An EgyptiAn SuccESS Story - Ghabbour · PDF file2 gB auto Company profile 2014 gB auto Company profile 2014 3 ... an Egyptian success story, and, increas-ingly, ... of Hyundai passenger

Company profile 2014

from family Business to regional player

An EgyptiAn SuccESS Story

gB auto Company profile 2014 1

growth, resiliency and expansion: a regional story12

Hard at Work: assembly and manufacturing26our storied past: a

foundation for growth04

Contact us32a portfolio of success: our Brands10

message from the Chairman02 Diversity in action:

Business units14

Co

nte

nts

Key milestones06 investing in tomorrow: gB academy28

gB auto at a glance08 a Boundless future: open road ahead30

gB auto Company profile 20142 gB auto Company profile 2014 3

city in the country, and many of the small towns, as well. We have six lines of business with more than 11 products and services and 20 major brands (including our own) on offer. We employ more than 6,000 Egyptians from the sales floor to the assembly line to the c-Suite, providing jobs and supporting the economy during trying times. in short, we are an Egyptian success story.

And as we expand beyond our original borders — from Egypt into the region’s major growth markets of iraq, Libya, Algeria and Jordan — we are becoming a regional success story as well, positioning ourselves to benefit from growth in those markets while keeping our eye on other promising regional opportunities.

i hope as you read through this profile you will join me in my optimism about the future of gB Auto, which i consider one of Egypt’s and the region’s most dynamic companies. As we continue on our journey, i am thrilled with our pros-pects going forward and remain confident that the best is yet to come.

Dr. Raouf Ghabbour, CEO

SucceSS StoryThe story of GB Auto is a story of success: A family success story, an Egyptian success story, and, increas-ingly, a regional success story.

certainly, the years since the Egyptian revolution of January 2011 have been particularly challenging for Egypt and for the companies doing business here. But the truth is that gB Auto has not grown from a simple family business into one of the leading automotive companies in Egypt on timid leadership and a “wait-and-see” approach to doing business.

it is well-worth repeating something i recently said: if there is any magic in business, it is in having the courage to move forward, remain resilient and take risks when others would bunker down, and the wisdom — and, sometimes, luck — to tread cautiously when others would rush in. that story is the story of gB Auto this year, and all the years preceding it, as we invest in tomorrow by spending to support the future growth of both our domestic and regional business despite the prevailing climate of the day.

From our humble beginnings in the 1940s as a family trading business, we have grown to encompass a group of businesses, with activities that cross industries —from manu-facturing to distribution to financing. We represent leading global brands and we have grown our own brands from the ground up. We are present in every major and secondary

Message froM the chairMan


today, gB Auto is a leading player in the Egyptian au-tomotive industry, providing outstanding value-for-money and built-to-last products. the company has operations in key markets and sectors throughout the Middle East and north Africa, and since 2007 has been listed on the Egyptian Exchange (EgX).

throughout its history, gB Auto has built a strong reputa-tion for standing behind its customers and is renowned for providing unrivaled service and support. With top-notch after-sales services and new vehicles sales, the company’s service and parts outlets make gB a fully integrated automotive player — a “one-stop-shop” that provides cus-tomers with lower ownership costs and real value.

Supporting the economygB Auto has demonstrated its support for the Egyptian economy by not only sustaining operations, but actively expanding and continuing to take risks during a time of political and economic uncertainty. As one of Egypt’s biggest employers — growing to 6,000 employees in 2013 — gB Auto is doing its part to ensure the econo-my in Egypt continues along its path to growth.

Behind every car is a success story — from the Egyptian employee assembling it to the consumer sharing memories in the final product. With operations across the automotive value chain, from assembly and sales to distribution and after-sales services, gB Auto provides support throughout the journey.

ViSion and miSSionBuilding on its storied past — and with an eye to tomorrow — GB Auto seeks to become the leading automotive assembler and distributor in the Middle East and Africa, securing and maintaining market leadership across the company’s lines of business and geographical footprint.

GB Auto also aims to further solidify the trust earned through years of reliability and success, guaranteeing consistent returns for shareholders while keeping all stakeholders proud of their affili-ation with the company through its adherence to the highest standards of customer service, quality control and corporate ethics.

our storieD past:

a foundation for growth

gB Auto is a true Egyptian success story, having grown from a family concern into a domestic automotive compa-ny into a regional automotive powerhouse. the company is innovative, resilient and focused on growth — creating brands to fill market gaps, expanding its expertise from assembly to manufacturing to after-sales and training, ex-panding its geographic footprint, and pursuing partnerships with global oEMs (original equipment manufacturers).

gB Auto does not treat its products and services as a means to an end — the company sees each and every transaction as the potential beginning of a long-term partnership. Behind every vehicle we assemble in our factories, there is a success story, and with each new product, each vehicle pur-chased, and each service center visit, a new story begins.

