Duty Free Entry
For Goods Shipped From Egypt QIZs after December 29 Source: Federal Register: December
29, 2004; El Alam El Youm, December 25 2004
The Office of the US Trade Representative
(USTR) (link
here) has issued a Federal Register notice officially
designating three joint Israeli-Egyptian qualifying
industrial zones (QIZs). Articles shipped from these
QIZs after December 29 will be eligible for duty-free
treatment when imported into the US.
The names and locations of the factories comprising
the Greater Cairo QIZ, the Alexandria QIZ, and the Suez
Canal QIZ are specified on maps and materials submitted
by Egypt and Israel and on file with the USTR.
In addition to certain requirements specified in the
recent Egyptian-Israeli QIZ agreement, US law requires
the following in order for QIZ products to qualify for
duty-free entry:
The product must be a new and different article of commerce
that has been grown, produced, or manufactured in the
QIZ. With respect to apparel products, this requirement
can generally be met if fabric components are assembled
together or the product is knit to shape in the QIZ.
The article must be imported directly from the QIZ,
Israel, the West Bank or Gaza Strip (the US-Israel Free
Trade Agreement (USIFTA) region).
At least 35% of the appraised value of a product at
the time it enters the US must be attributable to materials
produced, and direct costs of processing operations
performed, in the USIFTA region. Also, US materials
may account for up to 15% of the appraised value of
the finished goods. The agreement between Egypt and
Israel provides that at least 11.7% of the value of
the covered products must be Israeli.
In addition, until the establishment of a specialized
unit that will be responsible for monitoring the implementation
of the QIZ protocol, the General Authority for Export
and Import Control has decided to take the responsibility
of handling the names and inquiries from factories that
are interested to join the QIZ.
Nagui El Fayoumi, Advisor to the Minister of Foreign
Trade and Industry, stated that “the implementation
of the agreement will not take place before one month
from now”. He added that the specialized unit will include
all the parties that will be involved in the exporting
process, and that the duties of the unit will be to
receive the required documents for joining the QIZ and
to answer any inquiries from the factories and exporters.
Egyptian Cement
to be Exported to the US Source: Al Ahram Newspaper,
December 30, 2004
For the first time, an Egyptian cement
company has succeeded in entering the US market through
a 600-ton export deal in 2005, in spite of the fierce
competition from Mexican, Greek and Turkish companies.
This deal is an important step that reflects the successful
efforts of the government in association with the private
sector to promote Egyptian Exports. The importance of
exporting cement to the US lies in the huge consumption
in this market that exceeds 123 million tons, 23 million
of which is imported.
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Telecom Egypt Plans
Bond Issue Source: Trade Arabia, December
22, 2004
State-owned Telecom Egypt (link
here) expects to announce a public subscription
for a corporate bond issue worth 2 billion Egyptian
pounds ($321 million) early next week, the firm's chief
financial officer said.
Ali Salama said he expected the public subscription
notice to be published in newspapers on Sunday or Monday,
adding that the offer period would close after 15 days.
Telecom Egypt had originally planned to sell the bonds
in October but postponed the issue to this month. It
said at the time that the delay would ensure it secured
better rates.
The bonds are expected to have a maturity of either
five or seven years and will be the biggest ever corporate
issue in Egyptian currency.
'I have got all the necessary approvals,' Salama said,
adding that this included approval from the Capital
Market Authority, the auditor and the consortium of
underwriters.
He said the funds would be used for investment and financial
restructuring, which would involve retiring some more
expensive debt with less costly funds raised through
the bonds.
Salama said the firm chose a bond issue because it was
less costly for the issuer but also offered attractive
returns for investors. 'It is a very attractive tool
for both sides,' he said.
The underwriters are state-owned Banque du Caire,(AmCham
Member) (link
here) state-owned Bank of Alexandria (AmCham Member)
(link
here), Arab African International Bank (AmCham Member)
(link
here), and Citigroup (AmCham Member) (link
here).
Egypt's Internet
Market Growing Strongly Source: Comtex News Network
Inc., December 16, 2004
Egypt's Internet market is growing strongly,
according to a new research from the Arab Advisors Group
(link
here). Spurred by infrastructure-based competition
and government initiatives, Egypt's Internet accounts
are projected, by the Arab Advisors Group, to grow at
a Compound Annual Growth Rate (CAGR) of 23.7% between
2003 and 2008.
