A Japanese business delegation of 22 auto parts producers is poised to visit Cairo during the middle of the week.
According to Abdul Monem Saudi, chairman of the Egyptian Japanese Business Council, the Japanese companies have begun to look positively at investment opportunities in automotive parts manufacturing on the back of growing attention from the government to this industry. He pointed to government incentives to parts producers, including low-priced industrial land and the extension of utilities and infrastructure.
Ali Tawfiq, head of the Egyptian Auto Feeders Association, said the Japanese investors’ visit to Cairo shows that the industry has turned into more of a prime attraction for international auto parts manufacturers than the assembling industry. He added that this would not be the first visit of a Japanese delegation to Egypt this year. “Earlier this year, a Japanese delegation composed of representatives from 10 auto parts producers discussed investment opportunities in the Egyptian market, he explained.
Tawfiq said that the Japanese companies would be advised to manufacture parts that Egyptian producers lacked the capacity or the know-how to produce, in order to guarantee diversity and technology transfer.
The Ministry of Trade and Industry provides a raft of incentives to international companies to build plants in Egypt, including a portion of subsidies allocated to exporters of automotive parts and basic infrastructure.
Egypt has as many as 300 plants for auto parts with total investments estimated at LE 2 billion. The industry contributes about LE 16 billion to the gross national product, with exports of $105 million in 2005. The government plans to increase exports from auto parts to $150 million by the end of this year.
