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MIRA INFORM REPORT
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Report No. : |
500136 |
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Report Date : |
03.04.2018 |
IDENTIFICATION DETAILS
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Name : |
FUTURE PHARMACEUTICALS INDUSTRIES SAE (FPI) |
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Registered Office : |
Building No. 207, Street No. 28, 5th
Settlement, 4th Territory, New Cairo Cairo |
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Country : |
Egypt |
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Financials (as on) : |
31.12.2017 |
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Date of Incorporation : |
2008 |
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Com. Reg. No.: |
23188 |
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Legal Form : |
Egyptian Joint Stock Company |
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Line of Business : |
Subject is engaged in the manufacture of pharmaceuticals. |
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No. of Employees : |
320 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A |
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Credit Rating |
Explanation |
Rating Comments |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List
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Country Name |
Previous Rating (30.09.2017) |
Current Rating (31.12.2017) |
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Egypt |
C1 |
C1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
EGYPT - ECONOMIC
OVERVIEW
Occupying the northeast corner of the African continent, Egypt is bisected by the highly fertile Nile valley where most economic activity takes place. Egypt's economy was highly centralized during the rule of former President Gamal Abdel NASSER but opened up considerably under former Presidents Anwar EL-SADAT and Mohamed Hosni MUBARAK. Agriculture, hydrocarbons, manufacturing, tourism, and other service sectors drove the country’s relatively diverse economic activity.
Despite Egypt’s mixed record for attracting foreign investment over the past two decades, poor living conditions and limited job opportunities have contributed to public discontent. These socioeconomic pressures were a major factor leading to the January 2011 revolution that ousted MUBARAK. The uncertain political, security, and policy environment since 2011 has restricted economic growth and failed to alleviate persistent unemployment, especially among the young.
In late 2016, persistent dollar shortages and waning aid from its Gulf allies led Cairo to turn to the IMF for a 3-year, $12 billion loan program. To secure the deal, Cairo floated its currency, introduced new taxes, and cut energy subsidies - all of which pushed inflation above 30% for most of 2017, a high that had not been seen in a generation. Since the currency float, foreign investment in Egypt’s high interest treasury bills has risen exponentially, boosting both dollar availability and central bank reserves. Cairo will need to make a sustained effort to implement a range of business reforms, however, to induce foreign and local investment in manufacturing and other labor-intensive sectors.
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Source
: CIA |
SUMMARY
Company Name : FUTURE PHARMACEUTICALS INDUSTRIES SAE (FPI)
Country of Origin : Egypt
Legal Form : Egyptian Joint Stock Company
Registration Date : 2008
Commercial Registration Number : 23188, Cairo
Tax Card Number : 245-163-476
Authorised Capital : £E 150,000,000
Issued Capital : £E 70,000,000
Paid up Capital : £E 70,000,000
Total Workforce : 320
Activities : Manufacture and distribution of pharmaceuticals.
Financial Condition : Fair
Payments : Nothing detrimental uncovered
Operating Trend : Steady
Person Interviewed : Mohamed Abdul Jawad, Finance Manager
COMPANY
NAME
FUTURE
PHARMACEUTICALS INDUSTRIES SAE (FPI)
ADDRESS
Registered &
Physical Address
Location :
Building No. 207, Street No. 28, 5th Settlement, 4th Territory,
New Cairo
Town :
Cairo
Country :
Egypt
Telephone :
(20-2) 25606557 / 25606558
Facsimile :
(20-2) 26180131
Mobile :
(20-11) 6600449 / 11996333 / 10501506
Email :
gleithy@future-eg.com / m.tawfik@future-eg.com / m.sultan@future-eg.com
Premises
Subject operates from a large suite of offices and a
warehouse that are rented and located in the Central Business Area of Cairo.
Branch Office (s)
Location Description
· 1st
Industrial Zone, Plot No. 4G Factory
premises
Badr
City
Cairo
Tel: (20-2)
28647580 / 28647581 / 28647582 / 28607101 -5
Fax:
(20-2) 28647581 / 28647576
· 104B
Mall El Thagr Company Building Office
premises
El
Nozha Airport Area
Alexandria
Tel:
(20-3) 3834456
· 3 Om
El Quora Hospital Street Office
premises
Stadium
Area
Tanta
· Building
No. 5 Office
premises
Street
No. 3
Takseem
Elias Blash
Assiut
KEY
PRINCIPALS
Name Position
· Dr
Gamal Eddine Nasser Eddine El Leithy Chairman
· Dr
Alaa Mohamed El Jeyoushi Managing
Director
· Dr Joseph
Ayat Al Shareef Director
· Dr
Mostafa Awad Director
· Dr
Ghada Abdullah Al Shareef Director
· Mohamed Abdul Jawad Finance
Manager
· Nasser
Saleh Nasser IT
Manager
· Marwa
Sultan Administration
Manager
· Dr Huda Samir Production
Manager
LEGAL
FORM & OWNERS
Date
of Establishment : 2008,
however full production began in 2011.
