What the Russian Industrial Zone means for Egypt
Newspaper Title: https://www.egypttoday.com/
Newspaper Number:
Thursday - 24 May 2018
With the Russian Industrial Zone (RIZ) set to decrease unemployment in Egypt, increase foreign direct investment (FDI), increase production and establish Egypt as a trade hub, Egypt Today analyzes the deal, looking at what RIZ is expected to bring to Egypt and how it will affect Egyptian-Russian trade.
Egypt and Russia signed Wednesday an agreement for a $7 billion RIZ on Wednesday, according to a ministry statement. RIZ will be established in the East Port Said region.
During the signing ceremony, Minister of Trade and Industry Tarek Kabil explained that this 50-year agreement will give Russian companies rights to develop a 5.25 million square meter stretch of land in the Suez Canal Economic Zone into an industrial zone for Russian companies that will be built over three phases, giving them a solid, strategically-located base in Egypt to export to the rest of the Middle East and Africa.
Industrial projects and buildings will be built over a space of 2.8 million square meters, while the rest of the land will be used to build residential units as well as commercial and entrainment facilities for the zone's staff. Stretching over 461 square kilometers, the zone extends through the three Suez Canal governorates of Suez, Port Said and Ismailia, and will include six maritime ports, to be completed by 2045.
Manufacturing air conditioners, motors, construction equipment, glass, ceramics, electronics, medical supplies and plastic are among the industries targeted by the RIZ.
Russian Deputy Minister of Industry and Trade Georgy Kalamanov said in July that the RIZ will act as a platform for Russian products to enter the Egyptian and African markets. “I see it as a hub. I believe it is a first stage in shaping basic platforms for spreading Russian goods in African countries, “ Kalamanov had announced.
Building on Kabil's comments, Denis Manturov, Acting Minister of Trade and Industry of the Russian Federation, stated, “The signing of this agreement comes as a culmination of intensive discussions between the two ministries of industry and trade in the two countries over the past two years.”
RIZ is expected to give Russian companies an edge over other international companies, as it will be easier and less costly for them to export to the Region, meaning that their prices are likely to be more competitive on a global level; They will also take less time to arrive at the intended importing country and will leave less carbon footprints.
