Ancient Egyptians knew various industrial activities as they extracted metals such as gold, silver, copper and precious stones. They also made masterpieces, jewellery, and pottery and excelled, among others, in porcelain, linen textiles, oil squeezing, shipbuilding and military equipment. In the 19th Century, Egypt had witnessed a great industrial revival when Mohamed Ali created a great industrial base including shipbuilding, and military, sugar, soap, paper, textiles, oil squeezing and chemical industries. Mohamed Ali had also paid due attention to training the Egyptian labour on various artifacts, thus leading to the existence of skillful labour in various fields.

 

By the end of WWI, the national capitalism had played a prominent role in up-grading the Egyptian industry, thus, Industry Committee was established to encourage the national industries. Then, Tal'at Harb founded Banque Misr in 1920 which directed the national savings towards investing in the industrial sector. This bank succeeded in establishing an industrial base that included a chain of great companies and factories which succeeded in establishing an advanced Egyptian industry. The Egyptians adopted the slogan "Egyptian Product for Egyptian Citizen" which succeeded in protecting the Egyptian products.

 

 In order to realize the necessary protection for the national industries, the Cus-toms Reform Law was issued in 1930, then, the national industries realized further advancement during WWII.

 

The July 1952 Revolution had paid due attention to industry, especially during the period 1952-1967 where a number of heavy industries, such as iron and steel, petroleum, petrochemical, chemical, building material, pharmaceutical, spinning and weaving, engineering, electrical, mining and food industries were established.

 

The period 1967-1973 had negatively affected the performance of the industrial sector which was revived after the 1973 October War victory as Law No. 42 of 1974 was issued on the Arab Foreign and Free Zones Investment System with the aim of encouraging industrial investment in Egypt. This was followed by the economic open-door policy.

 

Since 1981, the motto "Made in Egypt" became a national goal for the Egyptian industry so as to realize self-sufficiency and increase Egypt's share of industrial exports.

 

In 1991, Law No. 203 on the Public Enterprise Sector was issued and the private sector was allowed to strongly participate in the industrial development field.

 

 

 

In many occasions, President Mubarak emphasized that exportation had become an essential matter because the development efforts are greatly based on the State's ability to export its products to foreign markets. The importance of exportation is also manifested in its ability to create new job opportunities, reform the deficiency in the balance of payments and attract local and foreign investments, thus realizing constant growth rates.

 

For the Egyptian exports, the African market represents a wide consumption base that is characterized by a great diversity in tastes, demand seasons, and various income levels, the matter which is deemed a great exportation outlet for the Egyptian products that are not optimally exploited due to various reasons, among which are, the expensive trade costs with such countries and the existence of stable European finance and marketing channels, thus increasing the hardships of competition.

 

 

This proramme was applied to raise the Egyptian industrial competitiveness to face the world challenges of globalization and economic blocs and benefit from the opportunities provided by the open markets and international agreements such as that signed between Egypt and the European group on December 1, 1998. The European Programme aimed at improving the competitiveness of around 5000 industrial establishments, fostering the ability of the businessmen associations to serve their members, qualifying 300 Egyptian business consultants trained in the field of industrial modernization services and studies and establishing 15 specialized technological centres and 15 business centres.

 

 

During the fifth 5-year plan (2002-2007), the industrial investments reached about LE 54 billion, including LE 6.5 billion as governmental investments and the rest, which are estimated by around LE 47.5 billion, as contributions from the holding companies and the private sector.

The Industrial Product Real Growth

 

The following figure shows the real growth rates of the industrial product in the fifth five-year plan which realized a noticeable growth from 2.3 % in 2002 /03 to 7 % in 2006/07.

 

 

The industrial sector's contribution to the GDP has increased in 2006/07 to around 17.2 %. The industrial domestic product value (at current prices) soared to around LE 115.1 billion expected in 2006/07. The public sector has contributed by around LE 15.5 billion and the private sector by around LE 99.6 billion. Contribution of the public sector in the industrial GDP has reached around 86 % in 2006/07, thus reflecting the impact of the state-provided investment incentives on the development of the private sector's role and its contribution in the field of transformational industries. 

