Transcript Egypt: Gateway to Africa and the Middle East

Egypt
The most promising market in the
Middle East - North Africa
Evangelos Dairetzis
Counselor, Economic & Commercial Affairs
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Egypt: Gateway to Africa and the
Middle East
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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
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Area: 1.001.450 sq. km.
Population: 85.000.000 in.
Density: 3 in. / Km²
Largest cities
Cairo: GMT +2
Cairo:
Alexandria:
Port Said:
Suez:
Luxor:
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14.000.000
4.500.000
610.000
550.000
490.000
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The Egyptian economy
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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
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GDP structure
Financial
3,27%
Social solidarity
3,23%
Tourism
3,15%
Real Estate
2,59%
Mining
17,33%
Education, health
3,80%
Transportations, storage
4,01%
Manufacturing Industries
15,65%
Constructions
4,58%
General Government
10,42%
Agriculture, irrigation, fishing
14,51%
Wholesale & retail trade
10,96%
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Egypt imports 2013
value
share
Item
$ 1000
3.590.086
2.024.648
1.941.596
1.940.742
1.570.451
1.518.479
1,099,404
1.095.947
955.313
926.570
909.189
839.167
836.806
830.101
826.892
%
10.91
6.15
5.90
5.90
4.77
4.62
3.34
3.33
2.90
2.82
2.76
2.55
2.54
2.52
2.51
PETROLEUM OILS
PETROLEUM CRUDE
YELLOW CORN, NOT FOR SHOWING
WHEAT
LIQUIFIED BUTANES
SEMI-FINISHED IRON PRODUCTS
MEDICINES
ARTICLES OF IRON & STEEL
FUEL OIL
MOTOR VEHICLES
GOLD
WOOD SAWN OR CHIPPED
IRON WASTE & SCRAP
95 OCTANE GASOLINE
BOVINE MEAT, BONELESS
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Main suppliers
share
2013
$ mil.
share
% 13/12
6.732
9,8%
6.961
10,9%
3,4%
Germany 4.749
6,9%
5.200
8,1%
9,5%
China
2012
$ mil.
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
Turkey 3.511
4%
5,1%
3.033
2.618
4,7%
4,1%
10,7%
-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%
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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
117,1%
16.968.039
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Greek – Egyptian Trade
2010-2013
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GREEK EXPORTS TO EGYPT 2013
'27'
'52'
'25'
'08'
'24'
'84'
'73'
'39'
'48'
'20'
'72'
'38'
'87'
'32'
'85'
'31'
'49'
'04'
'11'
'23'
'15'
'76'
'34'
2013
% SHARE 2013
TOTAL 593.468.273
MINERAL FUELS & OILS
406.931.716
68,6%
COTTON
63.621.851
10,7%
SALT, SULPHUR, EARTH & STONES
28.961.999
4,9%
EDIBLE FRUITS & NUTS
18.163.855
3,1%
TOBACCO & MANUFACTURED SUBSTITUTES
11.348.257
1,9%
NUCLER REACTORS, BOILERS, MACHINERY
8.377.403
1,4%
ARTICLES OF IRON & STEEL
7.112.353
1,2%
PLASTICS & ARTICLES THEREOF
5.899.786
1%
PAPER, PAPERBOARD, ARTICLES OF PAPERPULP
5.164.955
0,9%
PREPARATIONS OF VEGETABLES, FRUIT, NUTS
4.950.467
0,8%
IRON AND STEEL
4.296.783
0,7%
MISCELLANEOUS CHEMICAL PRODUCTS
2.954.339
0,5%
VEHICLES, PARTS & ACCESSORIES THEREOF
2.804.324
0,5%
TANNING OR DYEING EXTRACTS, DYES, PIGMENTS
2.777.962
0,5%
ELECTRICAL MACHINERY, EQUIPMENT & PARTS
2.716.260
0,5%
FERTILISERS
1.988.008
0,3%
PRODUCTS OF THE PRINTING INDUSTRY
1.519.960
0,3%
DAIRY PRODUCE; BIRDS' EGGS; NATURAL HONEY
1.468.829
0,2%
PRODUCTS OF THE MILLING INDUSTRY
1.325.490
0,2%
RESIDUES FROM FOOD INDUSTRIES, ANIMAL FODDER
982.976
0,2%
ANIMAL OR VEGETABLE FATS AND OILS
706.944
0,1%
ALUMINIUM AND ARTICLES THEREOF
703.537
0,1%
SOAP, WASHING & LUBRICATING PREPARATIONS, WAXES
604.067
0,1%
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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
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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
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Government Priorities
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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
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The negative image of Egypt
projected by Western media
(mainly via Al Jazeera)
is not realistic
Sectors with high growth rates
 Energy (renewable)
 Infrastructure
 Telecommunications - new
technologies
 Transportation
 Health
 Education
 Agriculture
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Market characteristics
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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
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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
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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
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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)
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Egyptian legislation one of the most
favorable regarding commercial
representation
Non Egyptian national is not allowed to set
up commercial importing company
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Energy
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RENEWABLE ENERGY
