Agribusiness and Food Production in Egypt
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1 COMMERCIAL SECTION EMBASSY OF THE ARAB REPUBLIC OF EGYPT Prague Agribusiness and Food Production in Egypt Doing Business in Egypt: Egypt the Future 24 th of February, 2015 Technology Centre ASCR, EEN
2 Specifications of the Egyptian Agriculture Sector The agriculture sector in Egypt employs about 30% of the total labor force, exports contribute to 14.8% of the GDP 20% of the total merchandise exports which makes agricultural sector one of the important resources of the national income.
3 Specifications of the Egyptian Agriculture Sector Agricultural exports are an important source of national income, there has been continuous growth in terms of agriculture products exports from 471 million pounds at the beginning of the eighties to about 6.79 billion pounds by the third millennium. Agriculture exports have witnessed a remarkable development during the last five years. At the forefront of the Egyptian agricultural exports comes raw cotton. Rice comes at the first place in Egypt's agricultural exports by as much as 40% of total exports of the sector. Potatoes and fresh orange come second and third in the list of Egypt's agricultural exports (without raw cotton). EU market comes on top of the receiving markets for Egyptian agriculture exports as it absorbs up to 42% of the total exports.
4 Specifications of the Egyptian Agriculture Sector Agriculture in Egypt is divided into three agricultural seasons: the winter season the summer season the season of indigo, This provides a sustainable annual production season which extends to the full agricultural year or several years. Crops that are benefiting from this agriculture calendar are fruits, vegetables and cane.
5 Specifications of the Egyptian Agriculture Sector The agricultural area in Egypt amounts to 8.5 million acres a long-term plan to add about 3.4 millions of acres of new land reclaimed until 2017 to add 1.5 million new acres each year of agriculture land Egyptian Government is showing recently some trends towards large ownerships for investment in parallel to small and medium ownerships of the agriculture land
6 Agribusiness The Agriculture sector in Egypt has created several sub-sectors, most importantly the agribusiness.
7 Agribusiness
8 Agriculture Machinery and Equipments Although Agriculture is a major source of income, export and employment in Egypt, and in the light of the government plan to add about 3.4 millions of acres of new land reclaimed until 2017, however this was not well reflected on the use of agriculture machinery in Egypt.
9 Agriculture Machinery and Equipments Egypt s imports of Agriculture Machinery (HS 8432) Item/ Year Total million Euros 2,100 3,500 2,900 3,700 3,500 China ,100 1, Portugal Germany Italy France USA Turkey Japan Netherlands Austria Souce: Trademap Value: Thousand Euros
10 Agriculture Machinery and Equipments Item/ Year Total 11,986 14,501 15,510 18,961 19,523 Germany 1,668 2,077 3,380 3,711 4,891 Italy 1,554 1,959 2,340 1,977 2,640 China 569 1,063 1,557 1,938 2,410 USA 1,496 2,438 1,933 2,710 2,039 Republic of Korea Egypt s imports of Agriculture Machinery (HS 8433) 1, ,146 1,692 1,902 UK Netherlands , Australia Spain Belgium Souce: Trademap Value: Thousand Euros
11 Agriculture Machinery and Equipments There is a growing interest now in Egypt to attract investment in the field of agriculture machinery and equipment especially with the recent trend for the large agriculture land ownerships, in addition to the growing interest in the increase in the crops yield. There are also recent plans to cooperate with the Public Bank for Development and Agriculture Credit PBDAC in Egypt to provide soft loans for the purchase of agriculture machinery.
12 Incentives for Investing in the Agriculture Sector and its Subsectors Egypt has adopted supportive policies to create an attractive and an encouraging investment climate in agriculture, and most importantly for investors in the newly reclaimed land through the provision of necessary infrastructure from the water for irrigation, roads, services and facilities for the space, in addition to the provision of lines of credit at an affordable cost, with the exemption from taxes until the land reaches its marginal productivity depending on the nature of each region.
13 Incentives for Investing in the Agriculture Sector and its Subsectors Freedom to determine acreage for all crops. Allowing the private sector in the field of production, distribution and import of agriculture inputs-including chemical fertilizers, improved seeds and chemical pesticides. Freedom in selling all agricultural crops. The free marketing, represent and contracts of cotton through the stock exchanges of goods. Encouraging cooperatives and private companies to play the role of mediator between producers and consumers and exporters, in addition to encouraging rural development and the deployment of services based on local small industries.