For more than 70 years, gB Auto has thrived under the leadership of one of Egypt’s visionary business families.

the company has grown from a small family operation to a top public corporation guided by the highest caliber executives. in seven decades of business, gB Auto has excelled with a commitment to the belief that Egypt’s modern economy presents great potential to support a robust automotive industry.

in the 1940s, Sadek and Kamal ghabbour — with the fore-sight to envision the Egypt of today — began a family-run trading business. one of the only truly private companies at the time, the brothers’ firm, which was soon incorporated as ghabbour Brothers, had interests across a number of business lines, including automotive related products, con-struction materials, home appliances and electronics.

thirty years later, raouf ghabbour decided to focus on the automotive industry and the company embarked on the path of regional, manufacturing and auto-related trading.


• Soft-launchestheGBAcademy,whichwillfocusonim-proving employees’ soft skills, including communication strategies, critical and creative thinking, time manage-ment, business ethics, and more.

• Opensitsfirstafter-salesfacilityinIraq,with70workingbays in Baghdad.

• Places in the top 50 companies on the HawakamahInstitute forCorporateGovernance’s S&PHawakamahEnvironment, Social, and corporate governance (ESg) pan Arab index.

2012• AnnouncesastrategicpartnershipwithGeelyAutomobileHoldingLtdof China thatwill seeGBAutoengage incKD assembly in Egypt and distribution in the MEnA region, beginning with the Egyptian market.

• Signs a contract with Iveco Irisbus, a Fiat Industrialcompany and global industry leader, to be the exclusive distributor of iveco bus chassis in Egypt.

• Drive,GBAuto’sconsumer financeventure,beginsop-erations, financing consumer purchases of passenger cars.

• Acquirestheexclusiverighttodistributeinternationally-recognized Zc rubber’s Westlake passenger car, van, tBr and otr tires in the Egyptian market.

• Inaugurates the newly revamped state-of-the-art Primaplant, which now features latest-generation quality-control systems, fully automated conveyer transits and the first fully robotic paint shop in the region.

• Submits its firstcommunicationof progress for theUNglobal compact.

2013• Continuestoexpanditsgeographicalfootprint,withkey

brand representations in Algeria and Libya.• BeginsinstructionatGBAcademy,thecompany’sauto-

motive-specific training academy.• GBPolosignscontractwithGeneralMotorsEastAfrica

to export buses.

• SignsanagreementtodistributeKarrymicro-microrangevehiclesandanagreementwithJACtosource4and7.5toner chassis for bus building.

• Receives Geely International Corporation’s ‘2012 Bestnew Distribution’ Award.

2014•AcquiresdistributionrightsforGoodyeartiresinAlgeria• Begins cKD projects in Egypt to serve passenger car and

commercial Vehicle markets• Finalizesplans to launchapre-ownedautomobilebusi-

ness in Egypt•Entersintoanexclusivestrategicalliancetodistribute gazprom neft-Lubricants

Key Milestones

1948Sadek and Kamal ghabbour establish a family-run business.

1956the ghabbour Brothers officially incorporate. the business trades in automotive related products, home appliances, and construction materials such as cement and ceramics.

1970sEgypt’s open door policy directs ghabbour Brother’s busi-ness focus to the automotive industry. the brothers secure licenses to market passenger cars, bus and automotive parts.

1985ghabbour Brothers establish assembly operations to manufacture bus bodies under a technical agreement with Scania AB.

1992ghabbour Brothers is appointed as exclusive distributor of Hyundai passenger cars in Egypt. The move markedHyundai’s definitivemove into theEgyptian passenger carmarket and the brand immediately captured market share with its wide-ranging, competitively priced portfolio.

1995ghabbour Brothers is granted a technical license to as-sembleCKDsforHyundai’spassengercarsinEgypt.Themove further solidifies the company’s strategic relation-shipwithHyundai.

1996Begins operations as the exclusive local distributor of Bajaj motorcycles.

1997Begins operations as the exclusive local distributor of Fuso and Volvo trucks and buses.

2007gB Auto completes an initial public offering and shares begin trading on the cairo and Alexandria Stock Exchange (now the Egyptian Exchange). the ipo raised Egp 1.2 billion.

2008• Entersa jointventurewithMarcopolo, theBrazil-based

global bus body manufacturer, to build a state-of-the-art production facility in Suez where the JV produces buses for domestic and export sales.

• EstablishesafinancialleasingcompanytooperateasGBLease, which will finance commercial vehicle sales as well as corporate clients purchasing passenger cars for fleets.

2009• LaunchesaGlobalDepositaryReceipt(GDR)program

without a capital increase in May 2009 that allows global investors to trade its shares in London and new york.

