Swell times ahead for Suez trade area

China-Egypt industrial zone located beside the Suez Canal is expanding

Plans call for construction to start soon on a major 6-square-kilometer expansion of the China-Egypt Suez Economic and Trade Cooperation Zone.

The expansion is expected to attract even greater overseas investment, further promote Egypt's industrialization and create big job opportunities. The zone currently is 1.34 square kilometers.

Enterprises that invest in the zone get great location advantages, one-stop services and favorable trade policies, according to TEDA SEZone Development Co, which runs the zone. TEDA is the Tianjin Economic-Technological Development Area, one of the co-creators of the zone.

The expansion area will be developed in three phases, with a total investment of about $230 million for development and construction, says Nahla Emad, head of investment promotion for TEDA. She also says land contracts have taken effect, and the construction and investment marketing efforts for phase one, an area of 2 sq km, will start soon.

Zhang Yixiang, CEO of TEDA, says 150 enterprises with a total investment of about $2 billion and sales of $8 billion to $10 billion are expected to be located in the extension area, creating 30,000 to 40,000 jobs. Plans call for roads covering almost 300,000 square meters to be completed and put into use by the end of 2016, he says.

Some Chinese companies have decided to be based in the extension area. Guangzhou Dayun Motorcycle Co Ltd has bought an area of 200,000 sq m in the extension area and plans to invest $78 million. Its planned output is 500,000 motorcycles. Also, China Glass and Yingli Solar say they have decided to set up shop in the extension zone. The extension, with residential, research and development, and industrial areas, will be developed in a flexible way, Zhang says.

"We will reserve 10 percent of the whole area to meet the needs of a future, unforeseeable development of a new industry city," he says. "The development phase could be adjusted based on future development of the industrial park."

Such developments are seen as evidence that an economically ascendant Egypt would greatly benefit from more Chinese involvement. Zhou Zhenbang, deputy secretary-general of the China Association of Development Zones in Beijing, says Egypt's economy has already taken off, given that the new government is keen to improve people's living standards through diversified economic development.

"Because China has had a similar development experience, its companies feel Egypt is on the right track," Zhou says. "We are willing to build trade platforms for companies, traders and business associations to widen communication to get more cooperation done."

Located in the golden triangle area of proximity to three continents - Asia, Africa and Europe - and adjacent to the Suez Canal, the zone is only 2 km from El-Sokhna port, which is the third largest in Egypt. Enterprises there also benefit from favorable policies.

"The SEZone Authority is under the direct administration of the Egyptian premier and enjoys the authority of formulating all policies except those concerning national defense, domestic affairs, foreign affairs and the judicial field," Zhang says.

"All companies, enterprises and their branches settled in the SEZone are exempted from tariffs, sales taxes, and other taxes for importing various necessary materials and equipment", and "are not required to obtain import and export registration and permission, and are permitted to directly handle various kinds of import and export businesses", he says.

Contact the writers through houliqiang@mail.chinadailyuk.com

Suez Economic and Trade Cooperation Zone

The zone was jointly established in 2008 over an area of 1.34 square kilometers by Egypt's government, the China-Africa Development Fund and Tianjin TEDA Investment Holding Co.

The 68 enterprises in the zone, including many Chinese firms like Sichuan Honghua Petroleum Equipment Co and Muyang Storage Engineering Co, have created 2,000 jobs.

Investment has reached $1 billion, with a cumulative sales volume of $590 million, and $34.69 million in cumulative tax payments to the Egyptian government.

China Daily