A look at industrial zone expansion in Egypt: An industrial zone is an area that is used for industrial development. Freezones and industrial zones differ in the regulations that govern them, including those related to taxation and customs rules.

Where Egypt’s industrial zones are: There are industrial zones across the country in different governorates, including Abu Rawash in Giza, Al Mahalla in Gharbia, Ataka in Suez, Mut Al Dakhla and Al Kharga in the New Valley, Al Kawthar and Tahta in Sohag, and Rubiky in Cairo. Qalyubia, Beheira, Aswan, Menoufia, Ismailia, Marsa Matrouh, Alexandria, Kafr El Sheikh, Port Said, and North Sinai also host several industrial zones, according to the Trade and Industry Ministry website.

One industrial zone is getting a freezone: In 2020, the Madbouly Cabinet agreed to set up a private freezone in the 10 Ramadan industrial zone. The freezone is part of expansion plans from the New Urban Communities Authority (NUCA), with NUCA developing a 500 acre plot of land on which it plans to establish a public freezone in 10 Ramadan, according to a General Authority for Freezones and Investment source Enterprise spoke with.

Why is this important? Freezones ensure the availability of industrial workforce, ease of access to raw materials, and overall facilitate processes in the export market. Regulations to export goods out of freezones are simpler, which allows companies to ultimately “push more goods out the door,” Mohamed El Gebely (LinkedIn), former general manager of the International Company for Agriculture Production and Processing (ICAPP) told Enterprise. For export-focused players, such as ICAPP, freezones allow a quicker process of moving out goods, which is essential to achieving on-time delivery. This allows efficiency in a company’s supply chain, which is essential since the business model of an export company incorporates that the process should be as quick as possible, El Gebely told us.

Egypt has public and private free zones: Whether the business is under state administration, or is a single investment project, being part of a freezone grants a business many advantages, including exemption from various taxes. Regulations for public and private freezones ensure the same privileges and incentives, according to Ahram Online.

There are still a handful of things that need to happen to ensure the success of the new freezones in Tenth of Ramadan, including setting up a free storage zone, Tenth of Ramadan Investors Association member Sayed El Barhamtoushy told Enterprise. This means that the entry of goods is included, and that the factory withdraws only the quantities it needs and pays the fees on them, making the burden of import costs — exacerbated by our ongoing FX shortage — easier to cope with, El Barhamtoushy said. The government also needs to address the ongoing issue with delayed land allocation for industrial investors, head of the Tenth of Ramadan Investors Association Samir Arif told Enterprise.

Your top industrial development stories for the week:

  • China’s largest cable manufacturer to expand SCZone factory: Chinese cable manufacturer Hengtong will invest USD 18 mn to expand its factory in the TEDA zone.
  • Sidpec partners with Nigerian firm on gas cylinder factory: Sidi Kerir Petrochemical (Sidpec) signed an agreement with Nigerian gas infrastructure company Rungas to set up a factory for manufacturing LPG cylinders in Egypt.
  • China Glass will invest USD 500 mn to establish a glass factory: The factory will produce 243.2k tonnes of tempered glass and 235k of rolled glass every year and export 80% of total output.
  • Xinxing Ductile Iron Pipes will open a USD 145 mn iron pipe factory: The first phase of the project will produce 250k tons of ductile iron pipes earmarked for export per year.
  • Shandong Tianyi Chemical wants to invest USD 110 mn in a new bromine factory: The factory will export all 140k tons of bromine produced per year.
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