• Establishes Mashroey, a majority-owned micro-financejoint venture to finance purchases of Bajaj-branded mo-torcycles and three-wheelers.

2010• Enters into an exclusive distributorship agreement to

import and distribute Mazda-branded vehicles in Egypt.• Entersintoajointventurethatwillseethecompanydis-tributeHyundaivehicles inIraqthrougha jointventurewith the Al-Kasid group of companies, which holds the exclusiverightstodistributeHyundaiproductsinIraq.

• Signs an agreement to be the exclusive distributor of yokohama passenger car, semi-truck, truck, bus and con-struction equipment tires in Egypt.

• Initiatesacompany-widehumanresourcesdevelopmentprogram.

2011• Completesconstructionof itsnewpaint facilities inthe

greater cairo Area, more than doubling capacity.


gB auto at a glanceHaving built a foundation for success, gb auto’s diverse operations now span six lines of business

• gB Auto’s Financing Businesses offer financing in all segments of the market

• gB Lease provides financing for commercial vehicle and corporate lease clients

• Mashroey finances the purchase of motorcycles, tuk-tuks, yto tractors and motor tricycles

• Drive offers consumer financing of passenger cars and factoring of auto and non-auto products

• Market: Egypt

Financing BuSineSSeS5.2%of fY13 group sales

• Distribution of motorcycles and three-wheelers (tuk-tuks)

• After-Sales service and distribution of spare parts• Financing options provided through Mashroey•Market: Egypt

motorcycleS & three-WheelerS13.5%

of fY13 group sales

• Distribution of gazprom neft-Lubricants• Markets: Egypt

success storYFrom its beginnings as a family enterprise, today GB Auto has grown to become a leading regional automotive producer and distributor, with six lines of business and activities that range from manufacturing to financing.

luBricantS

• Assembly and distribution of trucks and buses•Bus-body manufacturing; distribution of buses• Manufacturing and distribution of superstructures

and trailers• Distribution of construction and farming equipment• After-Sales service and distribution of spare parts•Markets: Egypt, Libya

commercial VehicleS & conStruction equipment5.3%

of fY13 group sales

• Distribution of passenger car, van, truck, con-struction equipment and bus tires

• Markets: Egypt, iraq, Libya, Algeria, Jordan

tireS4.3%of fY13 group sales• Assembly and distribution of imported completely

knocked-down (cKD) kits with a production capac-ity of 60,000 units per year for the Egyptian market

• Distribution of imported completely-built-up (cBu) vehicles across footprint

• After-Sales service and distribution of spare parts• Financing options provided through Drive in Egypt• Markets: Egypt, iraq, Algeria, Libya

paSSenger carS71.6%of fY13 group sales


this line of business distributes earth moving equipment, road machinery and power generators in Egypt under a distribution agreement with Volvo construction, SDLg and AKSA; distributes yto tractors in Egypt; produces buses for domestic and export markets through gB polo (a state-of-the-art facility in partnership with global leader Marcopolo and using Volvo, Fuso, iveco and JAc chassis); and sells great Wall pickup trucks in Libya.

in late 2013, gB Auto launched the seven-seater Karry, which it distributes in Egypt and Algeria.

Tiresthe company and other trading businesses have agree-ments with a number of tire manufacturers to distribute a wide variety of tires in five countries. in Egypt, the compa-ny distributes Lassa, yokohama, Westlake and Diamond Back tires while it distributes Westlake and Diamond Back tires in iraq. in Jordan, the company distributes Diamond Back tires; in Libya it distributes triangle tires; and in Algeria it distributes Lassa, grandstone and goodyear tires.

Financing BusinessesgB capital serves as the group’s financial arm, and is responsible for the Financing Businesses line, which consists of three independent companies including: gB Lease (commercial vehicles, corporate fleets and other asset classes), Mashroey (selling gB Auto’s Bajaj-branded motorcycles and three-wheelers on credit terms to micro-finance-eligible clients), and Drive (consumer finance for passenger cars and factoring). the aim of gB capital is to develop a well-diversified and synergetic group of financial services. to that end, gB capital is also on the lookout for new additions to complement its portfolio.

LubricantsgB Auto announced in January 2014 that it has entered into an exclusive strategic alliance to distribute gazprom Neft-Lubricants,givingGBAutoaccesstoa400-450,000tonperyearmarketthatgrowsata4-5%annualpace.Thecompany will aim to take the partnership to other regional markets, possibly incorporating other lines of business from gazprom neft’s downstream portfolio, following a successful rollout in Egypt at both gB Auto-branded and third-party points of sale.

SucceSS StoryHyundai was the first international brand that GB Auto represented; our success in this arena has led to a strong brand portfolio across all business lines.

a portfolio of suCCess:

our Brands

Motorcycles and Three-Wheelersin Egypt, gB Auto is the exclusive local agent and distrib-utor of Bajaj Auto’s motorcycles and three-wheel vehicles (often called auto-rickshaws or tuk-tuks).

