Construction investment is expected to increase

An Expert's View about Building Products and Construction in Egypt

Posted on: 15 Oct 2011

There are a glut of major and diverse new projects, including high-end real estate, tourist and leisure developments, infrastructure projects, and social housing. There is an increasing demand for housing to cope with the increasing population (is expected to double in the next 25 years to 160m).

Sector briefing Construction Opportunities in Egypt Why Egypt? ? The corporate and individuals income ? Egypt has the largest population in the taxes are limited to 20%. Arab world (approximately 80 million, likely this number will double by the ? Construction is one of the most active coming 25 years) and is the fourth- sectors of the Egyptian economy. largest economy. Real GDP growth has Construction equipment is a major sub- averaged 7 percent for the past 3 years. sector in Egypt's substantial In 2008/2009, it slowed down to 4% construction industry, with an annual due to impact of global financial crisis growth of 15%. and is expected to rise gradually again, it exceeded 5% in 2010. ? Construction investment is expected to increase to about US$7.3bn by 2015 ? Events in Egypt since January 2011, (residential construction US$606 and the transition to democracy, have million, non-residential construction had a negative impact on the economy. US$6.7 billion). Economists forecast that overall growth for FY 2011 will be around 3% rather ? There are around 31 public sector than the 5.7% which had been contracting firms (including 11 large expected. scale) and 36000 private contracting companies (including 250 large scale). ? The transition government has placed a real emphasis on the need to accelerate ? In 2008 Egypt ranked 27th globally economic reform alongside democratic among steel producing countries and developments and improve further the 3rd in the Middle East with yearly climate in Egypt for international production reaching 6.2 million metric investment. tons. ? Egypt has a strategic location in the ? The Cement industry is witnessing a centre of the Middle East and North booming expansion since 2005 with 14 Africa (MENA) region (800 million factories scattered all over Egypt. The people) and has links to the three annual production of grey cement continents of Asia, Africa and Europe. It reached 48.3 million tons in 2010. is the hub for the world?s maritime traffic with commercial ports on the For more information about our market Mediterranean and Red Seas. please visit Egypt page at: www.ukti.gov.uk/egypt. ? Egypt is signatory to many regional and international Free Trade agreements which reduce or wave completely the ?Construction investment custom duties on exported / imported is expected to increase to goods. about US$7.3bn by 2015?? UK Trade & Investment Sector briefing: Construction opportunities in Egypt Opportunities ? There are a glut of major and diverse ? Egypt has put an aggressive plan new projects, including high-end real targeting increasing domestic electricity estate, tourist and leisure production by 8.38 Gega Watts (GW) by developments, infrastructure projects, year 2012 to close the gap between and social housing. There is an production and demand. This will mean increasing demand for housing to cope the need to construct tens of new power with the increasing population (is stations expected to double in the next 25 years to 160m). ? The new Government after the ? The Egyptian authorities are now revolution is studying finding funds for investing in projects such as: The the mega project of Dr. Farouk El Baz Alexandria Growth Pole Project, which called ?Development passage? to build includes the construction of low-income new cities agglomeration in the western residential facilities to reduce dessert parallel to the Nile valley with impoverished areas in the Alexandria 1000 Km length. region. ? PPP is being encouraged to finance ? The Egyptian government, in public sector projects, though it can be association with the U.S. Agency for a slow process. Schools, public International Development, started the hospitals, water plants, roads and mortgage finance system of the country bridges are all current or potential PPP at a cost of US$35 million in the coming projects. five years. The improving mortgage finance system will lead to easier availability of finance for residential ? The new government after the construction, thereby increasing the revolution has dedicated 10 billion EGP spending on residential construction in in its budget for 2011-2012 for National the long term. Social Housing Project. ? The government plans to build three ? It has also allocated 1.5 billion EGP to nuclear power plants with a cumulative subsidise the housing projects for low capacity of 1,800 megawatts by 2020. income citizens and 55billion EGP for infra structure projects. ? The National Authority for Tunnels has planned to construct a 34-kilometer- ? The Government has plan to build 1 long metro line stretching from Imbaba million low cost houses over five years to Cairo International Airport. The for poor communities. project will be conducted in four phases. The first two phases cost US$1.1 billion You can be alerted to business opportunities on and are estimated to be complete by a regular basis by registering on the UKTI 2011, while the details of the other two website. Find out more on UKTI?s business phases are yet to be finalized. Similar opportunities service on the UKTI website transport projects will lead to an increased expenditure in infrastructure projects in the long term UK Trade & Investment Sector briefing: Construction opportunities in Egypt UKTI contacts Major events and activities Interbuild Sonia ELKATTAN www.agd-exhibitions.net Senior Adviser, Trade & Investment British Embassy 7 Ahmed Ragheb St, Garden City, Cairo, Egypt Metal & Steel Tel 00 20 22 791 6000 www.metalsteeleg.com; Fax 00 20 22 791 6130 www.arabiangerman.com Email sonia.elkattan@fco.gov.uk www.ukti.gov.uk Amex Marwa Hussein www.alumideast.com; Adviser, Trade & Investment www.arabiangerman.com British Embassy 7 Ahmed Ragheb St, Garden City, Cairo, Egypt Tel 00 20 22 791 6000 Windorex Middle East Fax 00 20 22 791 6130 www.windorex.com; Email: marwa.hussein@fco.gov.uk www.ukti.gov.uk www.arabiangerman.com Gary Hunt BEEM Deputy Director, Trade & Investment, www.agd-exhibitions.net Egypt British Embassy 7 Ahmed Ragheb St, Garden City, Cairo, Egypt GLASS WORLD EXHIBITION 2009 Tel 00 20 22 791 6061 www.glassworldex.com Fax 00 20 22 791 6130 Email: gary.hunt@fco.gov.uk www.ukti.gov.uk New export events are added daily to the site and you can register to be alerted to them on a daily, weekly or monthly basis UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events. UK Trade & Investment Sector briefing: Construction opportunities in Egypt Next steps - How UKTI can help ? Arranging appointments British companies wishing to develop their ? Organise seminars or other events for business in the Egyptian market are advised to you to meet contacts and promote your undertake as much market research and company in the Egyptian market planning as possible in the UK. UKTI?s team in Egypt, with its wide local knowledge and This work is available via our Overseas Market experience, can provide a range of services to Introduction Service (OMIS) a chargeable British-based companies wishing to grow their service which assists British-based companies business in global markets. wishing to enter or expand their business in overseas markets. This can include: ? Provision of market information To find out more about commissioning this ? Validated lists of agents/distributors work, or accessing other UKTI services and ? Key market players or potential specialist advice, please visit the UKTI website customers in the Egyptian market to find contact details for your local UKTI ? Establishment of interest of such office. contacts in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2011 by UK Trade & Investment. Crown Copyright © You may reuse this information (not including logos, images and case studies) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-government-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk This publication is also available from our website at www.ukti.gov.uk or for more information please telephone +44 (0)20 7215 8000. UK Trade & Investment Sector briefing: Construction opportunities in Egypt
Posted: 15 October 2011

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