Founded in 1998, the Suez Industrial Development Company (SIDC) has gone a long way since the days when it reclaimed a remote stretch of desert spanning 8.7 million square meters, cleared it of landmines, and built the first privately owned industrial park in Egypt. Today SIDC is part of the Suez Canal Economic Zone, where it operates a highly successful business with customized services for companies of all sizes and all fields of economic activity. Company CEO Amr El Batrik discusses SIDC’s plans for expansion and the opportunities available for foreign investors.
What does the company look like today and what are the main challenges up ahead?
When we started out, Sokhna was just a piece of desert with a lot of mines left over from the 1973 war. We reclaimed the land, took out the mines and created the necessary infrastructure. Back then there was no direct road from Cairo to Sokhna; that was built in 2003, so we faced major challenges for the first five years. But SIDC was different from others who just waited around for the government to create the necessary infrastructure. Instead, SIDC created and connected the infrastructure, and we like to say that we are faster than the client, and of course faster than previous governments.
Our main challenge today is different from the challenges of the past. Back then there were only six industrial developers in the country. In 2007 the Industrial Development Authority enhanced the system and new players came into the market. Our land appreciated in price, and we were ready for it. The challenge now is growing with the Suez Canal Economic Zone and competing with some major players coming into the industrial park market from places like Russia or Dubai.
What are your future plans for SIDC?
We are looking at the future and conducting studies. We are looking to grow outside of Egypt in the long term, and in the short term we are looking at having another industrial park in Egypt.
What is your relationship with German investors like?
Our history with German companies goes back to 1999, and our relationship with German investors was renewed in 2015, when there was an economic development conference at Sharm El Sheikh where President el-Sisi signed a large deal with Siemens for a power plant. We had lots of negotiations and entered into a contract for land for Siemens; later we signed another contract for another plot of land. The first one was for turbine wind blade manufacturing under a Siemens-Gamesa joint venture. Another project was a Siemens vocational training center and service center. Bosch also visited us in January 2018, although they finally went to another location as they will be producing home appliances and needed to be near Cairo. But they are in talks with us for another project.
What makes SIDC the ideal business partner for German investors?
We are the facilitator for everything that an investor can dream of, starting with land, either in ownership or in rental, long-term rental, or usufruct arrangements. It’s all available. Training for teams is also available through Siemens. And we provide on-site residential apartments for labor. Relations with the government and bureaucracy are taken care of on behalf of our clients. We are always the barrier between the government and the client, so that when there is a problem, we solve it. And we have incentives in the whole Suez Canal economic area, such as discounts of 50% on corporate taxes, near complete VAT exemption, and zero custom duties which is great for exports. At SIDC you also have zero infrastructure problems: we have a 24/7 maintenance team, no water or electricity cuts, and we follow WHO water specifications to be a sustainable operation: we have two recycling plants where the trash is turned into concrete bricks. We have high standards of security and safety, and pipelines connecting us to the port for the export of liquid materials. Finally, we are looking forward to having a business park to provide additional services required by our clients such as banking and more.
What about location? How convenient is Sokhna from a client’s perspective?
We are located under one hour from Cairo and 30 minutes from Suez City, where the trained labor is. We are connected to the new ring road linking us to the delta area. And there are three ports in the area at a distance of 45 minutes at the outside.
Is SIDC geared mainly towards large industrial clients?
No, we cater to clients of all sizes. For small and medium companies, there are ready-made factories that we call Plug & Play: you just plug in your equipment and get started on your path to success. We now have 64 clients ranging from heavy to small industries and a mix of activities, including fertilizers, ceramics, paper manufacturing, plastics, health equipment and pharmaceuticals. We have the ability to work with everyone in the market, whether local or global, big or small, in any industry. We don’t have a standard contract, and we use a customized approach rather than a cookie-cutter model.
How many of your clients are international?
Around 77% are Egyptian, the rest are multinational clients, from German to American, Turkish, Chinese, Saudi, Brazilian and more. And they come in all sizes.
What is SIDC’s reputation and how would you like to build on that?
Fully 20% of our clients are repeat clients, such as Siemens, which gives you an indication of their satisfaction rate. We are now trying to increase client satisfaction even further by creating a new team to follow up on their needs, such as a banking zone so they don’t have to drive long distances carrying large amounts of money. All our shareholders are looking forward to the next era of SIDC.
In terms of your investment needs, what are you looking for?
We are looking to attract some of the big names in the auto industry, maybe VW-Audi. We are also eyeing the power industry, which we are already involved with through Siemens. We want some of the big names to come into the region, not just necessarily to SIDC but to the whole Suez Canal Economic Zone, which we believe will drive development in the country. We also want new entrepreneurial ideas, and I am dreaming of projects in solar energy and manufacturing, from silica sand to solar panels. I would like to see this happening in Egypt. We have the best silica sand, the best sun, a government that is encouraging renewable energy, and the best engineering person working as a minister in Egypt. I believe any German tech supplier or entrepreneur could come here, and we will take their hand and help them manufacture the equipment.
What message would you like to send out to investors?
We are here to support you. We are the support for any industrialist or investor coming to Egypt. This country will be your gateway to Africa and the Middle East. Land price is not the issue here: location, incentives and manpower are your keys to success.