Egypt is close to signing a partnership agreement with a Chinese company to establish a factory to produce vehicle tires of various types in the Suez Canal Economic Zone with initial investments amounting to $360 million, according to two sources familiar with the project who spoke to Al-Sharq on the condition that their names not be published due to the privacy of the information.
The Arab country, which suffers from a widening trade deficit, seeks to reduce its import bill and localize various industries locally. Egypt imported automobile spare parts, supplies, and parts worth $9.3 billion in the period from 2014 until the end of 2023.
Egypt recently suffered from a stifling crisis in the provision of foreign currencies, but the Ras al-Hikma deal contributed to overcoming it, while Egyptian President Abdel Fattah al-Sisi believes that confronting what he called the “dollar challenge” depends on “manufacturing a large percentage of products locally, and this is not easy.” “.
The two sources explained that the anticipated project will be in partnership with the Arab Organization for Industrialization, which will make the land available, with the Chinese company securing financial investments. One of them added: “We aim to produce 6 million tires annually in the first phase, to later rise to 12 million tires annually.”
In 2022, the Egyptian market consumed about 10 million tires, of which only 15% were produced locally and the rest were imported, according to data from the Egyptian Center for Thought and Strategic Studies.
One of the sources stated that the Chinese side will own the majority stake in the project at 52% of the company’s capital, compared to 48% for the Arab Organization for Industrialization, expecting production to begin at the end of 2025.
Egypt suffers from a small number of factories producing vehicle tires, the majority of which are focused on producing tires for trucks and two- and three-wheeled vehicles known locally as “trucks” and “tuktuks.” The “Pyramids” factory, which is the largest in size in the country, began production operations about 4 years ago with investments belonging to the private sector amounted to approximately 3 billion pounds.
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