International companies are looking to turn Egypt into a manufacturing and export hub for home appliances, with several companies moving in the past few months to set up factories in the country. These companies are looking to take advantage of recent incentives from the government — including the golden licenses — as well as Egypt’s location and market demographics to boost exports.

A look at the size of the market: Although there are no official figures, market studies suggest the electronic appliance market in Egypt reached EGP 126.7 bn in 2021, growing 24.5% y-o-y. Egypt currently has 11 large-scale factories for local brands, in addition to agents and distributors for international brands, according to Wafi Abu Samra, a member of the Giza Chambers of Commerce’s electrical appliances division.

We’ve been rather import-heavy, although imports have been declining: Egypt’s imports of durable consumer goods dipped around 19.7% y-o-y in 2023 to reach USD 3.39 bn, according to recent CAPMAS figures. The products that saw lower imports last year include refrigerators — with the value of imports falling to USD 126.8 mn at the end of 2023, compared to USD 157.5 mn at the end of 2022 — as well as washing machines, the imports of which declined 27% y-o-y to USD 24.6 mn in 2023.

There are a few international players angling to make Egypt a regional hub: Korean electronics giant Samsung began manufacturing TV screens in Egypt several years ago, with plans to expand its local manufacturing footprint by producing other electric appliances. In the years since it first set up shop in Egypt, Samsung now manufactures smartphones and was recently awarded a golden license as the Madbouly government works to help localize the country’s mobile industry. Chinese electronics and household appliance manufacturer Hisense is also in talks with the government to assemble its products locally, after entering a partnership in 2021 with El Araby Group to launch a home appliance assembly line here. Hisense is reportedly gearing up to start trial production from its Ain Sokhna facility, according to sources in the know who asked to remain anonymous.

The golden license has been a significant point of attraction: Much like Samsung, Turkish home appliances retailer Beko is building a USD 100 mn home appliance factory in 10th of Ramadan to manufacture refrigerators and ovens, while Haier Egypt earned a golden license for its USD 160 mn factory in 10th of Ramadan.

Egypt could become a real regional hub for home appliance manufacturing, with the local industry becoming deeper over time, General Authority for Freezones and Investment Chairman Hossam Heiba told Enterprise. Some companies already have a c.70% local component quota, according to Heiba, who said that the goal is to hit a 90% local component quota within five years.

The big focus for now? Boosting exports: Household appliances could be a dark horse for Egypt’s engineering industries exports, particularly as foreign investments are flowing in after the recent EGP float, head of the Engineering Export Council Sherif El Sayyad told Enterprise. With the number of manufacturers currently in the country, and with that figure set to grow as imports and the availability of components become easier with the easing of the FX crunch, the manufacturing of home appliances could grow significantly and be well-positioned to export, El Sayyad said.

What’s holding us back: El Sayyad pointed to the need for a more expedited disbursal process for export subsidies that would allow exporters to get their hands on the subsidies within three months. It’s also critical to ensure that manufacturers consistently have access to raw materials required for production, particularly as the industry looks to rely more on sourcing local components, El Sayyad said. Metals in particular are in short supply, head of the Federation of Egyptian Industries’ engineering industries division Mohamed El Mohandis told Enterprise. “Currently, we’re facing a serious shortage of sheet metal, stainless steel, and other metal products because there’s only one sheet metal producer in Egypt,” El Mohandes said, stressing the importance of working with local or foreign private sector players to set up large-scale metal production projects.

The good news: Manufacturers agree that FX availability is no longer a cause for concern, with all of our sources confirming that they are able to release their goods from ports without trouble.

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