Trading with tigers
For Egypt and South Korea, great trade prospects are waiting to be discovered, finds out Sherine Nasr
During the last decade, South Korean products won the trust of Egyptian consumers, who had flocked towards the "Made in Japan" label during the 1970s and 1980s. Quality, durability and reasonable prices were all that South Korean automobiles, electrical and household equipment needed to establish themselves as competitive alternatives in the Egyptian market.
Meanwhile, South Korea is a heavy importer of products whose industries are well-established in Egypt, such as textiles, tapestries, petrochemicals, ceramics, marble, fertilisers and food products.
Here lies the catch: South Korean businessmen are not aware these industries exist in Egypt and those who know lack the knowledge of how to establish permanent trade relations with Egyptian partners.
Charles Cheung is the owner of a trade company who recently visited Egypt along with 37 other South Korean companies to explore trade opportunities.
"I understand that Egypt has very strong textiles and petrochemical industries," Cheung said, adding that his aim was to buy Egyptian textile raw materials, fibres and yarns to make clothing that he will later sell in South America. "Many Koreans want to buy Egyptian products, but they do not know how." Pakistan, he said, is a very strong competitor in the textiles sector and has already established itself in the South Korean market.
To introduce South Korean traders and businessmen to the Egyptian market and promote trade and investment between the two countries, the Egyptian Businessmen's Association (EBA) lately signed a memorandum of cooperation with the Korean International Trade Association (KITA).
"This is one of many other steps that we intend to take to consolidate Egyptian/ South Korean trade ties," said Sherif El- Gabaly, EBA member and chairman of the Korea-Egypt Business Council.
Plans are set to launch one-week specialised Egyptian trade fairs in South Korea in collaboration with KITA, under whose umbrella 85,000 trade and investment companies operate. Meanwhile, one-on-one business meetings were conducted to encourage more trade ties between the two countries.
The lack of information on what Egypt can offer the South Korean market is perhaps one of the main reasons why Egyptian exports to South Korea have remained at an estimated worth of $134 million, with oil and petrochemicals making up 80 per cent of those exports.
To encourage more exports to South Korea, the Commercial International Bank (CIB) together with the Export and Import Bank of Korea have opened a credit line of $50 million that provides banking facilities to Egyptian businessmen interested in trade with their South Korean counterparts. "Unfortunately, this line of credit has not yet been fully exploited," El-Gabaly said. "I think most Egyptian businessmen are apprehensive about approaching the South Korean market."
According to Ambassador Nihad Abdel-Latif, assistant to the foreign minister, South Korean direct investments in Egypt have lately reached $190 million and the trade volume between the two countries was estimated at $456 million in 2002. "These are humble figures when compared to the potentials available if more cooperation is achieved," said Abdel-Latif. "Egypt can be an excellent market to accommodate integrated industries for many South Korean enterprises."
Egypt is blessed with a unique geographical location and can work as a gateway to South Korean products in the Middle East, Africa and Europe, said Jae-Chul Kim, chairman of KITA. "In addition, the availability of natural resources and skilled manpower are all elements of attraction to South Korean investors."
