Engineering Square (IDG), the largest industrial developer in Egypt

Interview with Sameh Attia, Managing Director of Engineering Square (Industrial Development Group)

Let’s start with your evaluation of the business environment in Egypt with respect to foreign investments. 

From our point of view, we did not face any difficulties with respect to foreign investors here in Egypt. Even after the revolution we had many investors. Whereas before the revolution, the major part of the investors used to come from Europe and the United States, after the revolution it was mainly from the Arab world—Kuwait, Saudi Arabia, the United Arab Emirates and so on.

How would you evaluate the current business environment, even locally?

The problem in the business environment here in Egypt after the revolution is that most of the clerks or the highly placed government officials are afraid to take decisions. So, decisions are taking too long and this damages the whole business. Things that should be done in one or two weeks, take months. This is very bad. But we are all hoping and aiming for a better future in the coming weeks God willing.

Please tell us the story of the Industrial Development Group. How did you become the largest industrial development company in the country?

We started our company in 2007. It was the idea of the former Minister of Trade and Industry Engineer Rashid and some business people. They invented the so-called industrial developer to create more industrial land in Egypt without putting financial burden on the government. We were the third developer to be established in the country.

First of all, we had a 2 million square meters of land to develop, with the aim of finishing the development in 15 years – 7 years for utilities and 15 years for sales and operations. We were almost done with 70% of the work in two or three years. So, they gave us an extension of 1.1 million square meters. With 3.1 million square meters, we became the largest industrial developer in Egypt. We were lucky to be in 6th of October City. The vicinity of 6th of October City helped us a lot to market our park fast. We have sold out about 85%, of which 50% are already functioning. We have about 35 factories operating. Another 25 are under construction. They should be operating very soon, within the next two to three months. Our goal is to finish 50 factories this year, God willing.

What extra services do you offer to your clients? How do you stand out from the other industrial zones? May be you can mention the “one-stop shop”.

We believe that the greatest hurdle for foreigners to come to Cairo is the bureaucracy in government offices. So we promised every investor – especially the foreigners – that we will take care of every single governmental paper they need, starting from registering the companies, getting the building permits, even finding contractors, if they wish. Finally getting import certificates and the raw materials and getting them the work permit or the operation license to start manufacturing. This service goes out to the Egyptians too if they would like to make use of it.

We have a “one-stop shop”, which is open 7 days a week. They can come and order anything they like. We also offer other social services for the investors. If they would like to look for houses, schools for their children, hire cars, book hotels etc.

What are some of the special facilities available in the zone?

We are the most advanced developer. The IDA contract to all developers states some of the services we all should offer. Now we have the shuttle bus services, the medical center, the nursery, the vocational training academy, trucker’s hub with the Pascale scale, coffee-shop showers and bathrooms for the truckers, truck-service center, sports area etc. Every one of these is already functioning.  Some of our projects under construction are our hotel, conference center and our logistic park.

You mentioned that 85% is already operating; please tell us about some of the largest international companies that are already present here.

Our first foreign investor was an Indian company called Flex Films. They manufacture packaging foils. Now they are exporting to 17 European countries out of our factory. We have rkw from Germany. They had 18 factories the world over, but their first factory in a third world country was in Egypt. The same applies to Doehler, also from Germany. Then we Pegas from the Czech Republic. I think this is their first factory outside of Europe. We have Bostik from France, Fine from Jordon. They make paper tissues. Chloride from Morocco, they make car batteries. We have quite a few foreigner investors here and we are very proud because some of them are first-time investors in Egypt just like Pegas. We have elif from Turkey, they are also into packaging foils. We are very proud to get them to Egypt and start their factories or invest in Egypt at a time when Egypt for them was from the other world.  

Do you already have a list of clients for the remaining percentages?

We have a list of clients in the pipeline, but it is very time consuming to get a European factory in this country. Between our board meetings and their board meetings there are three to four months. So they ask some questions, we give the answers and then wait until the next board meeting to get some more questions and so on.

So, would you rather focus on another region, probably the Gulf region?

You know, we don’t necessarily concentrate on the Gulf region or on the European countries. We accept what we get as long as they are investing in this country. Our last and newest investor is from Kuwait. They are making a large investment here for hundreds of millions of dollars. We are now in the process of getting them the permits for starting construction in their factory.

As the managing director of the company, what challenges do you face on a daily basis?

There are many challenges. We have challenges on many levels. The first level is the challenge with the government. To work with the government with our philosophy was a challenge. They have their rules, which they have to follow, whereas we believe these rules were made 50 years ago and these rules have to be changed sometime. If we follow these rules without arguing, we will remain like this for another 50 years. So, we believe that it is our duty to object to these rules, to try to change these rules, to show the people in charge that we have to change something. We had many disputes with the government. I know they have their reasons because the rules say this or that. But we have to change it somehow. The second challenge is to get our local investors to follow the rules of the park – such as traffic rules, building rules etc. Every local investor thinks he is a rich and very successful man. So, he can allow himself some exceptions. We would like to have some discipline in this park and that was our last challenge. And we are still struggling with them on a daily basis – not with the owners themselves, but with their staff. 

What is your personal vision for the country?

I always think that the youngest population of Egypt is a very good opportunity for everyone to work with and invest in. I never lost faith in the future of Egypt – neither before nor after the revolution, nor after the Muslim Brotherhoods and not even now. I strongly believe now we have a better chance to move forward. I hope that everyone simply goes to his work, and works diligently without prying into the affairs of the neighbors. If everyone minds his own business, I think we have a good chance to move forward.

FAIR USE POLICY
This material (including media content) may not be published, broadcasted, rewritten, or redistributed. However, linking directly to the page (including the source, i.e. Marcopolis.net) is permitted and encouraged.