Orascom’s success story: A model for Egypt’s economic resurgence

Egypt is banking on a series of mega real estate projects to revitalise its economy. First came the $35bn Ras Al Hekma deal with the UAE’s ADQ to develop a 170-kilometre stretch of prime Mediterranean coastline in northern Egypt.

This deal, the largest single foreign direct investment in Egypt’s history, proved a lifeline for the country, which was grappling with debt. It also helped pave the way for debt reduction along with an IMF package and several FDI MoUs with EU countries.

Additionally, the success of the ADQ development plan set the stage for the more recent $21bn South Med project, also located along the northern Mediterranean coast. The project, to be developed by Egyptian real estate giant Talaat Moustafa Group in partnership with the Egyptian government, is expected to attract investments worth $20.7bn and generate sales of $33bn. 

Alongside other initiatives, such as New Alamein City on the Red Sea coast, these projects are expected to attract foreign tourists, especially from higher-spending segments in Europe and Arab countries.

More importantly, the South Med project is expected to create 1.6 million direct jobs in construction and related industries, significantly boosting Egypt’s economy.

While the scale of these projects is unprecedented, they follow a model first established decades ago by Egyptian entrepreneur and construction pioneer Samih Sawiris through the creation of the El Gouna township along Egypt’s eastern coast.

Orascom: Building sustainable communities

In 1989, Sawiris founded Orascom Development, with a vision of creating sustainable communities that blend seamlessly into their natural surroundings. The company’s first project was a groundbreaking endeavour on Egypt’s Red Sea coast, in an area known for its untouched beauty.

The vision was simple: to build a town that offered not just homes, but an entire living experience. It began modestly, with homes for friends and family, and eventually expanded into a full-fledged town complete with hotels, marinas, golf courses, schools, hospitals, and retail centres.

This holistic approach became the blueprint for Orascom’s future developments. As Omar El Hamamsy, Orascom Development’s group CEO, explained, “You start by building homes, then add hotels for visitors, followed by activities that make use of the environment—like marinas, golf courses, and downtown areas. Gradually, a small community grows into a town with permanent residents.”

Expansion beyond Egypt

By the early 2000s, the success of El Gouna became evident. This “virgin spot on the Red Sea,” as the CEO described it, had blossomed into a bustling yet serene town. Its success was not only due to the scenic location but also due to how the development integrated with the environment, preserving natural lagoons, wildlife, and landscapes.

Over three decades later, Orascom has expanded its model of integrated living across five countries, revolutionising how people live, work, and play, setting new industry standards.

From Egypt’s Red Sea shores to the Swiss Alps, Orascom’s developments have transformed environments and lifestyles alike.

El Hamamsy attributes Orascom’s success to Sawiris’s passion for life, nature, architecture, and design, which shaped the early projects. According to him, Sawiris’s lifestyle reflected the ethos of the communities Orascom sought to create—places where residents could enjoy a balanced life amidst beautiful landscapes, modern amenities, and sustainable practices.

Today, Orascom operates ten towns in countries such as Egypt, the UK, Switzerland, Montenegro, and Oman. Each town is designed around core principles: respect for nature, sustainability, and enhancing the quality of life for residents and visitors. These towns are vast, integrated communities, often spanning millions of square metres.

El Hamamsy highlighted this point, stating, “The aggregate land bank we have is 100 million square metres. On average, each development encompasses millions, not just hundreds or thousands, of square metres.” This scale sets Orascom apart from traditional real estate developers, positioning it as a leader in creating vibrant, self-sustaining towns.

From Egypt to Switzerland

Orascom’s expansion has been driven by both passion and opportunity. Samih Sawiris’s love for the sea and desert led to the development of multiple coastal communities along Egypt’s Red Sea, such as Makadi Heights and Taba Heights. These areas offer pristine beaches and modern, comfortable living.

Similarly, in Oman, the town of Jebel Sifah, located 40 minutes from Muscat, exemplifies how Orascom adapts its vision to local contexts while retaining its core ethos. Residents can enjoy activities like kitesurfing, and take a sunset boat ride, all within a community designed to blend into the desert and coastal environment while continuing to work remotely.

Switzerland presented a different challenge. The village of Andermatt, nestled in the Swiss Alps, had been a military base during the Cold War. After the military withdrew, the local economy faced collapse.

Recognising Orascom’s expertise, the Swiss government invited Sawiris to advise on revitalising the area. Despite being a foreign investor in a country known for strict real estate laws, Orascom was granted an exception, allowing it to develop the town while preserving its cultural and social fabric.

The result was a transformation of Andermatt into a thriving ski resort town, with luxury hotels, residential properties, and a renowned golf course.

Andermatt now boasts 180 kilometres of ski slopes and is a leading Swiss destination, demonstrating Orascom’s ability to adapt its model to diverse topographies.

This partnership with local communities is a hallmark of Orascom’s approach.

Creating sustainable towns

Orascom’s towns also emphasise social and economic sustainability along with being in harmony with the natural environment.

By creating jobs, supporting local businesses, and fostering community, Orascom ensures that its towns continue to thrive. In Andermatt, for example, the development revitalised the local economy after the military’s departure.

The Covid-19 pandemic has further highlighted the appeal of Orascom’s towns. As remote work became more prevalent, residents realised they could live in these idyllic settings year-round, rather than just for holidays.

“What was once considered a second home is now becoming a primary home,” El Hamamsy noted, illustrating how the pandemic reinforced the appeal of Orascom’s integrated communities.

A timely pivot

Under El Hamamsy’s leadership, Orascom Development has shifted to focus on core competencies and profit centres, moving away from operational aspects.

The recent sale of its 73 percent-owned subsidiary in the UAE for approximately $40m is part of this strategy. This deal also involves writing off CHF18m from Orascom’s total debts, according to media reports.

El Hamamsy told Gulf Business in an earlier conversation, “As part of our growth strategy, we recognise the need to transition away from owning and operating everything. This move is geared towards achieving profitable growth, enhancing customer experiences, and unlocking the stored value in our assets.”

The group’s strategic realignment has led to double-digit profits since 2022. According to its H1 2024 results, Orascom Development logged an adjusted net profit of CHF41.9m, up 35.6 per cent from H1 2023, with real estate sales up 59 per cent to CHF433m.

El Hamamsy’s leadership has been instrumental in the company’s transformation. With 19 years at McKinsey, focusing on high-growth and turnaround projects, and a background spanning Egypt, Europe, North America, and the GCC, he joined Orascom in 2020 at a pivotal time.

Despite challenges such as the Covid-19 pandemic and Egypt’s currency devaluation, he successfully tripled sales and shifted the company from a family-owned entity into a true multinational.

Inviting the world to live, work, and play

Orascom’s success lies in its ability to create spaces where people can truly live well. From Egypt’s serene beaches to Switzerland’s snow-capped peaks, Orascom’s towns offer something for everyone.

The CEO shared an anecdote from Switzerland, where the local community in Andermatt was initially sceptical about Orascom’s plans. However, after seeing the success of developments like El Gouna, they embraced the project, voting in favour of the revitalisation. This local support, combined with Orascom’s vision, has been key to the company’s continued success.

With ten towns thriving and more on the horizon, Orascom is not just building homes—it’s creating a new way of life.