As part of the continuous efforts of The United Bank to maximize the volume of the Egyptian exports to international markets, the bank held last week its first specialized workshop in 2019 to increase the Egyptian exports of chemical industries.
In the presence of Mr. Walid Rashid, Vice President of Holding Company for Chemical Industries, Dr. Omar Al-Shennawy - Advisor to The United Bank’s Chairman for foreign trade financing and Mr. Mohamed Ghonaim - Head of Corporate Finance at The United Bank and representatives of a large number of subsidiaries of the Holding Company.
Dr. Omar Al-Shennawy gave a lecture on the most important means of payment in foreign trade as well as the financial and technical services provided by The United Bank in the field of financing and guaranteeing the Egyptian exports of financing programs and financial services unique to the bank, it is headed by financing and ensuring the risks of non-collection of exports in a number of international markets, whether European or African.
Memorandums of understanding between The United Bank and international institutions to ensure export risks
Dr. Omar Al-Shennawy said that The United Bank is in the process of signing a memorandum of understanding with the European Bank for Reconstruction and Development and the African Bank for Import and Export. Whereby each bank will guarantee and enhance documentary credits issued by local banks in the African continent, Eastern Europe and Central Asia for the Egyptian exporter.
As well as cooperation with the Egyptian Company for Export Guarantee to extend the financing coverage to cover the open account accounting system without the mediation of banks between the parties. The Egyptian exporter sends the shipping documents directly to the importer. The company's services extend to the Egyptian exports to cover all means of payment through the insurance policies, which reach 90% of the total proceeds if it fails to supply.
Dr. Omar El Shennawy explained that "The only condition for financing export contracts and credits is that the Egyptian exporter is able to comply with the controls set out in the contract or approval of the export, so he has prior experience in implementing such export business, and the pre-shipment financing ratio is determined according to the period of implementation, The profit margin of the exporter, and other rules that differ from one export contract to another.
He pointed out that the services of technical consultancy and digital services provided by The United Bank and facilitate to the Egyptian exporter time and effort and facilitate the financial transactions in foreign markets. In addition to the possibility of managing his money easily and easily through cash management, as well as the possibility of payment of government obligations 24 hours 7 days a week.
Challenges hindering the development of trade
Dr. Omar El Shennawy pointed out that there are five challenges facing the development of trade and increasing the volume of Egyptian exports worldwide, the most important of which are shipping, transport difficulties, logistics, financing problem, and ensuring export risks. For this reason, the United Bank was concerned with the export risk guarantee component and linked it to the previous financing decision on shipping.
Mr. Walid Al-Rasheed, Vice Chairman of the Holding Company for Chemical Industries, said that the chemical industry is part of the national industries, which Egypt has a strong competitive edge in international markets. Chemical industry is one of the most growing and exporting sectors. This is due to the increase in the volume of petrochemicals and the increase of some inputs for the plastics industry. There is a greater opportunity if the process of developing and improving these products is allowed as an alternative to importation.
Egypt's competitiveness globally
Commenting on the workshop, Mr. Ashraf El Kady, Chairman of The United Bank, said that increasing Egypt's competitive position is one of the objectives of the modern Egyptian state. This is the result of the economic, legislative, customs and tax reform measures and the development of the investment law. As well as the great development in the field of infrastructure and Egyptian ports such as: Sokhna, Alexandria and Damietta, all working with the latest technology as well as road networks linking the governorates of the Republic, which contributes to the speed of transport and reduce the final cost of the Egyptian product and thus a concession to global competition.
Deepening domestic manufacturing to face trade deficit
El Kady called for deepening domestic industrialization and increasing production and exports together to achieve sustainable economic development. This will be reflected on the citizen. The contribution of the industrial sector to the national product is still modest, which requires the concerted efforts of the government and the private sector.
Ashraf El Kady pointed out that the bank has developed an ambitious strategy to promote Egyptian exports and support the invasion of the world markets and benefit from the economic reforms adopted by the state in recent years, foremost of which is the liberalization of the exchange rate.
He added that the strategy depends mainly on benefiting from all regional and international banks and the Egyptian Export Guarantee Company to finance export operations and ensure the collection of Egyptian exports.