Tue, 23 Jul 2024
22.7 C

VWGA moves to develop production capacity in Egypt

Home Manufacturing & Processing Automotive VWGA moves to develop production capacity in Egypt

BUILDING upon the progress and mutual understanding achieved under the agreement signed in November 2023 – to work together to develop a feasibility study on a shared automotive painting facility within the East Port Said Industrial Zone in the East Port Said Automotive Zone (EPAZ) in Cairo – Volkswagen Group Africa and the Government of Egypt have signed a new agreement.

In the new strategic co-operation agreement, Volkswagen Group Africa and the Government of Egypt are broadening their collaboration, to develop a feasibility study for the construction and utilisation of the body shop and assembly buildings, which will be located within the EPAZ.

The new agreement was signed by the chairman of the General Authority for the Suez Canal Economic Zone, Waleid Gamal Eldien, Chief Executive Officer of the Sovereign Fund of Egypt; Ayman Soliman, Vice President of the East Port-Said Development Company; Dr Ahmed Fikry and Chairperson and Managing Director of Volkswagen Group Africa (VWGA), Martina Biene in the presence of the Prime Minister of Egypt, Dr Mostafa Madbouly.

The signing ceremony which took place during the first day of the Egypt-EU Investment Conference hosted in Cairo on 29-30 June 2024, was also witnessed by Dr Mohamed Shaker El-Markabi, Minister of Electricity and Renewable Energy; Eng. Tarek El-Molla, Minister of Petroleum and Mineral Resources; Dr Hala El-Saeed, Minister of Planning and Economic Development; Dr Rania Al-Mashat, Minister of International Cooperation; and Valdis Dombrovskis, European Commissioner for Trade.

The prior agreement laid the groundwork for the collaborative endeavours aimed at deepening the localisation of the automotive industry in Egypt through a shared facility. This underscored the commitment of the Government of Egypt to bolster its automotive industry. In June 2022, the Government of Egypt announced the introduction of the Automotive Industry Development Programme (AIDP), which aims to foster local value addition, increase vehicle production volume, boost and attract investment, and improve emission standards in the automotive sector.

The Government of Egypt aims to establish a Special Purpose Vehicle (SPV) to construct the buildings for the body shop and assembly line. Volkswagen Group Africa has expressed interest to utilise these facilities to assemble vehicles for the Egyptian market, after the successful completion of the feasibility study and its findings confirming viability.

Biene commented: “The new strategic co-operation agreement with the Government of Egypt offers Volkswagen Group Africa an asset-light investment model, which shifts the investment focus from capital expenditure to operational expenditure. The agreement also presents Volkswagen Group Africa with the opportunity to progress its long-term plans to establish its presence in Egypt. Furthermore, Volkswagen is emboldened by the willingness of the Government of Egypt to explore an ingenious approach to realise the viability of the feasibility study. We are fully committed to working with the Government of Egypt to make this project viable

Most Popular

Kouga Municipality acts against suspected illegal sale of electricity

THE Kouga Municipality says it has recently become aware of acts of fraud and corruption relating to the illegal sale of electricity and suspended...

President must announce incentives for electric vehicles

OPINION | ZERO Carbon Charge calls on President Ramaphosa to announce in his Opening of Parliament Address on Thursday that the new Government of...

Ngqura terminal to speed up with 50 new haulers

THE Ngqura Container Terminal (NCT) has taken delivery of 50 new haulers to increase citrus loading rates as mid-season approaches, Transnet’s Eastern Cape Terminals...

SIU authorised to probe Nelson Mandela Bay lights contract

THE Special Investigating Unit confirmed on Monday that President Cyril Ramaphosa has authorised the unit to investigate allegations of serious maladministration in the affairs...