CAIRO: After signing a free trade agreement in 2005 that was dubbed “a turning point in relations between two regional powers, it was only a matter of time before Turkey established its first private industrial park in Egypt.
Turkish President Abdullah Gul inaugurated Wednesday “The Polaris industrial park, the first of its kind in Egypt, with investments totaling $1.5 billion.
The private industrial park is a joint venture between the two countries that is estimated to attract $4 billion of investments in the next four years.
“Trade ties between the two countries have already been on the rise since [ratification] of the FTA, said Minister of Trade and Industry Rachid Mohamed Rachid in a press statement.
“The majority of Turkish investments in Egypt seek to export to foreign markets, especially in Europe, the Middle East and Africa, as well as benefit from partnership agreements between Egypt and Europe, allowing preferential advantage of products manufactured in Egypt to enter these markets without customs, he added.
Sprawling two million square meters in the Sixth of October City – an area fit to host some 300 companies and factories – the cluster will include Turkish manufacturing operations from a number of sectors including textile and ready-made garments, furniture, automotive, glass, and food processing.
The ministry expects total production capacity to reach $3.5-4 billion per year.
Gul, who started an official visit to Egypt on Tuesday, told Reuters that recent economic reforms in the Arab country spurred interest from Turkish investors.
Egypt became very attractive. That s why the Turkish investors are here. I m sure that very soon there will be huge economic activity taking place here, he said, referring to Egypt’s direct access to regional, European and even US markets through the Qualified Industrial Zones (QIZ) Agreement.
Bilateral trade and economic relations were strengthened with the singing of the FTA. Under the agreement, Egyptian industrial exports to Turkey are exempted from customs duties immediately. Customs duties on Turkish exports to Egypt are dismantled over a 12-year period according to the four lists stipulated under the EU-Egypt Association Agreement, starting with raw materials, machinery, equipment, intermediary goods, finished products as well as luxury cars.
According to the ministry’s figures, volume of bilateral trade rose to $1.5 billion in 2007, recording an increase of 32.4 percent. Turkish exports to Egypt (automotive, dried vegetables, glassware, tableware and tires) hit $827 million in 2007, up from $645 million last year.
Egyptian exports to Turkey (rice, cotton, cement, steel and fertilizers) have also soared to $624 million, up from $362 million last year.
Meanwhile, the value of Turkish investments in Egypt reached LE 436 million in 2007, with forecasts that the number will rise to $1 billion during the course of this year after inauguration of the industrial park.
The Ministry of Trade aims to boost bilateral trade to $3 billion by the year 2011 and to bring around $4 billion of joint investments within four years.
Turkey’s economy ranks 17th worldwide, with total exports at $100 billion and direct investments at $20 billion in 2007.