It is projected that Internet accounts will grow from
around 647,000 by the end of last year to reach around
1.9 million by the end of 2008, a penetration rate of
2.5%. Internet users are expected to grow from 1.94
million by end of 2003 to reach 5.6 million by end of
2008, a penetration rate of 7.4%. Egypt's subscription-free
Internet service has generated revenues amounting to
US$66.2 million between January 2002 and August 2004.
A new report, "Egypt Internet and Datacomm Landscape
Report 2004" was released to the Arab Advisors Group's
Media Strategic Research Services subscribers on December
5, 2004.
"The Internet and Datacomm markets in Egypt are fully
competitive, where market liberalization started in
1999. The licensing framework is a three-tier one. There
are currently 4 Class A licensees (carrier level Internet
providers) and 8 Class B licensees (Public Data Network
providers).
As of September 2004, the Class C licensees reached
186. These are Internet Service Providers that obtain
leased lines from Class A licensees." Ms. Serene Zawaydeh,
Arab Advisors Senior Research Analyst wrote in the report.
"The Ministry of Telecommunication and Information Technology
(MCIT) (link
here) has launched several initiatives to accelerate
the growth of the Internet market, by making the service
affordable to end users. The Free Internet Initiative,
which was launched in January 2002, has enabled users
to access the Internet from any phone line, without
the need for a dial up subscription, and for the cost
of a local phone call, which is LE1.23 (US$0.2) per
hour. The total number of unique dialers has reached
1,013,459 by end August 2004, with a total of 782,011,194
minutes.
The subscription-free Internet service has generated
revenues amounting to US$66.2 million between January
2002 and August 2004." Ms. Zawaydeh added.
Broadband enabled value added services are also starting
to mushroom in Egypt: The Central Bank of Egypt has
licensed 12 banks to provide E-banking services.
The services include phone and mobile banking as well
as Internet banking services. Egypt's e-government portal
(link
here) provides several e-government services.
Egypt’s OPTD Bids
to Buy Hotel Firm Source: Trade Arabia, December
23, 2004
Egypt's Orascom Projects and Touristic
Development (OPTD) (link
here) said it was offering to buy 45.3% percent
of Orascom Hotel Holding (OHH), a deal that would give
it almost 100% ownership.
OPTD already owned 54.6% of OHH and, if this deal was
successful, it would own 99.9% of OHH, OPTD said in
an announcement in the Al-Ahram daily.
The announcement said OPTD was offering one of its shares
for every 1.24 OHH shares. It said the offer was open
until the end of the working day of December 29 and
the acquisition would be executed on January 13.
Dealers said the announcement offer was subsequently
amended during trading so that OPTD offering would offer
one of its shares for every 1.22 OHH shares. Officials
from both companies were not immediately available for
comment on the deal.
By the close of business, OPTD last traded up 0.20 Egyptian
pounds ($0.03), or 1.6%, at 12.40 pounds. OHH last traded
up 0.09 pounds, or 0.9%, at 9.88 pounds.
US Dollar Declines
against Egyptian Pound Source: El Hayat, December 30,
2004.
The US Dollar was hit hard on December
29 when it reached a 4% low against the Egyptian pound;
amid expectations that it will decline further by 7%
next week.
For the first time in years, banks are offering US Dollars
to Exchange offices with a profit margin. The Dollar
was sold on December 29 at 6.12/US$ compared to 6.21
last week and 6.45 in July 2004.
Abd El Rahman Baraka, Chairman of Misr Romanian Bank
(link
here) attributed this decline to the fall in Dollar
demand by importers as well as the activation of the
Inter-Bank.
One economist attributed the drop in the Dollar exchange
rate to the worldwide dollar depreciation and added
that it is only logical that the Dollar would decline
against the Egyptian pound.
Foreigners Record
Strong Performance on Securities Market Source: Financial Times, December
27, 2004
According to Al-Sharq newspaper (December
26, 2004), the operating foreign investors on the Egyptian
Stock Exchange (link
here) recorded a strong performance in the local
currency-denominated transactions through 2004 compared
with the previous year.
This performance had positive impacts on the different
sectors of the Egyptian economy. Addressing the Emerging
markets forum in Cairo, Mr. Abdul-Hameed Ibrahim, Chairman
of Egyptian Capital Market Authority (link
here) said that foreign investors are noticeabl
targeting the Egyptian securities market. He added that
foreigners are currently controlling 30% of the total
listed stocks value.
