Representatives of more than 70 associations and well-known enterprises in Egypt, including the China Chamber of Commerce for Machinery and Electronics, the Arab League Chamber of Commerce, the China Building Materials Federation, China Construction Steel (Egypt), China Telecom (Middle East) and Midea Group, attended an event at the China-Egypt-TEDA Suez Economic and Trade Cooperation Zone on November 23 to learn about the new services offered to enterprises in the TEDA Zone. The TEDA Cooperation Zone offers a new service for enterprises - "construction with capital".


It is reported that the TEDA Zone and Egypt's Alexandria Steel Group will jointly build the "Build with Capital" platform project located in the Zone's expansion area, which covers a total area of 1 square kilometre, with a first phase of 400,000 square metres. The Zone is responsible for the primary development and investment of the site, while the Alexandria Steel Group is responsible for the construction of the above-ground buildings. Companies interested in investing in the project can complete the project design and billable quantities according to their own project requirements and sign a construction contract with Alexandria Steel Group.


Liu Aimin, Chairman of China-Africa TEDA Investment Co., Ltd. said that TEDA Cooperation Zone has always insisted on creating an industrial development ecosystem for enterprises entering the zone to achieve their development, and thus their own development. This time, TEDA has joined hands with Alexandria Steel Group to build a cooperation platform for "building with capital", aiming to provide enterprises with a relaxed financing environment and high-quality construction projects, help them reduce the pressure of cash flow, expand the scale of production, and enhance the effectiveness of Chinese enterprises in the development of Egypt's economy and industrialization process.

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"The 'Build with Capital' project is similar to, but different from, the existing domestic model of building on behalf of investment projects. As with domestic projects, the advantage of this model is that it allows for professional construction management and achieves the objective of controlling investment and improving investment efficiency and management. The difference is that in China, the remaining payment is basically delivered after the construction is completed and accepted. The 'build with capital' project, on the other hand, takes full account of the large amount of capital taken up at the beginning of the construction of an enterprise's overseas investment, resulting in the inability to effectively scale up and put it into production quickly." Zhang Yixiang, Director of Investment Promotion at TEDA Special Zone Development Company in Egypt, said.


In Zhang Yixiang's view, enterprises building factories overseas are mainly faced with two problems: firstly, they take up a large amount of capital at the initial stage of investment and are unable to effectively expand their scale; secondly, they are unfamiliar with overseas investment policies, laws and regulations, especially in the process of building factories with little knowledge of the construction industry in the country of residence, resulting in low construction efficiency and high construction costs. This is reflected in the long construction period for plants and warehouses and the long payback period for project investments. For these two problems, the "build with capital" model will be effective in alleviating them.


Zhang Yixiang said that, in response to the lack of capital flow, the "build with capital" model allows companies to own the factory building with a down payment (30% of the total project amount) and be the first to put it into operation, with 10% to be paid after the project is delivered and accepted, and the remaining 60% of the project amount to be paid in four instalments over three years (the exact percentage of payment and interest can be determined by negotiation). be negotiated on a project-by-project basis). This helps to minimise the financial pressure on the project upfront. By acting as a 'financing' institution while providing construction services on behalf of the client, Alexandria Steel's initial investment size is not limited by cash flow, which greatly reduces the initial capital problems faced by companies investing abroad and facilitates faster start-ups. In addition, as a representative company of the Egyptian construction industry, Alexandria Steel Group is familiar with construction-related policies, effectively avoiding projects that are "illegal" due to unfamiliarity with overseas construction standards, and is able to complete the client's construction tasks with quality, quantity and speed, helping the company to take fewer "wrongful steps "The company will be able to complete the client's construction tasks with quality, quantity and speed, helping the company to avoid taking the wrong path.

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Mamdouh, Chairman of Alexandria Steel Group, said that after 60 years of development, Alexandria Steel Group has participated in many famous international engineering projects and is able to complete the construction tasks of customers with quality, quantity and speed, and is looking forward to working with TEDA to build the steel industry park-in-park project, helping the company to accelerate the overall project and put it into operation as soon as possible.


Alexander Steel Group also promised that the construction period of the project would not be included in the entire installment period and that the enterprise would not be required to pay interest during the construction period. It is understood that Alexandria Group has its own steel structure, steel plate and other processing and manufacturing plants, so the construction cost is lower than the Egyptian market price.


The participants believe that the launch of this service project will further demonstrate the good business environment and new opportunities for investment in the TEDA Cooperation Zone.