Egypt's largest European trading partner, Italy, is looking to take a leading role in investment as well. Pierre Loza reports "Let me highlight the fact that this is the largest conference of its kind, bringing hundreds of companies together," said Adolfo Urso, Italy's vice minister of productive activities at the press conference following the opening session of the "Sistema Italia" conference. The conference, held last week under the auspices of the General Authority for Investment and Free Zones (GAFI), brought together 105 Italian companies seeking investment opportunities in Egypt, as well as another 168 Italian companies already established in Egypt and looking to expand their presence. Matchmaking between these companies and 250 of their Egyptian counterparts was coordinated through the conference's two-day-long proceedings. SIMESTE, which is the private sector vehicle through which the Italian government promotes investment, and GAFI were the two main players behind the matchmaking effort. Supervised by the Italian Ministry of Productive Activities, SIMESTE is an investment-promoting entity, providing credit and technical knowledge for Italian investments outside the European Union. SIMESTE has funded numerous projects around the world and seeks a substantial increase to Italy's $2.2 billion of accumulated investments in Egypt. In an effort to target small and medium-sized companies, SIMESTE promised to finance any Italian investment project in Egypt at up to 49 per cent of the investment capital. For joint Italian-Egyptian ventures, the company committed itself to offer credit for the percentage share of the Italian partner's investment. Urso believes the conference marks a new phase in Italian Egyptian economic ties, highlighting the fact that one million Italian tourists entered Egypt last year. A 30 per cent increase in trade volume also made ItalyEgypt's second largest trade partner after the United States. He also emphasised how Italian companies were keen on utilising the investment opportunities within Egypt's privatisation agenda. "There is a renewed interest in investment, the Italian tourism group Dominni is planning a giant tourism project, EINNI is planning a major venture in the gas sector, and as well ItaliaCementi is planning to start a project that could be the largest foreign investment in Egypt outside the petroleum sector," he said. After the Egyptian government's rejection of last year's bid by ItaliaCementi to buy its shares in the Suez Cement Company (SCC), at LE80.05 per share, there is much speculation about a new deal in the works. Established in 1977 as a joint venture company, SCC has established itself as Egypt's largest cement producer, controlling 22.5 per-cent of the Egyptian market after acquiring 67 per cent of Torah Cement. With an authorised capital of LE1 billion and paid-in capital of LE640 million, its revenues are expected to grow at 11.2 per cent annually from 2003-2008. The company's costs are also among the lowest, at LE121 per ton for bagged cement. After the steady growth the company's stocks have witnessed this year and the positive remarks made by Urso, many believe that prospects of a deal could be revisited. Staunch government support for the event was reflected in the presence of Minister of Foreign Trade and Industry Rasheed Mohamed Rasheed and Minister of Investment Mahmoud Mohieddin at the conference's opening session. Mohieddin said that customs and trade liberalisation measures taken by the Ministry of Foreign Trade and Industry have helped bolster Egypt's investment climate. He also encouraged Italian investors to examine government stakes in joint venture projects in the cement, fertiliser and banking industries. Highlighting the multiplier effect of a newly formed mortgage sector, and the improved performance of the stock market, Mohieddin believes the present time represents a great opportunity for investment. "If you placed your funds from 2004 into our stock market's 30 most active companies, you would be cashing in today more than 120 per cent, in euro terms" he said. Mohieddin also heralded a new decision by the minister of tourism, which would allow foreign investors more flexibility in the buying and selling of real estate in select areas. For his part, Rasheed called Italy "Egypt's gateway to Europe", citing successful examples of joint cooperation such as the Italian- Egyptian Fashion Design Centre, and the Italian-Egyptian Programme of Technology Centre, presently under construction. Rasheed went on to affirm his commitment to providing investors with a pro-business environment through the "dismantling of bureaucratic obstacles, revitalising the business environment, as well as providing industrial bilateral and multilateral agreements to protect investment".