SOURCES
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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
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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
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HEALTH SECTOR
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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
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Franchising
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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
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Significant opportunities for
Greek products also because of :
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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
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INFRASTRUCTURE
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Highways
Railway network
Airports
Inland road network
Hospitals, schools
Power stations, RES
Housing units
Tourist complexes
Water - drainage
Desalination plant
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The Ambitious “ Suez Canal
Development ptoject”
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Ports
Industrial zones
Tunnels
Residential areas
Tourist areas
Fish farming
Logistics centers
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FOODSTUFF
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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
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TARIFFS
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Association Agreement 2004: phasing out tariffs
within 15 years
Tariff information (EU Market Access Database):
http://madb.europa.eu/madb/indexPubli.htm
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TARIFFS
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Foodstuff: 0-32%
Alcoholic Drinks 1200-3000% - 300% for "tourism
purposes"
10% sales tax on commodities
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Corporate tax
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Corporate tax: 25%
Companies in energy sector of 40%-55%
Personal income tax up to 25%
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Legal forms of companies
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Ανώνυμη Εταιρεία (Joint Stock Company)
Εταιρεία Περιορισμένης Ευθύνης (Limited
Liability Company
Ομόρρυθμος Εταιρεία (General
Partnership)
Υποκατάστημα (Branch)
Γραφείο Αντιπροσώπευσης
(Representative or Liaison Office)
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Investment Law 8/1997
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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
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The most significant trade fairs
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ΙΝTERBUILD (building materials)
www.interbuildegypt.com
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SAHARA (agriculture)
www.saharaexpo.com
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HACE (hotel equipment, restaurants etc.)
www.hace.com.eg
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AGROFOOD (foodstuff, agroindustry)
www.agrofood.com.eg/
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ΕGYMEDICA( medicines, medical equipment)
www.egymedica.com
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ENTRY TO THE MARKET PROMOTION
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Direct sale: dealer - distributor
Tenders
Participation in exhibitions
Trade mission organized by business
entities
franchising
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TECHNIQUES
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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”
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Greek investment
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Banking, constructions, shipping, energy
(exploration and production), food
industry, irrigation, clothing, packaging,
etc.
$ 1,2 billion
50 Medium and large scale companies
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Sectors of the Egyptian economy
and prospects for Greek products
and services
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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
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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
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INTERNATIONAL ECONOMIC
FORUM
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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.
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EMBASSY OF GREECE –
OFFICE FOR ECONOMIC &
COMMERCIAL AFFAIRS - COMPANIES
 Greek
Investors Club (Business Club)
Egyptian – Greek Business Council
(EBA - SEV)
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Active support for Greek investors
Assistance (advocacy) towards Authorities
Promotion of Greek products and services
TRADITIONAL GREEK PRESENCE
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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
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