Legal
Form : Egyptian
Joint Stock Company
Commercial
Reg. No. :
23188, Cairo
Tax Card No. : 245-163-476
Authorised Capital : £E 150,000,000
Issued Capital : £E
70,000,000
Paid up Capital :
£E 70,000,000
Name of Shareholder (s) Percentage
·
Dr Gamal Eddine
Nasser Eddine El Leithy 26%
· Dr
Alaa Mohamed El Jeyoushi 24%
· Dr
Joseph Ayat Al Shareef ]
]
· Dr Mostafa
Awad ]
]
· Dr
Ghada Abdullah Al Shareef ]
]
· Abdullah Shareed ] 50%
]
· Dr Fouad El Lafy ]
]
· Dr Ehab Fattouh ]
]
· Local
businessmen and private investors ]
Notes to the legal Form A
Joint Stock Company ( SAE ) can be both a public or private company the capital
of which is divided into shares of equal
value; the liability of the shareholder is confined to the value of the shares
to which he subscribes, and he is not liable for the debts of the company
except within the limit of those shares. A JSC may be 100% owned by foreign investors
and there should be at least three shareholders. The minimum capital of JSC
companies is EGP 250,000 or EGP 500,000 if it is a public company.
OPERATIONS
Activities: Engaged in the manufacture of
pharmaceuticals.
Import Countries: Europe and India.
International
Suppliers:
· Hitero India
· Sinochem India
· DSM India
Operating Trend: Steady
Subject has a workforce of approximately 320 employees.
FINANCIAL
DATA
Financial highlights provided by local sources are given
below:
Currency: Egyptian Pounds (EGP)
Year Sales
Year Ending 31/12/16: EGP
85,500,000
Year Ending 31/12/17: EGP
107,000,000
Local sources consider subject’s financial condition to be
Fair.
Note: According to
Egyptian Commercial Law, only Joint Stock Companies SAE (Listed on the Stock
Market) are required to publish their financial information. Financial
information on other legal forms can only be obtained from the companies /
businesses directly
BANKERS
·
National Societe General Bank
5
Champillion Street
Cairo
Tel:
(20-2) 27707000
Fax:
(20-2) 27707799
PAYMENT
HISTORY
No complaints regarding subject’s payments have been reported.
SANCTION
LIST CHECKS
The subject and its shareholders have been checked in the
following sanctions list databases:
Sanctions
list Results
United Nations Sanctions No
matches
Australian Sanctions No
matches
Bureau of Industry and Security
(US) No
matches
EU Financial Sanctions No
matches
Office of the Superintendent of
Financial Institutions (Canada) No
matches
OFAC - Specially Designated
Nationals (SDN) No
matches
UK Financial Sanctions (HMT) No matches
US Consolidated Sanctions No matches
GENERAL
COMMENTS
During the course of this investigation the following
sources were consulted:
- Internal database
- Journals,
directories, media & web searches
- Local Registry
office
- Interview with Mohamed Abdul Jawad, Finance Manager
During the course of this investigation nothing detrimental
was uncovered regarding subject’s operating history or the manner in which
payments are fulfilled. As such the company is considered to be a fair trade
risk.
COUNTRY
OUTLOOK
Recent
Developments
The first quarter of FY17 (July
to June) marked a slowdown in growth recording 3.4 percent compared to 5.1
percent in the same quarter last year, with annual growth in FY16 registering
4.3 percent. Growth was constrained by severe shortages in hard currency, an
overvalued exchange rate and sluggish growth in Europe, Egypt’s main trading
partner. Key sectors continue to experience negative growth, particularly
tourism and the oil and gas extractives sector that has been suffering from
underinvestment and arrears.
The annual fiscal deficit in FY16
increased to 12.1 percent of GDP, up from 11 percent the year before. However,
in the first half of FY17 the deficit declined to 5.4 percent of GDP, down from
6.4 percent in the same period last year. The improvement in the first half is
solely driven by a decline in total expenditures, which compensates for a drop
in total revenues. Lower expenditures were driven by a decrease in subsidies
and public wages as a percentage of GDP.
The most recent data for the
first quarter of FY17 show an overall surplus in the balance of payments of 0.5
percent of projected GDP, compared to a deficit of 1 percent during the same
period of the previous year. The improvement in external accounts was mainly
due to the narrowing trade deficit induced by an increase in merchandise
exports (by 11.2 percent) and a decline in merchandise imports (by 4.8
percent). Meanwhile, Suez Canal receipts further deteriorated by 4.8 percent
and net private transfers also declined by 21.8 percent. As a result, the
current account deficit widened to 1.4 percent of GDP compared to 1.1 percent
in the same quarter of the previous year. More positively, FDI inflows
increased to US$1.9 billion over the same period, up from US$1.4 billion the
previous year.
