Beyond the Bazaar

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Taking risks has served Sawiris well, even if he has had to take some hard knocks, Middle East--style. One of his first ventures beyond Egypt was in strife-torn Algeria, where his successful 2001 bid for a cell-phone license turned out to be twice that of his nearest competitor, which led to the creation of an operator called Djezzy. Soon he had turned Orascom's $400 million investment into an asset worth some $4 billion. Later, in 2003, it was the same story in Iraq: Orascom set up the country's first cell-phone network, IraQna, after the fall of Baghdad. He invested $40 million in IraQna's start-up, which he estimates is now worth $2 billion.

The human cost has been far greater: 11 members of IraQna's workforce of 400 have been abducted by terrorists, and two remain missing. Sawiris once shut down IraQna for a couple of days to compel the release of some of his employees. Insurgents, he explains, don't like to be without service. And IraQna has turned out to be a relatively safe bet financially compared with Orascom's adventures in Syria and Yemen, where Orascom was muscled out of partnerships in both countries, says Sawiris, with the Arab regimes there affording no protection or legal recourse. That behavior won't cut it much longer, and governments like Egypt's now realize that Arab businesses have to play by a new set of rules and on a much bigger field. "We are no longer looking at Egypt as our market," says Saad Sallam, chairman of Olympic Group in Cairo, which is increasing its exports of refrigerators, stoves and other home appliances to other Arab countries. "The region is our market."

Sallam's father started the business in 1939 but lost everything when Egyptian industries were nationalized in 1963. The family struggled back with small enterprises, at one point transforming a waste product generated by Ideal, another nationalized appliance company, into decorative moldings. Sallam's business has been transformed with Egypt's gradual implementation of economic reform, notably since 2004, when Prime Minister Ahmed Nazif took office in a Cabinet that included leading ex-businessmen. Sallam, who retains a 52% stake in the company, credits the government's moves to devalue the Egyptian currency, reduce tariffs and slash corporate taxes with enabling Olympic exports to take off.

Another family firm exploiting a more favorable business climate is Nadim. Once a maker of traditional furniture for Arab oil sheiks, it is becoming a producer of modern designs for trendy European and American boutiques. CEO Adham Nadim is spearheading a strategic partnership with the government to boost Egypt's furniture exports from $200 million to $1 billion by 2010. The government lured Helmy Abouleish from his job running Sekem Group, an organic-food exporter, to head the government's Industrial Modernization Center. "Globalization is coming, whether we like it or not," says Abouleish. "Can we survive five to 10 years down the road? Industry has to be the engine of growth for economic development."