Egypt's Glass Industry: A Rising Force on Global Stage
Updated 11/5/2024 8:00:00 AM
Egypt's glass industry has grown into a vital force in the global market, capitalizing on its strategic location, abundant natural resources, and skilled workforce.
With a diverse product range, including flat glass for windows and mirrors, container glass for food and beverage packaging, and specialized glass for construction and automotive uses, Egypt caters to both domestic and international demand.
Despite challenges, Egypt can work on its resources, enhancing its potential to become a regional hub for glass.
Egypt’s Glass Industry Economics
Being a well-established sector, Egypt's glass industry has become a significant contributor to the nation's industrial growth.
Dina Samir ElWakkad, an economics instructor and economist, tells Arab Finance: “Egypt is a major glass producer in the Middle East and Africa, with a significant share of production dedicated to both local use and exports.”
“The industry has been growing steadily over recent years, particularly with construction and infrastructure projects driving demand. This growth trajectory is also supported by regional demand, as Egypt supplies glass products to North Africa and some countries in Europe,” ElWakkad adds.
In 2023, Egypt exported $608.57 million worth of glass and glassware, surpassing its imports of $189.62 million, according to the United Nations COMTRADE database on international trade.
In September, Mohamed Khattab, CEO of Sphinx Glass and a board member of the Federation of Egyptian Industries (FEI), noted that the sector has seen substantial improvements since 2010. Over the last five years, production has doubled, shifting Egypt from being a net importer to a net exporter of glass products.
ElWakkad agrees, stating that glass exports have surged in recent years due to increasing global demand and Egypt’s strategic location on several key trade routes.
Revitalizing Glass Industry via Investments
To invigorate Egypt's glass industry and attract foreign investment, strategic initiatives are essential. These initiatives include attractive tax incentives and streamlined regulations that reduce costs and ease administrative burdens.
ElWakkad says, “Egypt has historically drawn in foreign direct investment (FDI) through tax incentives. The incentives included reduced income tax rates, customs exemptions on machinery imports, and simplified registration processes in special economic zones.”
“Incentives like offering tax holidays for new investments or lowering land costs in industrial zones have been effective,” she further explains.
These measures not only reduce startup costs for foreign investors but also position Egypt as an attractive production base for companies seeking competitive labor costs and proximity to regional markets, as per ElWakkad.
In this regard, the second edition of the International Glass Show (IGS) will be held from November 28th to 30th at the Cairo International Convention and Exhibition Centre. The event is set to be a dynamic platform for industry experts and leaders to showcase their latest developments and trends in the glass industry, from raw materials to finished products.
According to the Chamber of Building Materials Industries, about $200 million in new investments are expected in the glass sector over the next two years, driven by both local and foreign investors. These investments could boost production capacity by 25% to 30%.
Can Egypt Break Through in the Global Market?
The Egyptian glass industry still faces several challenges that hinder its growth and competitiveness. Rising energy costs are a critical issue.
“The glass industry in Egypt has faced significant pressures from the global economic climate, notably from soaring energy prices and supply chain disruptions,” ElWakkad points out.
“High energy costs have pushed up production costs, affecting profitability and, to some extent, competitiveness in export markets,” she notes.
Supply chain disruptions have also hindered the procurement of specific raw materials. However, Egypt's domestic supply of essential components like silica sand provides some level of resilience, according to ElWakkad.
Yet, Egypt’s glass leaders are finding ways to adapt and overcome these challenges, aiming for a successful growth journey.
ElWakkad explains that manufacturers are adopting energy-efficient practices and exploring alternative sourcing strategies to mitigate these hurdles.
While costs are increasing, Egypt's strategic location and established export channels help maintain its competitive edge in the Middle East and Africa. However, persistently high energy prices could potentially erode this advantage over time.
Egypt has the potential to become a regional hub for glass manufacturing and trade. Not only does it have an abundant supply of silica, but the country also boasts a robust infrastructure for manufacturing and exporting, supported by its location with access to key markets in Africa, the Middle East, and Europe, according to ElWakkad.
“The relatively lower labor costs in Egypt also provide a competitive edge in production costs compared to other glass-producing countries in the region,” she indicates.
To strengthen its regional competitiveness, Egypt can focus more on modernizing its transport and logistics infrastructure. Enhancing shipping routes and increasing port capacities would facilitate smoother export flows to Europe and the Middle East.
Furthermore, upgrading facilities with energy-efficient and sustainable environmentally-friendly technologies could make Egyptian glass products more appealing among international markets, particularly those with strict environmental regulations.
Additionally, ElWakkad suggests that establishing specialized industrial zones for glass production could help centralize resources and lower costs.
By strategically addressing challenges such as energy costs and supply chain disruptions while capitalizing on its abundant natural resources, skilled workforce, and strategic location, Egypt's glass industry is poised to solidify its position as a regional and global leader.
With continued investment, Egypt can unlock its full potential and become a thriving hub for glass manufacturing and trade.
By Sarah Samir
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