29 November 2008
Gateway to the world
It’s long been home to many wonders of the world. Now, Egypt is setting itself up as an export base for companies seeking access to that part of the world and beyond
Sharada Balasubramanian
Trade push
Marico’s experience typifies what Egypt has to offer today. Egypt was conceived by Marico as a move into a new market; in time, it became more than that. In 2006, Marico acquired the manufacturing plants and brand rights to two leading domestic hair products—a hair cream (Fiancee) and a hair gel (Hair Code). Marico, which has a 62% share of the hairstyling market in Egypt, earned 3.5% of its total 2007-08 revenues from Egypt. It’s now looking to leverage Egypt as a gateway to the world.Marico recently completed building its third plant in Egypt, to make about 400-500 tonnes of Parachute coconut oil per month. "The new plant will be the sourcing hub for neighbouring countries like Sudan, Syria, Iran, Liberia, and Saudi Arabia," says Brajesh Bajpai, Regional Head, Middle East and North Africa (MENA), Marico.
What’s got Bajpai excited is the cut in corporate tax rates from 42% to 20% in Egypt and the minimal or zero customs duties levied on Marico’s exports from Egypt because of the trade pacts. "We will now be more competitive," says Bajpai. For Marico, the operative trade pact will be the Greater Arab Free Trade Area (GAFTA), which came into existence on January 1, 2005. GAFTA is to the Arab countries (17 members) what Asean is to Asia. In the last four years, GAFTA has brought down the customs duties levied by member countries by 40%.
Read the entire article on Outlook Business
