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Trenco set for a USD 160 mn overhaul with private sector investment: The government is reportedly looking to team up with the private sector to revive and develop state-owned tire manufacturer Trenco, with estimated investments of USD 160 mn, Al Mal reports, citing a government document. Trenco — which previously covered 30% of the internal market — shut down operations in 2022.
(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)
The project at a glance: The project aims to see Trenco produce 1.5 mn truck and bus radial (TBR) tires locally, removing the need to import them. The project also entails adding production lines for heavy duty tires.
Things could go in a different direction: Trenco parent firm Chemical Industries Holding Company (CIHC) previously said that it is in talks with foreign companies that have showed interest in setting up a tire factory that would manufacture Trenco’s Nisr brand of tires on CIHC-owned land in Alexandria’s Amreya, according to Al Mal.
In line with our localization push: The government is looking into increasing the required localcomponent percentage in car manufacturing in an effort to boost feeder industries as more global players look to assemble their units locally.
REFRESHER- Egypt consumed around 10 mn tires in 2022, of which only 15% (1.5 mn) tires were produced domestically, with the remainder coming from imports. As of last year, Pirelli and Pyramid Tires stand as the only tire manufacturers in Egypt, covering around 8.2% of domestic demand, after Trenco closed its doors.
Want more? We published an Inside Industry last year diving into Egypt’s plans to localize tire manufacturing.
Remember: The previous government first laid out the Egyptian Automotive IndustryDevelopment Program (AIDP) — a comprehensive strategy to localize automotive industries — in 2022.
PROGRESS ON THE SINAI MANGANESE STAKE SALE-
Gov’t to offload a stake in Sinai Manganese: The same document also revealed that the government is planning to offer a minority stake in CIHC’s manganese producer Sinai Manganese.
Why now? The move comes as the government looks to fund two new projects with total investments of USD 11 mn — one for producing and processing kaolin (a clay used in the production of paper, rubber, and paint), with a production capacity of 40k tons a year, and the other for gypsum board calcination, with an annual production capacity of 6 mn cubic meters.
Remember: The company is on the government’s list of 35 companies up for stake sales to strategic investors, via the EGX, or a mix of both. The state-owned National Investment Bank currently owns 59% of the company and CIHC owns the remaining 41%.
Investors have been lining up for a slice of Sinai Manganese since last year: Al Mal reported last year that several local and international investors were looking to grab a stake in the state-owned company, which was being shopped around by the Sovereign Fund of Egypt ahead of the sale.
