MIRA
INFORM REPORT
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Report Date : |
07.12.2007 |
IDENTIFICATION
DETAILS
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Name : |
EASTERN COMPANY
SAE |
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Registered Office : |
450 Al Ahram
Street, Giza, P O Box 1543, Cairo |
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Country : |
Egypt |
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Financials (as on) : |
30.06.2006 |
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Date of Incorporation : |
12th July 1920 |
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Com. Reg. No.: |
4884, Giza |
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Legal Form : |
Egyptian Joint Stock Company |
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Line of Business : |
Manufacturers of cigarettes,
moassel, pipe tobacco, roll-your-own tobacco, cigars and Toscani. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
US$ 2,000,000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
SUMMARY
Company Name : EASTERN COMPANY SAE
Country of Origin : Egypt
Legal Form : Egyptian Joint Stock Company
Registration Date : 12th July 1920
Commercial Registration Number : 4884, Giza
Authorised Capital : ŁE 500,000,000
Issued Capital : ŁE 250,000,000
Paid up Capital : ŁE 250,000,000
Total Workforce : 12,120
Line of Business : Manufacturers of cigarettes and tobacco.
Financial Condition : Good
Payments : Nothing detrimental uncovered
Operating Trend : Steady
COMPANY NAME
EASTERN COMPANY SAE
ADDRESS
Registered & Physical Address
Street : 450 Al Ahram Street
Area : Giza
PO Box : 1543
Town : Cairo
Country : Egypt
Telephone : (20-2) 5703326 / 5724711 / 5724965
Facsimile : (20-2) 5684734
Email : eastern@easternegypt.com
Premises
Subject operates
from a large suite of offices, a factory and a warehouse that are owned and
located in the Suburban Business Area of Cairo.
Branch Office (s)
Location Description
·
91 Suez Canal
Street Owned
factory premises
Moharam Bey
Alexandria
Tel : (20-3) 4221427
·
38 Nabil El
Waqad Street Owned
factory premises
El Rasafa
Moharam Bey
Alexandria
Tel : (20-3) 4911868
·
Assiut Owned
factory premises
·
Menoufeya Owned
factory premises
·
Gharbeya Owned
factory premises
Subject owns 11 factories in total and has a strong and well-established
distribution network spanning the whole of Egypt, totalling in excess of 300
sites.
KEY PRINCIPALS
·
Eng. Mohamed
Sadiq Ragab Chairman
& Managing Director
·
Eng. Abdul
Hakim Mahmoud Director
·
Ahmed Mohamed
Saleh Director
·
Abdul Mohsen
Abdul Monem Shaaban Director
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Farouk M.
Abdul Hamid Director
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Eng. Abdullah
Tahnoun Commercial
Manager
·
Abdou Haddad
Abdou Public
Relations Manager
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Abdul Hadad Administration
Manager
·
Mohamed
Hussein Production
Manager
·
Amer Shaker Export
Manager
LEGAL FORM & OWNERS
Date of Establishment : 12th
July 1920
History : Subject’s operations date back to 1920,
however it was nationalised in 1963.
Between 1963 and 1984, when its monopoly
over the local cigarette market was
established, it was merged with
10 other local tobacco manufacturers, including
the merger of El Nasr Tobacco
and Eastern Tobacco Company.
Legal Form :
Societe Anonyme Egyptienne
- SAE (Egyptian Joint Stock Company)
Commercial Reg. No. : 4884, Giza
Authorised
Capital : ŁE 500,000,000
Issued Capital : ŁE 250,000,000
Paid up Capital : ŁE 250,000,000
Name of Shareholder (s) Percentage
·
The Mining,
Refractories and Building Materials Holding Co * 52.8%
9B Street No. 9
Maadi
Cairo
Tel : (20-2) 3516970 / 3501507
Fax : (20-2) 3517043
·
Egyptian
businessmen and private Investors 47.2%
* The Mining, Refractories and
Building Materials Holding Co is wholly owned by the government of
Egypt.
Note to the Legal Form
The Egyptian Company Law provides that the capital of a Societe Anonyme Egyptienne - SAE – should not be less than ŁE 500,000 if shares are offered to the public and ŁE 250,000 if not. If shares are offered to the public they are freely transferable, if not, transfer may be restricted. Liability of shareholders is limited.
LINE OF BUSINESS
Operations : Manufacturers of cigarettes, moassel, pipe
tobacco, roll-your-own tobacco, cigars and Toscani.
