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New Swedish firms likely to begin operations in Egypt during 2019 - Daily News Egypt

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New Swedish firms likely to begin operations in Egypt during 2019

‘We have seen rapid improvement of Egypt’s business climate,’ says Swedish ambassador


Most of the major Swedish companies are present in Egypt and hopefully 2019 will witness more companies being launched into the Egyptian market in different sectors, such as retail, insurance, and water technology, the Swedish ambassador to Egypt, Jan Thesleff, said.

“Many of the companies here are now using Egypt as a hub and increasing its footprint locally. In February 2019, Ericsson announced establishing a digital services hub in Egypt for the region. Late 2018, IKEA announced its first expansion since established in New Cairo in 2013,” the ambassador added.

Volvo Buses increased its cooperation with its local partner GB Auto in its assembly of buses locally while in June 2019, ABB is inaugurating their new regional headquarters in New Cairo, the ambassador highlighted.

Daily News Egypt interviewed Thesleff, on the occasion of the Swedish National Day that the embassy is celebrating on 17 June, the transcript for which is below, lightly edited for clarity:

 

What are the updates of the Business Sweden’s plans to establish an office in Egypt?

 

The role of Business Sweden is to facilitate trade and help Swedish enterprises grow. Egypt is an important partner to Sweden. It is our second largest trading partner in both Africa and the Middle East, and we therefore see a Business Sweden office in the country as important. It is our hope and goal that a Business Sweden office in Cairo will be re-established, until then the office in Dubai is doing a great job in continuing and increasing their focus in covering the Egyptian market, including recurrent visits.

 

What is the size of Swedish investments in Egypt, and how many companies are operating in Egypt?

 

Egypt is rapidly picking up pace thanks to the ongoing reform process and Swedish companies are increasingly eyeing Egypt, and we can see that investment is picking up, both from already established companies and new entries.

We hope to have several companies launch into Egypt during 2019 in different sectors, including retail, insurance, and water technology. Many of the companies here are now using Egypt as a hub and increasing its footprint locally.

In February 2019, Ericsson announced establishing a digital services hub in Egypt for the region. Late 2018, IKEA announced its first expansion since established in New Cairo in 2013. Volvo Buses increased its cooperation with its local partner GB Auto in its assembly of buses locally. In June 2019, ABB is inaugurating their new regional headquarters in New Cairo.

More than 40 Swedish companies are currently active in Egypt. Our prudent estimates are that more than 10,000 jobs in Egypt are directly created by Swedish companies. These are to a very high degree highly-skilled jobs. However, thousands of jobs are created indirectly via suppliers, consultants, or franchisees.

Most of the major Swedish companies are present in Egypt. One of the latest big entries being IKEA a few years back, now announcing further expansion and investment. We have seen their entry to Egypt as a success, and hope that they will be able to continue expanding in Egypt since each store employs almost 1,000 individuals.

Both Electrolux and ABB have manufacturing facilities in Egypt with exports to Europe, the Middle East, and Africa.

 

Ericsson are also investing heavily. We were happy to hear their announcement of the placement of their regional digital service hub in Egypt proving many dozens of new highly-skilled tech jobs in a cutting-edge sector of crucial benefit to Egypt, as well as providing Egyptian service exports to the region.

 

What do you think of Egypt’s investment climate and economic performance?

 

We have seen the rapid improvement of the business climate in Egypt during the latest years. The ministry of investment and international cooperation is making great efforts in opening the door for more investments in the country. This is very encouraging and inspires Swedish companies to come to the Egyptian market.

The reform programme has to a large extent been a success in order to provide the basic variables that are conducive for investments. This can be seen in the World Bank (WB) Doing Business Ranking where Egypt gained eight points 2018 (rank #120). Also, if we look at the current macro-economic figures the economic reform programme has so far been a success, with a current growth rate of around 5.5%, and higher projections going forward.

Egypt, with its diversified economy, large domestic market, a tradition of education, geographical location – and now with a reform agenda focused on private sector growth – provides interesting opportunities for Swedish and international enterprises. Egypt is strategically located both on the African continent and in the middle of the MENA region. It is an excellent base for business and manufacturing in both regions.

We have supported the International Monetary Fund (IMF) programme, and we have taken note of the praise that Egypt has received from the IMF, and the WB for the implementation of the reforms – work that needs to continue in order to allow for continued private sector growth. We believe that the main driver of growth for the Egyptian economy needs to be the private sector.

The impressive work that the Egyptian government has done on infrastructure is creating a backbone for investment and industrial development. For example, we have noted the achievements by Egypt in developing its energy sector in recent years. The ambition of Egypt on becoming an energy hub is fast being realised on many fronts. Moreover, road and transport infrastructure has also developed rapidly, which will also aid investors when looking for places that have the right factors for investment. In both these sectors, we see Sweden as a crucial partner for Egypt through our reliable experience and innovation.

Of course, there are always hurdles that remain to be faced, but the trend is positive. A global business environment relies heavily on a free flow of goods to function well, and Egypt is a crucial part of that global value chain, not the least because of the vital Suez Canal.

 

What about the latest trade statistics between Egypt and Sweden for the first quarter (Q1) of 2019?