Commercial Vehicles and Construction Equipment gB Auto offers a wide range of commercial vehicles under exclusive agent and distributorship agreements with Fuso and Volvo, while the company also manufactures and distributes semi-trailers and superstructures (i.e., oil and chemical tankers as well as concrete mixers). in addition,

Passenger Carsin Egypt, the company holds the exclusive license to as-sembleanddistributeHyundaiandGeelypassengercars,and import and distribute Hyundai, Mazda and Geelypassenger cars, as well as spare parts for all the brands. gB Auto is also a leading player in the iraqi passenger car market,whereitisthesoledistributorof Hyundaipassen-ger cars and spare parts, and in 2013 the company entered the dynamic Libyan and Algerian passenger car markets where it sells geely passenger cars in joint ventures with local partners.

location passenger carscommercial vehicles & construction equipment

Motorcycles & three-wheelers tires

financing businesses lubricants

egypt

iraq

libya

algeria

Jordan

utilizing its proven track record and diverse product offering, gB auto continues to secure key brand representations in key regional markets.


El-BostanHoldingCompany,awell-establishedconsumergoods, retail, automotive and logistics conglomerate owned by the Al Said family.

gB Auto has identified a cost-effective strategy to rapidly roll-out sales and aftersales facilities in tripoli.

Future ExpansionsgB Auto is actively exploring further markets into which it can expand, capitalizing on the region’s untapped po-tential and pent-up demand for real value backed by true customer care. Management looks forward to announcing further developments on this front going forward, with Sub-Saharan Africa as the current focus for growth.

SucceSS StoryUnder visionary leadership, GB Auto has expanded from an Egyptian business into a regional force. The company’s long-standing strategy of measured regional growth has borne fruit with the 2013 expan-sion into Algeria and Libya, which are among the most promising markets in one of the world’s most promising regions. GB Auto now has a footprint in Egypt, Iraq, Algeria, Libya and Jordan.

groWtH, resilienCy anD expansion:

a regional story

Algeriathe company entered the Algerian market in cooperation with the group rahmoune, a strategic player in the Algerian economy, with investments mainly in building materials, basic infrastructure and the automotive business.

gB Auto entered Algeria with geely passenger cars in 2013, augmenting its lineup with Lassa, grandstone and goodyear tires.

Libyain Libya, gB Auto began selling triangle-brand tires, geely passenger cars and great Wall pickup trucks in 2013. gB Auto entered the Libyan market in cooperation with

gB Auto first announced in 2009 that it was exploring op-portunities for growth outside its home market of Egypt. in 2010, the company entered into a joint venture to distribute Hyundai vehicles in Iraq. Proving the essential soundnessof thestrategy,in2013,Iraqioperationsaccountedfor31%of gB Auto’s total revenues. not a company to rest on its laurels, gB Auto continued searching for additional oppor-tunities in the region.

in 2013, the company announced that these efforts had come to fruition, with key brand representations in the north African markets of Algeria and Libya. Sales and after-sales operations in the markets began in 2013; gB Auto has man-agement control of each local venture.

Building on its strong brand portfolio and exclusive licenses in egypt and iraq, gB auto set its sights on reproducing this success in algeria, libya and beyond.

libya

Population 6.0 mn

Nominal GDP (2013e) US$ 70.9 bn

GDP / Capita: US$ 13,300

Motorization / 1,000 people 290 (in 2007)

algeria

Population 36.9 mn




egypt

Population 83.6 mn




Jordan

Population 6.2 mn

Nominal GDP US$ 28.8 bn



Sources: International Monetary Fund, EFG Hermes Research, UNCTAD, World Bank, GB Auto company research

iraq

Population 31.9 mn





Diversity in aCtion:

Business units


the company’s 3S business model promises showrooms, services and spare parts. gB Auto’s 9 large service cent-ersandmorethan650servicebays,25ownedshowroomsand numerous partnerships with independent automo-tive retailers, and a spare parts distribution channel that stretches across the country deliver comprehensive service to Egypt’s car market.

gB Auto’s start-to-finish customer orientation has helped makeHyundai’sresalevaluethehighestinEgypt.The3Smodel has helpedmakeHyundai cars synonymouswithpositive customer care and has strengthened gB Auto’s brand and boosted its market position across its product offerings. the company is planning an equivalent model to support its network of geely and Mazda passenger cars.

SucceSS StoryThroughout its more-than 70-year history, GB Auto has built a strong reputation for standing by its cus-tomers and is renowned for providing unmatched aftersales service in the Egyptian market. Together with the group’s new vehicles sales, the company’s service and parts outlets make GB a fully integrated automo-tive player — a “one-stop-shop” that provides customers with lower ownership costs and real value for money.

