Egypt and the Swiss Textile Machinery Industry

Hello out there!

24.10.2019: Would you believe it, this is my first blog – initially on LinkedIn. My goal is simple: To share some of my thoughts and/or professional experiences. I hope you will find some of them interesting and – even better – that you add your points so we can initiate a dialogue. I plan to focus on economic topics, opportunities and the positive side of things. My blogs can of course only be snapshots and will never be complete – they need to be short, right? And by no means, do I claim that my thoughts or my way of looking at things are “the eternal truth”. But for what it is worth, they are my thoughts.

The reason for my first blog: I have just returned from the Swiss Textile Machine Symposium 2017 in Cairo. As a mandate, I had the privilege to represent Maag Brothers Machine Works Ltd., a boutique producer of state-of-the-art, tailor-made inspection and making-up textile machines from Zürich.

In some ways quite a familiar activity actually. During the last six years as former head of Europe, Africa and Central Asia for Switzerland’s export and investment promotion agency Switzerland Global Enterprise (S-GE), I was used to travel extensively in my vast region. And together with my team in 13 countries and with many partner organizations I was used to represent and help the Swiss economy abroad.

Our task at S-GE was as simple as it was important: Support the Swiss export industry to access new markets and find foreign companies with an interest to invest in Switzerland. Covering over hundred countries and helping the entire Swiss economy across all major sectors (e.g. Life Science, Machinery, Food, ICT, Luxury Goods, Cleantech, Infrastructure etc.), it is fair to say that I had a very diversified job.

So my first blog could have easily been about e.g. any of the 150+ investor promotion events we hosted in many countries across Europe. Or about a Swissrail fact finding mission to Russia, a cleantech business & science delegation to Germany, our yearly Swiss Pavilion at the Mobile World Congress in Barcelona, a cantonal delegation to South Africa, a product launch at the Swiss embassy in London, our activities at the World Expo 2015 in Milano, or about opening our new offices in Astana, Lagos, Istanbul, Stockholm, and, and… But now, my first blog focusses on Egypt and the Swiss textile machine industry. And why not?

So coming back to my mandate: I knew a little bit about the textile machine business but taking into account that this was my first professional visit to Egypt, this task was quite a challenge. The Symposium was flawlessly organized by the team of Swissmem, the Swiss industry association representing our important mechanical and electrical machine industry, and their Egyptian partners of Nobletex, the biggest textile machine agent in Egypt. All went very smoothly and we as participants were spoiled with a perfect program at the Symposium and some unforgettable side events. Here are some of my observations:

With its population of approximately 90 million and its strong and unique culture, Egypt is a fascinating country. After difficult years following the revolution in 2011 and the change of power to the current President Abdel Fattah Al-Sisi, things seem to stabilize and the economy has begun to rebound.

Despite a solid GDP growth rate of about 4%, Egypt faces major challenges such as strong population growth (1.8%), high unemployment (40% youth unemployment), double digit inflation (12%), ever growing government debt (currently 95%), big trade deficit, lack of foreign currencies etc. etc. Not a pretty picture. But after the IMF agreed to a 12 billion USD credit for 2016-2019 and thanks to a very business focused agenda including various reforms by the current government, there are important business opportunities for the right kind of products, companies and mindsets.

For Egypt, Switzerland is the 16th most important source of import (mostly pharma and machines) and 21st most important export partner (mostly textiles). Overall the trade volume is about 1 billion CHF, which is remarkable.

Cairo, this ever expanding, buzzling capital of 20 million and host to our Symposium can definitely not be grasped during such a short visit. Just driving with a bus from airport to hotel, hotel to restaurant etc. doesn’t do the job. But it will amaze you about Cairo’s size and energy, the constant traffic chaos, the waste all over and of course about all the people, animals and street scenes you can observe. Fascinating.

Even after my many professional and personal experiences in most regions of the world, business behavior in North Africa and the Middle East are basically unknown to me. Strongly grounded in its religion, its unique culture and pace of living, the way to do business in Egypt is unique. As always when I travel abroad on business, I tried to prepare myself by reading “Kiss, Bow or Shake Hands”, a great book by Terry Morrison and Wayne Conaway which gives you great insights about the business protocol in more than 60 countries. You know, things like don’t use the left hand, take off your shoes, don’t give flowers as a gift to women, and in general what you should say or do or – as importantly – what you shouldn’t say or do.

