Ezdehar Case Study for AluNile

A story of cultural transformation, sound management systems, and strong commercial returns in Egypt’s aluminum fabrication industry, powered by a home-grown responsible private equity investor.

Transforming the Face of Cities: An Evolution in Urban Landscapes

Cities across Egypt and beyond are being reshaped by AluNile, the leading aluminum fabricator established in 1999. Known for its state-of-the-art aluminum and glass systems, AluNile transforms architectural landscapes with its extensive array of customized solutions. From structural glazing, and curtain walls to a variety of doors, windows, and metal cladding, their work contributes to the superior performance of the modern built environment.

AluNile stands apart in the industry with its unique business model, offering fabrication and installation services, a combination that sets them ahead of competitors.

Over the years, AluNile has partnered with major local and regional contractors and developers, including Orascom Construction, Consolidated Contractors (CCC), SODIC, AlFuttaim, AlHokair, Palm Hills Developments, Hassan Allam Holding, Marakez, and Dorra Development. These collaborations have culminated in multimillion-dollar projects that have patently formed the urban landscape of Egypt and beyond.

Operating from their headquarters in Giza and a factory on the outskirts of Greater Cairo, AluNile’s team of over 1000 dedicated engineers and technicians has completed around 250 projects since 2012. These include significant contributions to landmark projects such as the nation’s new administrative city, the “New Capital”, universities, airports, commercial spaces, and offices. As they continue to shape urban skylines and enhance living and working spaces, AluNile reaffirms their unyielding commitment to exceptional craftsmanship and client-focused solutions.

Driving Prosperity Through Responsible Investments

Ezdehar’s investment strategy is characterized by a strong emphasis on responsible and ethical business practices, aiming to build companies that establish lasting legacies that foster resilience and long-term success. As a sector agnostic private equity firm with a focus on Egypt, Ezdehar’s mission is to grow industries in promising sectors that have the potential to drive the growth of the Egyptian economy.

With a hands-on approach to its investments, Ezdehar has a set of essential elements to its portfolio management practices that aim at generating the highest levels of financial return for its investors while advancing the sustainability and business continuity of all investee companies beyond Ezdehar’s investment tenor.

Such elements include building robust leadership teams, creating solid financial and operational systems that are adaptable and scalable, establishing sound environmental and social risk management systems, integrating corporate governance and business integrity principles, and maintaining compliance with all relevant regulatory requirements. Ezdehar’s involvement with AluNile was no different.  

A Partnership Towards Collective Success

In 2017, Ezdehar invested in Nile Aluminum & Metal Co. S.A.E, also known as AluNile. Recognizing AluNile’s potential and the underlying needs of the company in mind, Ezdehar embarked on a collaborative journey with a new CEO and the company’s management team to streamline operations and focus on appropriate growth levels, taking it further where it can leap into its full potential with much more to offer.

This partnership resulted in improved commercial operations, the formation of a corporate strategy, upgraded internal IT systems, enhanced corporate governance, and a sound environmental and social management system. The outcome of these efforts was impressively exceeding  3× growth. 

Risk Mitigation and Redefining the Finish Line

In managing initial challenges, Ezdehar successfully mitigated business model risk by reducing AluNile’s sector and client concentration. This strategic shift towards a diversified business model was achieved by integrating new business opportunities, such as broadening the company’s addressable end markets to commercial and government segments. This diversification allowed AluNile to capture a larger market share and reduce its reliance on the residential end market.

The transition from the founder to a new CEO posed a significant risk to the harmony of the initial management team and the retention of historical clients. However, Ezdehar supported Alunile in navigating this transition smoothly; retaining employees through introducing a comprehensive benefits scheme, improving work conditions, and establishing a fair and transparent performance-based bonus system. In parallel Ezdehar helped grow the company’s client base through introducing new clients and expansion opportunities via its network.

Ezdehar also addressed the challenge of manual and legacy IT systems by transitioning various functions and altering workflows concurrently. This was achieved through the implementation of industry-leading software, which enhanced service performance and operational efficiency.

Creating Sustainable Impact

Pre-investment, Ezdehar, with the help of external advisors, conducted thorough due diligence assessments on multiple fronts, including but not limited to commercial, financial, environmental, social, and tax compliance on AluNile. These assessments informed a comprehensive post-investment portfolio management plan that also took into consideration cultural transformation initiatives within the company.

Ezdehar introduced ‘scaling up’ sessions for better decision-making and improved execution mechanisms, addressing gaps in management, particularly in supply chain and human resources. Institutionalizing Alunile resulted in the development of corporate policies, promotion of ethical practices, improvement of occupational health and safety standards, availing training and development opportunities for all employees, and expertly managing environmental and social risks. Altogether this led to improvements that led to higher financial and non-financial returns such as operational gains, resource efficiency enhancements, fewer incidents, higher employee satisfaction, and improved retention rates.

Together, Ezdehar and AluNile recognized the importance of a supportive work environment anchored in equality, women empowerment, and decent employment opportunities early on in their journey as partners. As such, AluNile’s turnover rate fell from 20% to 8%. Additionally, the company expanded Environmental, Social, and Governance (ESG) practices across operations, establishing formal employee grievance procedures and implementing a sound emergency response plan.

Ezdehar took actionable steps towards automating AluNile’s operations by implementing an ERP management system, which provided accurate reports, and gave a bird’s eye view of productivity and overall business performance.

AluNile is establishing a new factory expected to boost its annual production by 40-50% to expand its business-to-customer (B2C) line and competently pursue export opportunities beyond Egypt, securing contracts in North America and Europe.  

Furthermore, the Company is set to expand into the booming Saudi market, leveraging its strong reputation and broad client base where they anticipate a solid on-ground presence in 2024.