China's fiberglass company Jushi plans to raise investment, production in Egypt
Updated: 2016-01-19 11:21
By HOU LIQIANG in Suez, Egypt(chinadaily.com.cn)
Workers on new manufacturing line of Jushi Egypt. Photo by Jushi Group.
World's largest manufacturer of fiberglass Jushi Group plans to increase its investment and production in Egypt.
Given Egypt's advantage in location, resources and competitive labor cost, the China-based group wants to raise production to 200,000 metric tons in the country.
Established in China-Egypt Suez Economic and Trade Cooperation Zone in January 2012, Jushi Egypt for Fiberglass Industry S.A.E, a subsidiary of Jushi Group, now has an annual output capacity of 80,000 tons of fiberglass. The investment of the current manufacturing line is $223 million.
According to Yang Jixiang, deputy general manager of Jushi Egypt, the company employs about 1,100 Egyptians and 60 Chinese. In 2015, the company exported 95 percent of its products, valued at $84 million, and paid about 135 million Egyptian pounds ($17 million) in tax to Egyptian government.
Yang said the operation of Jushi Egypt has helped the development of downstream and upstream industries of fiberglass in Egypt. "Two Chinese companies have entered China-Egypt Suez Economic and Trade Cooperation Zone to supply materials to us. While improving their technology to meet our need for Kaolin powder, a raw material for glass fiber, an Egyptian mill factory has increased its mills from one to four," he said.
While assembling manufacturing line also with an output capacity of 80,000 tons, which will be put into operation in June, the company has started construction for capacity of another 40,000 tons.
Now 40 percent of the company's middle-level executives are Egyptians and they are not going to add more Chinese for the new capacity, said Yang.
He said the company chose to establish manufacturing line in Egypt because of its great location advantage, preferential trade policies Egypt enjoys and the rich raw materials for fiberglass.
"If you export fiberglass to Europe from China, you have to pay anti-dumping and anti-subsidy duty at a rate of 24.8 percent, along with the tariff. There is no tariff if you export to Europe and Middle East from Egypt and there is no anti-dumping and anti-subsidy duty at all," he said.
He said it takes at least one month to transport product from China to Europe, but from Egypt, it takes only one week. The container could arrive in Turkey in only two days.
Egypt is rich in human resources and also in natural resources for fiberglass industry. "The engineers in Egypt are well-educated. Though the efficiency in Egypt is not as high as that in our headquarters, it will improve as we invest more in training," he said.
However, the company is also faces challenges in Egypt.
Though Egypt government promised export rebates to exporters, it's not easy to get the rebates. Jushi Egypt only managed to get rebates in two deals with a total amount of about 70,000 Egyptian pounds, according to Yang.
Yang said the company's operation has also been affected by change of policies in Egypt. In September 2015, Egypt government called for testing all chemicals and powders imported to the country. However, the test cannot be done in one week as promised and could take two and even three weeks, resulting in a lack of raw materials for the manufacturing line and also much more demurrage charge.