Passenger carsEGypT

as the best value for money, and now looks to do the same with geely and Mazda at their unique price points.

the past several years have seen gB Auto invest in the expan-sion of its assembly capacity, culminating in the revamping of its prima facility, which it inaugurated in october 2012. the state-of-the-art facility features latest generation quality control systems, fully automated conveyer assembly lines, the first fully robotic paint shop in the Middle East and north Africa, and has a maximum annual capacity of c.60,000 units following the plant overhaul.

After-Sales SupportWith Egypt’s largest sales and after-sales network, gB Auto has transformed the nation’s new car experience.

gB Auto is the largest player in the Egyptian passenger car market in terms of sales revenue, market share and produc-tion capacity. the company holds the exclusive license to assembleanddistributeHyundaiandGeelypassengercars,andimportanddistributeHyundai,GeelyandMazdapas-senger cars, as well as spare parts for all three brands.

over the years, the company has solidified its market leadership with a dedication to value, unparalleled service and best-in-class products. gB Auto created its “one-stop-shop” approach to retail auto buying by vertically integrating sales, consumer finance (through Drive, gB Auto’s consumer finance venture) and after-sales support. its commitment to total customer care allows the company to offer Egypt’s car-buying market a power-fulvalueproposition—GBAutohaspositionedHyundaicars

BuSinESS unitSBuSinESS unitS


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Passenger cars ALGERIA AND LIByA

Following up on the success of the expansion to iraq, in early 2013 gB Auto announced that it would be pushing its regional expansion drive forward with moves in Algeria and Libya through new and existing brand representations.

Beginning in the third quarter of 2013, operations for geely-branded passenger cars began in the two key north African markets via local ventures.

the company plans to introduce an after-sales network — based on the highly-successful models in Egypt and iraq — in both countries going forward.

SucceSS StoryThe Middle East and Africa is one of the most dynamic growth markets in the world, and the potential op-portunities for a customer-focused model like the one GB Auto has perfected are boundless. GB Auto followed up on its successful ex-pansion into the Iraqi passenger car market with its 2013 expansion into Algeria and Libya.

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Passenger carsIRAq

As its first regional expansion venture, in early 2010 gB Auto formed a joint venture with an iraqi company and moved to serve the highly underserved, pent-up demand in the war-torn iraqi market. the company did not go blindly into this venture: At the time, iraq was a potentially volatile market, more so than today; but entrepreneurship is at its heart about taking considered risks — and the payoff that accompanies success is worth the effort.

today, gB Auto is a leading player in the iraqi passenger car market, where it is the sole distributor of Hyundaipassenger cars and spare parts. the company has begun building iraq’s leading after-sales service franchise based on the Egyptian model, with 4 service centers now open in the country in Baghdad, irbil, Suleimaniyya and Basra, with additional centers to follow in 2014.

SucceSS StoryGB Auto has long experience with Hyundai, for which it is the exclusive assembler, importer and distributor in Egypt, so it was logical to look to Hyundai when the time had come to begin expanding in earnest. The expansion of our Hyundai represen-tation into Iraq was a measured risk at the time, one that has been a true success.


BuSinESS unitS

‘built-in’ demand, the authorized service center network iscontinuously expanding to reach out to customers, thereby encouraging them to return to the gB Auto network for maintenance, spare parts and repairs.

gB Auto’s commitment to total care for customers of this key segment is evident in its nationwide network of 21 owned-retail showrooms including 1 after-sales service center, 21 gB Auto-owned spare parts outlets and a net-work of 120 authorized dealers, as well as 60 authorized service centers across Egypt.

SucceSS StoryOne of the more successful expan-sions that the company has made was the addition of Bajaj-branded motorcycles and three-wheelers to its product line-up. These vehicles are de-signed to appeal to a price-conscious consumer group that has responded well to GB Auto’s customer-centric business model and rewarded the company with a loyalty that sees us maintain the lion’s share of this small but key market.

BuSinESS unitS

Motorcycles & three-wheelers

gB Auto is Egypt’s exclusive assembler and distributor of motorcycles and three-wheelers from Bajaj, the largest global manufacturer of three-wheelers, often known as auto-rick-shaws or tuk-tuks. gB Auto imports Semi Knocked Down (SKD) units from the indian producer and assembles and fin-ishes the vehicles locally at the company’s Sixth of october city industrial Zone factory. Since it first began importing and selling three-wheelers in 1999, the company has been the country’s market leader for the popular vehicles, in part due to its efforts at providing quality, low-cost after-sales service to this segment’s price-conscious consumers, and later as the company introduced financing for this line via Mashroey.

