Industry is the biggest beneficiary a year after the floatation of the Egyptian pound

Mr. Bassiouni, chairman of the food industries committee, Tenth of Ramadan investors Association, said there are unjustified price increases for many commodities and products with 100%  local and domestic inputs and raw materials which requires a re-evaluation of the current costs of manufacturing for these products under a random state censorship and monitoring to avoid unreasonable price increases.

He added in an interview with “MEO” that he proposed to the Minister of Transport, Hisham Arafat, a proposal for the carriage of goods from factories to provinces by train in a scientific pattern, by establishing a private company for transporting products via the railway.

The proposal includes the establishment of a container for the transport of goods, that is either owned by the Railways Authority or a private company through the B.O.T system.

He explained that, a year after the decision of the Central Bank of Egypt to float the pound, there is a positive impact on investment and industry. 

The proportion of the domestic components increased which has led to a 70% rise in the production capacity of factories, whilst the exchange rate has saved factories from closure given the availability of the dollar for importing raw materials needed, and industry become an effective contributor to the national economy. 

How do you see rising prices of local or imported goods?

Prices of strategic products from abroad such as wheat, edible oils, and others are controlled by the prices of international stock exchanges and if the price on the stock exchange drops it will affect the price of the product as well as falling foreign exchange rates in the domestic market.

But as for commodities and products with 100%  local and domestic inputs and raw materials, their unreasonable price increases is not fully justified in its current form.

So should the required costs be reassessed?

Yes, factories must re-evaluate the cost of producing and manufacturing local products taking into account the achievement of justice within their margin of profitability, the reason for the rising prices of food products cannot be justified by the increase of petroleum prices. And I send a message to the merchants: “Fear God in Egypt and its people”. While government’s review of this process is essential in developing an updated and random monitoring of pricing.

Further more, the government must encourage local industry by developing protection against imported products with local alternatives in the Egyptian market.

How do you evaluate the decision to float the pound after a year?

The floatation of the pound has had a positive impact on investment and industry. The proportion of the domestic components increased which has led to a 70% rise in the production capacity of factories, whilst the exchange rate has saved factories from closure given the availability of the dollar for importing raw materials needed, and industry become an effective contributor to the national economy. 

Can we say that the industry is recovering or stabilizing?

The industry is starting to stabilize, the currency crisis that affected manufacturers and investors has ended. Long queues in banks have disappeared, but what we hope for is that the price of the dollar declines to a rate between 14 to 15 pounds, this will lead to a state of recovery, while its stability along the coming 5-6 years will lead to prosperity of the economy.

What about your meeting with the Minister of Transport and have you made any suggestions?

I presented to Hisham Arafat a proposal for the carriage of goods from factories to provinces by train in a scientific pattern, by establishing a private company for transporting products via the railway. The proposal includes the establishment of a container for the transport of goods, that is either owned by the Railways Authority or a private company through the B.O.T system.

The proposal suggests transfer of the company’s packaged products to the station to be placed by fork lift on the trains destinations, whether Upper Egypt or otherwise, the goods are unloaded in stations of provinces along its destined route. The traffic on railway lines at night is almost non-existent and therefore the goods will be loaded onto the train so that it reaches the different provinces in the morning. This will not only guarantee quality in the process, it will further lead to a reduction of fuel consumption by trucks working for each factory, traffic and lower accident-rates.

Have you received a reply from the Minister of Transport on this proposal?

 The Minister of Transport fully welcomed the idea, and instructed his advisers to study the idea; to work on its implementation during the coming period. The minister also requested upgrading the trains’ efficiency, for the transport of goods to cover all Egypt’s provinces.