 

Description	2005/06	2006/07	Annual Direction
Percentage of the industrial sector's contribution in the GDP (at current prices).	17.0 %	17.2 %	Upward

 

Industrial Domestic Product

 

The domestic industrial product value (at current prices) increased to reach LE 310.9 billion expected in 2006/07. Contribution of the public sector reached LE 57.3 billion and of the private sector LE 253.6 billion.

 

 

 

In 2006/07, number of employees in the industry field increased to reach around 2.74 million. Number of labour during the fifth five-year plan reached around 300,000, so the industry share reached around 4 % of the total number of employees.

 

 

The industrial sector exerts continuous efforts to foster the Egyptian industries and improve the industrial product quality to compete in the world markets. Thus, the Egyptian industry has engaged in new fields such as the electronic programming and advanced technological industries. The Egyptian industrial infrastructure is based on a number of important industries such as the textile, furniture, food, mining, chemical and leather industries.

 

Year 2006/07 witnessed high growth rates for the major industrial commodities. The advancement of the industrial production led to improving the self-sufficiency rate in various important industries such as sugar with 80 %, cement with 100 % and enforcement iron with 99.5 %.

 

The fifth five-year plan witnessed high growth rates in some industrial commodities such as aluminum with 77 %, lorries with 49 %, blankets with 45 %, ready-made garments with 40 %, vehicles with 38 %, animal and poultry fodders with 29 %, wool spinning with 30 %, cement with 26.6 %, silk spinning with 26 %, cotton spinning  with 19 %, refined sugar with 14 %, industrial fibers with 16 % and busses with 19 %.

 

Description	Unit	2006/07
Refined sugar	Thousand tons	1,699
Fodders	Thousand tons	11,073.8
Sparkling water	Thousand boxes	361
Cigarettes	Billion cigarettes	80.9
Cotton spinning	Thousand tons	314.2
Wool spinning	Thousand tons	29.7
Silk Spinning	Thousand tons	20.5
Herbal fibers	Thousand tons	97.6
Blankets	Million blankets	18.4
Ready-made garments	Million pieces	329.3
Cars	Number	36,108
Busses	Number	6,297
Lorries	Number	23,779
Washing machines	Number	942,400
Refrigerators	Number	957,700
Electrical lamps	Million lamps	202.5
Butane heaters	Number	285,400
Water meters	Number	534,000
Electrometers	Number	850,600
Aluminum	Thousand tons	273
Enforcement iron	Thousand tons	6143.8
Cement	Thousand tons	36896
Plain and carved glass	Thousand tons	173.8
Phosphatic fertilizers	Thousand tons	1359
Azotic fertilizers	Thousand tons	11378.6
Caustic soda	Thousand tons	135
Vehicle tires	Number	1176,500
Washing soap	Thousand tons	374
Toilet soap	Thousand tons	182.8

 

 

During the period (January-November) 2006, the Egyptian exports (of non-petroleum products) have realized a noticeable growth that reached around LE 73 billion, against LE 54 billion in 2005.

 

-   Value of the furniture sector's exports reached LE 849 million, thus realizing the highest growth rate that reached 99.6 %.

 

-  Value of the chemical and fertilizers sector's exports has exceeded LE 10 billion, with a growth rate of 73.6 %.

 

-  Value of the engineering and electronic commodities' exports has reached around LE 7 billion with a growth rate of around 65.7 %.

 

-  Value of the food industries' exports has reached around LE 4 billion, with a growth rate of around 20.7 %.

 

-  Value of the leather products' and shoes' exports has reached around LE 684 million, with a growth rate of around 34.7 %.

 

-  Value of confection textiles' exports has reached around LE 2 billion, with a growth rate of around 23.6 %.

