Egypt Discovers Brazil as Good for Business

Brazil’s exports to Egypt increased almost 35% last year and, if it depends on some entrepreneurs from the Arab country, new business will contribute even more for the approximation between the two nations.

This is the case of Ashraf Mahmoud, president at the Al Nouran Multitrading Corporation PLC, one of the greatest sugar importers in Egypt, which plans on investing in the northeast of Brazil.


Mahmoud studies, together with Brazilian partners, the construction of a refinery to produce 200,000 tons of sugar per year at an estimated cost between US$ 20 million and US$ 30 million.


“We prefer the north of the country because it’s closer to us, which ensures an economy in freight,” said the businessman, who already has a representative in the city of Maceió, capital of the northeastern state of Alagoas.


Sugar corresponds to 90% of Al Nouran’s business, where the product is entirely bought in Brazil. According to Mahmoud, the company negotiates between 600,000 and 700,000 tons of Brazilian sugar per year, which represents, on average, US$ 120 million. About 60% of the total is sold in Egypt and the remainder is negotiated in the international market.


“I believe we are the greatest Egyptian company with business in Brazil. I don’t know anybody with business this size,” he declared. According to him, the sugar deficit in Egypt is of about 1 million tons per year, in a market that consumes 2.5 million tons.


One of his objectives, with the investment, is to ensure the commodity is supplied in case the Brazilian millers decide to increase the production of ethanol to the detriment of sugar.


Last month he was in Brazil participating in a seminar about alcohol production to know more about the segment and in what way it could interfere in his business.


As well as building the refinery, Mahmoud is also evaluating the feasibility of, together with Brazilian partners, financing the construction of factories for third parties, also in the northeast. Although he already has partners in Brazil, nothing stands in the way of other partners joining the business.


Potential


In another sector, however with the same enthusiasm, the Egyptian Company for Trading & Construction (ECTC), importer of auto parts, started buying from Brazil this year.


The company represents in Egypt brands such as ZF, which manufactures axles and transmissions, and Luk, which manufactures clutches, both from Germany. Both companies have subsidiaries in Sorocaba, a city in the interior of the state of São Paulo.


As of this year the two multinationals started supplying parts manufactured in Brazil to the Egyptian market. In the case of Luk, the Brazilian products represent 50% of the total imported. The president at ECTC, Magdi Tolba, evaluates that the company should buy, at least, the equivalent to US$ 2 million in Brazilian auto parts in 2005.


“However this value is just to begin, it may reach, for example, US$ 5 million. I see a lot of potential I plan on using, I was convinced by the Brazilian industry,” said Tolba, who was in the country for the first time about five months ago visiting factories in Sorocaba. “And I went very late, I should have gone earlier,” he added.


He plans on going back to Brazil in a few weeks to look for new suppliers. He is already negotiating, for example, with Maxion, manufacturer of chassis, wheels and other components for heavy vehicles.


Agreements


Ashraf Mahmoud is also going to Brazil, but next week, as a member of the Egyptian business delegation to participate in the summit for South American and Arab countries.


“I am not going there to make business, because I already know the people in Brazil. I have to follow the decisions, see if some agreement in the trade and technical assistance areas will be signed, or some protocol,” he stated. “The summit is a great idea, I hope the Arab leaders take it seriously,” he added.


Both businessmen are in favor, for example, of the trade agreement currently being negotiated between the Mercosur (the customs union between Brazil, Argentina, Uruguay, and Paraguay) and Egypt.


“I think a lot can be done for south-south relations. Culturally we are much closer to the Latin Americans than to the Anglo-Saxons,” he highlighted.


Magdi Tolba added that a trade agreement could help the imports of auto parts from Brazil.


“I see a lot of potential between the two countries,” he said, recalling, however, that Egypt is also negotiating an agreement with Turkey, which is also strong in the sector.


ANBA – Brazil-Arab News Agency
www.anba.com.br

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