Hassan Behnam – General Manager, French Chamber of Commerce & Industry in Egypt
The General Manager of the French Chamber of Commerce and Industry in Egypt, Hassan Behnam, speaks about the resiliency of French-Egyptian relations – even during times of turmoil – while marking the progress of the French Industrial Zone in Alexandria (FIZA) project. He also underscores the recent flotation of the Egyptian pound as a green light for all local and international investors looking for a vote of confidence in Egypt’s economy.
Can you describe the French Chamber of Commerce and Industry in Egypt (CCIFE) and its role for companies?
“Egypt has a strategic location, 92 million potential consumers, good infrastructure, and many investment regulations. Stability and security have been important challenges but I consider that the situation is much better than before.”
The Chamber was created in 1992 and has today more than 640 members from various sectors and activities. We organize many meetings and events in order to promote bilateral relations, let French companies find agents, invest and work here and vice-versa. We also have 12 and very soon 13 thematic committees such as energy, marketing, tax & customs, prevention of risks, and the one coming is health. These committees also have regular meetings and seminars about regulations and taxes. Right now, we are working on a French Industrial Zone in Alexandria (FIZA) project, as well as promoting the trade agreements that exist between France and the European Union.
The CCIFE is celebrating its 25th anniversary in 2017. How does it represent the strength of the relationship between France and Egypt?
We are an important tool for this strong bilateral trade relationship. The French have confidence in Egypt and Egyptians like France, so it is a natural outcome. They helped each other, particularly in difficult times. Egypt is also a strategic partner in every sector, not just commercially and not just for France, but for most countries because it is an ideal hub between North and South, East and West. In the Chamber, we want the level of bilateral trade relations to get higher and more diversified. Today we have a total of 133 French companies in Egypt that employ around 33,000 people. If you include all the French SMEs that have distributors, agents, partners in Egypt, the number will reach 550. None of these companies left Egypt since 2011 because they know that the market has its ups and downs. Moreover, we have companies working in very diversified sectors. Therefore Egyptians can notice the French presence everywhere and that the country is doing something for them. To give you some figures: EUR 4 billion of French investments in Egypt; 2.4 billion euros in bilateral trade in 2016, EUR 1.6 billion of French exportations to Egypt; and EUR 800 million in Egyptian exportations to France.
Economic stability is still a cause for concern. What steps have you seen the government take to really establish financial security and restore investors’ confidence?
Egypt has a strategic location, 92 million potential consumers, good infrastructure (112,000 km of roads, 103 industrial and free zones, 71 maritime ports and 22 airports), and many investment regulations. Stability and security have been important challenges but I consider that the situation is much better than before (the police are back on the streets). Some of the challenges for French businesspeople are difficulties in obtaining permits and licenses to start working. They complain about prevailing bureaucracy, but the concerned authorities are determined to eliminate gradually this barrier for investors. Another challenge is how to repatriate benefits to the country of origin. There is also the issue of corruption which sometimes discourages foreign investors because they don’t know how to deal with it. Now, we can see the government taking serious steps to solve these issues.
Nonetheless, you have to consider that Egypt is and will remain an attractive market for investments. As I said previously there are tens of millions of consumers and relevant infrastructures. Besides, 69 percent of the population is below 35 years old (and 42 percent below 18 years old) which is a major opportunity for the country because through education, as well as technical and professional trainings, they can join the expanding industries and develop into traders. The big challenge and project for Egypt is to industrialize the country by creating new industries and businesses, by producing more and specially by exporting.
How does the recent floatation of the Egyptian pound affect your members and their interests?
I think it was a wise decision. It had to be taken. It came maybe late but it was courageous because we know Egypt and the risk of having a repetition of the events of 18th-19th January 1977. Fortunately, the authorities stayed firm with their decision and they communicated correctly about the issue to let the population be fully aware, understand the reason of the floatation and be convinced that this decision is in their favor.
Regarding the impact on companies, some of them face restrictions on importing basic products. However, none of the companies are on the verge of closing or stopping activities. They understand and agree that Egypt has to go through this in order to succeed. It will revive the Egyptian economy but it requires sacrifices and collaboration to go through this challenge. What makes me optimistic is that, as you know, IMF doesn’t give a penny without a thorough study. Therefore, by signing the recent deal, IMF sent a message that Egypt is safe, that its economy will recover. I consider it a green light for foreign investors and companies to invest in a country that has a great potential.
What is your outlook on the future increase of FDI from French companies?
I am very confident it will happen. We regularly feed the French companies with reports and studies showing that the Egyptian market is promising, that it is the proper time to resume investing and planning for projects in this country.
In what areas of the economy do you see the most opportunities for French companies to get involved and invest more?
In my opinion, the three most important sectors are construction (due to high increase of the population), energy (solar, new and renewable) and telecommunication. There is also the sector of assembling cars, and I heard that a big French brand has a real intention and interest in Egypt for this project.
Can you explain the FIZA project and what stage this project is at?
We at the French Chamber of Commerce have a project to create a French Industrial Zone in Alexandria (FIZA). It is progressing thanks to the efforts of among others our office in Alexandria and its co-president. It slowed down at a stage because we had three different Governors in Alexandria since this project started. However, the Federation of Egyptian Industries and the Ministry of Trade and Industry are backing us this far. We are at the stage of finding the land. The location will be determined very shortly. It is important to understand that this zone would be for French SMEs primarily. They will be able to produce for local consumption and also for exportations, for instance to East Africa through Comesa agreement.
Why do you want to create a zone especially for French industries?
France has traditionally conducted a lot more business with Morocco, Algeria and Tunisia, due to geographical proximity and also facility in communication (French language). It is a matter of culture and language. Creating a French zone in Alexandria will certainly attract French SMEs. In terms of mega projects, manpower and business diversity, Egypt offers much more opportunities. We will promote FIZA among thousands of French SMEs that are interested to export, stressing that they will operate in a French environment.
What are your objectives for the CCIFE in the next 3 to 5 years?
First of all, increase the number of our members. The more they are, the more interactivity to share experiences, ideas and help each other. I also would like to see more French companies coming to Egypt and more Egyptian companies export and/or invest in France. Our target is to have a better balance between French and Egyptian exports and investments as well as bilateral trade figures.
What is the one message you would like to convey to international companies that are still hesitant to invest in Egypt?
Well, you should be confident in the Egyptian market (92 million consumers, attractive location that can be a hub, infrastructure, etc.) and be sure that you are well-backed since the IMF has recently signed a USD 12 billion loan. Most importantly, Egyptians are waiting for you to help them get out of the crisis through modernization of its economy, and I am confident it will succeed. Egypt will definitely overcome.