Ancient Egyptians practiced the industrial activity and knew how to extract minerals such as copper, silver, gold and precious stones such as emerald and turquoise. They excelled in making fine artifacts, silver and gold pieces of jewellery as well as pottery and copperware. They also were famous for a number of industries including paper, textiles, oil squeezing, ship building and military equipment. These industries contributed to form the ancient Egyptian civilization.

 

 Egypt has known the craft groups, may be before Roman era. This system remained, for a long time, responsible for the industrial activity so that it led to the promotion of small industries that abolished the industrial building. At the beginning of 19^th century, Egypt witnessed a huge industrial revival thanks to Muhammad Ali who laid down a great industrial base, established a number of major industries including military and textile industries in addition to sugar industry, oil squeezing, rice mills and factories for preparation of chemical materials. In addition, he established many great factories, introduced the usage of advanced equipment and paid due attention to training Egyptian workers, thus creating a class of highly skilled workers.

 

At the end of World War I, the national capitalism managed to re-introduce modern industry and popular awareness of the importance of Egyptian industry increased. So that, in 1920, Misr Bank was founded as the first national Bank contributing to invest the Egyptian capitals in financing industry for the fist time the Bank succeeded to establish an industrial base including many great companies. The custom amendment law issued in 1930 achieved the national Industry protection.

 

The Egyptian industry achieved a great revival during World War II, However, the industry sector importance was still limited in the Egyptian economic structure.

 

The 23^rd July Revolution 1952 paid due attention to industry and considered it the major way for growth and progress. Therefore, the first ministry of industry was established in 1956. During the period from 1952 to 1961, the Egyptian industry witnessed a tangible leap that was characterized by establishing a number of pioneering heavy industry projects including iron and steel, petroleum, petrochemicals, spinning and weaving and food industries. At the wake of 1967 war, the Egyptian industry march was negatively affected and the period from 1967 to 73 witnessed a drop in the performance of industry sector and also problems and burdens increased.

 

After 1973 October war victory, Egypt witnessed a radical change in the economic philosophy and policy. The state began encouraging the private sector to invest as the law on Investment of Arab, foreign and free zones was issued and the liberalization process of public sector and the open-deer economy policy had taken place. Since 1981, Egypt has begun a new stage on the way of industrial development and the motto of “Made in Egypt” has become the driving objective of Egyptian industry.

 

Moreover, the state has given due attention to the quality so as to achieve self-sufficiency and enhance exportation. With the enforcement of Economic reform policy, public sector was re-structured by law no 203 of 1991 concerning public enterprises sector and has been the door opened before the private sector to lead the development process. Therefore, the great industrial companies have become affiliated to public enterprises sector instead of Industry Ministry.

 

So, the Industry Ministry has played guidance, observant and promotional role through bodies and departments that are affiliated to it.

By the enforcement of privatization programme, private sector role has increased and contributed to about 74.6 percent in development plan. Egyptian industry has been granted many facilitations and advantages and also the investments directed to industry sector have increased.

 

At the earlier of 21^st century, the state has adopted a programme for modernizing the Egyptian industry and (achieving) a leap in industrial product in addition to achieve quality to be able to compete in domestic and foreign markets under the umbrella of Markets opening. 

    

Industry sector is considered one of pivotal sectors in the Egyptian economy due to is role in National income and foreign trade development as well as improving balance of payments in addition to its role in providing citizens' needs from commodities and providing the main requirements to other sectors. It absorbs about 12.5% of the current total labour force.

At the earlier of 1980s the industry sector participation has developed in Gross Domestic Product. The total industrial product rose from about LE 8.9 billion in 1981/82 to LE 273.4 billion in 2004/05. Industry sector relative importance of Gross domestic product increased from 13.1% in 1981/82 to about 17% in 2004/05.

