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EgyptOrascom Construction to Slash Egyptian Projects, Boost Global Expansion by 2026
3 min
Orascom Construction plans to reduce Egyptian projects to a third by 2026.
The focus shifts to international projects, seeking foreign currency-backed and economically stable opportunities.
Delayed payments from Egyptian authorities are improving but remain a challenge.
Domestic construction challenges prompt a shift, with international ventures in UAE and Saudi Arabia.
Orascom aims for stability and growth by diversifying in Middle Eastern markets.
Orascom Construction is set to significantly scale down its activity in Egypt, aiming to limit its projects there to just a third of its overall operations by 2026. According to a conversation between CEO Osama Bishai and Alsharq Business, this change is part of a strategic shift to ramp up their international presence.
Bishai explained that the company is becoming more selective when committing to Egyptian projects, especially favouring those that can provide stability through at least partial foreign currency funding or backing from international financial bodies. Importantly, they're also choosing projects that have built-in contingencies to handle sudden economic shocks, such as rising inflation and price volatility.
One of the biggest hurdles Orascom has encountered domestically is the delay in collecting outstanding payments from government authorities. That said, Bishai did acknowledge a promising improvement on that front during the first quarter of this year, giving a nod to the Egyptian authorities for stepping up efforts in clearing overdue debts.
This strategic redirection comes amid ongoing concern within Egypt's construction industry. Businesses are struggling with exchange rate swings and soaring operating costs, prompting warnings from influential figures such as businessman Naguib Sawiris, who recently labelled the real estate sector challenges as a "ticking time bomb."
On the brighter side, though, Orascom's overseas adventures appear to be well underway, specifically in the UAE and Saudi Arabia. They've already joined forces with Spanish firm Tecnicas Reunidas to boost capacity at Saudi's Al-Qurrayyah Independent Power Plant, an ambitious project aimed at strengthening regional energy security.
Across in the UAE, Orascom is part of a consortium developing and operating sustainable seawater treatment facilities—a major step towards addressing water scarcity issues in the region.
It's a classic case of "don't put all your eggs in one basket," and Orascom seems intent on playing their cards right by adapting swiftly to changing market conditions. In the long-term, it's likely to mean improved stability and growth prospects for the firm across Mideast markets beyond Egypt.
Still, only time will tell how smoothly Orascom manages this balancing act, juggling domestic pressures with international ambitions. It's a smart strategy, perhaps, but as my grandmother used to say about baking shepherd's pie: "You won't know if you got it right until you pull it out of the ovven.
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