| COUNTRY PERSPECTIVES
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EGYPT |
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Business opportunities & territorial marketing |
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Since launching of the privatisation programme in 1991, the government has moved ahead with 196 sales out of the 314 originally slated for privatisation. The new Ministry of Investment, responsible for managing State-owned companies, announced an initial list of companies to be privatised over the period 2004-2007. |
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Egypt |
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Egypt |
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Introduction |
Since launching of the privatisation programme in 1991, the government has moved ahead with 196 sales out of the 314 originally slated for privatisation. The new Ministry of Investment, responsible for managing State-owned companies, announced an initial list of companies to be privatised over the period 2004-2007 in the following sectors: spinning mill and cotton weaving, trade, metallurgical industries, chemical industries, food industries, housing, tourism and cinemas, maritime and river transport, and ten other companies in various sectors.
Thanks to its strategic location in the Middle East and investment incentives available in particular for activities based in free zones and special economic zones, Egypt is used as a platform for re-export to the Middle East, the Maghreb and African countries. Moreover, the QIZ agreement makes the country attractive for investors targeting the US. For exporters interested in the Egyptian market, the main opportunities are in equipment, machinery and environmental services, information technology and telecommunications, pharmaceutical products and medical equipment, equipment for oil exploration, hotel accommodation and restaurants, food processing, plastic industries, architecture and construction, agricultural machinery, packaging, franchising, retailing, electrical power systems, building materials, components and automotive spare parts… |
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Construction and public works |
Policy promoting public works is a top priority, offering several opportunities in many fields, e.g. activities relating to infrastructure projects (a new channel in the Tochka Delta in the Sinai, new cities), activities in the energy sector such as construction of power stations, development of gas production (greater reserves, plants to produce liquefied natural gas) as well as oil activities. Taking into account the size of the country and its needs, Egypt is and will remain an active consumer of infrastructure projects. Upstream, the needs in consulting, engineering, market studies and modelling are considerable. On the other hand, building contractors and experts will be sought to manage equipment and supply added value services during the implementation phase. |
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Transport |
In the framework of a new global transport policy, a number of major projects have been planned. Among the essential axes of this policy, civil aviation is a most promising sector for foreign companies, with the government seeking to make Cairo the new A major undertaking is the new regional airport of Alexandria/Borg El Arab, along with rehabilitation/development/upgrading of the country’s airport platforms, and divestment of 20 percent in the national carrier Egyptair and its subsidiary companies in the stock exchange at the beginning of 2006. Worsening traffic conditions in the capital have led authorities to take up plans once again for Cairo’s third subway line, which had been put aside because of its cost. Work was scheduled to begin in October 2006.
Some 25 companies and 11 engineering departments are involved in the implementation of five initiatives (road signs, civil engineering, electromechanical works, railways and moving cargo & equipment), along with two other procurement actions relating to analysis of bids and project supervision. |
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Energy |
The oil and gas sector accounts for 8 percent of GDP and 40 percent of Egyptian exports. Natural gas is by far the major element in petrochemicals production and the abundance of Egypt's natural gas reserves gives it a competitive advantage. Production has increased by 75 percent over the past five years, reaching 3.3 billion cubic feet per day by the end of 2003-04, whereas proven natural gas reserves have reached 62 trillion cubic feet (tcf), with probable reserves estimated at 120 tcf. Two factories have been set up to produce liquefied natural gas (LNG) and export of gas has grown thanks to an expanded fleet of tankers to transport LNG, decreasing transportation and infrastructure costs and thus opening up developing markets. Initiatives include the Egyptian-Mediterranean project to export liquefied natural gas (LNG) to Jordan, Syria and Lebanon through extended pipelines and Damietta's complex to ship LNG to Spain and Italy. Egypt has recently become the world's seventh largest exporter of liquefied natural gas.
Over the past decade, electricity coverage has been extended to all parts of the country and virtually the entire population now has access to electricity. Installed capacity was 18.1 GW in 2004. About 86 percent of Egypt's generating capacity is thermal, the remainder hydroelectric. To keep up with growing demand, installation of an additional 13.4 GW by 2012 is planned, mainly through additional thermal power plants. The contribution of the electricity sector to GDP was 1.5 percent in 2003/04. |
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Health and pharmaceutical products |
The Egyptian medical sector is very complex, with multiple public and private actors. The State budget devoted to health remains largely insufficient to ensure maintenance and renewal of the free care network. Except for a few large hospitals, the whole of the medical system suffers from a low level of equipment and quality.
With more than 72 million inhabitants, Egypt is the number one consumer and producer of pharmaceuticals in the Middle East, this sector being one of the country’s oldest strategic industries. In 2004, Egypt exported approximately US$ 43 million worth of pharmaceutical products and an increasing number of private sector companies have entered the market. The private sector dominates over three-quarters of the local market. Egypt has the capacity to manufacture most of the drugs it needs, except for very high technology products. More than 6000 references are registered and 93 percent of needs are covered by the 74 local pharmaceutical companies. Local production covers approximately 94 percent of the domestic market and the government wants to reach self-sufficiency in pharmaceutical products, especially for the most common products. The Egyptian market thus offers promising prospects for foreign pharmaceutical companies, in particular for local production. There are attractive investment opportunities in therapeutic groups. |
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Tourism |
As in other Mediterranean countries, tourism is a major contributor to the GDP, employment and investment and the largest foreign currency earner in Egypt. Along with related services, tourism represents 11 percent of GDP, generates on average a quarter of Egypt’s receipts in foreign currency and employs 2.2 million people, some 12.6 percent of the labour force. International tourist arrivals in 2004 amounted to 6 million, compared to 3.9 million in 1997, expected to reach 8 million in 2005.
Egypt offers a wide variety of attractions from its historical heritage that spans several millennia. Landmarks and monuments from Pharaonic, Nubian, Greek, Roman, Christian and Islamic civilisations are easily accessible. In addition, beach and leisure tourism on the coasts of the Red Sea and South Sinai have grown considerably in recent years. To meet higher demand, tourism accommodation capacity has also been growing, increasing at an average annual rate of 7 percent over the period 2000–2003, outpacing 4 percent growth in tourist demand. |
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