By Ed Attwood
Billionaire Naguib Sawiris, one of Egypt’s richest men, talks exclusively to Arabian Business about his latest venture in Cyprus, investing in some of the world’s toughest locations, and why he hasn’t given up on his plan to create an island community for refugees.
Please don't characterise me as a spoilt rich guy,” laughs Naguib Sawiris.
One of Egypt’s richest men, with a fortune estimated at roughly $4bn, Sawiris may have been born into an already wealthy family, but his track record over the years has seen him branch out on his own to make money in some of the world’s riskiest hot spots.
But this is a man that — despite his wealth — doesn’t stand on ceremony. In Cyprus to mark the launch of construction on the $250m Ayia Napa Marina — in which he is the anchor investor — Sawiris is clearly in a jovial mood, armed with an array of one-liners and jokes that has his public relations team smiling nervously.
Now aged 62, Sawiris has earned the right to say what he pleases.
The eldest son of Onsi Sawiris, the man who founded the Orascom family business, he has certainly inherited his father’s entrepreneurial spirit. While brothers Nassef and Samih took over the construction and development arms of Orascom, collectively, Naguib founded and developed first the railways and subsequently the IT and telecoms side of the business. As the head of Orascom Telecom Holding (OTH), and of Wind Telecom, the firm which had a controlling stake in OTH, Sawiris quickly grew the company into one of the world’s largest emerging markets telecoms players.
With assets in Africa, the Middle East and Asia, OTH soon became a plum acquisition target, and in 2011, Russia’s VimpelCom bought Sawiris’ telecoms business for $6.5bn, creating what was at the time the world’s sixth-largest mobile telco.
Sawiris clearly had no intention of resting on his laurels. As part of the VimpelCom deal, the tycoon spun off some of his remaining telecoms assets into Orascom Telecom Media and Technology Holding (OTMT), which he still chairs today.
But since 2016, the Egyptian tycoon has branched out considerably.
“I’ve diversified since I sold the telecoms venture so I went into real estate, financial institutions and mining,” he says. “And in mining, I’ve done very well so I’m very hot on mining now. It was a new experience for me, so I had to learn the processes and everything.”
Much of Sawiris’ interest in mining has come through La Mancha, his family’s private resources investment vehicle, of which he is chair. Tie-ups with strategic partners mean that the firm is already active in Africa and Australia, primarily extracting gold and copper. Recent visits to both Argentina and Brazil have also convinced him to look further at opportunities in South America, as well.
“Argentina has been closed for 12 years — there have been no concessions, no exploration, nothing has happened,” Sawiris says. “Everything is there. This new government, the president [Mauricio Macri] is an excellent guy, he meets investors personally. He has a team of ministers, all of whom are very educated and very shrewd, so the prospects are high.
“It’s the same in Brazil, which is moving from socialism to a more right-wing government. It’s doing the right thing, trying to fix the economy and stop corruption. Both countries are now on my radar.”
By focusing on countries that have had well-documented problems in the recent past — the administration of Argentina’s previous president, Cristina Fernandez de Kirchner, was haunted by accusations of corruption and Brazil’s erstwhile leader Dilma Rousseff is currently being impeached — Sawiris is following a policy that has seen him invest in some of the world’s riskiest economies.
Those have included Algeria (“the worst experience of my entire life”), Iraq, the Democratic Republic of the Congo and even North Korea, where he signed a deal in 2011 to help build the country’s first mobile phone network, although that process has not been without trouble.
Against those experiences, the Cypriot investment looks far more secure, despite the memories of a cash crunch that forced the island nation to the verge of bankruptcy in 2013. The country has suffered a severe three-year recession since then, but with economic growth projected by Standard & Poor’s to reach 2.7 percent this year, it seems matters are finally looking up.
“You get the maximum profit when you go to a country at its lowest point – this [Cyprus] is the least risk I’ve taken in my whole life,” Sawiris jokes.
Elsewhere around the world, Sawiris is also working on tourism projects on the Caribbean island of Grenada and in Kazakhstan. He says that despite significant investments in Europe — mainly in Italian telecoms — his business won’t be too affected by Britain’s recent decision to leave the Eurozone, a decision he describes as “crazy”.
He is similarly unperturbed about the outcome of the presidential vote in the US in November, although he does describe it as the “worst election ever in the history of the America”. Sawiris’ lack of concern is down to the checks and balances in place in the US political system, which allow Congress and the Senate to curb potential presidential excesses.
“Even if Mr Trump wins, he will still have to deal with a Republican Congress and they will not unite behind him,” he says. “He can’t go and do the stuff he says — like build a wall, or prevent the Muslims from coming in.
“And she [Hillary Clinton], in my opinion is going to follow what Obama did, and for me Obama is the worst president in history. He’s responsible for all the mess we’re seeing in the Middle East”.
Sawiris says he sees no prospects for further real estate development in the Middle East outside Egypt, referring to the instability in many parts of the region and a lack of interest in foreign direct investment in the Gulf.
For the Ayia Napa project, Sawiris can draw on his experience as a real estate developer back home in Egypt. His family is responsible for one of Egypt’s top resorts, El Gouna, on Egypt’s Red Sea coast, while Nile City Towers looms large over central Cairo.
However, plans announced last year to inject $500m into the Egyptian economy via a string of investments in renewable energy, infrastructure and logistics have not come to fruition.