After-Sales SupportgB Auto provides its motorcycle and three-wheeler cus-tomers the same comprehensive service that it offers its car buyers, and the group’s 3S business model — showrooms, service and spare parts — extends to its motorcycles and three-wheelers business as well.

indeed, After-Sales is a small but important component of this business unit and a key differentiator for gB Auto in the market, given that the consumers attracted to two- and three-wheelers place strong emphasis on the availabil-ity of spare parts and service centers. to capitalize on this


Karry micro-micro range vehicles in Egypt and Algeria. in addition, gB Auto has signed an agreement with JAc to source4and7.5tonerchassisonwhichanewgenerationof gB polo designed bodies will be installed to serve the growing bus segment. together, these new products are expected to be significant drivers of growth for this line of business.

After-Sales Supportthe commercial Vehicles & construction Equipment business unit is supported by a robust After-Sales framework that extends gB Auto’s total care model to customers of this key LoB.

this business unit offers gB Auto customers throughout Egypt a nationwide network of owned-retail showrooms including 6 after-sales service centers.

SucceSS StoryThe Commercial Vehicles unit, more than any other GB Auto operation, demonstrates the group’s capabilities as a manufacturer. With the exception of the chassis, the company designs and manufactures complete buses at its facilities. At these production facilities, GB Auto produces the Fuso Rp coach, the Fuso Cruiser mini and medium-sized buses, and Volvo model tourism buses and will introduce the new generation Marcopolo bus range in 2014.

BuSinESS unitS

gB Auto’s commercial Vehicles business unit distributes imported and locally assembled trucks and buses in Egypt. the division assembles Fuso and Volvo buses as well as Fuso trucks at plants in Sadat and Suez (home to the new gB polo factory) and distributes Volvo heavy trucks. gB Auto also manufactures and distributes semi-trailers and super-structures such as oil and chemical tankers and con-crete mixers under its commercial Vehicles line.

gB Auto’s construction Equipment business unit in-cludes earth moving equipment, road machinery and power generators distributed in Egypt under distribution agreements with Volvo construction, SDLg and AKSA. the group markets its heavy-duty equipment line to public and governmental customers, as well as to private sector companies.

the company’s bus segment produces a range of transportation solutions, including maxi buses, or coaches, with a maximum capacityof55passengers;midibuses(30-38seats);minibuses(24-29 seats); and, most recently, micro buses (17 seats). gB Auto’s commercial Vehicles line markets heavy-, medium- and lightweight trucks for fleet operators, contractors, large indus-trial operators and government agencies throughout Egypt.

in late 2012, the company secured brand representation for yto tractors in Egypt. gB Auto also secured brand repre-sentation for great Wall pickup trucks in Libya, which it began selling in 2013.

Most recently, in late 2013, in an effort to increase the product offering of the commercial Vehicles & construction Equipment line of business, gB Auto signed an agreement to distribute

BuSinESS unitS

coMMercial Vehicles & construction equiPMent


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financing Businesses

gB Auto established gB capital as the sub-holding entity serving as its financial arm, which consists of three distinct and independent companies. the aim of gB capital is to develop a well-diversified and synergetic group of financial services, and to-date, the three companies have out-performed expectations and feature solid, aggressive growth strategies.

overall, the Financing Businesses line is growing steadily and is strictly governed by robust credit policies specifically developed for each industry. the companies’ credit approval and disburse-ment mechanisms are well-advanced and adhere to international best practices. Furthermore, asset quality and collections — being the backbone for the success of any financial institution — are closely monitored, well-maintained and controlled within each company, with results that match and exceed industry norms.

going forward, gB capital will focus on bringing all three busi-nesses to maturity and is on the lookout for new additions to complement its portfolio.

GB LeasegB Lease is the first financing company that gB Auto estab-lished. initially established to provide finance to gB Auto’s commercial vehicles and corporate fleet clients, gB Lease has since diversified its field of operations into other asset classes. it is now far into the growth phase, is well established, and is one of the top 10 leasing institutions in Egypt.

gB Lease provides business-to-business financial leasing solu-tions. it is non-exclusive to gB Auto, and caters to a diversified client base ranging from top tier multinationals, to local corpora-tions of various scales, as well as small and medium enterprises. the company fully complies with all regulations and operates under the auspices of the Egyptian Financial Supervisory Authority (EFSA).

MashroeygB Auto’s second financing venture was Mashroey, which

offers microfinance services on credit terms to eligible consumers. the company is at the end of its startup phase and is growing rapidly all across Egypt, with a network coverage of around65branches.

Mashroey started out selling gB Auto’s Bajaj-branded motor-cycles and three-wheelers on credit terms. While these vehicles continue to constitute the bulk of Mashroey’s portfolio — ac-countingforc.80%of itsbusiness—thecompanyhassinceadded motor tricycles (a non-gB Auto product) and gB Auto’s yto agricultural tractors, minivans, and preowned tuk-tuks to its suite of products for which it offers micro financing. it will also soon venture into other product lines outside the automo-tive sector to further diversify its portfolio—all on credit basis.

