CPC negotiating with SCZone to acquire 2.5m sqm in Ain Sokhna

Nihal Mounir
10 Min Read

The Construction Products Holding Company Egypt (CPC), which is part of the Saudi Binladin Group, is negotiating with the Suez Canal Economic Zone (SCZone) to acquire 2.5m sqm of land in Ain Sokhna.

Mohammed Al-Yafi, general manager of CPC, said that it is planned to establish ready-for-work complexes for small- and medium-sized enterprises (SMEs) in the region, especially since Ain Sokhna is one of the promising areas for development.

Al-Yafi continued, in his interview with Daily News Egypt, “the company has completed the feasibility studies of the new land in the region, which negotiations with [SCZone Head] Mohab Mamish will begin based on during the coming period.”

How much is the investment for the land acquisition received by the company in Sadat City?

In the coming period, the company expects to acquire 1.1m sqm of land from the Industrial Development Authority (IDA)’s last offering, which reached 8m sqm of land under the industrial developer system last October; 4m sqm in 10th of Ramadan and the same area in Sadat.

The investments allocated by the company to its projects in Sadat City following the acquisition of land from the IDA in the last offering were estimated at EGP 700m.

The company has also completed developing the master plan and the engineering design for the Sadat area. The company will begin work immediately upon signing the land contracts and receiving them from the IDA.

Is the company seeking to establish a complex for SMEs within its new projects in Sadat?

The company is definitely seeking to build a complex of ready-for-work units for small and medium projects on 10% of Sadat’s land, as a first stage.

Has the company submitted its papers to obtain land in 10th of Ramadan city?

The CPC has submitted its papers to Pyramids Industrial Parks, owned by Elsewedy, Jordanian conglomerates and others, to obtain land in 10th of Ramadan.

The company submitted its papers to the IDA to obtain 2m sqm in 10th of Ramadan, and has secured investments worth EGP 1bn in case of landing the deal and acquiring the land.

Has the CPC participated with the Ministry of Industry to set up a ready-for-work complexes project?

Yes, the CPC participated with the Armed Forces Engineering Authority and the IDA in setting up the industrial parks that were announced by the state in the cities of Badr, Sadat, and South of El Raswa in Port Said.

The company established 56 units of ready-for-work industrial complexes in the region.

The investments of these units amounted to EGP 160m, and ended with the sale of 100% of these units, some of which are used for manufacturing purposes, while others are used as warehouses.

Is the company trying to start a new phase of ready-for-work industrial units?

Yes, and is seeking to start the second phase of the complex of small- and medium-sized enterprises, comprising 40 units on an area of ​​60,000 sqm to be introduced on a system of rent and ownership. The investments are valued at EGP 150 and the start of the second phase of these complexes depends on the expansion of the company in the cities of Sadat and the 10th of Ramadan.

How much land did the company receive from the IDA in 2007?

The company acquired 1.5m sqm of land from the IDA in the industrial developer area in Sixth of October and completed the sale of 100% of the land to investors.

How many contracts has the company signed with investors? What is the number of factories operating and others under construction?

The company has signed 78 contracts with investors. The number of operational factories in the region is 42 and there are about 20 factories under construction.

Is there some unused land in the area?

The political and economic tensions that the country has gone through have led to the reluctance of some investors to complete their projects in the region. The company is currently negotiating on how to recover these lands, either by investors returning land or it being withdrawn, without having to resort to the justice system.

How much land is dedicated for investors in the master plan for the region?

Land plots in the master plan range between 2,500-7,500 sqm and investors are free to acquire greater areas.

What is the value of actual investments that the company succeeded in attracting to the region?

Actual investments in the region are estimated at EGP 2bn, 60% of which are for construction materials, 25% for food industries, and 15% for miscellaneous industries.

How many workers are there in the region?

Workers in the region are estimated at 4,500 workers, expected to increase to 9,000 workers in the coming period.

What is the average selling price of land to investors in the region?

In 2007, the sale price of land to investors amounted to about EGP 200 per sqm. The average selling price now in the region exceeds EGP 600, and annual increases in the price are in line with the IDA’s decisions.

What kind of industries do you refuse to establish in the region?

We reject industries that are polluting to the environment and industries that are energy intensive, so there are no fertiliser or iron industries in the region.

But there is a ceramics factory that works for you. Is it not a polluting industry?

On the contrary, the state did not classify the ceramic industry as one that is polluting to the environment. It also has the approval of the Ministry of the Environment. It is a labour intensive industry with about 800 workers.

What are the customer specifications in the region?

There are a number of specifications that must be met by clients to be able to invest in the region. First, companies should have prior experience, but start-up companies are considered, provided they have clear feasibility studies for their project. This is to prevent the land from becoming idle and the CPC also follows, step by step, the building of the plant and the completion of licenses.

Does the CPC have factories in the region?

The group owns about six factories in the region, with an investment of EGP 600m, in cement mixing industries, which are useful in facilitating production and construction operations. It also serves the urban growth in Sixth of October city.

There is also a read-for-use concrete factory, an aluminium extruding plant, and a steel works factory.

There are two factories under construction, one for the processing of flat glass, the other for windows and aluminium doors.

The Ministry of Trade and Industry intends to offer 5m sqm of land under the industrial developer system during the coming period. Does the company intend to acquire new land?

Certainly, we will take into account the future offerings of the IDA and we are studying the locations of offerings. The role of the IDA is not a competitor to the government, but is a complementary force, and provides integrated services to manufacturers.

What are the most prominent factories operating in the region?

The most important companies investing in the CPC’s area are Art Ceramic, with a factory on an area of ​​100,000 sqm, Alural Egypt for the manufacture of construction aluminium, Egy Steel for contracting and supplies, Oryx for concrete products, Giza Steel for the manufacture of metal wires, Al Ola for engineering industries, an Egyptian supplying company for manufacturing steel pipes, Proglass Egypt for glass works, Prima Plast  for plastics, a company specialised in manufacturing concrete walls, and Roots Steel for construction.

As a member of the Real Estate Development Chamber at the Federation of Egyptian Industries, how do you describe the year 2018?

I would describe it as the year of industry, and six months ago, domestic and foreign investors were attracted to industrial investment. The company receives daily investment requests from investors after two years of absence. The company had not received any investment requests due to political tensions.

The coming period is the period of industry in Egypt, especially following the measures taken by the government, including floating the pound, raising the competitiveness of Egyptian industry, especially labour-intensive industry, and the restrictions of imported products due to their high cost, which directed attention to local production.

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