14 Incentives for Investing in the Agriculture Sector and its Subsectors Free access to the private sector in the export and the import of agricultural commodities. Liberalization of agricultural crop prices, and the liberalization of agricultural inputs prices guided by world prices. A strong infrastructure in the field of agriculture. The abundance of arable land reclamation and aqua culture. The availability of different sources of water, especially with the use of modern irrigation methods. The availability of cheap and skilled agricultural labor. The presence of a large consumer market for agricultural products (above 82 million persons). The agricultural exports' accessibility to the European markets, the United States, and the Arab and the African markets.
15 THE PROJECT OF THE GLOBAL LOGISTICS CENTRE EGYPT One of the immense national projects that is not less important than the new Suez Canal project. It aims at allowing Egypt to become a global logistics hub for handling and storing grain and food commodities as well as the manufacturing, packing and packaging of oil seed crops, unrefined oils, raw sugar and grain. The project will lead to securing the local food consumption for Egypt and for other countries in the region.
16 PROJECT LOCATION: Damietta Port has been chosen to be the site in which logistics operations will begin, as it is directly linked with 15 governorates located on the Nile River and easily connected with other countries' ports in the Mediterranean, Black Sea and North America.
17 THE PROPOSED SCHEME OF THE LOGISTIC CENTRE: 1. Receiving and handling grain such as Soy, Corn, Wheat as well as raw sugar, unrefined oils and other food commodities - from the producing countries in North and East Europe, Central Asia and North and South America -through 4-6 sea piers with 1800 meter long. 2. Storing the grain in modern silos and fiber glass domes with advanced systems in order to maintain the quality of the grain and keep it ventilated. The total storage capacity of the logistics centre for Short term storing, medium term storing and storing for manufacturing purposes is amounted at m tons/year.
18 THE PROPOSED SCHEME OF THE LOGISTIC CENTRE 3. The construction of five investment and industrial zones for grains and food commodities with a total land use of 1.7m meters and a capacity of 7.5m tons/year. These five zones are divided as follows: FIRST ZONE: will be for mills and for producing fine flour for local consumption and export with a capacity of 1.5m tons/year. SECOND ZONE: will be for manufacturing soy, food commodity manufacturing, oil extraction and pasture production with a capacity of 1.5m tons/year.
19 THE PROPOSED SCHEME OF THE LOGISTIC CENTRE THIRD ZONE: will be allocated to corn production and covers oil, starch, and fructose extraction with a capacity of 1.5m tons/year. FOURTH ZONE: will be dedicated to distilling and packaging sugar with a capacity of 1.5m tons/year. FIFTH ZONE: will be allocated to complementary industries based on the abovementioned industries, including Pasta, pastries, burger and pastures with a capacity of 1.5m tons/year.
20 THE PROPOSED SCHEME OF THE LOGISTIC CENTRE Re-exporting 10-12m tons/year of grain and manufactured commodities to global markets using storage and industrial areas connected to the modern conveyor belt lines system that allows for handling more than ton/year. Shipping manufactured and non manufactured grain and food commodities into Egypt - with an amount of 10-15m ton/year of the local needs from these products - by using the river transportation network with a capacity of ton/day or the railroad/road networks.
21 LAST DEVELOPMENTS REGARDING THE PROJECT Most importantly, the Minister of Supply and Internal trade announced that Egypt had so far received more than 30 alliance offers so as to invest in the global logistics centre project. The list of bidders for the Egyptian giant project includes international leading companies and investors worldwide from, USA, Canada, China, Russia, France, Italy, Slovenia, Saudi Arabia, UAE,, Kuwait, Sudan, Uganda,, etc A Russian company offered to supply the project with required equipments and machineries, and to build a developed mobile storage units for grain drying and storing with a capacity of 1-2 tons to 500 tons. China Harbor Engineering Co Ltd - the fourth largest in the world in financing and providing infrastructure for marine engineering projects, with business activities covering more than 80 countries and areas - has offered to form a consortium with Egypt to invest in the global logistics centre project.
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