LEAD FEATURE
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“ANY NEW INVESTORS THAT COME IN WITH THE POTENTIAL TO CREATE JOBS WILL BE WELCOMED”
Egyptian government, could even prove to be actively business friendly, says Gurdon. However, the challenges facing any incoming government must not be underestimated. “Egypt needs to create 700,000 jobs a year and has enormous social and economic problems,” states Gurdon. “At present, there is little new foreign investment.” Alan Penrith, UK Trade & Investment
director at the British Embassy in Cairo, urges UK fi rms interested in Egypt but which have concerns about the immediate political outlook to consider the country’s huge potential. Its economy is expected to grow in the next three years and Egypt needs much that the UK can, and already does, supply. “Egypt is a real market,” says Penrith. “It is a huge, broad- based economy whose import needs will grow by 11.9 per cent and 17.4 per cent in 2012 and 2013.”
Despite the tumult of the past year, UK exports to Egypt still totalled £700m in the last eight months. The UK is also Egypt’s largest cumulative investor, accounting for 70 per cent of last year’s foreign direct investment. Penrith also sees great opportunities in education and training, IT, retail, oil and gas, outsourced services, security and fi nancial services.
Recent visits by the Prime Minister, the Deputy Prime Minister, William Hague and Lord Green further highlight the UK Government’s commitment to strengthening ties with Egypt, which is now deemed a priority market – something which should benefi t UK
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www.ukti.gov.uk
exporters. “The Egyptian system and government are highly appreciative of the UK’s efforts to assist and engage and UK fi rms are well placed to benefi t,” says Penrith. Egypt’s position as a natural hub for trade in the region, in both Africa and the Middle East, is another reason why it is an important market in which UK fi rms might consider basing low-cost regional operations. “It has a whole web of tariff- free preferential trade agreements and is also close to Europe,” he states. “Large UK fi rms, including HSBC, M&S,
Tesco, Vodafone and Cambridge ESOL as well as a number of SMEs are already expanding their activities in the region and others would do well to follow. These companies recognise that Egypt is a long-term market, and those who take the trouble to come in with a long-term vision will reap the rewards.” Julia Smyth, head of UK Trade & Investment at the British Embassy in Tunis, says the outlook also looks promising there. “The fact the elections were fair, open, transparent and democratic says a lot about the way forward for Tunisia,” she says. “Once a new government has been put into place it will aim to be open and transparent. That, in turn, will be good for investors because the opportunities will be fair and clear.”
Smyth sees opportunities for UK
fi rms in energy, including solar power, fi nance, construction and textiles in Tunisia and adds: “Any new investors that come in with the potential to create jobs will be welcomed. There’s a good workforce resource of well-
qualifi ed graduates, it’s very easy to start a company in Tunisia and it’s two and a half hours’ fl ight time from London. There’s a lot of potential here.” A common theme across these markets for any UK business wishing to trade is the need to recognise that the politics have changed dramatically, says Gurdon. His advice to UK fi rms interested in the region is to fi nd the right partners, ideally new ones not associated with former regimes. However, UK companies face tough competition in North Africa. Other European countries have historical ties with the region, such as France with Tunisia and Italy with Libya. Some UK fi rms may therefore fi nd it convenient to partner with European businesses that can exploit those relationships. “Finding the right local partners is vital,” says John Hamilton, director of business intelligence fi rm Cross-border Information. “Do background checks on potential partners as it’s diffi cult to get out of relationships that don’t work. UK Trade & Investment can help with the initial stages. Good local partners can also resolve a lot of your risk problems.” ■
LET’S DO BUSINESS ATTEND UKTI’S The Arab spring one year
on event on 8 March at The Oval, contact Gareth O’Brien on 020 7215 8604 or email gareth.o’
brien@ukti.gsi.gov.uk Follow UKTI on
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