Chinese industrial investments in Egypt: Past, present, and future. Chinese investors have been loving our local market for some time now and Egypt plans to keep the investments coming, with hopes of seeing some USD 1 bn worth of Chinese investments this year — a 20-30% y-o-y increase — Head of the Trade Ministry’s Commercial Representation Authority Yehia El Wathek Bellah told Al Arabiya.

As things stand: Chinese investments in Egypt grew by 69.8% y-o-y during the fiscal year 2022-23 to record USD 956.7 mn, according to latest figures released by state statistics agency Capmas.

SCZONE: THE DESTINATION FOR CHINESE INVESTMENTS-

To the zone: The Suez Canal Economic Zone (SCZone) has become the destination for Chinese investors looking to set up shop in Egypt. The SCZone in April inked 14 agreements with Chinese companies to set up several projects in partnerships with local private sector players. These include a USD 800 mn fiberglass and polyester factory courtesy of Chinese synthetic fiber manufacturer Xin Feng Ming Holding in the China-Egypt TEDA trade zone in Ain Sokhna and a power generation center by China’s electric utility company Zhejiang Energy International.

Nothing new: Chinese companies signed agreements and MoUs worth USD 15.5 bn late last year, all of the investment agreements targeted the SCZone — a combined USD 14.8 bn were dedicated to green manufacturing and green energy investments and the remaining USD 755 mn came in the form of manufacturing projects. These include a framework agreement for a USD 6.75 bn green hydrogen plant by state-owned China Energy, a green energy-powered potassium chloride complex, a glass factory, and an iron pipes factory.

Things are moving along: China’s state-owned Xinxing Ductile Iron Pipes in March signed an agreement with the SCZone for the right to use a plot of land in the TEDA industrial park to set up its USD 146 mn ductile iron pipe factory.

There is interest in a specialized industrial zone: Some 10-15 Chinese companies have shown interest in setting up a specialized industrial zone for chemicals and petrochemicals with CNY investments worth USD 7.5 bn-12 bn. There are also plans to expand the TEDA industrial zone in Ain Sokhna to 7.3k sqm.

Chinese investments extend beyond SCZone: Beijing has also set its sights on northern Egypt, with plans to set up a new industrial zone on the Mediterranean Sea which will cater to both the local market and exports to the US and Europe.

CHINESE MOVES OVER THE PAST 12 MONTHS-

Between factories kicking off operations, breaking ground, or just being agreed upon, there’s been a lot of movement when it comes to Chinese investments and projects in Egypt over the past year or so, among the most notable:

#1- A USD 38 mn manufacturing facility: Chinese electronics and household appliance manufacturer Hisense and the UAE’s FBB Tech inked a contract earlier this month with Chinese industrial developer Egypt TEDA to establish a USD 38 mn electronic devices manufacturing facility in the TEDA trade zone in Ain Sokhna.

#2- A USD 500 mn textile and ready-made garment complex: Chinese textile and garment manufacturer Jiangsu Lianfa Textile wants to set up a USD 500 mn integrated complex for textile and ready-made garment production in Egypt.

#3- A textile project in West Qantara: China’s Zhejiang Hengsheng Dyeing and Finishing Company last month laid the foundation stone for its dyeing, processing, and textile manufacturing project in the SCZone’s West Qantara Industrial Zone, with investments amounting to USD 70 mn.

#4- An integrated chemicals production complex: The SCZone in June inked a framework agreement with Chinese chemicals manufacturer Befar Group to set up an integrated chemicals production complex dubbed Green Marine in TEDA. The company has earmarked a USD 250 mn investment package for the project’s first phase.

#5- Two projects in TEDA worth a combined USD 9.5 mn: The SCZone in May allocated land plots for two projects in TEDA; a USD 5.5 mn project by Xinjin Textile, Printing, and Dyeing and a USD 4 mn project by Shengyuan Construction Engineering Company.

#6- A USD 12 mn home appliances and heat exchangers factory: Guangdong Vanward NewElectric broke ground in January on a USD 12 mn factory for home appliances and heat exchangers in the TEDA industrial zone, which is set to produce 500K water heaters and 2 mn spare parts annually.

#7- Haier’s ecological park: Chinese appliance manufacturer Haier inaugurated its eco-industrial park in Tenth of Ramadan City in May.

#8- A 10-GW solar project in Upper Egypt: China Electric Power Equipment and Technology in January signed an MoU with the Madbouly government to begin studies to develop a 10-GW solar project in Upper Egypt.

#9- Jushi’s fiberglass factory expansion: Chinese fiberglass manufacturer Jushi said inDecember it will invest USD 8 mn to expand its factory in TEDA after it was awarded a 60k-sqm plot by Elsewedy Industrial Development.

#10- A USD 2 bn chemicals production complex: China-based chemicals manufacturer Befar Group could build a USD 2 bn industrial complex for producing specialty chemicals in East Port Said under a letter of intent inked with the SCZone in December.

And we want more: The General Authority for Investment and Freezones is planning forums and promotional tours to attract more emerging markets-focused Chinese investors, GAFI Head Hossam Heiba previously said.

To sweeten the pot: Egypt and China are in discussions over conduction trade transactions in their local currencies and authorities are looking into allowing Chinese companies to make local investments in CNY, Heiba said late last year. There are also talks over opening up a branch of the China Development Bank in Egypt, facilitating access to CNY in Egypt for financing local investments.

Your top industrial development stories for the week:

• New Abdeen Cookware incoming: Abdeen Cookware is setting up an EGP 120 mn factory in the Tenth of Ramadan industrial zone, with operations set to begin in 1Q 2025. (Al Borsa)
• Biogrand to set up a SAR 25 mn fertilizers plant in KSA: Local fertilizers manufacturer Biogrand plans to set up a SAR 25 mn fertilizer factory in Saudi Arabia by the end of February 2025.