To stimulate growth and address
major macroeconomic imbalances, the government embarked on a major economic
reform program. The key features include (i) the liberalization of the exchange
rate regime; (ii) fiscal consolidation through a combination of expenditure and
revenue measures, notably cuts in fuel subsidies, containment of the wage bill
and introduction of VAT; and (iii) reforms to the business environment and
addressing impediments to industrial activity.
The reform program was supported
by an IMF Extended Fund Facility of US$12 billion which contributes to cover
Egypt’s financing needs, the rest of which has been covered through
disbursements under the World Bank, the African Development Bank and a number
of bilateral loans, in addition to a recent issuance of Eurobonds in the amount
of US$4 billion. Following the floatation, the exchange rate displayed strong
overshooting (hitting its
lowest rate of 19.5 in December
compared to a pre-float fixed rate of 8.8), but has subsequently strengthened
as foreign investor confidence picked up and backlogs of USD orders to finance
imports eased. Net international reserves reached US$26.4 billion at-end
January (6 months’ imports), up from a pre-floatation level of US$19 billion.
Currency weakening has led to a
sharp rise in inflation, which reached its highest recorded level of 30.2
percent in February 2017. Following the currency floatation, the CBE increased
interest rates by 300 basis points (bringing the cumulative increase to 550
basis points since March 2016) to absorb excess liquidity and curb inflation.
High inflation has contributed to the aggravation of social conditions, given
the persistently high unemployment (12.6 percent in 2016). The recently adopted
reform program involves efforts to improve social safety nets, notably through
the partial reallocation of freed up resources from reduced energy and food
subsidies; the expansion of cash transfer programs; and an increase in the
general pension budget by 15 percent. Nonetheless, the mitigation of recent
adverse
shocks will continue to depend on
an effective targeting mechanism.
Outlook
GDP is expected to grow by 3.9
percent in FY17, and will be largely driven by public investment and to some extent
net exports. Private investment is expected to pick up only in the second half
of FY17, supported by enhanced competitiveness following the depreciation of
the currency and the gradual implementation of business climate reforms.
Tourism is also expected to steadily recover on the back of a weaker currency.
Yet, growth will likely be undermined by slower growth of private consumption,
which is expected to be negatively affected by record high inflation rates.
Prudent monetary policy is projected to bring inflation down over the forecast
horizon after the one off effects of depreciation, subsidy reforms, and the
introduction of VAT dissipate.
The fiscal deficit is projected
to narrow to 10.5 percent in FY17, contingent on the government’s commitment and
ability to sustain its fiscal consolidation plan. With the implementation of
the VAT, the expected increase in the VAT rate to 14 percent from the current
13 percent, and efforts to improve tax collection, revenues are expected to
improve, while expenditures will continue to be contained.
The current account deficit is
expected to start improving in FY17, supported by a positive exchange rate
effect and an increase in remittances transferred through formal channels.
In the near term high inflation
is likely to have negative short-term effects on households. Current efforts to
improve
targeting in the food smart-card
program, currently used to protect the vulnerable population from food price
shocks and ensure a minimum level of food security, could provide additional
resources for an improved safety net.
Risks and challenges
Policy slippage and absence of
real-sector reforms may negatively impact the anticipated economic recovery.
Deteriorating security risks can adversely affect the recovery of the tourism
sector, traditionally a main source of revenue and foreign currency.
On the social front, resources
from fuel subsidy reform to be allocated to social programs may be lower than
expected
due to currency depreciation, but
efforts should continue to improve the efficiency of the safety net system.
Sustained high unemployment may lower households’ ability to improve their
living conditions.
Key Economic Indicators 2014 2015 2016* 2017* 2018 2019
Real GDP Growth (%) 2.9 4.4 4.3 3.9 4.6 5.3
Inflation Rate (%)
10.1 10.4 10.2 20.1 14.2 11.3
Current Account Balance (% of GDP) -0.9
-3.8 -6.1 -5.5
-4.4 -3.8
Fiscal Balance (% of GDP) -11.5 -11.0 -12.1 -10.5
-9.2 -7.3
* forecast
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
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US Dollar |
1 |
INR 65.04 |
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|
1 |
INR 92.28 |
|
Euro |
1 |
INR 80.62 |
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EGP |
1 |
INR 3.68 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
: |
NIS |
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Report Prepared
by : |
TRU |
RATING EXPLANATIONS
|
Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on
secured terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
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 are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
·
Promoters
/ Management background
·
Payment
record
·
Litigation
against the subject
·
Industry
scenario / competitor analysis
·
Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.