Elsewedy makes around 80% of its total revenues from wires and cables, along with engineering and contracting, and is active in Europe, the Gulf States and Africa.
The economic reforms, especially the devaluation of the pound, have impacted positively on Elsewedy Electric, leading to a 95.7% year-on-year revenue increase for the six-month period ending 30 June, says Ahmed El Sewedy.
“The devaluation was the best thing implemented in the last five years. Before the devaluation and before the revolution, industry was dead and everyone was investing in property. At that time the exchange rate of the Egyptian pound meant we were not able to compete with China, India or Turkey,” he expands.
After devaluation, exports became more competitive, and Egypt is now one of the cheapest countries worldwide, he adds, which in turn has led to industry leaders re-investing in Egyptian infrastructure and manufacturing. Indeed, the company has recently invested heavily in Egyptian industry.
The company has partnered with EDF France to build two 100MW solar plants, under the feed-in-tariff (FiT) scheme, with $150m funding from the European Bank for Reconstruction and Development (EBRD). Launched in 2015, the FiT hopes to produce 4,300MW from wind and solar farms by procuring an eventual $7bn in investment.
According to El Sewedy, the renewable energy feed-in-tariff programme has been very successful in attracting investors, and at the time of writing 25 companies were close to financially closing solar energy projects in the second phase of the programme.
By undertaking solar projects, Elsewedy demonstrates its ability to capitalise on market opportunities by aligning strategy to government vision, for which renewable energy takes increasing precedence: by 2022, 20% of energy should come from renewable sources.
Similarly, Elsewedy is involved with the government’s Mega Projects and has signed a contract with El Mostakbal for Urban Development to supply electricity and communication infrastructure networks for the first phase of Mostakbal City, New Cairo.
Furthermore, as the government aims to overcome a large budget deficit by reducing energy subsidies, Elsewedy can offer its energy saving solutions to companies battling increased operational costs.
Increasing electricity capacity via reducing consumption and pumping up production is of central importance to the Egyptian government, which dealt with an electricity deficit and power outages for quite some time. In 2013, Egypt produced 24,000MW of electricity, but 29,000MW were needed to meet domestic and industrial needs.
This creates enormous opportunity for a company like El Sewedy, and through a range of public-private partnerships and initiatives, the Ministry of Electricity has recently reported a surplus for more than 11 months of around 5,000MW – which can now be exported for profit. “It’s a very special time,” says El Sewedy.
Using Egypt as a base
El Sewedy describes how the company’s global network – working in almost 45 countries and exporting to more than 80 – is well grounded in Egypt. Egypt’s exports benefit not only from the devaluation of the pound, but also numerous free trade deals, he explains. “I am free to export to a lot of places without customs. With COMESA, we are free to export to Africa and the same thing with Europe.”
As it stands El Sewedy has become one of the largest sup- pliers of electricity generation and distribution equipment in Africa, and is active in Togo, Zambia, Nigeria, Mozambique, Angola, Tanzania and Kenya amongst other countries. Most recently, the company signed a MOU with Zimbabwe to build $15m of pre-paid smart water meters in Harare, expanding on the 20m water meters it has supplied to 46 other countries.
The company also signed a contract to supply 300,000 prepaid meters in Togo, with a contract value of EUR44m.
“Africa’s electrification is less than 10%, so there’s a lot of space in the continent, either in the energy sector or the transmission sector. I really believe Africa is one of our main interests, for us as a company in Egypt,” says El Sewedy.
Looking to the future, the company has its sights set on Latin America, reporting a decrease in demand for wires and cables in the Gulf States.
As for Egypt’s energy sector in general, El Sewedy finishes by saying: “I think before the economic reforms there was no future for investments in Egypt. On the back of the economic reforms a lot of investments have been made in infrastructure, in water and in energy, and so the sector has found a workable solution.”