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Germany’s Volkswagen Explores Establishing Facility in Egypt

July 2, 2024
Image Credit: Gerrigje Engelen/Flickr

German automotive giant Volkswagen is showing interest in entering a joint venture to establish a production facility in the East Port Said industrial zone, the company’s Chairperson and Managing Director in Africa, Martina Biene, told Asharq Business on 30 June.

The production facility is supposed to enable different original equipment manufacturers to work under the same facility, with manufacturers requiring only to set up separate body shops.

“It is a really interesting partnership because what Egypt and East Port Said are trying to build is something unique, and something we have not heard in the automotive industry so far,” Biene said.

Biene’s announcement comes after the company inked a joint agreement with the Suez Canal Economic Zone (SCZone), Egypt’s Sovereign Fund (TSFE), and the East Port Said Development Company (EPSDC) to conduct a feasibility study to work together on the facility.

“If feasible, I hope to be able to present a final agreement next year [to begin construction of the facility],” she added.

The German automotive manufacturer previously signed an agreement with the three state entities on 12 November to conduct a feasibility study on establishing an automotive zone in East Port Said.

In a separate statement, TSFE’s chief executive officer, Ayman Soliman, highlighted that the study will encompass the viability of constructing related facilities, including an auto body shop, buildings, and a car assembly line.

The managing director’s comments came on the sidelines of the European Investment Conference in Cairo, which concluded on 1 July.

During the closing speech, Egyptian Prime Minister, Mostafa Madbouly, remarked that the conference successfully raised EUR 49 billion (EGP 2.5 trillion) through 29 investment agreements and memorandums of understanding with entities affiliated with the European Union.

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