 

-  Value of medicine and serums' exports has reached around LE 736 million, with a growth rate of 21 %.

 

-  Value of the building materials' exports has reached around LE 19 billion, with a growth rate of 59.3 %.

 

-  Value of the ready-made garments' exports has reached around LE 5 billion, with a huge growth rate of around 71.4 %.

 

-  Exports of the qualified industrial zones (QUIZ) during the period (January-September) 2006 have reached around $ 459.8 billion, against $ 288.5 million during the period (March-December) 2005.

 

The following figure shows the value of the industrial exports and imports every 3 months as of October 2005 to December 2006 (Value in LE billion).

 

 

Thanks to the presidential decree on amending the customs tariffs, the new Tax Law and the Investment Law No. 13 of 2005 on facilitating the investment proce-dures and the commencement of the Free Arab Trade Zone, the industrial investment climate in Egypt has experienced a tangible progress. The industrial zones have been upgraded and equipped with the necessary services and utilities so as to encourage the industrial settlements, especially in Upper Egypt.

 

 Furthermore, the General Authority for Industrial Development (GAID) was es-tablished by a presidential decree to provide all necessary facilities for investors and establish equipped specialized industrial zones.

 

The GAID  has reduced the price of lands allocated for industrial investments, offered facilities in payment and permitted building on an area of 65 % of the lands instead of 50 %, thus reducing the price of lands by around 25 %.

 

A fund for supporting the industrial lands was also established to eliminate the hurdles that face the industrial projects and 610 land plots have been allocated for youth in 2005/06.

 

 

Industrial zones are essential means for attracting investment as the state allo-cates some of these lands for free or with low prices. Such zones also contribute to realizing an equal distribution of investments in the various governorates, thus realizing equal development all over Egypt.

 

A presidential decree was issued on the alienation of free lands for investment projects in Upper Egypt. This decree aimed at encouraging the investors to move to these places.

 

 The GAID promotes for these areas in its special index. Providing further industrial investment incentives and privileges has led to an increase in the number of industrial zones to reach 90.

Moreover, number of established plants exceeded 12,400 ones working in all walks of industrial activities, not to mention the infrastructure of the industrial projects that exceeded 27,000 in the fifth five-year plan.

 

These zones are found in Greater Cairo, Delta, Upper Egypt, Suez Canal region, Alexandria and Sinai. They work in producing pharmaceuticals, ready-made garments, petrochemicals, house-hold and electrical equipment, refrigerators, ceramic, cement, enforcement iron and building materials.

 

 

Description	Planned	Realized	Percentage %
Number of zones	83	90	108
Total area (thousand feddans)	140.7	172.7	123
Costs (LE billion)	115.0	129.2	123
Number of workers (thousand persons)	680.8	735.8	108
Area equipped with utilities (thousand feddans)	23.8	52.9	222
Number of productive projects	4835	5361	111

 Source :Socio-Economic Development Plan, 2007/08

 

Free zones in Egypt enjoy the best privileges, investment incentives, guarantees and exemptions. Thus, they are a distinguished investment pattern. They also represent an important mechanism for increasing exports, furthering the national product and creating new job opportunities. The free zones work in the framework of the Law on Investment Guarantees and Incentives No. 8 of 1997.

 

There are 7 free zones in Egypt that are all equipped with the necessary utilities and infrastructures. They also offer annual usufruct lands. Such zones have succeeded in attracting investments and increasing their exports to reach around 50 % of their production.

 

Moreover, there are private free zones which stipulate exporting around 50 % from its production and that all conditions on buildings, specified in the regulations and statutes, should be fulfilled.

 

Quality and Distinguished Efforts to Promote the Egyptian Industry

 

Ministry of Trade and industry is keen on improving the Egyptian industry quality so as to raise its competitiveness to be able to compete in the world markets. In this framework, the Ministry has applied an integrated plan to realize its goal. Around 6000 international standards for a large number of foods, architectural, chemical, spinning and weaving and textiles industries have been applied. This number is expected to reach 8000 by the end of 2007.

