Taiwan’s Rechi Precision Company has signed a joint venture agreement with Egypt’s Elaraby Group to establish an air conditioning (AC) compressor plant in Egypt with an initial production capacity of 2 million compressors per annum, which will be scaled to 6 million in five years.

Rechi Precision is fourth largest compressor manufacturer in the world with a total capacity of 20 million compressor units per annum.

The JV will invest $33 million in the project, which is expected to start operations in 2024, Egypt’s Ministry of Trade and Industry said in a statement.

The ministry said the plant would be built in the industrial zone of Kom Abu Radi in Beni Suef governorate over an area of 60,000 square metres (sqm).

The statement said the project will meet cater to local market and export 50 percent of its production to regional and international markets by taking advantage of Egypt’s preferential trade agreements.

The announcements were made after a meeting between Egypt’s Minister of Trade and Industry, Ahmed Samir and Chairman of Rechi Precision Chen Sheng Tien, CEO Feng Ming Fa and Mohamed Mahmoud El-Araby, CEO of El-Araby Group.

The statement said the plant will produce AC compressors in the 1.5-3 HP capacity range with 50 percent of the components being sourced within Egypt

Mohamed Mahmoud El-Araby said his company will soon open a new factory to produce antimony tin oxide, which is used as an input in the production of home appliances.

(Reporting by Eman Hamed; Editing by Anoop Menon)