Fitch Ratings Revises
Egypt's Long-term Local Currency Rating Source: Comtex News Network
Inc. December 17, 2004
Fitch Ratings (link
here) said on Wednesday it revised the outlook on
Egypt's long-term local currency rating of "BBB" to
"stable" from "negative.
"The agency affirmed Egypt's long-term foreign currency
"BB+" rating, its short-term foreign currency rating
of "B" and its "BB+" country ceiling.
Egyptian Minister
Maps Out Industrial Plan For 2005 Source: MENA Report, December
29, 2004
2005 will be the year of activating the
industrial sector in Egypt, said Minister of Foreign
Trade and Industry Rashid Mohammad Rashid.
The Ministry of Foreign Trade & Industry (link
here) will seek to iron out the problems of the
stumbling investors in the industrial sector in coordination
with the Central Bank of Egypt (link
here) and the other banks in order to re-operate
the factories and the industrial projects which stopped
due to financial problems.
Impediments hampering many industries will be eliminated,
especially in the domains of cement, car, textiles and
clothing industries.
The competitiveness of the Egyptian industries will
also be enhanced through specific mechanisms and within
a pre-set timetable that aims to boost the quality of
the Egyptian product, reduce its cost and increase the
Egyptian workers' productivity.
The ministry will also launch a national program to
upgrade the quality of Egyptian products to meet the
international standards and readjust the Egyptian standardization
system to be on a par with the European, the Japanese
and the American systems.
The technological centers that will be assigned the
transfer of new technologies to the Egyptian industries
will also be developed. More centers will be set up
to serve the industries of furniture, marble, granite,
handicrafts, and plastics as well as the clean industries
that operate with environment-friendly technologies.
The small industries will also figure high on the agenda
of the Ministry of Foreign Trade and Industry in 2005,
said the minister. Creativity in the product designs
and putting the industrial inventions in gear and practice
will also be encouraged and groomed.
The program also includes plans to foster inter-Arab
business relations and one of the outstanding projects
will be the establishment of a joint Saudi-Egyptian
petrochemicals factory.
The year 2005 will also mark the beginning of putting
the Qualified Industrial Zones (QIZs) protocol, co-signed
with the US and Israel, into force. The ministry will
see to setting up the areas to be covered by the protocol
and form the Egyptian committee that will supervise
the implementation of the agreement.
The ministry will also draw up 12 industrial maps for
the locally available crude and supporting materials.
It will propose new investments estimated at 20 billion
Egyptian pounds to procure some 6,000 jobs with an expected
yield amounting to 50 billion Egyptian pounds, according
to Rashid.
The first stage of the central geographical mapping
of Egypt's industrial and investment areas and outlining
the geographical survey of 86 industrial zones is also
set for conclusion during next year, said the minister.
A database for the industrial facilities in the country
will also be set up in accordance with international
criteria.
German and French
Companies to Run Main Airports Source: MENA report, December
26, 2004
On Monday, December 27, Egypt signed contracts
with two German and French companies to operate Cairo
International Airport and other airports across the
country.
Egyptian Minister of Aviation Ahmad Shafiq and the ambassadors
of Germany and France in Cairo attended the signing
ceremony. Shafiq said the move was late but necessary.
"Employing foreign experts to run international airports
in return for a profit share has proved a success."
The German Fraport the operator of Frankfurt's airport,
was awarded an eight-year contract to operate Cairo
International Airport as of 2005. The French ADL also
won a six-year contract to operate the airports of Hurghada,
Sharm al-Sheikh, Abu Simbil, Luxor and Aswan.
The two companies are to begin their work within the
coming three weeks, said Ibrahim Mana'a, the chairman
of the Holding Company for Airports and Air Navigation.
A Fraport spokesman said the airport operator will receive
between 1million and 1.5million dollars in annual operating
fees. He added that the company will not have to invest
in infrastructure at the Cairo airport.
Egypt Opens New
Damietta ”Electronic” Harbor Source: MENA Report, December
21, 2004
Egypt's President Mubarak on Monday opened
new Damietta electronic harbor, some 8.5 kilometers
to Damietta branch of the River Nile. The port is the
first in Egypt to be operated electronically. It also
establishes a link to exchange shipping information
with other harbors.
