CAIRO: Egypt’s Industrial Development Authority (IDA) has declared progress is underway in establishing a large-scale industrial project in Cairo.
Co-founded by Jordanian Al Tajamouat Investment Company, the industrial city is to involve the establishment of 210 small to medium scale industries, across 1.2 million square meters of land.
Announced this past summer, $5 million have been allocated to the project to date; and despite minor delays, the earth leveling phase of the project is complete. Official marketing is due to commence in early 2010.
The project follows the success of the Jordan Industrial City, which has become the largest and most developed in the country, and now Al Tajamouat are looking to leverage their experience in the Tenth of Ramadan City outside of Cairo.
In an interview with Daily News Egypt, Al Tajamouat Project Manager Janset Kasht explained, “We will be developing infrastructure across the entire plot, introducing commercial, industrial and warehousing facilities in different shapes and sizes to accommodate any light industry.
Al Tajamouat are now days away from the second infrastructure stage, containing internal networks and electrical distribution. “By November 2010 we will have a developed industrial sample unit ready for operation, added Kasht.
A total of LE 100 million in capital expenditure has been made available for the project, with estimated investments totaling over $200 million. The estate, purchased from the Egyptian government, will be constructed in three stages over a seven-year period and is expected to generate between $500-800 million in exports when fully operational.
This is forecasted to attract approximately $1 billion of foreign and local investment, creating a minimum of 50,000 job opportunities in the Egyptian labor pool. These figures are anticipated after full development of the estate.
When probed on any bearing the current economic circumstances may have towards the project, Kasht said confidently, “We are experiencing more and more Egyptian investors seeking to reserve areas within the plot, in addition to foreign investors with the long-term vision willing to seize this opportunity as the economy commences its road to recovery.
But with Egypt already established as a leading producer and manufacturer of textiles and ready-made apparels, what economic improvements can be made?
Kasht explained that with its bilateral agreements, Egypt is able to benefit from exporting without the associated heavy-duty restrictions; however only few companies have accomplished this global sector standard.
“I believe that by upgrading the industry, opening new markets and attracting international sourcing companies, this will put Egypt on the map as a major supplier of ready-made apparels and textiles. Consequently this will develop industry knowledge and facilitate healthy competition, she said.
Although the garment and textile industry will be the main focus of the project, other proposed industries will include packaging, engineering, electronics, jewelry, furniture, pharmaceuticals, warehousing and logistics.
Following the success and mistakes of the Jordan Industrial City, Kasht said that Al Tajamouat are now in a position of oversight and aim to bring an improved and polished park to Egypt.
In the past, the responsibility of industrial parks rested with the Egyptian government and this is the first time the private sector has been permitted to develop such a project. Al Tajamouat plan to take full advantage by adopting the concept of an all-encompassing “industrial compound.
An entire infrastructure, complete with warehousing, office and commercial units, waste management, and even labor residence and catering will be available on-site. This will be offered for both sale and rental to investors.
“We are providing something new and unique in Egypt. The relationship and service provision with the investors continues after the sale or rental agreement, stated Kasht.
Egypt’s Othman Tantawy Law Office (OT Law) are the legal consultants and advisors to Al Tajamouat Investment Company. Daily News Egypt met with Chairman Othman Tantawy to discuss the background and detail of the contractual agreements in place.
“This is a unique and unprecedented project in Egypt, attracting foreign and domestic investment. Our role is to review all contracts and provide all legal advice, said Tantawy.
The law firm specializes in establishing domestic and offshore projects of this scale, and had been recommended to Al Tajamouat by Egypt’s tissue company Fine.
With these agreements in place, Tantawy explained, Al Tajamouat are entitled to the legal ownership of the estate, and this also prevents the government from being able to influence any product pricing.
“Through the IDA, the government is facilitating investment and removing obstacles, encouraging and strong climate in the road ahead, said Tantawy.
Furthermore, Al Tajamouat have the right to re-sell or rent factories or land within the project after the infrastructure is complete. The government is guaranteeing this ownership in order to prompt future investments in Egypt.
