2 - 8 May 2002
Issue No.584
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Al-Ahram Weekly Online 2 - 8 May 2002 Issue No.584 |
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Driving to prosperity
The Indian economy is growing fast and Egypt is keen to get in on the act. Eman Youssef reports on a cooperation framework recently signed between the two countries' auto component industries
As part of a broad plan to promote India's automotive industry, Indian executives representing the automotive component industry in India recently visited Egypt. Santan Singh, Indian ambassador in Cairo, said that the visit took place as part of the celebration of the "year of India in Egypt." "It follows the high-level Egyptian ministerial visit to India last January," said Singh, adding that the aim was to promote bilateral trade and economic relations. The Indian delegation met members of the federation of Egyptian industries and the automobile industry chamber of commerce.
Several concrete results ensued. A memorandum of understanding was signed between the Egyptian Auto Feeders Union (EAFU) and the Automotive Component Manufacturers Association of India (ACMA), Deep Kapuria, vice president of ACMA, told Al-Ahram Weekly.
Both sides identified the automotive sector as a priority area for cooperation between the two countries' private sectors.
The memorandum aimed to foster a spirit of better cooperation and coordination between the two countries and the members of associations, without creating any legally enforceable obligations between EAFU and ACMA, according to Kapuria. He emphasised that both associations will exchange information and other relevant publications on technology of mutual interest and on laws and regulations pertaining to foreign trade and investments.
Ali El-Saidi, Egypt's minister of industry and technological development, urged Indian and Egyptian companies to set up joint ventures and exploit Egypt's existing potential. The country boasts 16 automotive factories that produced 56,000 cars in 2001.
Egyptian exports to India increased lately, from $156 million in 2000 to $252 million in 2001.
Meanwhile, Indian exports to Egypt stood at $284 million in 2001, a 24 per cent increase from 2000.
Egypt mainly exports cotton and leather goods to India, while importing textiles, machines and equipment, iron and steel.
"Historically, India's economic and commercial relations with Egypt have been close and diverse," said Singh, adding that last year, India was the fourth largest market for Egyptian exports. India is the 13th largest foreign investor in Egypt ploughing about $330 million into the country.
Egyptian business people seem pleased with the prospects of cooperation. Abdel- Moneim Seoudi, chairman of the federation of Egyptian industries, told Al-Ahram Weekly that five years ago, a cooperation agreement was signed between the industry federations of both countries during the G15 summit in Cairo.
"The automotive feeding industry makes an important economic, technical and social contribution to the engineering sector at large," said Seoudi.
He advised Egypt to learn from India's pedigree. "Our experience in Egypt concerning the auto-feeding industry, though relatively shorter than India's, is that it was, and continues to be, a potentially remarkable sector, growing in line with the automotive industry as a whole. India is an excellent example to follow", said El- Saidi. Esteem was mutual. "The visit of the Indian delegation to Egypt reflects the growing awareness among the business community in India of the tremendous opportunities in Egypt," Singh chimed in.
"It also underlines the importance we attach to the Egyptian economy's vast potential for growth and mutually beneficial ties. The 'year of India in Egypt' focus will substantially strengthen bilateral trade relations," Singh told the Weekly.
Such cooperation is important in these days of tough economic competition. "International trade is subject to severe challenges, arising from WTO commitments," said Singh. He argued that major developing countries like India and Egypt should pool their resources to develop technologies, products and strategies that can face the challenges jointly.
As if in response, links between the two countries' industries seem to be burgeoning. A few weeks ago, Minister of Industry Ali El- Saidi, together with Minister of Foreign Trade Youssef Boutros-Ghali, headed a large delegation of industrial and commercial businessmen on a visit to India. A full- fledged programme encompassing all aspects of cooperation between the two countries was almost concluded during the visit. All that remains is for the programme to be submitted to the steering committees of the ministries of trade and federations of industry in both countries. Singh urged the two sides to make serious efforts to implement various provisions of the memorandum of understanding.
The ACMA visit is considered the first fruit of that memorandum. "Bilateral cooperation in the automobile component sector must be a shining example for others to follow," argues Singh.
According to El-Saidi, the automotive industry in Egypt is continuously growing. Production capacity is 180,000, well above the nearly 60,000 actually produced a year.
Of these, 40,000 are passenger cars; 15,000 trucks, 3,500 heavy-duty cars and more than 200 buses. Investment in the Egyptian automotive industry stands at $2 billion, according to Ali Tawfik, chairman of EAFU. Local components in assembled vehicles should be 40 per cent for passenger cars and 60 per cent for trucks and buses. Industrial vehicle production in Egypt dates back to 1959, and the industry gained momentum in the early 1960s, according to Tawfik.
The auto parts industry of Egypt has developed rapidly as a consequence of development in the automotive industry. The main suppliers of automotive parts in Egypt are the US, Germany, Italy and East Asian countries.
Egypt also imports 25,000 vehicles in addition to those produced or assembled. "We need to utilise the capabilities we already have," noted El- Saidi, with an eye on the domestic industry's future.
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