China's top chemicals company has signed a deal to set up its first factory in Egypt which aims to become the Asian giant's launch pad for investments in Africa and the Middle East. The National Bank of Egypt signed a memorandum of understanding with the China National Chemical Engineering Company (CNCEC) on Dec. 17 for the establishment of a soda-ash factory in Fayyoum, south of Cairo.
The deal marks "CNCEC's first entry into both the Egyptian market and the Middle East," the Egyptian trade ministry said.
CNCEC -- a leading manufacturer of petrochemicals, fine chemicals and fertilizers -- is also mulling a deal with the Egyptian-Kuwait Al-Kharafi Group for a $700 million complex in Fayyoum.
On his first visit to Egypt, the CNCEC chairman also agreed on setting up a committee with the Egyptian petroleum ministry to assess a number of oil refinement projects in Egypt and Africa. "This deal is one result of the sustained efforts by Egypt to strengthen and deepen its economic ties with China," Egyptian Trade Minister Rashid Mohammed Rashid said. "We want to attract Chinese investors to use Egypt as a production base and natural gateway to Europe, the Middle East and Africa," added Rashid, who made a landmark visit to China in September.
Egypt is currently in talks with China and Italy aimed at ensuring that close to 100% of Chinese exports to Europe pass through the Suez Canal -- up from the current 60% -- in exchange for lower transit fees.
Cairo has been shifting the focus of its trade strategy from its traditional Western partners toward China, which it says could replace the U.S. as its top trade partner by 2012.
Copyright Agence France-Presse, 2006