CAIRO: Egypt's Arab Cotton Ginning Company (ACGC) is splitting off its real estate holdings from its core cotton production business by offering its land for real estate projects, chairman Hani Olama said in conference Sunday. The new real estate company will focus on investments in housing, tourism, and commercial development, taking advantage of ACGC's current land bank which exceeds 600,000 square meters in 13 locations around Egypt. "The land was traditionally utilized to house gins that are currently being moved to new less costly industrial zones situated further away from residential areas, according to a statement. ACGC will re-acquire 100 percent of the new company via a share swap, giving it a 50 percent stake or more in five companies, which qualifies it as a holding company, Olama said. The company's restructuring process is expected to take four months. The new real estate company will focus on residential housing projects particularly for the youth. The projects will be carried out in partnership with developers, Olama said. It will also venture into commercial and tourism projects. Asked if this is the right time to make this kind of move, Olama said the crisis has bottomed out. "We were planning to shut down for a month in July 2009, Olama said, and last May, the company began taking Fridays off after accumulating 900 tons of inventory in storage. However, the pace picked up last June and inventory volume has since declined to 100 tons, which prompted ACGC to turn the gins back on every Friday. ACGC was planning to acquire four companies last August 2008, Olama said, but as prices peaked, they adopted a wait-and-see policy "We were lucky to hold these deals one month before the market crashed, Olama said. "We expect that by the beginning of the year [2010], it will be business as usual, he added. On ACGC's core ginning business, Olama said that 50,000 machines will arrive in 2010. ACGC was first established in 1963 as state-owned company and was privatized in 1997. Its business activities include textile, agricultural industries and real estate. Sixty percent of ACGC's shares are offered on free float and 40 percent is owned by strategic investors.
