🏭 The Russian Industrial Zone could attract investments worth USD 5 bn, with the project slated for completion by 2028, a government source told EnterpriseAM. Infrastructure work is scheduled to begin in 2026, including zone planning and factory development, with the initial construction phase exempt from taxes and fees. The zone’s first phase will span around 500k sqm, Federation of Egyptian Industries board member Kamal El Dessouky told us.

Some 30 Russian companies are currently exploring investment prospects in the zone, the government source said. The firms will benefit from major tax and customs incentives fixed for 49 years under an intergovernmental agreement, as well as a three-year exemption to accelerate construction and production. The Suez Canal Economic Zone (SCZone) offers full tax and customs exemptions on goods produced for export, while domestic sales are subject to Egyptian regulations.

Which sectors will the zone focus on? Egypt is awaiting the list of Russian companies that will participate in the first phase, expected to be finalized before the end of 2025, the government source said. These firms operate in petrochemicals, pharma, automotive, food, and engineering industries. Key sectors also include textiles, technology and information, railways, and building materials, El Dessouky told us.

What’s in it for the Russian firms? The zone’s location provides access to developed infrastructure, the Suez-Hurghada highway, nearby rail links, and more than 70 preferential trade agreements signed by Egypt. Priority sectors align with where Russian exporters see growing African demand, particularly for chemicals.

The project supports Egypt’s Vision 2030 strategy to build a sustainable, manufacturing-led economy, El Dessouky said. Large-scale factories planned for the zone are expected to boost exports, curb inflation, and create new industrial partnerships. Products manufactured in the zone could also be sold locally, helping replace imported goods and strengthen Egypt’s industrial base.

The zone will also give a push to Egypt’s pharma industry, Gamal El Leithy, head of the Pharma Chamber at the Federation of Egyptian Industries told us. It is expected to transfer new technologies to Egypt — particularly in biologicals, biosimilars, and vaccine production.

What’s next? “We are waiting for the Russian side to inform us of the companies that will operate the zone to begin the approval process within the SCZone,” the government source said. Once appointed, the operator will handle factory plot allocations and oversee onboarding of participating companies.

Your top industrial development stories for the week:

  • Chinese state-owned conglomerate CITIC Group is mulling establishing a reverse osmosis desalination plant in Egypt with local partners, the group’s Vice Chairman Liu Chengjun said during a meeting with Prime Minister Moustafa Madbouly to discuss potential partnerships across several sectors.
  • Japanese dairy company Megmilk Snow Brand is mulling setting up a dairy products factory in the SCZone, aimed at serving regional and global demand, the company said during a meeting with SCZone head Walid Gamal El Din during his promotional tour in Tokyo, Al Borsa reports.
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