17 January 2018 05:22 PM

Industry Development

Monday، 20 July 2009 12:00 AM

Historically ancient Egyptians were known for being engaged in industrial products, especially after discovering mining. They extracted minerals such as copper, silver and gold.

In modern-time Egypt's Mohamed Ali set up a major industrial base, where textile, sugar, cooking oil squeezing, rice mills and the military industries flourished. A shipyard and factories for preparation of chemical materials were established.

In 1920, Banque Misr launched a campaign to revive Egyptian industry. An industrial base was successfully established that included a chain of great companies and factories. The Egyptians embraced the slogan of “the Egyptian product” which helped protect their products.

After the July 1952 Revolution Egypt set up a number of heavy industry projects such as iron and steel, mining, petroleum, chemical, spinning and weaving and food industries.

The war period from 1967 to 1973 negatively affected the performance of the industrial sector, which was revived later following the 1973 October war victory. The open-door economy policy was actively embraced.

With peace having been established, Egypt embarked a new stage of industrial development. The motto “Made in Egypt” became a national goal and the industrial sector endeavored to develop the Egyptian product. By virtue of the economic reform policy that started in 1990s of the past century, the role of the private sector increased achieving the industrial development. The industrial sector enjoyed a variety of privileges and incentives.

By the beginning of the 21st century, Egypt set out to revive its industry especially after the ministries of industry and foreign and domestic trade became a single entity. Egyptian products were able to compete and industries were modernized within an integrated program. A suitable atmosphere was thus created which encouraged the private sector to assume a key role in achieving economic development.

The industrial sector represents a factor in national economy. It tops other economic sectors due to its participation in Gross Domestic Product (about 17.5% in 2005/06) in addition to its strong interrelation with several productive and services sectors, and its role in developing foreign trade and improving the balance of payment.

The sector’s contribution to GDP amounts to a total of EGP275.3 billion, of which the private sector contributes EGP223.9 billion (81.3%) while the public sector contributes EGP51.5 billion (18.7%).

The year 2007 witnessed the launching of the 1,000 factories project. The number of the major factories the investments of which hit more than EGP15 million amounted to 283, including 169 new factories and 114 expansions of existing factories till the end of November 2007.

Egypt as an industrial hub

• Egypt boasts several factors that could well turn into a world-renowned industrial hub:
• Cheap labor
• Investment incentives
• A transportation network
• Raw materials

 

Egyptian Industry Modernization Program

 

In the framework of Egyptian –European partnership, Egypt began to implement the modernization program since 2002/03. The program aims at increasing the competitiveness of the Egyptian product to integrate the country into international economy. Another goal is creating more job opportunities and increasing the national income due to the increase of industrial exports volume.

The modernization program costs 437 million Euros, the European Union contributed 250 million Euros or 59 percent of the total cost. The program has benefited 430 industrial facilities during the first three years. The Egyptian Modernization Industry Centre has assumed the full supervision on implementing the program since 2005/06. The centre has successfully implemented the program in 3,400 facilities within the modernization plan. The volume of financing to the modernization activity reached 146 million euros during in 2006, while 145.6 million Euros were allocated to finance the program during 2006/07 to assist 7,300 facilities.

Industrial Production Development

Sustainable efforts are exerted by the industrial sector to support the Egyptian industrial base and help Egyptian industrial products occupy a suitable position on world markets. The productivity of a number of basic industries has increased 25 percent in the past 25 years. In addition, new industries were introduced such as hi-tech and micro-electronics industries.

The Egyptian industrial construction is based on seven industries representing 80 percent of the industrial facilities. The country’s top three are textiles, food and beverage and furniture; minerals, chemicals and metallurgy are also major industries.

Industrial contribution to GDP in 206/07 increased to 17.2%, amounting to a total of EGP115.1 billion, of which the public sector’s share was estimated at EGP15.5 billion; the private sector at EGP99.6 billion.

Industrial Exports...on Rise

The recent years have witnessed a remarkable increase in Egyptian exports, from $13.8 billion in 2004/05 to $22 billion in 2006/07.

In the period from January to November 2006, non-petroleum exports reached EGP73 billion; an increase of 4% over the 2005 figure of EGP54 billion.

 

Incentives

Egypt has recently witnessed a marked improvement in the atmosphere of investment due to several elements topped by the republican decree of amending customs tariffs, issuing the new tax law, launching the Great Free Arab Trade Zone Since January 2005, issuing the law of Investment No. 13 of 2005 that aims to facilitate the procedures of investment through establishing the unified services centre, establishing the public Association of Industrial Development that is in charge of the industrial developing policies and responsible for developing the industrial areas which is qualified to attract industrial investment.

 

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