Mohamed Mansour once washed dishes in a pizza parlor in Raleigh, North Carolina. Today his family firm is the Egyptian representative of, among other companies, General Motors and McDonalds.
Mohammed Farid Khamis started his carpet business with a single loom. Today there is a good chance your living room or bedroom carpet was made by his company, Oriental Weavers.
Two Egyptian business “whales”, as they’re called here. Two examples of a special Egypt-U.S. relationship. So how are these two men and their businesses faring in the new Egypt?
The Mansour family made its first fortune in Egypt’s most luxurious export – cotton – without which no five star hotel or self respecting linen shop would be complete.
Then, in 1955, the country’s economy was nationalized and the family left the country. Those were the pizza parlor days. And also college days – at North Carolina State.
The family made its second fortune in the 1970s when President Anwar Sadat opened up the Egyptian economy to foreign investment.
Mohamed Mansour was one of a few dozen Egyptian businessmen with the suitable experience and background to partner with the international, mostly American, brands that have been at the core of the Mansour family business ever since. GM came first in 1975. Today, the Group represents Chevrolet, Microsoft, Caterpillar, Dell, UPS and Philip Morris.
Just this November the three Mansour brothers, Mohamed, Yasseen and Youssef debuted on the Forbes African Billionaires List. They placed 13th, 14th and 15th respectively. Their individual fortunes are valued between $1.5 billion and $1.7 billion.
“The Mansours are like the Rockefellers” said an Egyptian businessman and family friend, who wanted to remain anonymous.
“At one time the Egyptian government was asking for a loan from the private sector in the United States and Mohamed Mansour personally had to guarantee that he would be responsible for the loan if they didn’t pay.”
Once like the Rockefellers, now a lower profile
But since the revolution the Mansour family reputation has been battered by corruption allegations.
In March the youngest brother, Yasseen Mansour, who runs the McDonalds franchise, had his and his immediate family’s assets frozen by order of the Central Bank of Egypt and the Prosecutor General. Day-to-day running of McDonalds is continuing as normal, but Yasseen Mansour’s other main business venture, Palm Hills, one of the largest land banks in the country, has veered from one problem to another.
“We still don’t know if Yasseen Mansour is innocent or guilty,” said a source at the attorney general’s office. “He remains under investigation.” But not in the country: Yasseen Mansour is on the run, reportedly in the UK.
Middle brother and family patriarch, Mohammed Mansour, has also been subject to unaccustomed scrutiny.
Under Hosni Mubarak who ruled the country for 30 years, it was common for powerful businessmen in Egypt to be pressed to join the president’s National Democratic Party (NDP) and most did so, more or less willingly.
In 2005 Mohammed Mansour went one step further when he quit the family firm to become Mubarak’s Minister of Transport.
This was a particularly fraught job. It was on his watch that one of the worst maritime disasters in modern history took place when 1000 people died on a ferry boat in the middle of the Red Sea. That same year Mansour admitted publicly that the country’s train network was underfunded after a train crash that killed 58 people. A second crash two years later shocked public opinion so much that there were fist fights in parliament and Mansour was forced to resign.
Now in the wake of the wake of the revolution, corruption allegations about his time in office have surfaced. In February the Egyptian Rail workers filed an official complaint. They claim that as Minister of Transport Mansour failed to collect money owed to the state by a number of companies, at least one of which he owned.
Friends of Mohamed Mansour maintain he is innocent and unlike his brother, Mohamed Mansour remains at liberty and in country. These days, however, this particular “whale” is keeping a very low profile.
Magic carpetsMohammed Khamis is the so-called Pharaoh of Egyptian carpets. He started his firm, Oriental Weavers, in 1980. It has gone on to become one of the world’s leading suppliers of machine-woven carpets, sourcing to big-name retailers like Macy’s, Wal-Mart and Target. It has a 25 per cent market share in the U.S.
Like the Mansours, Mohammed Khamis and his family enjoyed close ties to both the US and the Mubarak regime. But the generals’ government has made little fuss about his former closeness to power.
As for how the carpets have fared, according to figures released last month, sales have never been better. The trouble for Oriental Weavers comes from the world economic situation and the soaring price of oil – which represents 55 per cent of production costs. Just last week the company reported a 23% decline in profits over the last 9 months.
And that’s not the only issue.
The challenge from below
Egypt’s downtrodden textile workers also have something to say about how things develop, especially now that their voices can be heard more loudly.
Strikes by cotton and carpet workers have been widespread in Egypt since 2005 but under Mubarak the regime was able to suppress dissent by force.
Since the revolution there has been a sharp increase in industrial action generally as everyone from police and doctors to bank employees and imams have made use of their newfound freedom to protest low pay and poor working conditions.
The government has offered a number of far-reaching concessions, increasing the top rate of tax to 25% and the minimum wage to 708 Egyptian pounds (or $118) a month.
But according to Dr. Howarda Roman, Political Science Professor at the National Research Centre, in future more industrial action looks likely.
“No precise figures are available but there is usually at least one strike a day somewhere in Egypt. Most strikes take place in the cotton and carpet sectors as the workers are vulnerable and often suffer poor working conditions. The government is weak so they accept the strikers’ demands but they do not have a consistent policy for dealing with industrial action. I expect we will have more strong trade unions in future,” she said.
With many Egyptians now calling for a fairer distribution of wealth, social justice is on the agenda of all political parties in Egypt. The next big challenge to the whales is likely to come not from above but from below.