China’s Zenith group will build a car tyre component plant in Egypt at a cost of around $300 million under an agreement it signed in Cairo on Wednesday.

The project is located in Ain Sokhna industrial zone in the Northeastern Suez governorate and nearly 30% of its products will be exported to the Gulf, other parts of the Middle East, Europe and the Americas.

Walid Gamal El-Din, Chairman of the General Authority for the Suez Canal Economic Zone, said the project would span 320,000 square metres (sqm) and includes the establishment of advanced production lines to produce 120,000 tonnes annually of steel cord for car tires and 50,000 tonnes annually of bead wire, creating approximately 1,000 direct job opportunities for Egyptians.

“The project will enhance Egypt's ability to become a regional hub for exporting components for advanced engineering industries,” he said in comments published on the cabinet website.

Chinese companies are among the largest foreign investors in Egypt, with projects mainly in industrial zones covering steel, auto parts, textiles and chemicals.

In April, China’s Shandong Linglong Tyre Co unveiled plans to invest nearly $2 billion in building a car and heavy truck tyre factory in Egypt for export to the Gulf and US.

The factory will be based in Borg El-Arab industrial zone in the Northern Mediterranean port of Alexandria, the ministry said in a statement.

China’s National Tire and Rubber Corporation (CNTR), a subsidiary of state-owned Sinochem Holdings, said last month it is planning to invest $550 million to build a new tyre manufacturing project in Egypt.

(Writing by N Saeed; Editing by Anoop Menon)

(anoop.menon@lseg.com)

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