An Egyptian man named Mina Labib launched Tajerinn on Dec. 24, 2014, the first Egyptian communication network that aims to connect Egyptian manufacturers of raw materials to each other, locally for the time being, with plans to go worldwide in the future. The website is an attempt to connect manufacturers to each other and to consumers, and to develop the way the purchase of raw materials is done on other platforms, such as Alibaba and Tradekey.
Labib, 24, who studied business management at Valley Forge Military Academy and College in Pennsylvania, told Al-Monitor that Tajerinn allows producers and buyers of raw materials such as cotton and primary materials such as yarn to create an online account to show all the information about their product’s quality and price, and to allow the seller to communicate with the buyer without any commission fees being paid to Tajerinn on any sale, even if account holders permit the website to assist them in selling part of their production.
Besides connecting manufacturers, the website gives registrants an opportunity to examine and analyze economic developments, stock market developments and investment opportunities in private manufacturing that use raw or primary materials.
Labib believes that the Egyptian economy can benefit from the Tajerinn platform as it allows the imported amount of raw and primary manufacturing materials to be reduced. Tajerinn allows Egyptians who produce these materials to showcase their products, thus providing more internal marketing opportunities for Egypt’s raw materials. The website also provides an integrated database of Egyptian industries and the best investment opportunities in private manufacturing, especially in terms of availability of raw materials.
Fakhri al-Fiqi, the former assistant executive director of the International Monetary Fund, told Al-Monitor that state policies tend to restrict imports and subsidize exports in a way that is compatible with Tajerinn’s goals.
Tajerinn aims to facilitate the manufacture of raw materials locally as the first step to start exporting ready-to-use products instead of exporting raw materials. Tajerinn also aims to reduce importing raw and primary materials by developing a local marketing strategy of Egyptian materials.
The governor of the Central Bank of Egypt decided on Feb. 4 to restrict bank deposits by individuals and companies to $10,000 a day or $50,000 a month. This move disrupted import operations, which use the US dollar, amid a lack of liquidity in the banks because of that decision. On March 1, the central bank injected $420 million to complete the import of food commodities, medicines and manufacturing needs only, which indicates that the state wants to support manufacturing.
Fiqi said that Tajerinn could contribute to reducing the balance of payments deficit, which is estimated at $35 billion a year, by increasing Egyptian exports — which amount to $25 billion annually — through the opening of the world’s largest market for primary materials for industries such as aerosols and petrochemicals. He said that the platform is capable of reducing imports — worth $60 billion a year — by marketing Egyptian raw materials locally, and promote local production that will in turn reduce imports that are more expensive.
Fiqi said that Tajerinn may contribute to reducing the cost of imported raw and primary manufacturing materials by abolishing the role of intermediaries between the source outside Egypt and the buyer in Egypt. According to him, the intermediaries’ commissions reach 40% of the cost of imported industrial supplies (raw and primary materials), or about $35 billion a year. Tajerinn would be an “electronic intermediary that takes no commission. If Tajerinn succeeds, the paid commissions would drop to $21 billion a year.”
Fiqi added that the website may have a role in reducing monopolistic behavior because it is a simple marketing means for small manufacturers who cannot afford to compete with monopolists. This may help eradicate corruption within the government and private institutions by showcasing a product’s value and quality. Some workers in purchasing departments hide a product’s real quality from their management to get a commission from a specific supplier despite that supplier’s deteriorating product quality or high prices compared to others suppliers who do not pay commissions.
Labib said that Tajerinn’s team signed up 80% of the manufacturers that they met. To date, Tajerinn features about 90 private and governmental industrial accounts. The online registration is free until the selling and buying process starts. He added that the account setup fees will be low and that he will soon announce in a news conference the end of the website testing phase.
Al-Monitor spoke with Mohammed Mattar, the head of marketing of al-Nijma thread factory. The company controls about 70% of the Egyptian market and exports to 20 countries and has a Tajerinn account. Mattar said that the website could open up a larger market for Egyptian products and support foreign investors to invest in Egypt by providing data and information about manufacturing. Rihan Mohammed, the director-general of the International Trade Bureau, affiliated with the Ministry of Trade and Industry, told Al-Monitor that the bureau supports and counsels Tajerinn.
Tajerinn may benefit the Egyptian economy at least by reducing the cost of imported raw and primary materials, but it might also face resistance from intermediaries and some monopolists.