An agreement was signed on Tuesday between Egypt and Russia to establish a Russian industrial zone in the Suez Canal area near the coastal city of Port Said. A memorandum of understanding was also signed between the Russian Direct Investment Fund and several Egyptian banks under which a mechanism for financing upcoming Russian investments in the industrial zone was agreed. The details of the agreement have yet to be disclosed. The Russian industrial zone is to be built on a two-square-kilometre site and is to house projects in several fields, including pharmaceutical industries, shipbuilding, energy, petrochemicals, furniture making, land reclamation and the manufacture of agricultural and construction equipment. The agreements were signed by Egypt's Minister of Industry and Trade Tarek Kabil and his Russian counterpart, Denis Manturov, following meetings of the Egyptian-Russian Joint Economic Committee (ERJEC), which began on Monday and included representatives from around 100 Russian companies and over 60 Egyptian businesses. “We can reach $5.7 billion in annual bilateral trade,” said Shamel Orlov, head of the Russian side in the Egyptian-Russian Business Council. “This is what we aim to achieve through doing more business and having more investments such as in the industrial zone in the Suez Canal area.” Bilateral trade between Egypt and Russia reached $4.5 billion in 2014, with Egyptian exports increasing by 22.3 per cent and expected to reach higher numbers this year. Orlov said administrative matters are a big challenge against growth of bilateral trade, and called on both governments to facilitate procedures that will enable expanding trade relations. Orlov and Ahmed Darwish, head of the General Authority for the Suez Canal Economic Zone (SCEZ), signed a memorandum of understanding on Tuesday to prepare Russian businessmen for the new investments in the Russian industrial zone. “The SCEZ currently offers a wide array of competitive advantages for investors,” Darwish said at the ERJEC conference. He added that any company looking to do business in the SCEZ can do so in about three hours as a result of “a great deal of flexibility in the organisational and legislative framework”. He also noted that the SCEZ is a free zone that enjoys a lack of custom tariffs and offers a high level of security, including devices to detect both drugs and explosives. “The infrastructure of the zone is also ready for new investments,” Darwish said. Speaking at the ERJEC conference, Kabil said that structural reforms in financial and tax policies, as well as carrying out major economic projects, have all helped increase foreign investments in Egypt, which reached $6.4 billion in the 2014-2015 fiscal year. The Russian industrial zone in the Suez Canal area will be able to export about 70 per cent of its production to African nations, according to Darwish, while 30 per cent is expected to serve the local market. Ahmed Al-Wakil, chairman of the Federation of Egyptian Chambers of Commerce, said the free trade agreements between Egypt and African countries encourage Russian companies to seek more investments in Cairo because it will give them access to over 1.6 billion consumers in the African and Arab markets through bilateral trade agreements. “Several meetings between Egyptian and Russian companies and businessmen will be held following the ERJEC forum,” Al-Wakil said. He added that the business communities in both countries want to expand cooperation, especially since there are similar articles in the constitutions of Egypt and Russian that guarantee the free movement of trade and capital.
