National budget to reach LE 312.6 bln Prime Minister Ahmed Nazif announced the draft of the government budget for fiscal year 2008/2009, which is set at LE 312.6 billion, up 26 percent from LE 244 billion in FY 2007/2008. The new budget targets a growth rate of 7.5 percent, versus 7.1 percent in the previous year, by increasing private sector participation in implementing the public investment plan to reach at least 70 percent versus 62 percent in the current year. It also plans to increase the average real per capita income, reducing unemployment rate and developing the companies export ability. Arafa eyes European clothing brand Reuters reported that Arafa Holding is seeking to spend at least $300 million to buy men s clothing brands in Italy or Germany this year to raise the company s profile, the firm s chairman, Alaa Arafa, said. Arafa, which agreed last month to pay 21.5 million sterling ($43 million) for British menswear retailer Speciality Retail Group (SRG), also made between $30 million and $31 million in net profit last year, up about 26 percent from the previous year, Arafa said. Arafa Holding s financial year ended March 31. Our sales were up in the UK and Germany and we were more efficient, Arafa told reporters. Arafa, founded in 1907 as a fabric retailer in the Nile delta, says it is Egypt s oldest textile company. Exports account for 90 percent of Arafa s sales, with about 70 percent to the UK and 30 percent to the United States. Stores including Harrods, Debenhams, Marks & Spencer, and Bloomingdales carry Arafa apparel, according to a company information book. Arafa, which also agreed to buy the wholesale business of clothing company John Langford, was in talks with companies in Europe, Arafa said. We have up to $300 million ready and we want to buy an international brand, Arafa said. We could spend more than that, he said, adding he hoped for two acquisitions this year. Italy is a dream for us, he said. If we have an international brand in Italy this will change our dimensions. An economic slowdown in Europe had made prices of possible targets more attractive, he said. -Agencies Dana Gas imports from Iran to reach UAE by mid-2008 Dana Gas is set to begin importing gas from Iran by the middle of this year and also expects its gas projects in Iraq to start operating at the same time, it said in a statement yesterday. For 2008, Dana Gas aims to build on the strong foundations of 2007, said Hamid Jafar, the company s executive chairman, at yesterday s annual general meeting. Khaleej Times reported that he also stressed that 2007 saw Dana Gas achieve its first revenues and operating income. This year the company also plans to develop gas cities in other countries in the Middle East and North African region and is looking to acquire companies in the Gulf and North Africa. Aside from its expected start-up operations in Iran, the UAE natural gas producer and distributor will also drill 19 new wells in Egypt to increase production and take advantage of the high prices of energy. While building upon its positions and assets in the UAE in 2007, the company also made important entries into all areas of the natural gas business in Egypt and Iraq s Kurdistan region. Jafa said his company has established strong positions in the UAE, Egypt and Iraq due to high oil prices and increased interest in the energy sector worldwide. These positions cover all areas of the natural gas business from exploration and production to processing and pipeline transmission as well as gas marketing and downstream projects. Dana Gas posted revenues in excess of 1 billion dirhams for 2007 and had total assets grown by 59 percent to 10.8 billion dirhams from the previous year. Vale raises iron ore prices in Middle East The price of feedstock for steel mills in the region could rise by nearly 90 percent on 2007 prices as a result of negotiations between Brazilian iron ore producer Vale and Middle Eastern steel makers. Vale has raised the cost of direct reduction pellets sold to four of the region s steel producers by 86.7 percent. The rise is the outcome of negotiations between Vale and Egypt s Ezz Steel; the Libyan Iron & Steel Company (Lisco); Qatar Steel Company; and Saudi Basic Industries Corporation (Sabic). This is a significant price increase, says Mohammed Al-Jabr, chairman of the Arab Iron & Steel Union. There was the expectation that there would be some increase in prices, but not to this level. This could be a disaster for the region s steel industry, says a senior executive at a steel production facility in the Gulf. Steel manufacturers will not be able to absorb that price rise. It will be passed on to consumers. Tourism arrivals up Tourist arrivals reached 973,700 in February 2008, up 6.3 percent from January 2008 and 25.6 percent from February 2007. The number of nights spent in February 2008 reached 8.9 million, up 39.6 percent from a year before. Arrivals have been witnessing double-digit growth since February 2007. Tourist arrivals totaled 11.1 million in 2007, compared to 9.1 million in 2006. Betlone Financial said, "Despite the first quarter of the calendar year being a slow period, compared to other seasons, the drop in arrivals has slowed, compared to previous years, when arrivals dropped by a higher magnitude, reflecting the strong growth in arrivals, generally, and the growth in Arab and European tourism in off-seasons. "On an annual basis, arrivals jumped in 2007, as the effect of regional geopolitical turbulence led to more arrivals being channeled to Egypt, in addition to the effect of the Egyptian pound weakening against GCC currencies and the Euro and more tourist destinations becoming available in Egypt. We expect tourist arrivals to remain strong in 2008, averaging 12 million in 2008.
