The most promising market in the Middle East - North Africa businees in Egypt.pdf · ΓΡΑΦΕΙΟ...

1 ΓΡΑΦΕΙΟ Ο.Ε.Υ. ΚΑΪΡΟΥ

Egypt

The most promising market in the

Middle East - North Africa

Evangelos Dairetzis

Counselor, Economic & Commercial Affairs


Egypt: Gateway to Africa and the Middle East


Strategic position in the Mediterranean

Strategic position in the Middle East and

Africa

The largest market in the Arab world

The most stable country in a volatile

region

Gateway for the Greek products to the region


Area: 1.001.450 sq. km.

Population: 85.000.000 in.

Density: 3 in. / Km²

Largest cities

Cairo: 14.000.000

Alexandria: 4.500.000

Port Said: 610.000

Suez: 550.000 Luxor: 490.000

Cairo: GMT +2


The Egyptian economy

GDP $ 262 billion

Per capita GDP $ 6.600

GDP Growth 2.1% (2012/13), 3,5% 2013/14 (est.)

Inflation 11,4% (Αug. 2014)

Unemployment 13,4% (Μarch. 2014)

Public debt 83.4% (2012/13) GDP

Budget deficit: 13.8% (2012/13) GDP

Sharp decline of 5 years CDS of state bonds


GDP structure

Mining 17,33%

Manufacturing Industries 15,65%

Agriculture, irrigation, fishing 14,51% Wholesale & retail trade

10,96%

General Government 10,42%

Constructions 4,58%

Transportations, storage 4,01%

Education, health 3,80%

Financial 3,27%

Social solidarity 3,23%

Tourism 3,15%

Real Estate 2,59%


Egypt imports 2013 value share

Item $ 1000 %

PETROLEUM OILS 3.590.086 10.91

PETROLEUM CRUDE 2.024.648 6.15

YELLOW CORN, NOT FOR SHOWING 1.941.596 5.90

WHEAT 1.940.742 5.90

LIQUIFIED BUTANES 1.570.451 4.77

SEMI-FINISHED IRON PRODUCTS 1.518.479 4.62

MEDICINES 1,099,404 3.34

ARTICLES OF IRON & STEEL 1.095.947 3.33

FUEL OIL 955.313 2.90

MOTOR VEHICLES 926.570 2.82

GOLD 909.189 2.76

WOOD SAWN OR CHIPPED 839.167 2.55

IRON WASTE & SCRAP 836.806 2.54

95 OCTANE GASOLINE 830.101 2.52

BOVINE MEAT, BONELESS 826.892 2.51


Main suppliers

2012 $ mil.

share 2013 $ mil.

