According to the Cairo office of the Korea Trade-Investment Promotion Agency (KOTRA), South Korea-Egypt trade exchange reached $3.15bn in 2022, the second-largest in history after $3.17bn in 2010.
Egypt’s exports to Korea also reached an all-time high of $1.69bn, an increase of 161% year-on-year. It marked a $220m surplus in 2022 from a $1bn trade deficit in 2021.
In the background of these achievements, exports of natural gas and petroleum products played a decisive role. $810m of natural gas and $760m of petroleum product naphtha were exported to Korea, the increase of 705% and 107%, respectively, from the previous year.
Meanwhile, South Korea’s exports to Egypt fell by 13 % on-year to $1.46bn. Major export items include synthetic resins, passenger cars, auto parts, soft steel plates, and semiconductors. The main reasons for Korea’s decline in exports to Egypt are the mandatory L/C measures at the time of importation, which took effect in March last year, and the difficulty of remittances from Egypt.
Investment cooperation as well as trade is steadily taking place. As of 2022, South Korea made a cumulative investment of about $790m in Egypt, 33 times Egypt’s investment in South Korea, according to the Export-Import Bank of Korea. In 2022, a Korean company invested about $30m in Egypt.
Of Korea’s total investment in Egypt, the manufacturing industry accounts for about 63%, the highest proportion among industrial sectors. Currently, around 35 Korean companies are actively engaged in business in Egypt. LG Electronics established a TV and washing machine manufacturing plant in 1990. Samsung Electronics constructed a TV production plant in 2012 and added tablet PC production in 2021, and is currently producing some mobile phones. These Korean companies invested in Egypt are planning to expand their businesses further. In particular, cooperation between the two countries has become closer in the defence industry and culture beyond the economy, through the export of K-9 self-propelled guns, the supply and production of metro trains for the lines 2 and 3 in Cairo, and the construction of the El Dabaa nuclear power plant.
Hong Jin-wook, South Korea’s ambassador to Egypt, said: “We are trying to strengthen manufacturing capabilities through Egypt’s ‘Egypt Makes Electronics (EME)’ policy and National Development Plan Vision 2030,” adding, “We expect Korean companies to actively participate in exporting from Egypt as the hub to neighbour countries through the African Free Trade Agreement (AfCFTA), which entered into force in 2019.” He also added, “In order for Egypt and South Korea to further strengthen cooperation in the field of trade and investment, it is necessary to implement the procedures for signing a ‘trade and economic partnership agreement’ between the two countries as soon as possible.”