 

Industry sector Gross Domestic product reached about LE 95.6 billion in 2004/05, of which the public sector contributed about LE 12.9 billion a rate of 13,5% and the private sector contributed about LE 82.7 billion with a rate of 6.5%. The implemented investments of industry sector during the two past decades exceeded over LE 60 billion. Investments of 2004/05 reached about LE 7.7 billion.

 

Total industrial buildings of General organizations for industrial on 1^st January 2005 reached 26458 buildings. The volume of its product reached about LE 224516 million at an investment cost of LE 195300 million. In the framework of sustainable efforts to develop Egyptian Industry, the two past decades witnessed supporting Egyptian industry base and increasing the productivity capacity with a ratio of 25% in a number of basic industries in addition to entering new fields such as hi-tech industries and programmes and micro-electronics industry.

 

The Egyptian Industrial building is based on industries forming more than 80% of industrial institutions. The greatest three industries are textile, food and beverage industries as well as furniture manufactures and mineral, chemical and main metals industries.

The industrial quantitative production has realized regular development in many industries.

 

 Quantitative production of spinning and weaving industry in 2004/05 reached about 407.4000 tons and about 279.6 million pieces of ready-made garments. In the field of construction and building requirements, 28339 thousand ton of cement and about 4405 thousand tons of reinforcement steel were manufactured.

In food industries, 1434 thousand tons of sugar, 20,000 tons of flour and 3,320 ton of rice mills were produced.

In Medicine Industry, about LE 3562 million were achieved.     

 

		Product		Growth
Commodity	Unit	1981/82	July 2004 February 2005	Rate %
- Spinning - Ready-made garments - Carpets and moquette - Blankets - Refined sugar - Flour (wheat, corn and barley) - Rice mills - Animal poultry fodders - Manufacturing cleaning - Passenger Car - Buses - Refrigerators - Washing machines - Medicines - Phosphate fertilizers - Cement - Reinforcement steel bars	1000 tons Million pieces Million m2 Million pieces 1000 tons 1000 tons 1000 tons 1000 tons 1000 tons Number Number 1000 1000 LE million 1000 tons 1000 tons 1000 tons	262 45 1.1 3.4 693 8243 1344 1611 52 16273 705 326 221 245 511 3629 355	707.4 279.6 19.5 15.2 1434 20.000 3320 3303 252 30.000 3066 1000 993 3562 1270 28339 4405	56 521 1673 347 107 143 147 26 385 84 335 207 350 1354 149 681 1141

 

Egypt enjoys a competitive advantage in certain industries, salient of which are spinning and weaving, chemical and petrochemical industries, in addition to engineering and aluminium products industries.

The volume of Egyptian exports increased from $ 515.5 million in 1981/82 to $ 7695 million in 2004. The industrial exports growth rate reached 24 percent during this year. Mineral products ranked the first of Industrial exports in 2004. It reached $ 3766 million with a rate of 43 percent of exports volume. So, textiles and ready made garments ranked the second and reached $ 1008 million with a rate of 13 percent, then plants products were the third and reached 86,3 million, with a rate of 8 percent.

 

The precious metals achieved a tangible leap and rose from one million dollar in 2000 to $ 528 million in 2004, with a rate of 7 percent of total exports.

The Markets of Western Europe countries came at the top of the countries that receive Egyptian exports. It has received about 33 percent of total exports in 2004, then Asian markets with a rate of 28 percent and a group of different markets (Arab and non Arab) were the third with a rate of 16 percent and African markets with a rate of 8 percent.

 

In the framework of developing the capabilities of industrial sector, ministry of Industry and Ministry of Technological Development merged with foreign trade ministry and became Ministry of foreign trade and Industry. The Ministry is to affirm on the “Quality” concept as a national motto and join the standard specifications of industrial commodities with the international specifications as well as pay due attention to the environmental origin of Egyptian industry and identify the environmental specifications of Egyptian industrial product for the international demand especially European.

 

Major steps have been implemented in order to develop the industry sector performance. Salient of which are: approving the first law for small Egyptian industries to encourage and develop them; giving exemption and tax advantages for many productive projects and approving a new draft for custom tariff contributing to increase the competitiveness capability of Egyptian product, in addition to continuing to support exports and exporter through Exports Development Fund and providing information and industrial guidance network.

