The Federation of Egyptian Industries (FEI) has called for the stabilization of gas and electricity prices for factories, as industry leaders propose several key measures to advance Egypt's wood and furniture sector. Alaa Nasr El-Din, a board member of the Chamber of Wood and Furniture Industries and a member of the Arab Cooperation Committee at FEI, emphasized the importance of revitalizing this vital sector, which the government relies on to achieve its national strategy of boosting non-oil exports to $145 billion annually.
He highlighted that one of the most critical measures is revisiting the current value-added tax (VAT) applied to various industries. He argued that the government should exempt all manufacturing raw materials from VAT, as high raw material costs hinder manufacturers' ability to compete in foreign markets. Supporting local raw materials is therefore essential.
Nasr El-Din also stressed the need to lower the price of industrial land, which he described as a substantial burden on current and potential investors in Egypt's industrial market. He further recommended prohibiting the import of products that have locally-made alternatives and suggested increasing taxes on any imported product with a domestic counterpart.
Additionally, he urged the government to expand the organization of exhibitions and support Egyptian producers' participation in them. This could include reducing exhibition space costs and facilitating manufacturers' involvement in international exhibitions to promote their products globally, thereby opening new markets and increasing exports.
He pointed out the necessity of having a constant presence of industrial chambers to assist small and medium-sized manufacturers, helping them enhance their standards and prepare for export through practical training sessions. He called on the Ministry of Industry to take a supervisory role over the industrial chambers and to review each chamber's plans to develop its designated sector. Nasr El-Din urged the need for meetings with Minister of Industry Kamel El-Wazir and the full board of directors of each industrial chamber, rather than limiting discussions to just the chairperson or their delegate.
He expressed that rapid actions and clear plans from the Ministry of Industry are needed to advance the sector, which should be implemented by chamber board members and their staff. He proposed establishing permanent exhibitions with full ministry support for all sectors and maintaining continuous oversight by industrial chambers over their members. This approach would ensure that the sector's needs are addressed for all workers, extending beyond just the chamber's chairperson and executive office to the entire council, thus providing equal opportunities for everyone.
Taha Zidan, a board member of the Chamber of Building Materials Industries at FEI, also emphasized the importance of issuing a package of financial and procedural incentives to support the growth of the industrial sector by 2025. Key recommendations from Zidan include stabilizing gas and electricity prices and expediting the customs process to facilitate the release of raw materials and production requirements under a provisional release system.
To increase state revenues in foreign currency, he proposed the issuance of dollar-denominated bank certificates for Egyptians working abroad and exporters, similar to the model used for the New Suez Canal certificates. Zidan noted that this measure would ensure a surplus of dollars within a month. He also called for higher conversion rates for dollar remittances from abroad in banks, exceeding the current rate by 3-4%. This initiative aims to encourage foreign currency remittances through official banking channels to combat currency trading outside the formal market.
In his comments on industrial support, Zidan stated, "Firstly, it is essential to stabilize gas and electricity prices, enforce stricter oversight on all industries, and ensure adherence to the law for fairness and competition. Additionally, a net profit margin for manufacturers should be set between 20% and 25%."
He added, "Secondly, export incentives should be tied to the dollar revenue generated rather than relying on the percentage of local content or documentation. Moreover, dollar price incentives should be provided for export proceeds ceded to the state, ranging from 3% to 13% based on the volume of dollar revenue, while allowing exporters to retain 10% of the proceeds for unrestricted use."
Zidan further emphasized the need for greater facilitation in releasing raw materials and production inputs to support the industrial sector effectively.
Finally, Zidan stressed the importance of government meetings with investors and organizing visits to all industrial zones to assess their on-the-ground conditions, called for considering the private sector's demands that benefit both the state and the sector as a whole, rather than those driven by personal interests.
