MAK Brake Lining Company was founded by A. Wahab as an automotive parts manufacturing firm that was located in Egypt and financed by the El Kharafi Investment Company of Kuwait. Created in January 1991 according to Egyptian investment law #230 as a shareholder company with paid up capital of 4,000,050 Egyptian pounds, a total of 26,700 shares were issued at par value of LE 150 each (Gupta and Hatem, 2). MAK found a technology partner with credibility with the Original Equipment Manufacturer (OEM) or vehicle assemblers. This partner was Ferodo, one of the most reputable companies in the industry and a producer of both brake lining and disc brake pads for passenger cars (PCs) and commercial vehicles (CVs).
The firm entered into a Licensing and Technical Assistance Agreement (LTAA) with Ferodo providing the technical expertise and MAK, under Wahab, developing the products. However, the scope of the agreement did not include the use of the Ferodo brand name in export-oriented products.
In short order, as it became apparent that an international vehicle manufacturer was not going to invest in Egypt, MAK changed its direction and decided to deal with the replacements or after market (AM) (Gupta and Hatem, 3). Today, MAK's products include friction products such as automotive disc pads, commercial brake lining and rivets and disc pads, and related molded, rolled materials and brake fluid. The firm had a competitive advantage in the Egyptian market which contained two local competitors possessing only 6 percent of MAK's total sales in 1998.
Internally, MAK is organized to include a limited partnership with Ferodo. The firm faces challenges regarding its licensing arrangement with Ferodo due to the fact that it needs to restructure its production system away from the use of asbestos in order to be able to export to markets outside of Egypt.
MAK is chaired by Mr. L.J. Kharafi of the major investment group that is fi...