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	Egypt		Info-Prod Country Guide
CHARACTERISTICS   INDICATORS   THE ECONOMY   INVESTMENT ISSUES   PROJECTS   PROSPECTS

Current and Projected Projects General Foreign corporations are now looking seriously at new direct investment in Egyptian projects. That Egypt is to be listed on the International Finance Corporation's emerging market's index by January 1997 only makes the country more attractive for investment. Multinational companies are particularly active in the petroleum sector in Egypt. Among these are the Gulf of Suez Petroleum Company (GUPCO) which is a joint venture between the Egyptian General Petroleum Corporation (EGPC) and Amoco of the US, with more than $5 billion in investments. Amoco is also active in the development of compressed natural gas for automotive use and is developing an integrated business in Egypt involving public station for vehicle fueling and other fueling facilities. Other multinationals operating in Egypt in both oil and gas include Shell; Italy's Agip; Repsol of Spain; Mobil and Norsk Hydro of Norway. Technology has been bought from ABB Lummus Crest (USA) for the implementation of an ethylene/polyethylene plant at Ameriya-Alexandria; and EGPC has also signed a licensing agreement with British Petroleum for the production of polyethylene. Food processing is another industry which has attracted multinationals in Egypt. Production units have been set up to serve both the local market and neighboring countries. Thus, recent new-comers include Nestle, Heinz, Kellogg's, Cadbury, Pioneer Hi-bred and Unilever. Both Heinz and Cadbury are also working in association with the Kuwait Food Company in Egypt. Italy's Danieli has committed 25 percent of the equity of a flat steel products plant in Suez. Holderbank of Switzerland investing in a cement venture, and Owens Corning of the US has invested in a glass reinforced pipes project. The US-based European Global One has agreed to form a joint venture in the telecommunications field. The vehicle assembly sector is showing impressive results. Most major international models are now produced at twelve assembly plants employing 75,000 workers. General Motors, Peugeot, Suzuki, Citroen, Daimler-Benz, and Hyundai all produce in Egypt. A prominent local Egyptian intends to invest ŁE 140 million in two new projects to assemble Daewoo and BMW automobiles. Skoda, Kia and Nissan are also expected to start production within the next two years, and Volkswagen may begin sourcing some material in Egypt if the proper standards can be met. Build Operate Transfer Foreign and local investors are intensifying their involvement in both build-operate-transfer (BOT) and build-own-operate-transfer (BOOT) schemes in Egypt. Projects which have already been initiated include the construction on a BOOT basis of a thermal power station with two 325-megawatt generators, to be located at Sidi Krier on the Mediterranean coast, at an expected cost of about US$ 450 million (Siemens KWU has already won the contract to supply the generators), and a water-driven pumped storage plant at Ataqa near Suez, which will also have two 325-MW generators and is expected to cost some US$ 600 million. The pumped storage system would pump sea water into a basin in the mountains when the grid has plenty of slack and let the water down again to generate extra power during peak periods. Plans are also being drawn for a wind farm at Zaafarana on the Gulf of Suez, which will include a 300-MW turbine and cost about US$ 350 million. An additional project involves the construction of a private airport at Mersa Alam on the Red Sea Coast, 300 kilometers south of Hurgada and 800 kilometers south of Cairo, also to be built on a BOOT basis. Plans for a second international airport project, to be located on the Mediterranean coast near El Alamein, have been announced, and an offer for tenders has been issued. Other projects expected to go ahead on a BOT or BOOT basis include the construction of roads, hotels, restaurants, rest-stops and service stations along roadways, as well as the setting up of agricultural production and marketing schemes along urban and rural arteries. The four toll roads to be constructed are between Alexandria-El-Fayyoum, El-Fayyoum-Aswan, Dairout-Farafra and El-Kharga-El-Dweinat highways, and have a total length of 1,850 kilometers (1,150 miles). International consultants have already been invited to bid for contracts and to advise the government on how to build the roads on a BOT basis. International tenders have also been invited for a suspension bridge over the Suez Canal. The bridge will span the 404 meter navigation channel and will be about seventy meters in height, to allow ships to pass underneath. The scheme is part of a strategy to develop Sinai as a major industrial and residential area in order to ease pressures on the Nile Valley. In the medium-term, the General Authority for Investment (GAFI) foresees BOT and BOOT being applied to other transport projects, such as the construction of new railroads and metropolitan lines to serve the huge new industrial and residential cities which have been built in desert areas. The Ministry of Transport and Communications is considering private sector involvement in the development of new telecommunications infrastructure. At present, the government is planning to add one million lines to the network each year, at a total annual cost of about US$ 1 billion. Franchising The franchising market in Egypt has tremendous growth potential, mainly in the fast food sub-sector. This market has experienced remarkable expansion since it began in 1970, and market sources expect continued growth at an annual rate of 10 to 20 percent. Brand conscious Egyptians, numberinby some estimates near percent of the population or two million consumers, are drawn to the increasingly popular and convenient service. Fare prices are high because of franchiser quality assurance standards and imported ingredients. Of the nine fast food franchises today in Egypt with sixty-seven total outlets, five are US-based with a total of thirty-two sites, two are local with a total of ten facilities, one is UK-based and another is from Pakistan with a combined twenty-five outlets. Garment franchising is another new and growing industry in Egypt. Using Egyptian workers and materials, garment franchises have met with great success in Egypt's increasingly freer market economy. Currently, approximately fifteen garment franchises exist in the Egyptian market. 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