Chinese companies announced planned investment in Egypt
INVESTMENT WATCH- The fruits of President Abdel Fattah El Sisi’s China trip continue with the announcement of multiple new investments by Chinese corporations. These largely came on the back of Trade and Industry Minister Tarek Kabil staying put for talks after El Sisi left China for Vietnam last week after signing a number of multi-bn USD agreements.
First off, the auto industry: Chinese automaker FAW Group will be building a minibus and pickup truck assembly factory in 10 Ramadan City with its Egyptian partner, Geyushi Motors, Kabil announced on Saturday. The plant, which will serve the local market and export to neighboring countries, is expected to begin production by March 2018, Kabil said after a meeting with FAW’s vice chairman in Beijing yesterday. The minister also met with SAIC Motor’s vice chairman to discuss the company’s efforts to find a local partner to begin manufacturing cars in Egypt. The minister said that Egypt is looking to attract new investments of around USD 5 bn to the auto industry to help it achieve its vision of increasing car exports to USD 3 bn a year and produce 500k cars a year by 2022, according to African Independent.
Next up, Chinese spinning and weaving companies TIDA and Shoon Dong Roy are planning to invest USD 800 mn in a new ready-made garment factory in Egypt, sources tell Youm7. The factory is part of the company’s plan to expand its presence in Africa, the sources add, explaining that negotiations are currently ongoing with the Egyptian side. Al Borsa said that a delegation of Chinese textile manufacturers is also planning to visit Egypt soon to explore potential investment what might be done here.
China’s fibreglass maker Goshi Giken signed an agreement with the Suez Canal Economic Zone that will see it spend USD 60 mn to expand its operations in Ain Sokhna, Al Masry Al Youm said on Thursday.
Kabil also met with officials from SKG China, which is currently conducting studies for a potential home appliances plant it wants to build in Egypt, AMAY reports.
The China Development Bank is planning to facilitate funding for Chinese industrial projects in Egypt under the Belt and Road initiative, Kabil also said. The minister said that China and Egypt have agreed on 12 main projects that will receive funding priority, including ones in electricity, transport, housing, industry, and communications. This came after Egypt inked five MoUs with China on Thursday that will see both countries cooperate on agricultural exports, IT, automaking, and fibreglass.
A little bit of context: China is now the largest foreign investor in African greenfields as measured by capex volume (at USD 36.1 bn this year), followed by the UAE at USD 11 bn. The United States remains the largest by number of projects backed.