“The company aims to be a major catalyst for long-term economic impact in Egypt and throughout the wider region,” says Captain Ossama Al Sharif, CEO and president of Sokhna Port Development Company, which is part of the Cairo-based Amiral Group and runs the port.
Captain Al Sharif, along with business leaders and high officials of the Egyptian government, discussed the port and the logistics centre as well as Egypt’s role in world commerce during the first-ever Egyptian-European Union Trade and Investment Conference on July 7 in Brussels. The conference, attended by more than 150 invitation-only delegates at the European Parliament, highlighted the importance of the growing relationship between Egypt and the EU.
Investment flows in
In only three years, Sokhna Port and Logistics Centre has grown phenomenally since Egypt’s President Hosny Mubarak inaugurated the project in October 2002. About €1.8bn of FDI has already been committed up to 2007, with €6.7bn projected for 2015-2020 and €15.7bn for between 2025 and 2030. Among them is a €435m magnesium project, a €355m methanol project, a €344m ammonia project, a €110m biodiesel project, a €79m sugar refinery project, a €56m wool scouring project, a €52m tank farm project, a €27m grain silos project and a €16m livestock slaughterhouse project. Today, Sokhna Port is already one of Egypt’s top foreign investment earners.
Investors especially benefit from the port’s strategic location on the Red Sea, which is one of the world’s busiest waterways for global trade with south-east Asia, particularly China. The port is adjacent to the Suez Special Economic Zone (SSEZ) and 110km from Cairo.
“We offer multinationals and shipping lines an exceptional opportunity to be closer to their target markets by using Sokhna as a strategic storage for their goods,” says Captain Al Sharif. “This enables them to offer tighter market delivery times and become more competitive in the process.”
Sokhna was built around the premise that its logistics centre would serve as a base for international companies to set up their headquarters, and use it as a warehousing and distribution hub to the Middle East and the rest of the world. The fact that the project, which offers cutting-edge technology with the latest management and security, has full government support reflects Egypt’s commitment to being a world-class player in today’s global economy.
During the Brussels conference EU trade commissioner Peter Mandelson said that the “new Egypt” is “looking towards its natural place in history as a regional leader in economic and political reform”.
“Egypt’s visionary leaders are staking their all on making Egypt a modern economy,” he said.
HE Rachid M Rachid, Egypt's minister of foreign trade and investment, emphasised the need for continuing co-operation between Egypt and the EU and stressed that a strong focus on investment in business is key to the sustainable creation of jobs. “As a government, we are trying very hard to ensure that we continue to develop an environment that will encourage business people on both sides of the Mediterranean to co-operate, to create opportunities and jobs for the citizens of Egypt and for Europe as well,” he said.
The port has already made huge strides since its inauguration less than three years ago by steadily developing strong business associations with Europe and seeking to provide tangible opportunities for foreign investors. For one, the Amiral Group has partnered with Austria’s Power Tech International, an engineering and construction company, to establish the Sokhna Biodiesel Company at Sokhna Port. From there it will produce biodegradable diesel fuel from 100% vegetable oils. Once fully operational, the company expects to produce and export 750,000 tons of biodiesel per year to European markets.
From left: Lord Cunningham, member of the House of Lords, Philippe de Fontaine Vive Curtaz, vice-president of the European Investment Bank, HE Dr Mahmoud Mohieldin, Egypt’s minister of investment, Captain Ossama Al Sharif, president and CEO of Sokhna Port Development Company and Admiral Mahfouz Marzouk, chairman of the Red Sea Port Authority
The potential is vast because the European Parliament is currently reviewing a law that could stipulate that regular diesel must contain a minimum of 5.75% biodiesel in all diesel vehicles in the EU.
Part of Amiral’s €115m investment calls for a number of Jatropha plantations as part of its 20-year master plan. The location of the Jatropha plantations close to Suez, and the oil pressing and biodiesel processing plants at Sokhna Port give the company multiple strategic advantages.
The port’s location was also attractive to Egyptian Magnesium, a joint venture with Australian giant Magnesium International Limited (MIL). “Following an extensive search in Australia and a number of offshore sites, MIL selected Sokhna Port for the establishment of the smelter in December 2004,” said Gordon Galt, MIL managing director. “This site takes advantage of significant cost benefits, which we believe will enable the smelter to become the world’s lowest cost producer of magnesium metal and magnesium alloys.”
The magnesium produced will be exported to Europe for use in the car industry under a 15-year off take agreement with Thyssenkrupp, the renowned German metal company. The high quality magnesium alloy market is growing strongly as auto manufacturers seek lightweight solutions to comply with increasingly stringent greenhouse gas emission and fuel consumption regulations.
Sokhna is adamant about attracting as many environmentally-related projects as possible. “Sokhna is a green port and we are intransigent when it comes to protecting the environment,” says Captain Al Sharif.
Several other projects are being established at Sokhna and in the SSEZ to make use of the port and its logistics centre. This includes a crude oil refinery, which would receive its raw material via a pipeline that is being built between the north Egyptian coast and the Sokhna area. The crude, arriving from wells in the Ural region in Russia, will transit through the Black Sea and will be pumped to a storage facility in the SSEZ to be processed in the new oil refinery. The output will be strategically stored at the Sokhna Port Tank Farm and exported to east Africa, south-east Asia and China.
Sokhna is also becoming the port of choice for many cruise lines transiting through the Suez Canal. “Cruise lines have certain important prerequisites, which are vital to their choosing a certain port over another,” says Captain Al Sharif. “Security and facilities, including basin water depth and proximity to major tourist attractions, are among the most important. And Sokhna passes each with high marks.”
“We are seeing more and more interest from Russian and eastern European concerns to use our facilities and take advantage of such a strategic location – a stone’s throw away from markets in the Middle East, Africa and Asia,” says Captain Al Sharif.