{"id":640395,"date":"2024-08-25T00:00:00","date_gmt":"2024-08-25T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/chinese-investors-have-been-loving-egypt-as-of-late-heres-the-breakdown-of-how-this-love-has-translated-into-investments\/"},"modified":"2024-08-25T00:00:00","modified_gmt":"2024-08-25T00:00:00","slug":"chinese-investors-have-been-loving-egypt-as-of-late-heres-the-breakdown-of-how-this-love-has-translated-into-investments","status":"publish","type":"inside_industry","link":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/chinese-investors-have-been-loving-egypt-as-of-late-heres-the-breakdown-of-how-this-love-has-translated-into-investments\/","title":{"rendered":"Chinese investors have been loving Egypt as of late \u2014 here\u2019s the breakdown of how this love has translated into investments"},"content":{"rendered":"

Chinese industrial investments in Egypt: Past, present, and future. <\/strong>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 \u2014 a 20-30% y-o-y increase \u2014 Head of the Trade Ministry\u2019s Commercial Representation Authority Yehia El Wathek Bellah told Al Arabiya<\/a>. <\/p>\n

As things stand: <\/strong>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<\/a> released by state statistics agency Capmas. <\/p>\n

SCZONE: THE DESTINATION FOR CHINESE INVESTMENTS- <\/p>\n

To the zone: <\/strong>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<\/a> 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\u2019s electric utility company Zhejiang Energy International. <\/p>\n

Nothing new:<\/strong> Chinese companies signed agreements and MoUs worth USD 15.5 bn<\/a> late last year, all of the investment agreements targeted the SCZone \u2014 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.<\/p>\n

Things are moving along: <\/strong>China\u2019s state-owned Xinxing Ductile Iron Pipes in March<\/a> 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. <\/p>\n

There is interest in a specialized industrial zone: <\/strong>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<\/a>. There are also plans to expand the TEDA industrial zone in Ain Sokhna to 7.3k sqm.<\/p>\n

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

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CHINESE MOVES OVER THE PAST 12 MONTHS-<\/p>\n

Between factories kicking off operations, breaking ground, or just being agreed upon<\/strong>, there\u2019s 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: <\/p>\n

#1- A USD 38 mn manufacturing facility:<\/strong> Chinese electronics and household appliance manufacturer Hisense and the UAE\u2019s FBB Tech<\/a> 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.<\/p>\n

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

#3- A textile project in West Qantara:<\/strong> China\u2019s Zhejiang Hengsheng Dyeing and Finishing Company last month<\/a> laid the foundation stone for its dyeing, processing, and textile manufacturing project in the SCZone\u2019s West Qantara Industrial Zone, with investments amounting to USD 70 mn.<\/p>\n

#4- An integrated chemicals production complex:<\/strong> The SCZone in June<\/a> 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\u2019s first phase.<\/p>\n

#5- Two projects in TEDA worth a combined USD 9.5 mn:<\/strong> The SCZone in May<\/a> 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.<\/p>\n

#6- A USD 12 mn home appliances and heat exchangers factory:<\/strong> Guangdong Vanward New<\/a>Electric<\/a> broke ground in January on a USD 12 mn factory<\/a> 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. <\/p>\n

#7- Haier\u2019s ecological park:<\/strong> Chinese appliance manufacturer Haier<\/a> inaugurated its eco-industrial park in Tenth of Ramadan City in May<\/a>. <\/p>\n

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

#9- Jushi\u2019s fiberglass factory expansion:<\/strong> Chinese fiberglass manufacturer Jushi said in<\/a>December<\/a> it will invest USD 8 mn to expand its factory in TEDA after it was awarded a 60k-sqm plot by Elsewedy Industrial Development.<\/p>\n

#10- A USD 2 bn chemicals production complex: <\/strong>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<\/a>. <\/p>\n

And we want more:<\/strong> 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<\/a>.<\/p>\n

To sweeten the pot: <\/strong>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<\/a>, facilitating access to CNY in Egypt for financing local investments.<\/p>\n

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Your top industrial development stories for the week:<\/strong><\/p>\n