 

During Q1 of 2019, Sweden’s exported goods to Egypt increased by 33%, compared to the corresponding period in the previous year. Trade must go both ways and we encourage Egyptian exports to our market.

From the statistics, we can see that the composition of both exports and imports are quite diverse.  Sweden mainly exports raw materials and high-tech manufactured products, while it mainly imports finished goods, such as textiles, machinery, and petrochemical products but also agricultural products such as vegetables and fruits.

Last year, trade between the two countries exceeded $600m. The Egyptian economy remains strong. Egypt is our second market in the MENA, as well as in Africa.

 

What are the main commodities traded between Egypt and Sweden?

The main commodities Sweden exports to Egypt are of two extremes, raw material and high-tech manufactured products. In the first category, we find timber in the form of sawn soft wood and iron ore, which together represent over 40% of our exports. Egypt is Sweden’s second biggest market worldwide in regard to wood export.

This sector is a perfect example of the symbiosis between Swedish quality raw materials and Egyptian industrial production. The raw materials are being used in the Egyptian market in construction, furniture, and steel industry.

These quality materials are being finished for use by domestic consumers, or exported as refined goods, which generates export income for Egypt.

In the second category, we find high-tech equipment supporting Egypt’s economic development such as telecommunication equipment, which is providing infrastructure for the mobile operators locally; vehicles that support the logistics and transport sectors, as well as water purification technology to provide clean water for the local population.

 

 

 

Are there any business missions between Egypt and Sweden in 2019?

We were very happy to receive the Swedish Prime Minister Stefan Löfven at the EU-LAS Summit earlier this year. It was an important sign of the bilateral strong relations.

Representatives from our trade and investment council, Business Sweden, are regularly in Egypt to promote Swedish companies locally and to explore increasing Swedish investments in Egypt. The embassy is working very close with Business Sweden, and we have jointly seen several successful delegations and visits lately.

 

What about touristic cooperation with Egypt, and how many Swedish tourists did visit Egypt in 2018?

 

Tourism is a key industry for Egypt, and it has the best possibilities to be a major destination. However, we should not overlook the softer aspects of tourism, as the contact between peoples and cultures is inherently beneficial for the mutual understanding of each other.

Egypt has had a remarkable increase of tourist arrivals. Basically, we are seeing three-digit growth of the number of tourists, and we continue to see that there is also a strong increase with regards to Swedish tourists that are finding their way to Egypt.

The Nordic travel market is integrated with airports serving several Nordic countries. Some 200,000 Nordic tourists are estimated to visit Egypt this year.

Egypt is the second biggest tourist destination, after Thailand, outside of the EU for Swedish travellers. This trend is likely to be further reinforced in the coming season. Egypt’s Minister of Tourism, Rania Al-Mashat, has tirelessly worked to promote Egypt as a prime destination.

Several new hotels have opened which cater to Swedish and Scandinavian tourists on the Red Sea coast.

This winter season, Egypt was a top destination for Swedish tourists, due to the comparative proximity and its mild climate and price levels. Egypt has something to offer anyone from its historical sites and sunny weather. It is this fantastic combination that makes Egypt unique for visitors.

 

What about cultural cooperation and the future cultural events that the embassy will organise?

 

The cultural cooperation between Sweden and Egypt is of course very important, as can be seen through the extensive focus from the embassy on the culture field. I would like to highlight the Swedish and Egyptian Dads Photo exhibition that was held both in Cairo and Alexandria, where we showcased the importance of active fathers. In April, we hosted the first in a series of events we titled “Science Talks”.

At that occasion, we highlighted the importance of biodiversity and inaugurated “the Vivi Täckholm Sustainable Garden” which commemorates the late Swedish botanist Vivi Täckholm who spent most of her life in Egypt and published the important work “Flora of Egypt”.

Seeing the cinematographic heritage and Egyptian excellence still in that field, we have also focused on showcasing Swedish films in Egypt. Yearly we participate in the film festival “Panorama of the European Film”. Last year, we also took part in El Gouna Film Festival, which we also plan to do this year.

 

Can you please elaborate about the Swedish experience in achieving welfare and prosperity? What are the latest indicators of the Swedish economy?

 

Sweden takes great pride in having one of the most extensive welfare systems in the world. Free education including higher education, low-cost healthcare and a widespread social safety net for the most vulnerable are some of the services that Sweden offers its citizens.

Simultaneously, Sweden is one of the most innovative countries in the world, being second only after Silicon Valley for start-ups and investing at the global top when it comes to research and development (R&D).

The WB considers Sweden’s overall regulatory business environment to be among the most business-friendly in the world and the country is ranked 12 among 190 countries in the ease of doing business. Sweden is a living proof that a generous welfare system does not exclude or compete with an innovative business climate.

In Sweden, the key has been the introduction of an efficient tax system, a fair labour market, free and good education, and gender equality combined with favourable conditions for the Swedish business and industry.

As for the Swedish economy in general, it is performing well. Last year we saw a growth rate at 2.4% and during 2019, the economy is expected to continue to grow. The Swedish unemployment levels are among the lowest in Europe. Sweden has furthermore seen several large investments in the last years including from tech companies such as Facebook.

https://cdn1.dailynewsegypt.com/2019/06/16/new-swedish-firms-likely-to-begin-operations-in-egypt-during-2019/
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