DrivegB Auto’s most recent financing business is Drive, a consumer finance company focusing on offering auto loans to end con-sumers, as well as corporate factoring services to a specific range of companies.

Drive is still in the start-up phase of its development and is grow-ing steadily. Since its launch in 3Q12, the company has made remarkable strides in market presence; achieving operational breakeven and carving a place for itself in the very competitive automotive financing sector within its first year of operations.

Drive’s initial strategy was to focus on financing sales of gB Auto’sHyundai andGeely passenger cars out ofGBAuto’sshowrooms.Having successfully completed this phase aheadof schedule, the company has advanced its operational strategy and is expanding to serve customers at gB Auto’s independent dealer network, as well as incorporating the finance of consum-er purchases of brands that are not exclusive to gB Auto. the company operates under the auspices of the Egyptian Financial.Supervisory Authority (EFSA).

SucceSS StoryEgypt’s financial sector is both fragmented and highly-competitive, making the out-sized success of the three GB Capital businesses even more impressive.

BuSinESS unitS

tires

gB Auto has been among Egypt’s leading tire dealers for more than50yearsanddistributespassengercar,van,bus,construc-tion equipment and light-truck, truck and bus-truck tires under license with turkey’s Lassa, Japan’s yokohama, china’s Westlake, triangle, Diamond Back, grandstone and goodyear.

in early 2013, this business unit announced that it had suc-cessfully concluded agreements that have seen it expand from Egypt to cover Algeria, iraq, Jordan, and Libya, as well as diversify the company’s product offerings in Egypt.

SucceSS StoryGrowth has been vital to GB Auto’s rise to regional prominence, and our Tires line of business has grown from a small segment to having op-erations in five countries, the most of any of our other lines of business.


ManufacturingFor the commercial Vehicles and construction Equipment unit, production extends beyond assembly to include design and manufacture of complete buses, semi-trailers and super-structures — with the exception of the chassis — at three plants in the greater cairo Area as well as gB polo facilities in Suez.

GB PologB polo, the company’s joint-venture with global giant Marcopolo,hascompletedthebuild-outof a5,000unit-peryear capacity (potential capacity, based on two shifts daily) state-of-the-art bus body manufacturing facility targeting local and export markets. gB polo produces buses covering all applications (micro, mini, midi, city, school / labor, inter-cityandcoach)andthefacilityutilizesalmost285,000squaremeters of land.

gB polo was conceived as a move to capture export oppor-tunities in bus field manufacturing by utilizing gB Auto’s quality standards and relatively low-cost, highly-trained workforce in combination with Marcopolo’s 65-year his-tory of successfully developing technological and innovative concepts for full transportation solutions and setups in key markets worldwide. the addition of the iveco chassis has also proved to be a further boost to the strength of gB Auto’s Bus Business.

a SuStainaBle FutureIn addition to providing a vast pool of manufacturing know-how and exper-tise from the combined resources of GB Auto and Marcopolo, the GB polo facility also utilizes renewable energy sources to ensure environmentally friendly operations (Green Facility). From recycled water and reduced byproducts and air contamination throughout the production process, to natural gas-powered ovens with desert development and forestry in the area inside and surrounding the facility, GB polo is a facility designed with the environmental future of Egypt in mind.

HarD at WorK:

asseMBly and ManufacturingWith a vision to empower the auto market in egypt, gB auto assembly and manufacturing operations represented a transitional phase in the history of the company.

asseMBlygB Auto’s assembly operations include production of passenger cars and commercial vehicles at three plants in the greater cairo Area. At these plants, assembly largely refers to completely Knocked Down (cKD) vehicles imported as kits from leading internationalbrandsincludingHyundaiandGeelythatareas-sembled with a legally mandated percentage of local content.

Prima FactoryAt thePrimaplant,GBAutoassemblesHyundai andGeelypassenger cars and Mitsubishi canter cabins from imported cKD kits as well as locally sourced components. the plant — whichcoversalmost58,000squaremeters—wasestablishedin 1994 and, by February 2014, had produced more than 240, 000 passenger cars. in September 2012, gB Auto completed a

significant investment, allowing production to grow to include our new geely models while at the same time modernizing certain aspects of the assembly process.

today, prima is truly state-of-the-art — with fully-automated conveyer systems, robots for the painting, and more. our manufacturing workforce of 1,200 staff works two shifts in thecourseof an18-hourdayandcanassembleasmanyas261unitsdaily,whileourmaximumcapacityisover75,000unitsper year. After receiving kits from the suppliers, they are put through a rigorous process — including assembly, painting, application of trim, quality checks and pre-delivery inspection — before being delivered to the finished goods warehouse for distribution to dealers and customers.