share % 13/12

China 6.732 9,8% 6.961 10,9% 3,4%

Germany 4.749 6,9% 5.200 8,1% 9,5%

USA 5.372 7,9% 5.174 8,1% -3,7%

Italy 3.511 5,1% 3.535 5,5% 0,7%

Ukraine 3.941 5,8% 3.143 4,9% -20,2%

S. Arabia 2.739 4% 3.033 4,7% 10,7%

Turkey 3.511 5,1% 2.618 4,1% -25,4%

Kuwait 2.679 3,9% 2.598 4,1% -3,0%

Brazil 2.922 4,3% 2.273 3,6% -22,2%

India 2.293 3,35% 2.259 3,5% -1,5%


Greek – Egyptian Trade

2012 - 2013

€ mil. 2012 2013 % 12/13

Exports 345.386.332 593.468.273 72%

Imports 444.391.206 576.500.234 29,7%

Trade volume 789.777.538 1.169.968.507 48,1%

Trade Balance -99.004.874 16.968.039 117,1%


Greek – Egyptian Trade

2010-2013


GREEK EXPORTS TO EGYPT 2013 2013 % SHARE 2013

TOTAL 593.468.273

'27' MINERAL FUELS & OILS 406.931.716 68,6%

'52' COTTON 63.621.851 10,7%

'25' SALT, SULPHUR, EARTH & STONES 28.961.999 4,9%

'08' EDIBLE FRUITS & NUTS 18.163.855 3,1%

'24' TOBACCO & MANUFACTURED SUBSTITUTES 11.348.257 1,9%

'84' NUCLER REACTORS, BOILERS, MACHINERY 8.377.403 1,4%

'73' ARTICLES OF IRON & STEEL 7.112.353 1,2%

'39' PLASTICS & ARTICLES THEREOF 5.899.786 1%

'48' PAPER, PAPERBOARD, ARTICLES OF PAPERPULP 5.164.955 0,9%

'20' PREPARATIONS OF VEGETABLES, FRUIT, NUTS 4.950.467 0,8%

'72' IRON AND STEEL 4.296.783 0,7%

'38' MISCELLANEOUS CHEMICAL PRODUCTS 2.954.339 0,5%

'87' VEHICLES, PARTS & ACCESSORIES THEREOF 2.804.324 0,5%

'32' TANNING OR DYEING EXTRACTS, DYES, PIGMENTS 2.777.962 0,5%

'85' ELECTRICAL MACHINERY, EQUIPMENT & PARTS 2.716.260 0,5%

'31' FERTILISERS 1.988.008 0,3%

'49' PRODUCTS OF THE PRINTING INDUSTRY 1.519.960 0,3%

'04' DAIRY PRODUCE; BIRDS' EGGS; NATURAL HONEY 1.468.829 0,2%

'11' PRODUCTS OF THE MILLING INDUSTRY 1.325.490 0,2%

'23' RESIDUES FROM FOOD INDUSTRIES, ANIMAL FODDER 982.976 0,2%

'15' ANIMAL OR VEGETABLE FATS AND OILS 706.944 0,1%

'76' ALUMINIUM AND ARTICLES THEREOF 703.537 0,1%

'34' SOAP, WASHING & LUBRICATING PREPARATIONS, WAXES 604.067 0,1%

Greek – Egyptian Trade,

1st Semester 2014

€ mil. Jan-Jun 2014 Jan-Jun 2013 %13/14

Exports 490.505.170 347.140.985 41,3%

Imports 464.552.957 185.825.308 150%

Trade volume 955.058.127 532.966.293 79,2%

Trade Balance 25.952.213 161.315.677 521,6%


Egypt Today

Turning points: the revolutions of January 25, 2011 and

June 30, 2013

Government and a charismatic elected president with

broad popular support

Parliamentary election expected by the end of the year

Gradual return of the country to normality Security has

been restored to the greatest extent

Powerful and capable economic team to manage and

restart economy

Clear signs of recovery of the Egyptian economy


Government Priorities

Restarting the economy, attracting foreign investment

Ongoing investment program:15 mega projects of $ 100 billion to boost economy (Canal Suez Corridor, new land for agricultural use, road, railway network)

Infrastructure, security, education, housing, health, energy, agriculture, renewable energy resources

Continued financial support by Arab States –

Egypt’s stability crucial, not only for the region

The negative image of Egypt

projected by Western media

(mainly via Al Jazeera)

is not realistic


Energy (renewable)

Infrastructure

Telecommunications - new

technologies

Transportation

Health

Education

Agriculture

Sectors with high growth rates


Investment required in time and effort to

establish oneself in the market

Reliable local partner in problem solving

Detailed knowledge of legislation

procedures prior to any agreement.

Use of lawyer recommended

Ensure of exporter by letter of credit

Market characteristics


Overregulation, delays at customs

Cumbersome commercial justice system

Price is the dominant factor, followed by

quality

Consumption peak period: two months

before and during Ramadan

Emerging market with considerable yields


Gateway for re-exporting to countries in

the wider region

Preferential agreements with Arab, Nile

basin countries, African countries

(COMESA)

Positive image of Greece in Egypt but

incomplete. Most known for its food

products

Greek traditional products are popular,

though not successfully enough due to

lack of a comprehensive strategy on behalf of the Greek exporters


Greek products, due to price, are

addressed to middle class consumers

Satisfactory performance but not as

successful as of Italian and Spanish

competitors

Labeling in Arabic offers clear advantage

to the product (successful cypriot example)


Egyptian legislation one of the most favorable regarding commercial representation

Non Egyptian national is not allowed to set up commercial importing company


Energy

RENEWABLE ENERGY

SOURCES

State target: Cover 20% of energy needs

by 2020

Significant solar and wind resources

Funding: State budget, international

organizations and developmental tools of

western countries

Prospects for Greek enterprises: using

solar energy for solar farms and

household, industrial and tourist use

Government has adopted new law

establishing new feeding tariffs for solar

and wind energy (at 0.8 and 1.05 piasters

per kW respectively). This might stimulate

alternative energy investments



HEALTH SECTOR

Drugs - medical equipment: 10% increase

in demand per year

The vast majority of medical equipment is

imported

Upgrading the health system creates

business opportunities (hospital supply)

Private medical centers


Franchising

460 companies (65 American)

24% foreign names

$ 7 billion investment mainly in the food

sector

Prospects: food, clothing, foreign

languages teaching, furniture, accessories-gifts, hotels, electronics

Significant opportunities for

Greek products also because of :

Upgraded political relations with Greece

Crisis with Turkey is shrinking its market

share

Civil War in Syria (affected mainly the fruit

market) and Libya (trade through Egypt)

Prospects of increased maritime and port

cooperation


Construction

Μακέτα του νέου Διοικητικού Κέντρου


INFRASTRUCTURE

Highways

Railway network

Airports

Inland road network

Hospitals, schools

Power stations, RES

Housing units

Tourist complexes

Water - drainage

Desalination plant

The Ambitious “ Suez Canal Development ptoject”

Ports

Industrial zones

Tunnels

Residential areas

Tourist areas

Fish farming

Logistics centers



FOODSTUFF

Egypt imports basic foodstuff

The world's largest importer of wheat

Greek products: middle class (15 mil.)

