CAIRO: Egyptian and Russian trade and industry delegates on Tuesday inked a Memorandum of Understating (MOU) that will pave the way to the establishment of a Russian Industrial Zone in Borg El Arab.
Russian and Egyptian energy, automotive, aviation, heavy machinery and biomedical companies will occupy an area of one million square meters in Borg El Arab industrial city in Alexandria.
In a press conference held at the headquarters of the Ministry of Trade and Industry prior to the singing ceremony, the Minister of Trade and Industry Rachid Mohamed Rachid and the Russian Federation s Minister of Industry and Energy, Viktor Khristenko, hailed the document as an important step towards boosting economic ties between both countries in light of ongoing economic reforms
The signing of the MOU follows President Hosni Mubarak s visit to Moscow and his meeting with Russian President Vladimir Putin, which demonstrated Egypt s commitment to boosting the economy, particularly through attracting investments in industrial activities, Rachid told reporters.
Rachid also said that the MOU comes as both countries are negotiating a Free Trade Agreement, the conclusion of which was pending Russia s joining of the Word Trade Organization.
As for the first ever Russian industrial zone (RIZ) in Egypt, Rachid said it that it is expected to attract investments of around $550 million and generate $700 million in export revenues over the next five years.
Between 100 to 120 factories owned by Russian, Egyptian, or Egyptian-Russian joint ventures will be built. These companies will develop Russian technologies in the field of automotives, aircraft and aircraft components, heavy engineering, metallurgy, and energy.
Minister Khristenko headed a delegation of leading Russian industrialists including aircraft manufacturer MIG, and automotive and heavy machinery giants Autovaz, Gaz, Kamaz, Technopromexpo and Tiazhpromexpo.
He said the economies of both countries are undergoing major changes and developments, spurred by economical structural reforms.
Economic reforms are the needed incentives for prompting economic relations between our two countries, and today s meeting [to confirm that an understating was reached on the RIZ] will serve to broaden the industrial base in Egypt, and attract the Russian business sector to doing business here, he said.
Rachid also pointed to Russian businesses in Egypt will benefit from the signing of the MOU and the following formal trade negotiations on the Free Trade Zone between the two countries.
He said: Some goods will enjoy preferential treatment in the markets of both countries, and with the number of Russian tourists in Egypt hitting 1 million last year, the service sector is also set for a boon.
The MOU and the formal Free Trade Zone negotiations will discuss tourism, banks, services, and contracts, he added.
Both ministers stressed, in response to questions by reporters, that Egypt s wealth of oil and natural gas resources, and Russia s advanced nuclear technology will play a key role in shaping the economic and investment relations between the two countries.
My Russian colleague will meet with Egypt s Minister of Electricity and Energy, later today, and Egypt s Minister of petroleum in the near future to discuss all aspect of the issue of energy, said Rachid.
Minister Khristenko reiterated that there are no limits to the cooperation between the two countries when it comes to energy, and that while Egyptian oil and natural gas are the obvious candidates for talks, nuclear energy will not be ignored.
Egypt s imports from Russia currently stand at $ 1.1 billion, mainly in the form of machinery, wheat, iron, steel, wood, and wooden products, and fertilizers. Egypt exports $ 100 million worth of goods, mostly agricultural exports, to Russia. Russian investments in Egypt stand at nearly $ 45 million, compared to $7.5 million in Egyptian investments in Russia.
Khristenko s visit to Egypt follows Rachid’s visit to Russia in October 2006.
