Value Creation

Case Study: A Coal Trading and Logistics Opportunity

We understand the challenges specific to Egyptian companies and work alongside the managements of our investees to drive sales, improve margins, generate cash and manage risks. We execute an Egypt-centric investment strategy by bringing all of our local knowhow to bear in active ownership. Beyond adding value to the companies in which we invest, Sky looks to create dynamic synergies among its investees whenever possible. One such opportunity is presented in this Case Study related to coal trading and its associated logistics.

With a rapidly-growing population that crossed the 100 million mark in 2017 – and is expected to reach 150 million by 2030 – Egypt’s energy requirements are substantial. To provide for its citizens and to keep its factories running, the government is developing a comprehensive plan that embraces many diverse energy sources – from renewables and nuclear to natural gas and coal. Coal is one of the most cost-effective energy sources and as such is commonly used by heavy industries, such as cement. Recognizing an opportunity to meet the demand for coal-fired plants, Sky has been able to execute on an end-to-end process – from sourcing to end-user delivery – by combining the resources of several of its portfolio companies.

Strong Demand for Coal

Cement Factories

  • 60mn

    tons of cement

  • 8mn

    tons of coal by 2017

Power Plants

  • 8,000

    megawatts expected

  • 12mn

    tons of coal by 2017

An End-to-End Process

Synergies Among Portfolio Companies

Coal Trading and Sourcing

Sky Distribution
  • As the trading arm for the group, actively imports coal for Egypt’s heavy industrial sector
  • Secures diverse suppliers so as to import coal from different sources and regions
  • Strong financial and FX sourcing capabilities are key success factors in importing coal

Stevedoring and Logistics

Sky Logistics
  • Secured a stevedoring agreement in the port of Adabyia, north of Sokhna in the Suez Canal Economic Zone
  • Provides stevedoring in Sokhna DP World with EIA-approved coal warehousing facility
  • Services include customs clearance, logistics project management, storage and operating personnel

Environmentally Approved Storage Facility

Dynamics
  • Provides a bulk storage facility located in close proximity to Sokhna and Adabiya ports
  • A custom bonded storage area is in progress that will make handling quicker and easier
  • The storage facilities follow all environmental and safety regulations and processes

State-of-the-Art Transportation Capabilities

Sky Logistics
  • New fleet of trucks acquired to service clients with daily coal consumption from warehouse to factory
  • Ensures all routes are regularly surveyed and all loads are properly secured
  • All staff, including drivers, attend regular safety training courses and safety meetings