CAIRO: At the end of a three-day visit to Egypt, the Chairman of Singapore s Tolaram Group and Minister of Trade and Industry, Lim Hng Kiang, have signed a memorandum of understanding (MOU) with Egypt, agreeing to establish two factories; one here and one in Singapore, to produce methanol.
Using the much sought after Egyptian natural gas, the two companies will export the methanol to Singapore.
According to the Egyptian Minister of Petroleum, Sameh Fahmi, the methanol will be transformed into ethylene in Singapore.
The other factory, according to the minister, will manufacture maintenance equipment for gas exploration, relying on collaboration between companies in Singapore and Egypt that specialize in this arena.
The factories, which will cost a total of $2.3 billion in investment, according to the Egyptian Minister of Foreign Affairs, Ahmed Abul-Gheit, will increase the value of Egyptian gas, already a hot commodity, and open new markets for local production.
The Minister of Petroleum also stated that the factories will aid in creating greater job opportunities and should pump foreign currency into the nation.
The Egyptian Assistant Foreign Minister for Asian Affairs, Ali El Hefny, also stated that the establishment of the factories will serve to convey to the Singapore business community the capabilities and resources that are available in Egypt, thus attracting further foreign investment.
According to the Minister of Investment, who also met the Singapore minister during his visit, Kiang expressed his country s wish to cooperate with Egypt s petroleum sector by setting up joint projects to produce petrochemicals.
Taking into consideration the Egyptian government and the private sector’s joint efforts to further develop the petrochemical industry for investment opportunities, which is reflected in the industry’s rapid growth, Singapore stands to benefit from the raw materials made available by the industry. Petroleum and petrochemical products top the list of Egyptian exports to Singapore.
The Special Economic Zone North West Suez Gulf is equipped with the geographical and financial qualifications needed for large investments, said the Chairman of the General Authority for Investment and Free Zones (GAFI), according to the Ministry of Investment. GAFI is also willing to provide information and data about the zones and coordinate Singaporean investments in Egypt, according to the ministry.
This is not the first time that Singapore has shown interest in the country. Last February, the Singapore Business Union visited Egypt, where they met with high-ranking officials and prominent businessmen. Their visit resulted in a number of investment possibilities in the petrochemical and food industries, manufacturing, maritime transport and infrastructure.
According to the Minister of Investment, Kiang applauded radical reforms in Egypt s economy and investment climate. I visited Egypt to see on ground the economic environment to convey a clearer picture of investment climate to the business community in Singapore, he reportedly said.
In terms of bilateral trade, in 2005, Egypt was Singapore s tenth largest trading partner in the Middle East. Total trade between Singapore and Egypt grew by 58 percent from 2003 to reach a total trade value of S$645 million in 2004. The increase was mainly due to the 97.7 percent growth in imports from Egypt, which raised from S$216 million to S$427 million, according to the Vice Chairman of the Singapore Business Federation, Umar Abdul Hamid, during the 2005 Egypt-Singapore Business Forum.