing in GMC?
Unfortunately, we depend on a combination of manufacturing and assembling by 70-75%, as local manufacturing does not exceed 25-30%. However, we target to increase its percentage up to 60%.
How can local manufacturing be supported?
We need financing facilities. Furthermore, I call the government not to dismiss free trade zones. Moreover, the government should apply tax exemptions for ten years for industrial investments. I think the revenue will exceed the taxes in that case. To illustrate, factories will work and land prices will increase, in addition to more job creation. Moreover, exporting will increase versus importing, which supports the trade balance.
Why does local industry depend on combination?
This can be traced back to a shortage in qualified experts and employees. We also lack the strong finance. The exporting subsidy we received is low. In addition to this, we did not receive it since 2016.
How will the Central Bank of Egypt’s (CBE) removal of caps on deposits and withdrawal of foreign currency for importers of non-essential goods affect the industry?
GMC’s factories will not be affected by the decision since we rely on local manufacturing to a great extent. Furthermore, the company’s exporting rates have inched 800% in 2015, 50% in 2016, 70% in 2017, and is supposed to double by 100% in 2018.
How do you evaluate the cooperation between the banking sector and investors?
It is important to make radical changes regarding the banking sector and the financing system. The banking sector strategy does not cope with Egyptian people’s ambitions. To illustrate, the volume of deposits in the banks of Egypt amounts to EGP 3tn, which should be utilised in achieving the country’s strategic goals, namely launching new investments and creating job opportunities. In fact EGP 2tn of the total value of deposits is not utilised. However, we face problems in financing industrial, agricultural, and touristic projects. Moreover, 70% of that EGP 2tn is invested in governmental treasuries and loans to governmental organisations. As a result, the private sector utilises only 15% of the EGP 2tn. In contrast, investment rates reach 90-100% on average from the total deposits in the UAE and Saudi Arabia’s investment rates reach 75-80% on average from the total value of deposits. It is a perfect usage of the deposits that we are not applying here. This is why I call for a radical change in the banking law. The government has to set a strategy for the financing system. The banking sector witnessed a lot of developments, but it still needs more than this.
What about the Industrial Investors Association’s recent activity?
Industrial Investors Association called the head of the industry committee of parliament to set a meeting with the minister of finance to solve the crisis of not receiving the exporting subsidy since 2016.
How do you evaluate the new investment law?
The new investment law does not solve our problems. The law that controls industry contradicts with some items of the investment law. Some items in the industry law can be traced back to Egypt’s kingdom era.
Finally, how do you evaluate the economic reform programme?
We witnessed good financial and monetary reforms, but we still need more decisions to decrease the gap in trade balance between exports and imports. Our exports amount to EGP 20bn, while our imports amount to EGP 50bn.