MIRA INFORM REPORT

 

 

Report No. :

511912

Report Date :

31.05.2018

 

 

 

IDENTIFICATION DETAILS

 

Name :

UNITED COMPANY FOR BIOLOGICAL INDUSTRIES (BIO EGYPT)

 

 

Registered Office :

84 Manial Street, El Manial, Cairo 11451

 

 

Country :

Egypt

 

 

Financials (as on) :

31.12.2017

 

 

Date of Incorporation :

15.02.2007

 

 

Com. Reg. No.:

22680

 

 

Legal Form :

Limited Liability Company

 

 

Line of Business :

Subject is engaged in the manufacture of vaccines, biopharmaceuticals, biotechnical and pharmaceutical preparations

 

 

No. of Employees :

116

 

 

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23rd January 2017)

 

MIRA’s Rating :

A

 

Credit Rating

Explanation

Rating Comments

A

Acceptable Risk

Business dealings permissible with moderate risk of default

 

Status :

Satisfactory

 

 

Payment Behaviour :

No Complaints

 

 

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

 

Country Name

Previous Rating

(30.09.2017)

Current Rating

(31.12.2017)

Egypt

C1

C1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderately Low Risk

 

B1

Moderate Risk

 

B2

Moderately High Risk

 

C1

High Risk

 

C2

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.

 

Source : CIA

 

SUMMARY

 

Company Name                                    : UNITED COMPANY FOR BIOLOGICAL INDUSTRIES (BIO EGYPT)

Country of Origin                                   : Egypt

Legal Form                                           : Limited Liability Company

Registration Date                                  : 15th February 2007

Commercial Registration Number           : 22680

Issued Capital                                       : EGP 65,000,000

Paid up Capital                                     : EGP 65,000,000

Total Workforce                                                : 116

Activities                                               : Manufacturers of vaccines, biopharmaceuticals, biotechnical and

                                                              pharmaceutical preparations

Financial Condition                                : Fair

Payments                                             : No complaints

Operating Trend                                    : Steady

Person Interviewed                                : Hany Mohamed Tareef Ali Gad, Director & Finance Manager

 

 

 

COMPANY NAME

 

UNITED COMPANY FOR BIOLOGICAL INDUSTRIES (BIO EGYPT)

 

 

ADDRESS

 

Registered & Physical Address

 

Street               : 84 Manial Street

Area                 : El Manial

 

Town                : Cairo 11451

Country             : Egypt

 

Telephone         : (20-2) 23624442 / 23624441

Facsimile          : (20-2) 23685520

Mobile              : (20-100) 0001503

Email                : info@bioegypt.net

 

Premises

 

Subject operates from a medium sized suite of offices that are rented and located in the Central Business Area of Cairo.

 

Branch Office (s)

 

     Location                                                                                           Description

 

·       CBC Industrial Unit                                                                            Factory premises

Factory No. 38, Plot No. 17717

Giza

6th of October City

 

 

KEY PRINCIPALS

 

     Name                                                           Nationality                     Position

 

·       Mohamed Ali Salem Al Abbadi                      Egyptian                       Managing Director

 

·       Hend Atif                                                     Egyptian                       Director

 

·       Hany Mohamed Tareef Ali Gad                      Egyptian                       Director & Finance Manager

 

·       Mohamed Galal                                                  -                             Investment Manager

 

·       Hanan Salem                                                      -                             Export Officer

 

 

LEGAL FORM & OWNERS

 

Date of Establishment  : 15th February 2007

 

Legal Form                  : Limited Liability Company

 

Commercial Reg. No.   : 22680

 

Issued Capital              : EGP 65,000,000

 

Paid up Capital            : EGP 65,000,000

 

Name of Shareholder (s)

 

·       Mohamed Ali Salem Al Abbadi

 

·       Hend Atif

 

·       Hany Mohamed Tareef Ali Gad

 

Notes to the legal Form

A LLC may be formed with a minimum of two shareholders and a maximum of 50 shareholders. The capital 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 LLC may be      100% owned by foreign investors. The minimum share capital required to form an LLC is EGP 50,000

 

 

OPERATIONS

 

Activities: Engaged in the manufacture of vaccines, biopharmaceuticals, biotechnical and pharmaceutical preparations.

 

Import Countries: India, China, Russia and the United States of America

 

International Suppliers:

 

·       Span                                    India

·       Arex                                     India

·       Ahlcon                                 India

·       Olympic Star Pharma            China

·       Novatek                               Canada

 

Clients:

 

·       Multipharma

·       Ibn Sina Pharma

·       Pharma Overseas

·       United Company of Pharmacists

·       The Egyptian Pharmaceutical Trading Company

 

Export Countries: Africa and GCC countries

 

Operating Trend: Steady

 

Subject has a workforce of 116 employees.

 

 

FINANCIAL DATA

 

Financial highlights provided by local sources are given below:

 

Currency: United States Dollars (US$)

 

Year                                                     Sales                           

 

Year Ending 31/12/16:                           US$ 10,000,000            

 

Year Ending 31/12/17:                           US$ 10,000,000            

 

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

 

·       Qatar National Bank

Al Maqrizi

Mansheya El Bakry

Heliopolis

Cairo

 

·       Audi Bank

90 Manial Street

     Al Manial

     Cairo

 

·       Commercial International Bank

1089 Corniche El Nil

Qasr An Nile

Cairo

 

 

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 Hany Mohamed Tareef Ali Gad, Director & 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

US Dollar

1

INR 67.63

UK Pound

1

INR 89.70

Euro

1

INR 78.20

EGP

1

INR 3.77

 

Note : Above are approximate rates obtained from sources believed to be correct

 

 

INFORMATION DETAILS

 

Analysis Done by :

NIS

 

 

Report Prepared by :

SYL

                                                


 

RATING EXPLANATIONS

 

Credit Rating

Explanation

Rating Comments

A++

Minimum Risk

Business dealings permissible with minimum risk of default

A+

Low Risk

Business dealings permissible with low risk of default

A

Acceptable Risk

Business dealings permissible with moderate risk of default

B

Medium Risk

Business dealings permissible on a regular monitoring basis

C

Medium High Risk

Business dealings permissible preferably on secured basis

D

High Risk

Business dealing not recommended or on secured terms only

NB

New Business

No recommendation can be done due to business in infancy stage

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)

 

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.