SucceSS StoryGB Auto factories rely on strictly Egyptian labor, providing a strong source of employment and further support for the Egyptian economy. As a company with a keen sense of social responsibility, GB Auto is deter-mined to do its part, providing jobs while offering services that span the spectrum of the automotive industry.


the company. technical employees are offered product-spe-cific training as well as customer service skills, and business employees acquire basic business and people management skills.

Additionally, a recent pilot of the Driver’s Safety training for corporate drivers highlighted the ongoing need for spe-cific and targeted training as well as skills upgrading train-ing for all employee populations.

Training programs launched:• customer Service Excellence for salespeople, aftersales

teams and corporate groups•Drive for Quality for manufacturing groups• core principles of people Management for managers

and supervisors

• HMC,GeelyandCitiproductlaunchesandtechnicaltraining•gB Auto technicians Apprenticeship program

Expansion of the GB Academy PortalA series of updates and improvements have recently taken place to provide gB Auto employees with better access to developments at gB Academy. Employees will be able to preview program descriptions and course schedules on an informative portal page, and we are excited to have piloted the first online testing for training participants of the personal Excellence workshops.

SucceSS StoryThe 2012 launch of the GB Acad-emy in partnership with Canada’s Centennial College has enhanced organizational efficiency and raised quality standards, benefitting both customers and employees of GB Auto.

investing in tomorroW:

gB acadeMy

gB Auto believes that knowledge is the key pillar of suc-cess, serving as a vital strategic resource for any business. As such, gB Auto is pleased to have opened the gB Academy in partnership with centennial college. instruction has begun at the purpose-built campus in Abu rawash, with sixteeninstructorsdeliveringtrainingtothec.5,000corpo-rate employees of gB Auto as well as the extensive network of authorized dealers in the passenger cars, Motorcycles & three-Wheelers, commercial Vehicles & construction Equipment, and tires business units.

training encompasses both manufacturing and blue-collar technical skills in our five lab areas as well as managerial, business and functional skills in our 14 traditional classroom settings. Along with a complete assessment center, we conduct training both in the field and remotely through

classroom technology to our regional businesses. regular train-the-trainer events are supported by partners such as Volvo,Bajaj,HyundaiandCentennialCollege.

TheAcademywilldeliverup to250 trainingdaysperyearon campus as well as field training, with the capacity to train 200-250employeesadayorinexcessof 1,000employeesperweek. it also provides facilitation for talent management and organizational development planning, as well as supporting 30 young Egyptians in a partnership with local technical schools to provide a comprehensive apprenticeship program along with our traditional apprenticeship program.

Training for Tomorrow gB Auto brings trainees a blend of business and technical training catering to the needs of the diverse employees at

as a forward-looking company that is never satisfied with the status quo, gB auto — through gB academy — seeks to further the successes of today by providing the training for tomorrow.


SucceSS StoryFrom its beginnings as a family-trad-ing business through its growth and expansion during tough economic times, the road to success for GB Auto is an open-book journey that has only just begun.

LiByA

ALGEriA AFriCA

• penetrate the passenger car market• create after-sales network based on the successful

Egyptian model•potential expansion of gB Auto’s product range

• penetrate the passenger car market• Augment passenger car sales with a wide range of

tire brands•potential expansion of gB Auto’s product range

• Enter select Sub-Saharan African markets with a strong product range that addresses pent-up demand in traditionally under-served industry segments

a BounDless future:

oPen road ahead

through a three-axis strategy designed to maximize long-term growth — expanding new ventures, growing our prod-uct portfolio and targeting high-growth markets — gB Auto has its sights set on becoming the largest automotive products distributor in Africa and the Middle East.

in the coming year, the company seeks to develop newly established ventures in Libya and Algeria, with the support of strong sustainable growth from Egypt and iraq; expand brand representation and product portfolio and expand prod-uct reach across all countries of operations; and continue to expand in new high-growth markets with a focus on Sub-Saharan Africa as the next growth phase.

gB auto sees its history of growth, resilience, expansion and success as merely the first chapter in an open-ended story.

EGyPT

irAq

•Maintain leadership in passenger car market•Fill in product gaps• capitalize on expansions already made and in-

progress in aftersales•Support sales through financing options

• given growth of the economy and pent-up demand, current unit sales are considered the “tip of the iceberg”

• continue to expand after-sales network to support sales, solidify market presence and increase profitability

•potential expansion of gB Auto’s product range

gB auto Company profile 201432

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Head OfficeCairo-AlexDesertRoad,Km28IndustrialZoneAbu rawash, giza, Egypt

Tel:+20235391201Fax:+20235391198

ghabbourauto.com

www.ghabbourauto.com

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