Significant perspectives for Greek fresh fruits

Meat and poultry products: Helal certification

Packaged agricultural products, juices, milk,

snacks, pre-prepared meals, pastries, frozen meats, seafood


TARIFFS

Association Agreement 2004: phasing out tariffs

within 15 years

Tariff information (EU Market Access Database):

http://madb.europa.eu/madb/indexPubli.htm




TARIFFS

Foodstuff: 0-32%

Alcoholic Drinks 1200-3000% - 300% for "tourism

purposes"

10% sales tax on commodities


Corporate tax

Corporate tax: 25%

Companies in energy sector of 40%-55%

Personal income tax up to 25%


Legal forms of companies

Ανώνσμη Εταιρεία (Joint Stock Company)

Εταιρεία Περιορισμένης Εσθύνης (Limited

Liability Company

Ομόρρσθμος Εταιρεία (General

Partnership)

Υποκατάστημα (Branch)

Γραυείο Αντιπροσώπεσσης

(Representative or Liaison Office)


Investment Law 8/1997

Guarantee of capital repatriation, right to

hold foreign currency accounts

Preferential treatment and incentives

(manufacturing, infrastructure)

Information about the current status of

investments: General Investment Authority

(GAFI)www.gafinet.org

http://www.gafinet.org/


The most significant trade fairs

ΙΝTERBUILD (building materials)

www.interbuildegypt.com

SAHARA (agriculture)

www.saharaexpo.com

HACE (hotel equipment, restaurants etc.)

www.hace.com.eg

AGROFOOD (foodstuff, agroindustry)

www.agrofood.com.eg/

ΕGYMEDICA( medicines, medical equipment)

www.egymedica.com

http://www.interbuildegypt.com/

http://www.interbuildegypt.com/

http://www.saharaexpo.com/

http://www.hace.com.eg/

http://www.agrofood.com.eg/

http://www.egymedica.com/


Direct sale: dealer - distributor

Tenders

Participation in exhibitions

Trade mission organized by business

entities

franchising

ENTRY TO THE MARKET -

PROMOTION


TECHNIQUES

Egyptians entrepreneurs: cosmopolitan, international experience, very good negotiators

Cultural specificities: every price is negotiable, sluggish bureaucracy

Advertising in newspapers and magazines, growing role of TV, street posters, “junk mail advertisement”


Greek investment

Banking, constructions, shipping, energy

(exploration and production), food

industry, irrigation, clothing, packaging,

etc.

$ 1,2 billion

50 Medium and large scale companies


Sectors of the Egyptian economy

and prospects for Greek products

and services

Energy: Renewable energy

Environment – water treatment, recycling

Transportation

Shipping: construction - expansion ports, passenger transport

Construction: undertake projects, construction materials

Agriculture: agricultural machinery, irrigation equipment, construction equipment and greenhouses, fertilizers, oil formulation, aquaculture, agribusiness

Health (hospitals, medical equipment, drugs)

Education and training

Manufacturing - industrial cooperation

Foodstuff

Transportation

Telecommunications


New technologies

Freight and passenger transport

Shipbuilding

Financial Sector

Security systems for companies, individuals, government

Franchising (foods. Wear, foreign languages, furniture, accessories-gifts,

227 Greek companies export products and services in Egypt

INTERNATIONAL ECONOMIC

FORUM

International economic summit scheduled

for February of next year.

The summit will encourage international

companies and organizations to invest in

the country and contribute to its

development.


EMBASSY OF GREECE –

OFFICE FOR ECONOMIC &

COMMERCIAL AFFAIRS - COMPANIES

Greek Investors Club (Business Club)

Egyptian – Greek Business Council

(EBA - SEV)

Active support for Greek investors

Assistance (advocacy) towards Authorities

Promotion of Greek products and services

TRADITIONAL GREEK PRESENCE

Patriarchate of Alexandria

Greek communities in Cairo and

Alexandria

Greek schools

Associations and Clubs of the Greek

community

Greek Chambers of Cairo and Alexandria


OFFICE FOR ECONOMIC & COMMERCIAL

AFFAIRS

EMBASSY OF GREECE IN CAIRO

ΤEL. +202-27948482

FAX +202-27940684

e-mail: [email protected]

Website: www.agora.mfa.gr

mailto:[email protected]



http://www.agora.mfa.gr/

The most promising market in the Middle East - North Africa businees in Egypt.pdf · ΓΡΑΦΕΙΟ...

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