Mohamed Baraka, the chairperson of Baraka Contracting and Trade, a subsidiary of the Indonesian GT Tires company, revealed that the Indonesian company has showed it is willing to reopen the case for investing in Egypt and establishing a tyre factory.
Baraka told Daily News Egypt that the decision to float the Egyptian pound has encouraged the Indonesian company to think about investing in Egypt, noting that he will be one of the shareholders with the Indonesian company in the case that a tyre factory is established in Egypt. He pointed out that the investment cost of the tyre factory is estimated at $600m.
He noted that Egypt imports tyres annually for $500m, as there is no local tyre industry that meets local demand. Baraka explained that there are only two factories in Egypt, which are Pirelli, producing 60% of truck tyre needs, in addition to the public business factory Nisr Tires, which covers 6% of passenger car needs. Most of its production goes to the state’s administrative agency and its units.
He added that the price of tyres in Egypt have increased by 40% due to the price of US dollar, even though the price of tyres has declined globally.
Baraka added that his company’s sales of imported tyres reached $20m annually, stressing the importance of having a strategy for car manufacturing made by the government to encourage car industries that aim to increase the gross domestic product. The strategy should include facilitating the procedures of land allocation, in addition to a tax policy that stimulates investments, as well as financing facilitations from banks that must stand beside industries and reopen the file of troubled factories. This calls for bold decisions by the government, which will eventually benefit the national economy.