Industry & Retail
From The Report: Egypt 2020
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Industry is front and centre of Egypt’s economic growth and diversification plans. The government aims to increase high-technology exports and boost the value of the manufacturing sector. To further enhance output and investment, Egypt continues to implement favourable policies, including the development of industrial zones and special economic zones. Although the sector will face challenges in the short term, a longer-term focus on infrastructure development is expected to soften the trend. Meanwhile, Egypt’s retail industry benefits from a growing population, affluent middle class and openness to new offerings. Although the pandemic is set to result in slower than anticipated growth in the short term, the government has taken steps to offset repercussions on the economy, such as raising online payment limits; increasing tax exemptions; and supporting informal workers. At the same time, customers are increasingly taking advantage of online retail options, which is likely to be a lasting trend in the post-Covid-19 world. This chapter contains interviews with Yehia Zaki, Chairman, Suez Canal Economic Zone; and Ahmed El Sewedy, President and CEO, Elsewedy Electric.

Articles from this Chapter

Overview

Enhanced output: Regulatory changes and investment in special economic zones aim to enhance efficiency and production
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Industry is front and centre of Egypt’s economic growth and diversification policies. The government aims to increase high-technology exports in this sector, as well as increase the value added by manufacturing as a percent of GDP. Several factors make industry attractive to foreign investors, including the country’s location between key markets in Africa, Europe and Asia; relatively low-cost labour; and a number of new infrastructure projects. To enhance output and investment in industry,…

Interview

The place to be: Yehia Zaki, Chairman, Suez Canal Economic Zone, on the right incentives to attract international investment
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Interview: Yehia Zaki Which policies can be adopted to encourage more private investment in special economic zones? YEHIA ZAKI: Encouraging private investment in economic zones is about ensuring a competitive regulatory framework and efficient bureaucratic system, and combining these with the necessary infrastructure and supply chain links. Reducing or removing value-added tax for certain companies that export goods can attract manufacturing and create jobs. In the case of imported goods, applying…

Analysis

Spinning forward: Investment in textile production is set to boost exports
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In comparison to many other industrial subsectors in Egypt that rely heavily on imported inputs, which grew more costly following the 2016 currency devaluation, the garment segment is able to use locally sourced materials. Foreign investors are attracted to the production base’s relatively affordable labour, lower electricity and water costs, and attractive location with proximity to key markets in Europe, Africa and Asia. Textiles are also central to the government’s efforts to increase…

Analysis

Fast-moving change: Producers and food retailers adapt to shifting preferences
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After the 2016 currency devaluation and IMF-backed economic reforms that led to an increase in the prices of necessities such as fuel, electricity and basic foods, Egyptian consumers began to rationalise their spending habits. Many began to opt for cheaper brands, or stopped purchases in certain categories altogether. Fast-moving consumer goods (FMCGs) and food retailers were particularly affected by the changes, as high inflation drove down demand. However, a fall in the unemployment rate…

Interview

Power through: Ahmed El Sewedy, President and CEO, Elsewedy Electric, on supply chain integration and strengthened energy infrastructure
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Interview:Ahmed El Sewedy In light of the headwinds created by the Covid-19 pandemic, how can the private sector shift to create long-term gains? AHMED EL SEWEDY: Almost every industry around the world has been affected by the Covid-19 pandemic, and everyone has to work hard to overcome these uncertain times. The first and most important thing that organisations should do to sustain their companies in light of the pandemic is to ensure business continuity while offsetting disruptions, whether…

Overview

Growing options: E-commerce expands as customers turn to online retail platforms for more of their shopping needs
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Egypt’s retail industry benefits from a growing population, affluent middle class and openness to new retail options. Although the currency devaluation in 2016 initially affected business via downward pressure on consumer purchasing power, spending resumed in 2018 and is expected to stabilise further when unemployment and inflation levels balance. While high-income consumers contributed to the sector in terms of value per purchase, low- and middle-income consumers – who are more likely…

Analysis

Manufacturing shift: The Covid-19 pandemic has sparked questions about whether China can sustain its position at the centre of global industry and international supply chains
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The fact that the virus originated in China, the world’s major manufacturing centre, led to disruptions in global supply chains of basic goods, and gave rise to speculation that some companies would seek alternative production bases. Indeed, international reaction was swift, with representatives of three of the world’s four largest economies publicly encouraging companies to shift their manufacturing operations out of China as part of plans to diversify global industry. In April 2020…