CAIRO: A 10-year tax exemption, land ownership, the availability of infrastructure and access to basic utilities are just a few reasons to invest in Upper Egypt, officials said at a conference recently.
Aswan summers are hot, but a fresh breeze wafted through the room as nine governors from Upper Egypt spoke of investment opportunities in the area at a one-day conference titled “Investment in Upper Egypt, held this past June under the auspices of the Ministries of Investment and Local Development.
These incentives have already lured some investors, such as Mostafa El-Badawy, chairman and managing director of SF Marina Egypt, a Swedish-Egyptian joint venture that produces floating pontoons.
El-Badawy first set up shop in one of the Free Zones but relocated to an industrial zone in Minya, Upper Egypt after facing some difficulties. “Now we are doing better business because of the incentives in Upper Egypt, he said.
Ready to go?
The governors of Upper Egypt presented tens of ready-to-go projects to potential investors, such as 50,000 square meters to raise chicken in New Valley, another for raising cows and a factory for chicken feed.
From the Red Sea governorate, projects for fish farms were presented in Hurgada, Safaga, Ras Gharib, Qusier, Shalateen and Marsa Alam.
Minya Governor Ahmed Diaa Mohamed said there are opportunities to establish two-, three- and four-stars hotels, adding that “Minya is home to many monuments, which makes it an attractive destination for tourists.
But one of the main obstacles standing in the way of potential investors is efficient marketing, said El-Badawy, whose company relies on business-to-business networks. “We try to reach out to resorts and hotels in Upper Egypt and in South Sinai.
Financing, is another problem. Mostafa Abdel Rashid, head of trustees at the New Minya Investors Association, sought funding from the National Bank of Egypt (NBE) for 32 percent of his LE 18 million project to build a granite facility. He waited a whole year before his request was rejected.
His project is already up and running, but he was seeking funds to run the project at full capacity, he said.
Efforts to extend the natural gas pipeline to the last point in Aswan, due to be complete by the end of 2009, has given Upper Egypt investment a big push.
It was one reason Abdel Rashid, who resides in Cairo, decided to start more projects in Minya despite difficulties to find funding. His second project will set up a bottled water and juice facility with Danish partners, and is due to launch in a year.
He’s also already gotten the license to set up an institute to train managerial staff, and may start accepting applications by 2011.
What about agriculture?
Almost all business activities were well-covered in the presentations given by the governors, but only one in agriculture.
Qena Governor Magdy Ayoub highlighted the project announced by Japan-based Kobi Bosan in 2006 to set up a frozen-foods factory, cultivating and producing vegetables, pickles and jams on 7,500 feddans in Qena.
Kobi Bosan, which owns a supermarket chain of 550 stores in Japan, has factories in China, Mexico and Australia.
The factory will have a production capacity of 1,000 ton per month, all of which will be exported to Japan. A total of 1,500 jobs will be created, most will go to residents of Qena, Ayoub told Daily News Egypt.
Kobi Bosan has so far deposited LE 76 million in the Central Bank of Egypt (CBE) as down payment for the land.
While Egypt was once an agriculture-based economy, it has ceased to be one of the staple sectors, which is probably why no other agricultural projects were mentioned in the 10 governorates of Upper Egypt.
According to a recent report by the General Authority for Investments and Free Zones (GAFI), the agricultural sector received the least investments in fiscal year 2006/2007, and Upper Egypt governorates have taken the least of the investment pie.
In order to maintain a fair distribution of growth, agriculture, where many jobs are created, should work to attract more investments, the report said.