Orascom Construction is a leading global engineering and construction contractor primarily focused on infrastructure, industrial and high-end commercial projects in the Middle East, North Africa, the United States, and the Pacific Rim for public and private clients. The Group also develops and invests in infrastructure opportunities.
What is your outlook for Egypt’s economy?
We see incredibly positive signs within the Egyptian economy. First and foremost the economic reform program delivered by the government tackled some long needed areas that affected the competitiveness of the nation. Tough decisions were made to address crucial challenges such as national subsidies and foreign exchange.
The second phase of development addressed long-needed infrastructure projects within power, energy, roads, and transportation, amongst others. These projects will be the real catalyst for the Egyptian economy moving forward and allow Egypt to reach record GDP growth levels. A one year spike in GDP growth will have limited impact. We must emphasize the need to sustain GDP growth, even at a moderate 5-8% for 6-8 years, which will revitalize the entire nation. I am confident Egypt will achieve this. Egypt’s population growth will continue to drive GDP through increased consumption. However, sustainable growth will require the attraction of much needed FDI.
In 2018, Egypt was approaching a population of 100 million with a growth of 2% per annum. Youth under 15 make up 35% of the population. This causes a real issue when youth reach the labor market. We have to be very innovative in expanding the job market as much as possible on an annual basis. This cannot happen without numerous new players coming into the market. As a player in the market, we do not see enough foreign direct investment outside the oil and gas sector and the stock market. This is a real challenge for economic growth. We would like to see more direct investments in the form of local subsidiary expansions and greenfield projects that will boost organic growth. Egypt has a large consumer market, many investment opportunities and capabilities to increasingly become a workshop for Europe. Egypt is open for business. In spite of challenges in the Egyptian business ecosystem, it is a great place to do business and make money.
I am very optimistic about Egypt’s capabilities to continue growing in the right direction. As a nation, we have done very well at the beginning of the road, and have a long way to go.
What opportunities exist to increase trade with Europe?
Eastern Europe has traditionally been the workforce and workshop of the European Union. However, as costs in Eastern Europe rise, Egypt is emerging as a competitive alternative thanks to its affordable labor force, energy and shipping rates due to its proximity. We offer competitiveness across the board. We should develop Egypt’s capacity to build workshops catering to the European market. Egypt can become the manufacturer of choice for European countries. This will, in turn, increase the focus on much-needed education and skill set training for the labor force.
How will Egypt’s construction sector evolve?
Egypt’s construction sector will continue growing backed by the nations steadily increasing population and its needs for infrastructure. However, the construction sector is a cyclical business model, and Egypt cannot continue building infrastructure projects forever. We are therefore working to create sustainable growth for our business. The internationalization and export of construction services is an important area.
Egyptian contractors can capitalize on their local experience, and make Egypt the leading contractor of the Middle East. We must strive to reach this goal and be able to provide services across the board. The Middle East mirrors Egypt, and it holds a growing young population which will require additional power, housing, transport, and other infrastructure. There is also reconstruction through the entire Middle East. I think it is an opportunity for Egypt to increasingly provide these services in the region and for the rest of the world.
Being a successful and profitable contractor allows us to export this service outside of Egypt. We are very keen on the bottom line, and although we can be criticized for it, being equitably compensated allows us to fund, finance and receive the bank guarantees needed to do projects abroad. A healthy bottom line also means we can attract, train and retain good employees required to develop the sector.
Egypt also needs to be exporting other products and services as they will be an essential element to the nation’s development. Egypt has an intelligent labor force which is especially visible in the IT sector. I envision exponential growth is achievable in this area in particular if the correct strategies are implemented.
What role do you see Orascom Construction taking in building Egypt?
As a company, Orascom Construction and its team will leave behind a legacy. We have been very involved in improving the quality of life in Egypt. We are involved in building landmarks, not only iconic buildings but key national infrastructure projects in many sectors including; energy, transport and even tourism. We are proud of being a part of Egypt’s national development story.
Orascom Construction delivers. We are a very reliable partner able to deliver fast-track projects for both the government and the private sector. In this time and age, schedule and return on investment are key to success. We are consistently able to meet strict schedules, time and time again.
Orascom Construction has worked hard to boost national electricity infrastructure. We alone have installed 11 000 Megawatts in the last three years which represents a large chunk of what Egypt has developed since 2014. In addition, we believe it is vital to exponentially expand Egypt’s renewable energy capabilities and therefore are proud to have developed a 50 Megawatt wind farm. Nonetheless, much more can and should be done to grow the renewable energy sector in Egypt.
Orascom Construction is also a key player in the extensive transport construction network being built throughout Egypt. This excellent infrastructure project will facilitate trade and commerce between different parts of the country which is key to growth.
Lastly, the building of the Egyptian Grand Museum is so much more than a construction project. It is a unique, one of a kind building, that will be the house of Egyptian heritage. It is a once in a century project and a game changer for Egypt’s tourism sector. It should take the center of attention in due time to become a catalyst for the improvement of the tourism industry in Egypt. We have an extraordinary affinity towards the Grand Egyptian Museum. We are very proud to have our names as a company associated with this iconic building that is quickly becoming a global landmark.
