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Troubled factories must solve banking problems with banks: Abdel Nour - Daily News Egypt

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Troubled factories must solve banking problems with banks: Abdel Nour

Minister of Industry and Trade asks troubled factories to solve financial problems with banks themselves rather than with Ministry


Troubled factories must solve their problems with banks and the Ministry of Trade does not have a part in this process, said Minister of Trade and Industry Mounir Fakhry Abdel Nour. (Photo courtesy of Suez Cement company)
Troubled factories must solve their problems with banks and the Ministry of Trade does not have a part in this process, said Minister of Trade and Industry Mounir Fakhry Abdel Nour.
(Photo courtesy of Suez Cement company)

Troubled factories must solve their problems directly with banks, rather than with the ministry, said Minister of Industry and Trade Mounir Fakhry Abdel Nour.

The state banking system, under the Central Bank of Egypt (CBE)’s leadership, has launched several initiatives postponing tourism debt payment to banks over the past three and a half years.

Abdel Nour said: “The Egyptian Tourism Federation [said that they] asked the Ministry of Tourism to request that banks postpone the sectors’ financial debts, but the Ministry has not received any such requests from the Federation.”

The Federation called on the Ministry to pay EGP 500m to EGP 900m to troubled factories, according to the Industrial Modernization Center (IMC) statistics.

“I cannot comment on the Minister’s statements. I must hear him speak myself,” said Chairman of the Federation of Egyptian Industries Mohamed Al-Suweidy.

Despite the IMC saying that 900 troubled factories exist, 2,300 textile factories have suspended their work according to the Chairman of the Chamber of Textile Industries Muhammad Morshedy.

Morshedy declined to disclose total investments for those factories or their proportion to the sector’s total projects, saying, “It differs from one factory to another.”

Investments in the textile and weaving sectors exceed EGP 1bn according to Morshedy.

The failure of 95 factories in Assiut’s industrial zone to obtain operational licenses from the General Authority for Industrial Development and poor financial liquidity resulted in wasted investments numbering in the billions, according to a member of the Investors Association of Assiut, Osama Abdel Alim.

Investments in Assiut’s industrial zone amount to EGP 2bn, and include paper and food factories as well as others, Abdel Alim said.

Investments in Upper Egypt suffer generally from a lack of government interest according to Abdel Alim. He added that the most important issues faced by investors in the area include a lack of upgrades for land and energy, whether for the electricity or natural gas necessary to run factories.

Abdel Alim requested that the Ministry of Industry and Trade support industrial areas, especially in Upper Egypt in light of an increase in poverty rates in these areas.

Poverty rates in Egypt stand at 26%, while it has reached 50% in the governorates of Sohag, Qena, and Assiut according to the Central Agency for Public Mobilization and Statistics (CAPMAS).

The Kawthar Industrial City in Eastern Sohag has investments at a value surpassing EGP 2.5bn according to the area’s Investors Association Chairman, Mohammed Al-Shandwely. He added that 30% of these investments are suspended due to a lack of trained technical labourers and problems with marketing and financial liquidity.

The suspended projects include chemical and metal industries, according to Al-Shandwely.

He requested that a dry port be constructed on the Red Sea Road in Sohag, saying, “240 acres have been allocated to the region, but until now, there is nothing there.”

He added that price hikes for petroleum products from the burden of marketing and high transport costs harms competition with factories located in Northern Egypt.

He also said that developing river transportation will enhance the capacities of Upper Egyptian industrial zones, and stressed the need to deliver natural gas to factories in light of high electricity costs.

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https://wwww.dailynewssegypt.com/2014/09/14/troubled-factories-must-solve-banking-problems-banks-abdel-nour/
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