Industry
From The Report: Egypt 2016
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In the years since the 2011 revolution, the industrial sector has been put at the forefront of government plans for economic growth. New industrial zones, substantive training programmes and development plans along the Suez Canal corridor have all been committed to paper as part of a strategy to boost the manufacturing sector’s contribution to economic output over the next decade. The proposals and initiatives are of considerable value, particularly given that Egypt’s industries have had to face headwinds over the past few years, both globally and domestically. In the shorter term, industrial growth is likely to be constrained by electricity and dollar shortages, but the government is working to address these issues and conditions should ease over the medium term. This would clear the way for more robust industrial expansion, as the growing population and rising incomes ensure that demand in segments from building materials to FMCGs remains strong. This will, in turn, result in significant opportunities for growth over the next decade.

 This chapter contains interviews with Ahmed Abou Hashima, Chairman and CEO, Egyptian Steel; and Hani Berzi, Chairman, Edita Food Industries.

Articles from this Chapter

Overview

Fuelling expansion: Industry remains an important driver of economic activity
OBG
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In the years since the 2011 revolution, the industrial sector has been put at the forefront of government plans for economic growth. New industrial zones, substantive training programmes and development plans along the Suez Canal corridor have all been committed to paper as part of a strategy to boost the manufacturing sector’s contribution to economic output over the next decade. The proposals and initiatives are of considerable value, particularly given that Egypt’s industries have had to…

Analysis

Appetite for growth: The consumer food segment remains strong
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While the years since the 2011 Arab Spring have been difficult for many of Egypt’s industries, the fast-moving consumer goods (FMCG) segment has remained largely resilient. Although inflation has been a worry in terms of its effect on domestic sales, the majority of FMCG manufacturers have been experiencing robust growth. Trending The long-term trends in the market look positive, with food and beverage processing is seen as a particularly promising. Food consumption has been increasing by more…

Analysis

A fertile segment: Chemicals manufacturers invest in local capacity
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The chemicals and plastics sector has a long history in Egypt, and it is becoming an increasingly important component of the country’s industrial output and export base. With strong demand for a range of industrial chemicals and for plastics to serve the thriving fast-moving consumer goods market, the sector is likely to become an industrial heavyweight in the coming years. According to Mohamed El Kheshen, chairman of Evergrow, a fertiliser company, “The chemicals sector is one of the most stable…

Interview

Steely resolve: OBG talks to Ahmed Abou Hashima, Chairman and CEO, Egyptian Steel
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Interview:Ahmed Abou Hashima What are your expectations with respect to short-and medium-term demand for steel? AHMED ABOU HASHIMA: No matter what is happening on the political and economic fronts, there is always a high demand for steel, and these last five years have shown the resilience of the Egyptian economy. The new capital alone will have a huge impact on the steel sector, in particular through a rise in demand. Other real estate projects announced by the government and the…

Interview

Growing production: OBG talks to Hani Berzi, Chairman, Edita Food Industries
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Interview: Hani Berzi What makes Egypt an attractive base for the production of fast-moving consumer goods (FMCG)? HANI BERZI: First, Egyptian households spend 40% of their monthly income on food. With 90m people, the market is very large, and the population is young and growing at around 1.8-1.9% per year. As a result, the snack-food market has seen a compound annual growth rate of around 20% over the past few years and is worth approximately LE15bn ($2bn), according to 2014 figures. Second, given…

Analysis

Not set in stone: Cement producers overcome energy challenges by using coal
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In countries around the world, the cement industry is often seen as a bellwether. When it is performing well, it suggests an economy in full flow, moving in the right direction. It is hardly surprising, therefore, that much like the rest of the industrial sector and the economy at large, Egypt’s cement producers – which account for 3.7% of GDP, or LE60bn ($8.2bn) – have experienced mixed fortunes in the last few years, with some encouraging signs and promising long-term prospects alongside…

Analysis

Changing gears: While the prospects for the domestic automotive sector are promising, there are challenges to overcome in the short term
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The Egyptian car industry resonates as a marker of prestige and self-sufficiency. However, it also holds more tangible benefits for the country’s economy. The 15 car assembly factories and 75 facilities in supporting industries employ 75,000 workers and have the capacity to produce 300,000 cars and buses per year. The industry performed strongly in 2014. Overall sales figures, including imported vehicles, reached almost 300,000 units, up almost 50% on the previous year. The local production sector…

Analysis

Weaving it all together: International agreements provide a strong foundation for the textiles industry
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The textiles sector is among Egypt’s oldest and most important industrial segments. With the introduction of Qualified Industrial Zones (QIZs) in 2004, giving exporters tariff-free access to the US market, the textiles industry reached new heights. Indeed, for much of the 2000s, the industry was experiencing double-digit growth. However, the 2011 Arab Spring and the insecurity that followed hindered development, and the challenge now is to push forward to meet ambitious government goals. Major…