Subject is Egypt’s
sole cigarette manufacturer. In addition to manufacturing its own brands, which
command a 94 percent market share, the company retails 17 international brands
under license from Philip Morris, BAT, RJ Reynolds and Rothmans.
In April 1998 subject initiated a new strategy aimed at
expanding profit margins. The plan has involved upgrading its cheapest and most
popular cigarette, the Cleopatra King Size brand, to improve blend and marketing, and raising the price for each
packet to ŁE 1.60 from ŁE 1.50 – a move which is forecast to widen the margins
by ŁE 0.04 a packet from ŁE 0.06 currently. The company also launched a new
brand called Cleopatra Regular, which sells for ŁE 1.50 and has the same
packaging as the former Cleopatra King Size brand, but the length of the
cigarette has been reduced from 80mm to 75mm. In addition, the company has
relaunched its Super Cleopatra brand as a new product called Cleopatra Super
King and raised the price from ŁE 1.55 to ŁE 1.70. It has also introduced a new
product called Toshiba, containing 10 cigarettes per packet which has
experienced strong demand. The product restructuring was prompted by rising
tobacco costs, production problems and depreciation costs.
In June 2003 Eastern signed an agreement with Jordan’s International Tobacco & Cigarettes Company to market its brands in Egypt.
Production
Capacity : Local brand cigarettes – 1 billion
Moassel – 13,858 tonnes
International
brand cigarettes – 1 billion
Import Countries
: Africa, South East Asia, India,
Malaysia, Indonesia, Latin America and Bulgaria.
Export Countries
: Subject exports its
products throughout the Middle East, as well as Japan.
Brand Names : CARONA MARLBORO KAMEL
BOSTON MARLBORO
LIGHTS DUNHILL
CLEOPATRA ROTHMANS CARLTON
SALOM KENT CAPTAIN
CIGARLO SILK
CUT DUMORIER
LITE WINSTON
Operating Trend
: Steady
Subject has a
workforce of approximately 12,120 employees.
FINANCIAL HIGHLIGHTS
Latest Financial
highlights provided by outside sources are given below :
Currency : Egyptian
Pounds (ŁE)
Year
Ending 30/06/06: Year
Ending 30/06/05:
Net Operating
Revenue ŁE 3,513,276,000 ŁE 3,401,584,000
Net Profit ŁE 508,081,000 ŁE
452,715,000
Local sources consider
subject’s financial condition to be Good.
BANKERS
·
National Bank
of Egypt
24 Sherif Street
Cairo
Tel : (20-2) 3924175
Fax : (20-2) 3924143
·
Banque Misr
151 Mohamed Farid Street
Cairo
Tel : (20-2) 3912711 / 3912106
Fax : (20-2) 3919779
·
Misr International
Bank (MIBANK)
14 Alfy Street
PO Box : 631
Cairo
Tel : (20-2) 5931002
Fax : (20-2) 5912306
·
Scotia Bank
3 Ahmed Nessim Street
Giza
PO Box: 656
Cairo 11511
Tel: (20-2) 3365734 / 3365731
Fax: (20-2) 3365730
PAYMENT HISTORY
No complaints regarding
subject’s payments have been reported.
Credit amount 100,000 208,000
Amount overdue 0 0
Payment terms 60
days 60
days
Payment Method Letters
of Credit Letters
of Credit
Paying record No
Complaints No
Complaints
Currency US
Dollars Pounds
Sterling
GENERAL COMMENTS
Opinion on the
credit figure of US$ 150,000:
Eastern Company SAE
is the leading cigarette and tobacco manufacturing company in the Middle East and
Africa, and the sole cigarette manufacturer in Egypt. Its own cigarette brands
command a
94 percent share of
the Egyptian market and it also retails a range of international brands under
licence from international companies such as Philip Morris, BAT, RJ Reynolds
and Rothmans.
Subject faces no
real threat from foreign tobacco manufacturers due to the economies of scale it
enjoys and the inability of the market to absorb more than the current supply
of foreign brands. The exclusion of the tobacco industry from tax breaks
normally offered in old and new industrial zones also serves as a deterrent to
new investments in this sector.
Local sources
report that the company is deemed a sound trade risk and the above credit
figure is admissible.
Maximum suggested
credit figure: US$ 2,000,000
RATING
EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)