“We have the projects ready and we want to do them, but unfortunately all the necessary approvals from the government side have not been done,” Sawiris says.
That news is not particularly good for Egypt’s flailing private sector, which has been suffering from weak economic growth, flagging investor confidence, currency concerns and rising poverty. Plans from foreign investors to develop new megaprojects in the country — including Dubai’s Arabtec and Abu Dhabi’s Eagle Hills — have stuttered even as public sector projects such as the $8bn new Suez Canal have strolled to completion.
As one of Egypt’s largest private sector employers, Sawiris is diplomatic about the current state of play in the country, although it’s clear that employment remains a considerable concern. However, his interest in politics – Sawiris is the founder of the Free Egyptians party, and was vocal in his opposition to the rule of former Islamist president Mohammed Morsi – appears to be on the wane.
“Politicians don’t have a heart – that’s why I’m retreating from politics,” he says.
When questioned about the ongoing refugee crisis, particularly in light of the deaths of 177 migrants after a boat capsized off Egypt’s coast in late September, the tycoon says more needs to be done to create a more amenable atmosphere at home.
“Look, the Egyptian government should create jobs, it should provide the atmosphere for investment, so we can invest more and create good jobs so people don’t need to leave,” Sawiris says.
“And not just jobs — well-paid jobs, because these people are not leaving because they don’t have jobs. They just don’t want to do the jobs they have in Egypt because they’re low paid. So the government should ease the investments and push so we can prevent that.”
Last year, Sawiris made global headlines when he offered to buy a Greek island to house some of the hundreds of thousands of refugees who have fled the Middle East and Africa, many of whom are still based in camps in the European nation. Although that idea was largely ignored by the Greek government, the billionaire doubled down on his offer in May by offering $100m and other aid to any government that would secure him land on which he could build a refugee community.
Sawiris says that despite the impasse, he is still committed to the idea, although he is scathing about the lack of response from Greece.
“I would say the European Union should take a more severe stance with Greece,” he points out. “Greece has not done anything and I’m personally frustrated because I don’t consider myself that I failed with my idea.
“It failed because I only needed one thing — government approval. I can’t just take people and put them on an island. Lots of people on my Twitter account said: ‘Yeah, where is your island?’ And they don’t understand. I’m not the kind of guy to say something he doesn’t mean.”
In an effort to broker a deal, Sawiris said that he went to see the head of the UN High Commission for Refugees in Geneva who promised to speak to Greek Prime Minister Alexis Tsipras on his behalf. However, he never heard back. Regardless, the billionaire says that either this project, or a similar one like it, will remain high on his agenda.
“I feel that I’ve done my part in making money,” he says. “What I want, before I leave, is to do a great humanitarian thing, that people will remember me for. My project was this one.
“You know, I’m a very emotional person. So when I saw the pictures of the boy on the sand [the images of drowned Syrian toddler Aylan Kurdi, which went viral last year], I always try to pick parallels. What if this was my son? I’m lucky, I was born in a good family and I was never in that situation.
“I got very emotional and I decided this was something I wanted to do. Nobody’s going to remember a billionaire who just has a lot of money. If I don’t find that project, I’m sure God will send me something similar to do. I still have time to do something like that and I’d love to do it.”
Sawiris may have had considerable success over the years, but if his humanitarian plans come off, he will also have left a genuine legacy. Rich? Definitely. Spoilt? Definitely not.
Ayia Napa Marina
Located just west of the Cypriot resort town, the developers behind the Ayia Napa Marina are hoping that the $250m megaproject will add a touch of glamour to a part of the island that is more usually associated with package holidays.
With two twisting towers, featuring 190 apartments, as well as luxury beach villas and a full-scale marina that can house 600 yachts, Egyptian investor Naguib Sawiris says that the project will allow Ayia Napa to compete with locations like the Greek island of Mykonos, which regularly draws deep-pocketed tourists to its beaches, bars and restaurants.
Sawiris is partnering up with Cypriot entrepreneur Gerasimos Caramondanis to build the marina, which is due to be opened in 2021 — although the Egyptian tycoon is hoping that it will be completed sooner.
“Why Cyprus? When I was 19 years old, I was studying in Zurich and I came here on holiday with a Swedish friend,” he says. “There were only two or three hotels here, but I fell in love with the island.”
The project is a significant boost for the Cypriot government and is one of the largest examples of foreign direct investment into the island’s troubled economy in recent years. The marina will also facilitate 800 jobs in the country.
“Naguib came in when we were at our lowest point,” says Stavros Caramondanis, the chief executive of Ayia Napa Marina.
Sawiris says demand for homes at the project – he has himself bought a penthouse apartment and a villa – has been strong, with especial interest from buyers in Russia, Lebanon and Egypt (the latter of which are both around 45 minutes away by plane). And this is also unlikely to be the last project that he helps to fund in Cyprus.
“We will and we are – but not now, this is a huge thing,” Sawiris says, when questioned as to whether he has further Cypriot deals in mind. “We want to make sure we’ve passed critical mass, so once we are at 60 or 70 percent of sales, we can start looking at another project.”For all the latest industry news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Great news and I have been following this project for some time We would love to see some over this side of the island Polis and Latchi in Chrysochou Bay, north west side of the island its the baby side of the island ripe for investment