 

 Preparing industrial data base including 11261 industrial buildings and 3318 products in addition to 12 industrial investment maps for raw materials and commodities and 24 feasibility studies of relative advantage industries as well as preparing a guidance list including the required industrial enterprises in local market and could accepted in foreign markets.

 

Quality is the major element for enhancing the Egyptian industry competitiveness capability in order to face the challenges in local and foreign markets. In the framework of Egyptian-European partnership, since 2002/03 Egypt has started to implement the Industry Modernization Programme at a total cost of 427 million euro. European Union contributed to 250 million euro in the programme with a rate of 59 percent of total cost.

 

The programme aims at enhancing the competitiveness of the Egyptian industrial sector so as the Egyptian products would become qualified for making optimal use of the openness of Egyptian markets and integrates Egypt into the international economy, in addition to envisages to provide more job opportunities and increase income. Numbers of factors benefited from this programme during the past three years reached 430 buildings.

 

It is targeted to modernize 3400 building during the period (2004/05- 2005/06) through providing technical support for these factories that work in the field of weaving, ready-made garments, furniture, software programmes, food industries, engineering and chemical industries.

 

In the framework of modernizing the Egyptian industry, consultant council was established to modernize industry and rehabilitate 300 Egyptian consultant offices in the field of modernization services.

 

The industrial zones is the most means of attracting investment due to the advantages that the state provided to these zones. Salient of which are: allocating lands in some zones in free or with law prices. These zones contribute to equally distributing investments in various governorates and enhance great development for all Egyptian regions.

 

Industrial zones in Upper Egypt governorates enjoy special advantages due to the Presidential Decree of giving the people title deeds for investment projects which have begun its production.

 

General Authority for Investment promotes for these zones through specific guide.

Number of industrial zones rose from 12 in 1981/82 to 90 zones in 2005 including 12 zones in Greater Cairo, 8 in Delta, 27 in Upper Egypt, 27 in Canal region, 13 in Alexandria and 3 zones for heavy and extracting industries in Suez and Sinai governorates.

 

The allocated areas of industrial zones increased from 60.3 km² in 1981/82 to 657 km² in 2005. The most important activities in these zones are pharmaceutics production and its requirements, ready –made garments, petro -chemicals, house-hold and electric sets, refrigerators, ceramics, paints, cement, reinforcement steel and building materials

 

The new cities and urban communities that reached 21 in 2005 help in redrawing Egypt's urban and economic plan.

The industrial zones are the hope to create new job opportunities for thousand Egyptians due to the investment advantages of these zones at a top of which are taxes exemption and lands law prices that contribute to increasing number of productive factories from 896 in 1991/92 to 3322 factories in 2005, with an increase rate of 271 percent. The productive factories capital in these new cities and urban communities till January 2005 is about LE 32.2 billion. The volume of annual production reached about LE 34.7 billion and number of workers are about 308.5 thousand. There are about 1709 factories under construction.

 

Free zones in Egypt is a distinguished investment model. It enjoys the best investment advantages and incentives in addition to guarantees and exemptions compared to many countries. It is considered an important machinery of increasing exports and national income, as well as providing new job opportunities.

 

Free zones operate under the law of investment guarantees and incentives No 8 of 1997.

Egypt has 7 free zones equipped with utilities and infrastructure to receive enterprises. The lands are provided against annual usufruct 83.5m² of industrial projects.

The free zones are spread near the ports. These zones succeeded to attract investments and develop exports in a way these Zones industrial projects export not less than 50 percent of their total production.

 

In addition to the general free zones, the investment activity in Egypt could be practiced in exclusive free zones. The established projects in the country could be transformed into exclusive free zones, providing that the project should actually operate its business and exports are not less than 50 percent of total production and fulfill all conditions that are set by statute and rules.