The Egyptian government is likely to postpone the bid for the new cigarette manufacturing company’s license, in order to receive more offers, a source familiar with the matter told Economy Plus.
It is noteworthy that Phillip Morris Misr, a subsidiary of Philip Morris International, was the only company to submit its technical offer during the bid opening session held by the Egyptian Industrial Development Authority (IDA) earlier this August.
British American Tobacco, the distributor of Imperial Tobacco products Al-Mansour Group, and Japan Tobacco International (JTI) did not submit their offers, seeking delay of the deadline for submitting their offers until December 2021 due to reasons related to time and their vision towards achieving future balances in the market, the source said.
Some studies have showed that revenues from the new licenses in the tobacco sector could reach up to $3 billion, instead of the current revenue of $350 million, the source highlighted.
Moreover, the source noted that the business volume of the cigarettes market in Ethiopia is estimated at 9 billion cigarettes and generates a direct revenue of $1 billion, which means that the Egyptian market with a business volume of 80 billion cigarettes should not see revenues of less than $3 billion.
The government has agreed on issuing more licenses after this bid and cancelling the condition which prohibits the issuance of licenses for 10 years after the offered bid, with state-run Eastern Company (EAST) having the right to hold a 24% stake in the new company’s capital.
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