Alexandre Rocha, special envoy*
alexandre.rocha@anba.com.br
Cairo – Egyptian businessmen want to organize a mission to Brazil. The announcement was made yesterday (03) by the honorary consul of Brazil to Alexandria, Ashraf El Attal, who is also a foreign trade businessman, in the seminar that opened, in Egypt, the activities of the Brazilian trade delegation that is visiting the North of Africa. “Our trade balance is very unequal, there is much to be done, we have not been making the necessary effort. It is essential to learn about Brazil and to encourage the country’s businessmen also to buy raw material and finished products from Egypt,” he said.
The idea is to organize the trip at the end of the year. Together with the Arab Brazilian Chamber of Commerce, Attal, who is the coordinator of the Brazil-Egypt Business Council, wants to identify the sectors that are most appropriate to the promotion of business with Brazil. He mentioned some sectors that are strong in his country, among them naphtha, fertilizers, cement, rice, furniture, chemical products and handicraft.
To the marketing vice president at the Arab Brazilian Chamber, Rubens Hannun, the mission is appropriate, as several of the activities related to trade with the Arabs should take place at the end of the year. To the Brazilian ambassador to Cairo, Elim Dutra, who also participated in the seminar, the Egyptians should travel to Brazil, learn about the market and sell.
Last year, Brazilian exports to Egypt generated US$ 1.35 billion, whereas imports totalled just US$ 38 million, according to figures supplied by the Brazilian government Foreign Trade Secretariat (Secex).
In the area of investment, the secretary general at the Egyptian Businessmen’s Association (EBA), Mohamed Youssef, said to ANBA that Egypt is developing a new kind of industrial district turned to countries. “We offer an area with all facilities to a country,” he said.
This kind of enterprise is born from an agreement made by businessmen in the private sector in a specific country and the Egyptian government. Turkey, for example, has an area turned to the entire textile industry chain, Russia will have a hub turned to the heavy and aeronautical industry, Germany and India, according to him, are in the final phase of negotiation for the establishment of business of the kind. In the case of Germany, the project is turned to the automotive sector, and in the case of India, the sector has not yet been defined. “The industrial districts may operate in just one or in several sectors,” stated Youssef.
The products may be turned to export or to the local market. According to him, the investors have access to the necessary infrastructure, including electricity and water, at low costs, and they may make use of the trade agreements that Egypt has with the European Union and with other Arab and African countries. To benefit from the agreements, however, the products must have 40% of Egyptian inputs.
The foreign company may have a local partner or not and the choice of the place in which to establish the enterprise is free. “That is according to the investor’s needs,” he said. To Attal, however, having a partner in the country is important to learn about the local operation. The industrial zones also include training centres for local labour.
Attal also pointed out the tourist potential of Brazil. “I have seen many impressive places in Brazil. I recommend it,” he said. Hannun added that Brazil should become an important destination for Arab tourists. He recalled the regions represented by the businessmen in the delegations. They are from Rio Grande do Sul and Paraná (S), São Paulo and Minas Gerais (SE) and the Northeast.
Opportunities
Hannun also pointed out that the Brazilian delegation in Egypt shows the vigour and diversity of the Brazilian economy, as it covers various sectors, like food, inputs for the food industry, building material, beverages, fruit, tools, furniture, agricultural machinery, tools and medical and dentistry equipment. The coordinator of the international investment unit at the Apex, Juarez Leal, pointed out that the Brazilian products have good prices and quality.
Elim Dutra mentioned some examples of Brazilian sectors that may expand their exports to Egypt. “The Egyptian maize market is US$ 500 million a year, and the country buys from the United States and Argentina. Brazil does not export one kilogram to Egypt, but sells US$ 460 million on the foreign market. Why not sell to Egypt?” he asked.
In the same line, he said that the wood market has a turnover of US$ 600 million a year in the country, but Brazil participates with just US$ 1.6 million. In the area of auto parts, according to the diplomat, the size of the Egyptian market is US$ 300 million, but the Brazilian share is just US$ 4 million. “If Brazil exports cars here, why does the country not sell parts?” he inquired. He also mentioned the field of medical products, which has a turnover of US$ 100 million and in which Brazil participates with just US$ 10 million.
Credit
The president of ABC Bank in Egypt, Essam El Wakil, who was also present at the event, believes that the institution may play an important part in trade between both countries. “Today I saw many opportunities, and we are going to grab them,” he said. The great ABC differential, according to him, is the fact that the bank has branches in Egypt and in Brazil.
ABC was established in 1980 by the emirate of Abu Dhabi together with Kuwait and Libya. At the end of the 1980’s it started operating in Brazil. “Today Brazil is becoming one of the success stories of the group, with US$ 1.7 billion in assets, little over that of the Egyptian branch,” he said. The Brazilian branch was also born before the Egyptian, which was opened in 1999.
One of the parts played by the bank, according to him, is covering trade between the Arab countries and the rest of the world. In Egypt, the bank finances 2% of the country’s exports and wants to play an active part in the foreign trade credit between both countries and in the identification of business opportunities.
The director of the KPMG investment division in Egypt, Abdel Abou Shenef, also participated in the seminar and spoke about the investment environment in the country. Today (04) the Brazilian businessmen are going to participate in business roundtables with Egyptian companies at the Four Seasons Nile Plaza hotel, in Cairo.
*Translated by Mark Ament
