Al Ahram Beverages

Case Analysis
Al Ahram Beverages Company “2”

By:
Marmina Abdel-Malek
900 00 1809
Fall 09 I- Overview:
ABC was a public company originally found in 1897, that has been nationalized in 1963, until it had been privatized in 1997 and acquired by the Luxor Investment group represented by Ahmed el Zayat as a CEO and board chairman. Luxor group is an American investment group focusing on investment more than the business itself.

Zayat’s vision and objectives: Marinating local market dominance and transforming the company from a domestic brewer to a leading edge multinational beverages company.

II- Situation Analysis:

- General Environment Analysis o Demographic Trends
 350 million Muslim in the MENA region
 Platform for easy access to many countries
 Population size: 60.2 million in 1994
 Age structure: 60% under 25 years
 Ethnic mix/religion: 94% Muslims and 6% Coptic Christians o Economic Trends
 GDP increasing steadily (6.11%)
• Average per capita is USD 50/ month
• Inflation decreased from 21.10% in 1992 to 8.3% in 1996
• Different government trend: deregulation of the economy
 Privatization of publicly owned enterprises
 Liberalization of financial markets and trade
 Trade liberalization efforts
 Removing the ceiling on nominal interest rates
 Depreciation of the EGP against the dollar o Political Legal Trends
 Tax holidays for newly manufactured or upgraded plants
• 6 years tax holiday for Sharkia plant
• 10 years tax holiday for Nile Brewery
 High Tax on imported beer and spirits
• 1200% for non-touristic areas and 300% for touristic.
 High duties on wines were to take place for the coming 4 years.
 Stable political environment: peaceful relations with neighboring countries & no military disputes
 Sale of alcohol is legal.
 The Egyptian labor law governs the termination of permanent or temporary employees; consequently a company cannot easily fire an employee.

o Socio-cultural trends
 Religious