The government is now shifting its focus toward using government-owned companies’ unused assets for industrial development, after years of focusing on residential, commercial, and administrative projects. Officials are on the lookout for industrial developers to optimize returns on state-owned industrial land — an effort long overdue and previously attempted on a limited scale — industry insiders told EnterpriseAM.

The move will see increased attention to plots deemed unsuitable for real estate and commercial projects, with many areas owned by public sector companies situated outside of residential areas potentially finding investors from the industrial sector, CPC Industrial Development Company CEO Moataz Baha El Din told EnterpriseAM. While many public sector companies have monetized plots in residential areas through direct sales or partnerships with real estate developers, offering up its cheaper land outside of these areas to industrial developers could open up some important revenue streams.

However, industrial developers favor vacant land that can be equipped and tailored to one’s wishes, in contrast to unused buildings owned by the public sector, Baha El Din added. Baha El Din explained that this company is keen to work with the government to utilize state-owned industrial land.

Different plots may also appeal to different investors, as investors will assess plots based on their compatibility with different industries, Bahaa El Din and Freezones Investors Association chairman Moatasem Rashed told us. Available infrastructure, utility readiness, and regulatory compliance will also influence decisions, we were told. Bahaa El Din emphasized that industrial zones must adhere to strict zoning rules, preventing incompatible industries — such as food and chemicals — from operating in close proximity.

We’ve seen several similar initiatives recently, like when four state-owned companiesinked agreements in 2023 with private-sector firms to co-develop new factories on land owned by government-owned companies. The projects included a factory for chlorine pellets and another for PC wire on land owned by Chemical Industries Holding Company, a hydrogen processing unit on land owned by Egyptian Chemical Industries, and a kidney dialyzers factory on land owned by El Nasr Pharma.

The government is also thinking beyond traditional industrial zones and has recently repurposed land adjacent to petroleum sites and designated areas in the Red Sea’s Ras Shukeir as a “green industrial zone” for petrochemicals, green hydrogen, and ammonia production.

The exact way the initiative will work is still yet to be determined, The Public Enterprises Ministry is open to multiple models for industrial development, Polaris Parks General Manager Bassel Shoirah told Enterprise AM. Options include outright land sales to private developers or joint ventures to industrialize the land.

Polaris Parks is one of the interested parties, and is currently awaiting a list of available plots to consider for investments, we were told. The company is also exploring collaborations with the Public Enterprises Ministry for hotel and resort development. Although still in the feasibility phase, initial plans involve converting select government buildings into boutique hotels.

The success of this initiative will depend on offering competitive investment incentives, Freezones Investors Association chairman Moatasem Rashed told us. Transparent pricing mechanisms for land sales or partnerships will also be crucial.

It’s hoped that the collaboration with industrial developers and global partners will bolster Egypt’s efforts to create an attractive investment climate, Public Enterprises Minister Mohamed El Shimi highlighted, according to a ministry statement. The ministry aims to convert idle public-sector land into industrial zones, supporting the national strategy for sustainable industrial growth, boosting local production, and creating jobs.

Your top industrial development stories for the week:

• Elsewedy Electric is set to build the region’s first subsea cable factory: Elsewedy Electric will build a USD 500 mn subsea cable factory in the newly-announced zone in Dameitta Port that is set to be the first of its kind in the region and only the sixth in the world.
• Another ready-made garments factory sets up shop in Qantara West: Chinese firm Di Seta has kicked off the construction of a USD 40 mn ready-made garments factory in the Qantara West Industrial Zone, with operations set to begin in September.
• CEO of local furniture manufacturer Mobica Mohamed Farouk and an unnamed British partner plan to establish a EGP 1 bn healthy food factory in the Sixth of October Industrial Zone, expected to be completed within a year after.