However, things onsite at the 2 day Swiss Textile Machinery Symposium turned out to be much less complicated. I found the Egyptian businessmen and -women in general to be very kind, approachable and fairly easy to interact. Amongst the guests at the Symposium, there was quite a variety ranging from very westernized to more Arabic looking and acting counterparts. Also, English or French skills range from perfect to nonexistent. On the other side, I was amazed how many Egyptians speak German. Women are by the way generally covered. If not, you might actually be talking to a Coptic Christian woman (Copts form about 10% of Egypt’s population). What seems to be the same for all Egyptians (and Syrians who become more and more present in the Egyptian textile sector), they all have strong negotiation skills and know exactly what they want. And they like to smoke! Everywhere.

If you do business in Egypt, be patient, expect to spend lots of time and don’t hope for immediate success. In every in-depth business meeting I had, I learned at least as much about the counterpart’s social life, family, history, Egypt and his/her personality than about the concrete business topic. More than once I was invited to a private home of a business partner when I return next time. E.g. one new Egyptian acquaintance explained with pride that he was a great chef and that he would be honored if he could cook his outstanding seafood and pasta for me in his private home in Cairo. There seems to be always a personal note to business in Egypt. I quite like this. But on the downside, this will ask a lot of your personal time and commitment. As a general rule, you cannot achieve your business objectives in just one visit. Meaning, I might actually get to taste the seafood pasta soon!

As for the Symposium: I felt that the attendance of about 200 Egyptian businessmen and women on each day was impressive. Egypt has a traditionally strong textile industry. It is particularly known for its world-class cotton. And with Egypt’s current need for economic growth and for more foreign currencies, additional exports are a very important success factor (together with more tourism, more remittances and more income from the Suez canal and from commodities). And within exports, the textile sector plays a key role. This was reflected in the number and the quality of the Egyptian attendance.

As it is for many sectors in the economy, the Egyptian military is a strong player also in the textile sector. So be aware, many of the large contracts are commissioned by the military/government and are subject to very specific decision processes (public tendering).

Just as everywhere globally, probably the most important key to success for the Swiss textile machine exporters in Egypt is the choice of their local partner/agent. The symposium was a great opportunity for the Swiss to meet old and/or new agents and to deepen their relationship.

There is a longstanding tradition between the Swiss textile machinery industry and Egypt (e.g. Maag brothers exported their first machine to Egypt in 1938) and I feel that despite the weak Egyptian pound and the usually higher priced, top-quality range of Swiss products, the Egyptian textile industry can strongly benefit from the Swiss textile machines. And it seems that I am not the only one feeling this way: Having spoken to some of the participating CEOs or Head of Sales of companies such as Rieter, Stäubli, Saurer, Amsler, SSM, Jakob Müller, Benninger and many more, all of them seemed satisfied and even some new business was done.

So overall I think that this Swissmem format of a yearly Swiss Textile Machinery Symposium in important, new textile markets (last year they were in Iran) is an efficient way to boost business. And it is also a great opportunity for the participants of the textile machinery industry to network and to exchange experiences amongst each other.

As for me, it was a very worthwhile and memorable trip basically because of three reasons. First, I was able to accomplish the objectives given to me by the CEO of Maag (which always comes first). Secondly I profoundly deepened my know-how of Egypt and the textile machinery industry. And last but not least, I returned to Switzerland with a wonderful new network consisting of a very supportive, enthusiastic and fun group of decision makers of the Swiss textile machinery industry and of some new Egyptian business partners.

As a last point: I was thoroughly impressed by what the Swiss textile machinery industry has to offer. I continue to be amazed how our small country can create so many outstanding, innovative and often world-leading products across many sectors. If you want to know more about what the Swiss textile machinery industry has to offer, check it out here: FACTOR+

What do you think about this? Please share your thoughts!