Many companies across the economy froze their investments and expansions during 2020 due to the novel coronavirus (COVID-19) pandemic.
However, with the absorption of the global health crisis, Daily News Egypt conducted an opinion poll of major listed companies operating in different economic sectors about their investment trends during the coming period. The results aim to explain the tendency of many companies to start vigorously re-investing again, beginning in 2021, and which are set to continue over the coming years.
After Ghabbour Auto (GB Auto) decided to freeze its investments in the past year, the company now plans to spend around EGP 260m in capex during 2021.
GB Auto management expects Egypt’s total passenger car (PC) market to grow by 10% year-on-year (y-o-y) in 2021. The company’s focus for 2021 is to increase its market share to at least 20%, amounting to 36,000 units, more than the 30,000 units sold in 2020.
Concerning GB Capital, management expects at least 25% growth in total portfolio, and maintaining a healthy loan book. The company is also considering selling minority stakes in its non-bank financial services (NBFS) entities to strategic investors that can add value.
EDITA Food Industries plans capex budgeted for 2021 of around EGP 400m, which have been allocated for the expansion of the industrial operations either through capacity expansions or installing new lines.
The company is expecting to gain market share specifically in the bakery and wafer segments with further capacity expansions and new innovations and products in the pipeline. It sees acquisition opportunities in 2021 versus 2020.
Concerning its operations in Morocco, the construction of its factory in the North African country has now been completed. The company will start installation of the first line this month, which should be operational by the end of the first quarter (Q1) of 2021. This bears in mind that the pricing of products in Morocco is slightly higher.
The €2bn main capex of Obour Land for Food Industries (OLFI) will be allocated to its farm, and only maintenance capex will be given to its cheese and milk segments.
The company is finalising licences for the farm, which it hopes will be fully operational in October or November of 2021. Its production will cover 25% of packaged milk needs but will not cover cheese production, which will continue to require powdered milk.
Cairo for Investment and Real Estate Development (CIRA) plans to spend EGP 600-EGP 800m over the next two years, starting from 2021, until it has its Assiut facilities in place, and has completed the expansion of Badr University in Cairo (BUC).
CIRA aims to launch four or five faculties within the medical line in Assiut for September 2021, and expects to open three or four new schools by September 2021.
The Egyptian International Pharmaceutical Industries (EIPICO) plans to invest around EGP 169m in 2021, directed towards the purchase of new machinery for EIPICO 1 & EIPICO 2. It will also be invested in servicing the production and packaging of ointments and pills along with facility renovations.
The company plans to invest around EGP 800m over the next three years excluding the biosimilar project, directed towards operating, re-modelling and renewing the facilities machinery.
Ibnsina Pharma is planning to invest EGP 180-EGP 200m in 2021, to set up new distribution hubs and improve its tech capabilities. According to management, capex is directed to expansion and network optimisation, upgrading existing warehouses, and technological developments.
Capex is to be 80% financed through a medium-term loan, and the remaining 20% will be financed from internal resources.
Cleopatra Hospitals plans to invest about EGP 350-EGP 500m, according to early guidance, in electromechanical upgrades and renovations, during 2021. This should be followed by lower capex spending in the following years.
Meanwhile, Orascom Constructions (OC) has maintained its guidance for a fiscal year (FY) 2020/21 EBITDA margin of 10%-12% in the Middle East and Africa (MEA) region, and 1.5-2% in the USA.
Meanwhile, it will keep capex spending almost the same at $40m, excluding any investments. As of now, the company does not see a need for changing their guidance for the next year, but management would give more guidance later into the year.
Oriental Weavers Capex is expected to be in the range of $17-20m for 2021, with the company expecting to open eight new showrooms in 2021 including a huge showroom in the New Administrative Capital (NAC).
The company’s land in the NAC will span over 3,300 sqm, and is valued at around EGP 50m, which is set to rise to EGP 150m with buildings and decorations.
RAMIDA investments and capex spending are directed towards machinery upgrades, to comply with GMP and environmental guidelines. This will see improvements in the efficiency of their laboratories and water treatment station, which will cap capex spending in 2021 at EGP 50-EGP 60m.