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MIRA INFORM REPORT
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Report No. : |
501711 |
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Report Date : |
12.04.2018 |
IDENTIFICATION DETAILS
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Name : |
EL MOHANDES FOR
TRADING & MANUFACTURING MODERN CHEMICALS |
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Registered Office : |
Cairo Desert
Road, Km 71, Janaklis Entrance, Km 15, Abu El Matamir, Beheira 22732 |
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Country : |
Egypt |
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Financials (as on) : |
31.12.2017 |
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Year of Establishment : |
1998 |
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Com. Reg. No.: |
7090, Kafr El
Dawar |
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Legal Form : |
Limited Liability
Partnership |
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Line of Business : |
·
Manufacture of chemical products used in the
paint industry. · Subject’s product range includes, nitro- cellulose thinner, paints & coatings solvents, ink and typography solvents, cleaning solvents and all kinds of industrial solvents. |
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No. of Employees : |
450 |
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 : |
Good |
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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 :
EL MOHANDES FOR TRADING & MANUFACTURING MODERN
CHEMICALS
Country of Origin : Egypt
Legal Form :
Limited Liability Partnership
Registration Date : 1998
Commercial
Registration Number : 7090, Kafr El Dawar
Tax Card Number : 566-975-386
Issued Capital : £E
1,000,000
Paid up Capital : £E
1,000,000
Total Workforce :
450
Activities :
Manufacturers of chemical products used in the paint industry.
Financial Condition : Fair
Payments : No
Complaints
Operating Trend : Steady
Person Interviewed : Mostafa Jaber,
Sales Executive
COMPANY
NAME
EL MOHANDES FOR
TRADING & MANUFACTURING MODERN CHEMICALS
ADDRESS
Registered & Physical
Address
Street : Cairo Desert Road, Km 71
Area : Janaklis Entrance, Km 15, Abu
El Matamir
Town : Beheira 22732
Country : Egypt
Telephone : (20-45) 2452103 / 2403703 / 2430456 /
2430455 / 2430454 / 9515912 / 24052102
Facsimile : (20-45) 2422135 / 2430135
Mobile : (20-10) 5389800 / 5838530 /
(20-100) 7159777 / 6223394 / 3138552 / 5014687 / 1114881 / 0414198
(20-101) 0700055
Email : info@el-mohandes.com / trading@el-mohandes.com
Premises
Subject operates from
a suite of offices and a factory covering an area of 36,000 square metres that
are rented and located in the Suburban Business Area of Beheira.
KEY
PRINCIPALS
Name Position
·
Mohamed
Mahmoud Abu El Kheir Managing
Partner
· Abdel Fattah Khalifa
Omar Finance
Manager
·
Abdel
Wahed Eissa Production
Manager
·
Seif
Mahmoud Export
Manager
·
Mostafa Jaber Sales
Executive
LEGAL
FORM & OWNERS
Date of Establishment : 1998
Legal Form :
Limited Liability
Partnership
Commercial Reg. No. : 7090, Kafr
El Dawar
Tax
Card No. : 566-975-386
Issued Capital : £E 1,000,000
Paid up Capital : £E 1,000,000
Name of Partners Percentage
·
Mohamed
Mahmoud Abu El Kheir 28.42%
·
Kasem
Abu El Kheir 24.18%
·
Abd El
Wahed Saad Essa 23.32%
·
Atef
Mohamed Moussa 14.20%
·
Mohamed
Ali El Akraa 7.92%
·
Abd El
Rahman Shaaban Abu El Kheir 1.96%
OPERATIONS
Activities: Engaged in the manufacture of chemical
products used in the paint industry.
Subject’s product range
includes, nitro- cellulose thinner, paints & coatings solvents, ink and
typography solvents, cleaning solvents and all kinds of industrial solvents.
Production Capacity: 70,000 MT/Year
Import
Countries: Belgium, the
Netherlands, Jordan and the United States of America.
International Suppliers:
·
Henkel Germany
·
Daewoo
Chemicals United Arab Emirates
·
SABIC Saudi Arabia
Operating Trend: Steady
Subject has a
workforce of approximately 450 employees.
FINANCIAL
DATA
Financial highlights provided by local
sources are given below:
Currency: Egyptian Pounds (EGP)
Year Sales
Year Ending
31/12/14: EGP
23,280,000
Year Ending
31/12/15: EGP
25,000,000
Year Ending
31/12/16: EGP
26,835,000
Year Ending
31/12/17: EGP
28,000,000
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
·
Al
Watany Bank of Egypt
PO Box: 750
Cairo
Tel: (20-2) 23379363
Fax: (20-2) 23772959
·
Misr
International Bank (MIBANK)
14 Alfy Street
PO Box: 631
Cairo
Tel: (20-2) 25931002
Fax:
(20-2) 25912306
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 Mostafa Jaber, Sales Executive
Please note that
the correct name of the subject is “El Mohandes For Trading & Manufacturing
Modern Chemicals” and not “Elmohandes”.
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
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 65.13 |
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1 |
INR 92.52 |
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Euro |
1 |
INR 80.59 |
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EGP |
1 |
INR 3.71 |
Note:
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
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DIV |
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Report Prepared
by : |
NIT |
RATING EXPLANATIONS
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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.