Ahmed Darwish, chairman of the Suez Canal Economic Zone (SCZone), introduces the SCZone during a press conference in Ain Sokhna, east of capital Cairo, Egypt on March 13, 2017. China is the largest investor in the development of Egypt's Suez Canal Corridor, a mega project showcasing the win-win partnership between the two countries, said Ahmed Darwish, chairman of the Suez Canal Economic Zone (SCZone), in an interview with Xinhua. (Xinhua/Zhao Dingzhe)
by Mahmoud Fouly
SUEZ, Egypt, March 16 (Xinhua) -- China is the largest investor in the development of Egypt's Suez Canal Corridor, a mega project showcasing the win-win partnership between the two countries, said Ahmed Darwish, chairman of the Suez Canal Economic Zone (SCZone), in an interview with Xinhua.
China's TEDA corporation, one of the oldest industrial developers of the region, has seen a steady increase in the number of its development projects and tenant factories since it entered Egypt and established a joint Suez Economic and Trade Cooperation Zone, in the Ain Sokhna district of the Suez Canal Corridor east of capital Cairo.
"Currently, the Chinese investments are the largest. We highly appreciate the earnestness of our Chinese partners. They were among the first to act as an industrial developer in the zone," the SCZone chief told Xinhua. "TEDA has put in place the micro-infrastructure and is re-promoting the land. They are doing an excellent job."
"This partnership is a win-win situation," because TEDA knows best how to promote the zone among Chinese investors while Egypt's trade agreements with African states make it easy for Chinese products to enter African markets without trade barriers or customs, he said.
"We're opening for Chinese investors 26 African countries due to our trade agreements. When they have the 'Made in Egypt' label on their products, they go through zero trade barriers and zero customs," Darwish said, highlighting the zone's distinguished location that is only one hour away from Jeddah, Saudi Arabia, two hours from Djibouti, and two hours and a half from Mombasa, Kenya, by air.
The idea of an industrial zone, covering a total area of 461 sq. km and comprising four sections and six ports, in the Suez Canal Corridor emerged in 1998, with laws getting modified to facilitate the presence of foreign investors and to provide foreign companies with land usufruct rights.
China's TEDA is working on the development of an area that increased to 7.23 sq. km at Ain Sokhna. It has completed its first phase, attracting some 68 enterprises, including Jushi, a fiberglass giant from China. The second phase started in 2016.
As for the SCZone connection with China's Belt and Road Initiative, proposed by President Xi Jinping in 2013 to revive ancient land and sea trade routes between China and countries in Asia, Africa and Europe, Darwish stressed that Egypt is "a major player" in the initiative.
"We are welcoming very much the Belt and Road Initiative. We are on the Silk Road Economic Belt," he said. "We are very happy that the Chinese are seeing us among the bright spots of development and sustainability along the Belt and Road."
As for the complaints of some companies that the Egyptian government raised the tax imposed on investors in industrial zones from 10 percent to 22.5 percent, Darwish explained that this will not be applied to those established and operated in Egypt under the old law, like TEDA.
"Companies that started in the zone with a 10-percent tax remain in the zone with a 10-percent tax. TEDA was established under the old law, but new tenants of TEDA that came after the new law is enacted will be subject to the 22.5-percent tax," he said.
Darwish said the investment law is still being reviewed and hopefully an attractive formula for investors will come up.
He said that a comparison of the SCZone with 17 other zones along different industries worldwide has shown that the Egyptian zone has a competitive advantage in areas such as the pharmaceutical, automotive and food and beverage industries.
"Initially, I have been doing general promotion of the zone, meeting with associations of businessmen in China, France, the United States, Japan, South Korea, etc. But now I am more focused on targeting certain companies and trying to attract leading investors to the zone to build clusters of specific industries," the SCZone chief told Xinhua, expecting a cluster of pharmaceutical firms to be soon established at the zone.