Coffee With: Ahmed Galal Ismail, CEO of Majid al Futtaim: Since entering the Egyptian market in 2002 with the launch of City Centre Maadi, Majid Al Futtaim (MAF) has rolled out a significant footprint here in retail, real estate, and entertainment portfolio. Present in 14 cities and welcoming 90 mn visitors annually, MAF’s Egyptian investments include four shopping malls, 70 Carrefour stores, and six family entertainment centers.

We sat down with MAF’s CEO, Ahmed Galal Ismail (LinkedIn), to discuss the company’s strategy moving forward, the potential Egypt holds in terms of investment, and what policies will enable MAF’s growth moving forward.

The key takeaways:

  • MAF could invest EGP 25 bn into expanding Carrefour in the medium term;
  • It aims to double Carrefour branches by 2025 and grow the network to 300 by the end of the decade;
  • It wants a presence in 25 cities around the country by 2030;
  • Egypt accounts for 10% of the company’s revenues.

Edited excerpts of our conversation:

MAF + EGYPT-

We were probably one of the earliest foreign direct investors in the country and we’ve invested USD 2.5 bn to date without any local bank facilities. All our financing comes from MAF overseas directly into the Egyptian economy. We employ 9k Egyptians and have indirectly created roughly 144k jobs over the past 25 years through our investments in the local supply chain and local industries.

Our investments here have accelerated in the past 12 to 15 years with the opening of City Center Almaza, Mall of Egypt, and the growth of Carrefour’s business. We believe we’re at a point in time today where we’ll probably see another J curve of growth in Egypt for MAF.

ON STRATEGY-

In terms of a medium-term investment plan, there’s an opportunity to deploy probably another EGP 25 bn into the Carrefour network expansion. We intend to double the number of Carrefour branches by 2025, and we could double again by 2030 and have 300 stores present in Egypt. We’re also looking to grow outside the major cities. We’ve just opened Carrefour in Port Said and Port Fouad and we plan to have a presence in 25 cities by 2030. We’re also looking at new retail formats, we launched a discount retail format called Supeco and the first few stores are off to a good start. We can probably open another 140 stores.

Youth is a very interesting segment in Egypt — their consumption habits in terms of media, retail and so on. We launched Lokal in our malls as a way to showcase new upcoming young Egyptian designers and brands, who can hopefully one day graduate into a store. We want to create a world-class office park near Mall of Egypt and continue to grow in entertainment. We recently entered into local content production and co-produced Voy, Voy, Voy along with aiding in its promotion at home and abroad.

We export a lot of products, agricultural products, food products throughout our Carrefour network in 16 markets, and we’ve established our Global Solutions business headquarters here in Egypt, and we export services on the back of that to all of our markets in tech services, data services, procurement services, accounting services and more.

You could look at the macro headwinds on FX as an opportunity to export services and do the same with inflation and conclude it’s an opportunity for discount retail, but it’s not just a commercial opportunity. It’s also an opportunity for us to continue to be as Egyptian and as local as we possibly can while bringing in best practice, global standards, and new experiences.

ON REVENUES-

Egypt represents 10% of our total revenues as MAF and we generate nearly EGP 23 bn in revenues annually. If we think 10 years ahead — and that is the mental clock of the company, not quarter to quarter or year to year — that number could reach EGP 100 bn in revenue, and will require continued investment and reinvestment as we move forward.

It’s a young market and it’s growing fast. The share of modern retail when we first entered the market was around 6%, which has now grown to around 20% with the help of our investments and others. As the share of modern retail grows from total retail, it helps control inflation, improves food quality, paves growth avenues for local farmers and manufacturers, contributes more taxes, and provides more jobs. I think the modern retail angle is very important for the long-term prospects of any market.

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