 

The first quality electronic map has been applied on the internet so as to make people acquainted with the companies that enjoy applying the international stan-dards. Moreover, a national institute for quality was established in cooperation with the Arab Academy for Sciences and Technology to promote the Egyptian industrial product.

 

 

In 2002/03, Egypt started the Industrial Modernization Programme (IMP) with a total cost of ? 427 million. The European Union contributed in this programme with a grant of ? 250 million, i.e. 59 % of the total cost. This programme aims at increasing the domestic product growth rate, promoting the competitiveness of the Egyptian product, creating further job opportunities, increasing the income and merging in the world economy.

 

 

The Centre offers all means of technical support for the establishments that work in the architectural, chemical, programming, food, textile, clothing and furniture industries. It has also followed up the implementation of the Industrial Modernization Programme since 2005/06 and succeeded to apply the programme in 3400 establishments in the framework of implementing the modernization plan.

 

Number of services offered from the Industrial Modernization Centre (IMC) has increased from 731 in 2004/05, to around 7,802 in 2005/06, with a total of 15501 by the end of 2006. Moreover, the number of labourers has increased from 431 to 5,226 during the same period with a total amount of 9,906 laborers by the end of 2006.

 

In the framework of the modernization efforts, the Consultative Councils for Modernizing Industry and 300 Egyptian consultative offices in the field of modernization services have been rehabilitated to offer consultations and technical support for the employees in the industrial field.

 

The IMC signed a protocol for the Industrial Financing Programme in coopera-tion with the Trade Union and banks to allocate LE 75 billion to finance the Egyptian industries in an attempt to contribute to implementing the 1000 Factories Programme during the period 2005-2011.

 

 

The Ministry of Trade and Industry has signed a memorandum of understanding with the Japanese International Cooperation Authority (JICA) in August 2007.

 

 This memorandum aims at transferring and settling the state-of-the-art Japanese technology to the Egyptian industry and expanding the services of the Japanese Technological Center (Kaizen) so as to improve the quality and raise the productivity with a total grant of around LE 17 million. The Centre will offer its services to a large number of factories and companies in various industrial sectors and they will start in the 6th of October, 10th of Ramadan and Alexandria cities.

 

An agreement has been made with the Japanese Development Bank on allocating $ 130 million in the form of grants and loans to be provided to the Egyptian factories and companies to purchase and modernize the equipment and machinery, train the Egyptian labourers in Japan, and provide Japanese expertise in various fields to contribute to modernizing and upgrading the Egyptian industry.

 

The Japanese Centre encourages the labourers on applying the comprehensive quality systems, developing the labourers' and technicians' skills and abilities, in-creasing the added value and the productivity of the factories and improving the quality of the industrial products so as to compete in the domestic and international markets.

 

In 2006/07, the Centre has provided services for around 125 factories and plants in the field of textiles, architectural and chemical industries, in addition to training 300 technicians and engineers and offering 1500 technical consultations in the fields of improving the quality and productivity, maximizing the benefit from the raw materials and decreasing losses. It is targeted to reach 1000 factories in the next three years and train around 3,000 technicians and labourers. 

 

 

The Thousand Factories Programme will be implemented within the period 2006-2022. This programme aims at encouraging the partnership between the private and banking sectors to build 1000 factories with international standards or make expansions in the existing ones.

 

 

Targeted	2006	2007	2008	2009	2010
Number of Factories	90	123	153	180	200

 

Law on Protecting the Consumer… a Step Towards Guaranteeing Quality of the Egyptian Product

 

In the framework of the exerted efforts to raise the quality of the Egyptian industry, Law on Protecting the Consumer No. 67 of 2006 was issued. The Consumer Protection Agency, which includes the consumer protection associations, governmental and non-governmental bodies, was established by virtue of such law which aims at fighting the industrial fraud and the incompatible products, thus realizing the benefit of the consumers, traders and manufacturers.