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Al-Ahram Weekly 13 - 19 May 1999 Issue No. 429 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 13 - 19 May 1999 Issue No. 429
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Profile Books Travel Sports People Time Out Chronicles Cartoons Letters More than timber
by Rania KhallafFinnish officials and businessmen are keen to develop markets in the Middle East, the most important of which is Egypt. However, Finland is concerned about the huge imbalance in Egyptian-Finnish trade in favour of Finland. The problem has been compounded by Finland's joining of the European Union in 1995, which means it is now obligated to open its market to more goods from other European countries.
Trade relations between Egypt and Finland started as early as 1917, the year Finland gained independence from Russia. At the beginning, the main Egyptian client was the Trade Company for Wood, which remained for years the only wood importing company in Alexandria.
To this day, timber and wood products remain by far the largest Finnish export to Egypt.
By 1985 the value of exports from Egypt to Finland had reached $2.6 million, and by 1998 exports had risen to $6 million, but the value of Finnish exports to Egypt totalled $188 million in 1998, said Pekka Hyytinen, Finnish commercial attaché in Egypt. So far, serious attempts to increase the volume of Egyptian exports to Finland have not succeeded because of the latter's commitment to the European Union.
"Total annual wood exports to Egypt are 450,000 cubic metres of red wood, white wood and filleries, which are the wooden skeletons used in the first phase of construction. About 10 per cent of Finland's total wood exports goes to Egypt," explained Aulis Pitkakangas, managing director of HASA, one of the biggest wood companies in Haapajarvi in northern Finland. The filleries are also used in door frames and furniture.
Egypt is one of the most important customers for Finland, he added. Asked if the volume of trade relations with Egypt could be enlarged, Pitkakangas told the Weekly that businessmen in Egypt want to increase the amount of wood imports from Finland, but it seems that the Egyptian government has put more restrictions on wood imports to redress the current volume of trade. However, overall trade between the two countries is growing, he added. Pitkakangas said his own company "is satisfied with the size of trade with Egypt. We hope the situation will remain stable".
Egypt is the most important trade partner in the Arab world for Finland. But because of the recent limits imposed by Egypt, new markets for wood are expected to be opened in Libya, Morocco, Algeria and Lebanon, Pitkakangas added.
Mohamed Ayoub, a commercial expert, explained that recent Egyptian government decisions require traders and importers to pay the total expenses of the wood imports in cash. "Such a decision is not meant to restrict the volume of trade between the two countries, but to prevent unprofessional traders from entering this business," he said.
Finnish forestry has a long tradition. The slow growing forest in the north has been a key factor in the strength of Finland's economy.
"HASA, a private enterprise, is big enough to cater to big consumers of sawn timber worldwide. It ships about 200,000 cubic metres of sawn red wood and white wood annually. HASA markets its output of sawn timber to more than 20 countries including Egypt," Pitkakangas said.
"What distinguishes our wood exports to Egypt are the reliable deliveries and strict product quality criteria which are part of the company's operating philosophy," said Esko Isotalus, sales manager of HASA.
About 65 per cent of Finland's exports to Egypt consist of sawn timber, 11 per cent is paper and boarding boxes, 9 per cent special machinery and 7 per cent electronic equipment. Hyytinen of the Finnish Embassy said that about 43 per cent of Egyptian exports are cotton and fabrics, 30 per cent aluminium and 16 per cent vegetables and fruits. Finnish businessmen are interested in expanding imports of fresh vegetables and fruits from Egypt, he added.
The huge trade imbalance, however, can be attributed partly to the lack of direct flights between the two countries, which is an additional obstacle to increasing trade, Hyytinen said. "To accomplish this goal, business people from both countries should hold regular meetings, and Egyptian products should also be promoted more widely and professionally," he concluded.
Finland's economic structure has changed significantly over the past few years because of the shift from traditional industries to hi-tech industries, and this has affected the mix of its exports. "Finland has been able to develop its electronics and telecommunications industries to such an extent that it is no longer dependent on forest-based industry," said Martti Maenpaa, director-general of TEKES, a consulting organisation which implements technological development projects for companies in Finland.