There is a 4.5 km-long canal link between the Nile River
and Damietta, Trains run alongside the berths. The port
has been divided into sub-harbors, quays and berths.
The complex was built on 3.2 million square meters,
and includes a petrochemicals berth, a container berth,
a general cargo berth, a cement quay, a grains berth,
and a multi-purpose berth.
The first-class transshipment port can accommodate a
new generation of large container vessels now that berths
have been dredged to a depth of 14.5 meters and new
container handling equipment introduced.
The total area of the port now is 11.8 square kilometers,
water area 3.9 sq km and land area 7.9 sq km.
In addition, vessels can discharge at any time. Vessels
transiting the Suez Canal can use Damitetta Port without
any deviation, which saves quite a lot of time for main
liners.
Minister of Transportation, Essam Sharaf, said during
the event "New Damietta port will add to Egypt and the
world a new modern harbor that is operated with the
latest information and communications technical know-how."
He added that a troubleshooting company for harbors
was established to operate the system installed in Damietta
Port.
The total costs of the project reached about LE 190
million which is totally covered from the revenues of
the Damietta Port Authority, which makes the project
one without debts, Sharaf said, adding that the harbor
provides 31,000 jobs.
Alcoa Opens New
Plant Outside of Cairo Source: Mena Report, December
21, 2004
Alcoa (link
here) has announced that its Alcoa Closure Systems
International (CSI) (link
here) business formally opened a new plant outside
of Cairo, Egypt this month to support beverage customers
in North Africa. Alcoa CSI produces plastic and aluminum
bottle closures and packaging machinery for the beverage
and food industries worldwide.
The new facility has the capability to produce 800 million
closures per year and had already begun shipment to
customers. "This plant supports Alcoa's aim of meeting
our customers' needs for prompt, competitive closure
supply," said Eduardo Gemelli, general Manager of Alcoa
CSI Europe, who is also responsible for CSI Egypt. "The
facility also provides a solid base to support Alcoa's
future growth and development in Africa."
This is Alcoa's first operating facility in Egypt.
Alcoa Closure Systems International, Inc. (CSI), a part
of Alcoa, is recognized as a world leader of closures
and closure application systems. Alcoa CSI provides
quality closure and capping equipment products, as well
as technical service and support to all key markets.
Alcoa is the world's leading producer of primary aluminum,
fabricated aluminum and alumina, and is active in all
major aspects of the industry. Major markets include
carbonated soft drinks, food, juice and isotonic, bottled
water, beer, dairy, liquor, personal care, and automotive
fluids.
Egypt's Oil and
Gas Exports Hit $4.5 Billion Source: Trade Arabia, December
28, 2004
Egypt's Minister of Petroleum Sameh Fahmy
said that oil is the backbone of economic and social
growth in Egypt.
Speaking to the opening session of a conference on the
future of oil and petrochemical industries in the Arab
countries Monday, Sameh Fahmy said that total Egyptian
oil natural gas output hit 58.5 million tons in 2003-2004.
Oil refinery capacity in Egypt stood at 35 million tons
while exports reached 18.6 million tons at $4.5 billion
during the same fiscal year, he said.
Oil export levels have not yet reached the aspired volume,
he said, adding that the increase in oil prices has
bridged that gap.
The natural gas industry has witnessed a remarkable
upheaval over last few years with the new investment
projects in northern Delta city of Rosetta to export
liquefied gas to European markets, he added.
The three-day conference will discuss 75 researches
on future challenges countering oil and petrochemical
industries in the Arab world.
First SEGAS Shipment
to Spain Source: Trade Arabia, December
28, 2004
Egypt's first shipment of liquefied natural
gas (LNG) is expected to head to Spain at the start
of next month, a little behind the original December
export schedule, an Egyptian gas source said.
SEGAS, a venture including Spain's Union Fenosa (link
here) and Italy's ENI (link
here), had originally planned the first exports
for early December but the source said commissioning
of the plant had taken longer than expected.
The source said the LNG carrier Cadiz-Knudsen was likely
to leave the SEGAS plant around January 3 or January
4.
Loading of the vessel, which has capacity to carry 138,500
cubic meters of LNG, or about 55,000 tons, was expected
to start on Friday.
