The President and the Counselor of the French Chamber of Commerce and Industry in Egypt, discuss plans to establish a French industrial zone in Alexandria (North of Egypt) to further attract French FDI, and furthermore highlight the unique French-Egyptian relationship.
Could you please introduce us to the French-Egyptian relationship?
Mahmoud El Kaissy (MK): A remarkable feature of the French-Egyptian relationship is that none of the CAC40 companies left Egypt during the unrest in 2011, a fact that the current Prime Minister Ismail Sherif knows and approves of.
Hassan Behnam (HB): In 2011 I was the regional Director of communication at the commercial department of the French embassy, dealing also with roughly 115 French companies in Egypt. If any of those had wanted to leave Egypt we couldn’t have prevented them. During the dangerous times in January and February 2011 very few left temporarily, some for a couple of weeks, but never fully closed operations as they were convinced that the situation would improve in a short period of time. By March, these companies were back to business and fully operational. The confidence French companies have in Egypt is based on various simple reasons: bilateral historical ties still prevail in the current relationship and the French are confident in their knowledge about the cultural and business perspective on the whole middle eastern and gulf region. They realize the potential and unique opportunities offered by the Egyptian economy and never doubted the return to this potential.
In 2010, Egypt was internationally recognized as an emerging economy. A natural feature of markets in this stage of development is the emphasis on enhancing the quality, parallel to quantity of products and services. In the context of know-how transfer, French companies were a major partner for Egyptians at this time. Thus Egyptians feel at ease with the French as the common experience and collaboration further bonded. For years, French investments have been the most diversified in Egypt and present in nearly all sectors of activity.
MK: Although French investments are the most diversified, we are still behind the Germans and British investments in terms of volume where France is ranked fifth. As military cooperation between both countries developed recently, and substantial French investments have been made in Egypt from the electronic appliance, cement and the food packaging sectors, the combined investment volume climbed to roughly four billion euros (USD 4.4 billion) in 2014. Our ambition for the future is to further enhance French FDI into Egypt.
What is your current plan to further enhance French FDI into Egypt?
MK: One of our most innovative ideas is the FIZA Project (French Industrial Zone in Alexandria). Although Egypt provides strategic location advantages, has excellent trade agreements, has established logistics facilities into East and South Africa and is host to 1.7 million Francophones, French companies still tend to prefer Algeria or Tunisia to Egypt for FDI because they speak French. The rationale behind this is the assumption of an increased ease of doing business due to the absentee of the language barrier. The justification of our project is that the ease of doing business will be enhanced in a way that as FDI destination, Egypt becomes beneficial over Algeria or Tunisia.
HB: Earlier this month, Mr. El Kaissy introduced our project of FIZA to the visiting French Prime minister Manual Valls, in presence of his Egyptian counterpart Sherif Ismail, who both welcomed the project as an innovative initiative that bares great potential for both the French companies and Egypt’s economy. The core idea is that Egypt will provide the necessary infrastructure and surrounding services, and in return, the French companies will bring their know-how and special equipment. This combination will enable a rapid start of the project and production in an eco-friendly environment, as FIZA will only be host to non-polluting production units. Besides, it will bring further investment into Egypt and create employment opportunities for Egyptians. Another important issue is that besides the satisfaction of domestic needs, since the framework for re-exporting is already in place, FIZA and Alexandria as a whole will become the export hub into East and South Africa.
As FDI encouragement is a central aspect of the current Egyptian policy makers, the responsible authorities who have welcomed the FIZA project are committed to ease formalities for permits, licenses and authorizations regarding customs and taxes. Meanwhile, the main concern for French companies is security and political stability. Although Egypt still suffers from the image born in 2011, the situation has changed and is improving significantly. Egypt is a safe and stable country! We are confident that this image will change positively in the future and that FIZA project will soon become a reality.
"Egypt is a safe and stable country! We are confident that this image will change positively in the future and that FIZA project will soon become a reality". - Hassan Behnam, Counselor, French Chamber of Commerce, Egypt
