Japanese companies are negotiating with their Egyptian counterparts for the establishment of pharmaceutical factories and food industries in the domestic market during the next few months.
Japanese ambassador to Egypt Takehiro Kagawa said in an interview with Daily News Egypt that total Japanese investments in Egypt are estimated at $100m annually. He added that these investments will be reduced in the coming period as a result of the deteriorating economic situation in the Egyptian market after the decline of the local currency against the US dollar after the government’s decision to float the exchange rate of the pound.
Kagawa explained that his country will focus in the coming period on the food industry and the medicine sector, adding that they are currently negotiating with several Egyptian companies specialised in these fields to launch partnerships in the next few months.
He continued that the Japanese government has several partnerships with Egypt to finance many projects in different sectors in Egypt, notably in the electricity sector and in infrastructure projects.
Kagawa further continued that the Japanese government has concluded a cooperation protocol with the Ministry of Investment to boost cooperation, adding that the Egyptian ministry will send permanent official representatives to Japan within a few days to determine economic sectors for investment.
Kagawa stressed the need to encourage small industries in the Egyptian market in the coming period in order to make the economy recover and solve the crises that have plagued most of the economic sectors due to the fluctuation of dollar exchange rates after the flotation of the pound.
Kagawa pointed out that there has been a partnership with the Egyptian government for a long time to build wind and coal power plants, but the Egyptian Ministry of Electricity postponed the implementation of these project for an indefinite period due to the bad economic conditions and the fluctuation of the dollar exchange rate in Egypt.
He noted that Egypt is primarily interested in the implementation of major projects, while it has to focus on small and micro projects to boost the local economy.
Kagawa continued that most of the developed countries pay more interest in small and medium industries, in addition to the small businesses with large yields, including restaurants, feeder industries, transportation, and others projects which are neglected by the Egyptian government.
He pointed out that the Japan External Trade Organization recently signed a cooperation protocol with the General Authority for Investment and Free Zones (GAFI) for the exchange of information and expertise, along with organising workshops between the Egyptian and Japanese business communities.
Kagawa pointed out that the Japanese government began to provide the Egypt-Japan University of Science and Technology (E-JUST) with scientific equipment worth $18m, in the framework of the Egyptian-Japanese partnership initiative in the field of education.
Kagawa explained that Japan plans to build about 100 schools based on the Japanese model in Egypt during the next several years, and there are other agreements in the energy and civil aviation sectors worth $500m.
The Japanese ambassador explained that the most prominent sectors in Egypt are the automotive industry, the feeder industry, engineering, home appliances, the pharmaceutical industry, petroleum, drilling and exploration, medical supplies, agricultural projects, construction, the food industry, and insurance.
Kagawa said that the number of Japanese companies operating in Egypt reached 66 companies, working in the manufacturing, financial, service, gas, and commercial sectors.
According to the Egyptian Japanese Business Council, total Japanese investments in Egypt are estimated at $771.5m, of which $385m are in the petroleum sector.
The Egyptian exports to the Japanese market during 2015 increased by nearly 49%, representing about $150m compared to $293m during 2014.
The most important Egyptian exports to Japan include liquefied natural gas, petroleum products, garments, carpets, floor coverings, medicinal and aromatic plants, cotton, dried vegetables—especially onions—and other food industry products, including jam, frozen strawberries, and potatoes.
On the other hand, the most important Egyptian imports from Japan include cars, tractors, boilers, machinery, home appliances, iron and steel products, cinematography and photographic optics tools and equipment, plastics, and organic chemicals.
The trade exchange between Egypt and Japan declined in 2015 by 17% to reach about $1.4bn compared to $1.7bn in 2014, according to the Japanese customs authority.