LNG is gas that is super-cooled into liquid form, so
tanks in LNG ships also need to be cooled before loading.
The source said the already lengthy loading process
was likely to take several days in this case because
equipment was being used for the first time. The ship
had docked at the SEGAS terminal on December 26.
SEGAS is the first of Egypt's two LNG projects to start
processing gas for export. The SEGAS plant has capacity
to produce about 4.8 million tons a year of LNG.
The second project being built by a consortium including
Britain's BG Group (AmCham Member) (link
here) is expected to start exports during next year.
The two plants, which are both on Egypt's north coast,
will sharply increase Egyptian gas exports, which began
last year with the opening of a gas pipeline to Jordan.
Egypt has proven reserves of about 66 trillion cu ft
(1.869 trillion cu meters) and has been seeking to develop
its gas business as production of crude oil has fallen
in recent years.
Femip Lends 160
Million Euro for Clean Energy Source: Comtex News Network
Inc., December 28, 2004
The Facility for Euro-Mediterranean Investment
and Partnership (FEMIP) is providing EUR160 million
to the Egyptian Electricity Holding Company (EEHC) (link
here) for the construction of two 750 MWe natural
gas-fired combined-cycle power generation modules, one
at Talkha-Damietta power station in the Nile Delta and
the other at El Kuriemat power station 90 km south of
Cairo.
EEHC is responsible for the generation, transmission
and distribution of electricity throughout Egypt. Incorporated
in 2000 as a private sector company and wholly owned
by the Egyptian State, EEHC owns and operates a unified
power system integrated with those of neighboring Libya
and Jordan.
The projects intend to meet the growing demand for power
and are scheduled to start commercial operation in 2007.
They will be implemented by EEHC's wholly-owned subsidiaries
East Delta Power Production Company (Talkha) and Upper
Egypt Electricity Production Company (El Kuriemat).
They will employ combined-cycle gas turbine technology,
which delivers high energy efficiency with low environmental
impact. The turbines are designed to burn natural gas
but can use distillate fuel as an emergency backup.
The Egyptian Natural Gas Company (GASCO), to which FEMIP
is also providing finance, will supply indigenously-sourced
natural gas.
This loan complements the loan of EUR220 million granted
yesterday to the Spanish Egyptian Gas Company (SEGAS)
or the construction of a liquefied natural gas (LNG)
plant, storage facilities and gas export equipment in
Damietta, some 60 km west of Port Said.
The General Organization for Greater Cairo Water
Supply, Foreign Purchases Committee issued a request
on December 29, 2004 for international offers for
the rehabilitation, on turnkey basis, of the automatic
control system at Road El Farag Potable Water treatment
plant by providing the necessary water management
system known as Skada. The specification fee is L.E.
2,000, the performance bond is 5% and the bid bond
is L.E. 300,000 & 40,000. Deadline for the submission
of offers is March 15, 2005.
The General Organization for Greater Cairo Water
Supply, Foreign Purchases Committee issued on December
16, 2004 a request of international offers through
agents for the supply & erection of four vertical
filtered water pumping sets, inclusive of dismantling
of the old sets, at the filtered water division of
Geziret El Dahab potable water treatment plant. The
specification fee is L.E200, the performance bond
is 5% and the bid bond is L.E. 65,000. Deadline for
the submission of offers is February 20, 2005.
Egyptian Public Authority for Drainage Projects,
General Directorate for Beni Swef Drainage, The Cashier
issued a request on December 28, 2004 of international
offers for the construction of subsurface, tile, drainage
networks at Atfeeh Zone, in Markaz Atfeeh, serving
5,400 feddans land in Giza Governorate under funding
from the World Bank. The specification fee is L.E
700 and the bid bond is L.E 110,000. Deadline for
the submission of offers is February 14, 2005.
Construction
The Cashier of the Housing Directorate El Wadi El
Gedid Governorate, , issued a request on December
29, 2004 for the construction of (a) 25 residential
buildings in El Kharga City, comprising 500 housing
units & (b) 5 residential buildings in Mout City comprising
100 housing units for completion in 36 & 24 months
respectively. Bid bond is L.E. 12,000 for each building.
The specification fee is L.E. 500 each and the bid
bonds are is L.E. 300,000 and L.E. 65,000 and the
performance bond is 5% each. Deadline for the submission
of offers is February 6 & 7 2005.
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