Suez Canal Economic Zone can facilitate trade
How can the Suez Canal Economic Zone facilitate Brazilian trade? General Authority for Suez Canal Economic Zone (SCZone) counselor Mohamed Abdelaziz (pictured above) delved into the topic in a webinar hosted by the Arab Brazilian Chamber of Commerce (ABCC) on Tuesday (6). He participated in a panel on investments in the logistic sector.
Abdelaziz said the Zone offers 0% of customs tariff and a five-year residency for foreign investors in Egypt, among other benefits. He says that by using the economic zones, Brazilian companies would have shorter supply chains and preferential access to more markets, a greater penetration in existing markets and more integration with the global commerce.
The Economic Zone was launched in 2015 aiming at adding value to the Suez Canal so that it was not only a passage of ships, Abdelaziz says. According to him, 12% of all goods of the world that travel by sea go through the Canal. The complex feature four industrial zones and six ports, three in the Mediterranean and three in Read Sea. The Economic Zone is both locally and internationally connected.“We have an infrastructure of roads developed over the last seven years and now they end up in the east of the channel. The economic zone has a road network connectivity throughout Africa, and I believe this is something we’ve been talking nowadays, trying to create a hub for Brazilian products for the rest of Africa,” Abdelaziz said.
The counselor mentioned the example of the Said Port integrated zone, which encompasses an industrial and a logistic zone. It’s being expanded and has the energy capacity to accommodate factories from different sectors like steel, fertilizer, oil, and others, and is able to accommodate any ship with draught up to 18.5 meters deep.“Our goal by 2025 is aiming at sectors that have domestic investment opportunity, which could be tires, animals, petrochemical, food processing, pharmaceutical, and others,” he said.
“A major challenge is the high cost of sea transport between Brazil and the Arab countries,” Investment and Development Authority of Lebanon (IDAL) vice president Alaa Hamieh said. He stressed the importance of finding strategic partners to increase trade between the countries.
Union of Arab Chambers (UAC) secretary-general Khaled Hanafy discussed the possibility of increasing trade between the countries, making Egypt a hub for the African and Asian markets, and he also addressed the industrialization and activities that could benefit the economic zones of Egypt and Suez Canal.“We need a strategic alliance to help industries in the sectors of agriculture, food, as well technology, railway, and other potential business,” he said.
The assistant executive secretary of Brazil’s Ministry of Infrastructure, Felipe Fernandes Queiroz, said that 21% of all the cargo of refrigerated containers that leave Brazil go through the Suez Canal. He stressed the Dubai Ports terminal in the Port of Santos (DP World Santos) as an example of Arab investment in Brazil and present a schedule of the Brazil’s next transport auctions.
“The fist privatization of the ports of Brazil will the port of Espírito Santo,” Queiroz said. The secretary added that the Port of Santos, Itajaí, Company of State of Bahia Docks, and the Port of Sebastião will also be privatized, still with no scheduled date.
ABCC president Osmar Chohfi opened the event by addressing the significance of the Suez Canal for the global trade. The Canal opened back in 1869 and remains one of the world’s key sea-based trade routes due to its prime position between Africa, Asia and Europe and also its importance for the trade between the Americas and the rest of the world.“The historic and economic relevance of the Suez Canal is undeniable,” Chohfi said.
Chohfi said that, for Brazilians, the Suez Canal Free Zone represents a major gateway for markets and an opportunity for companies to explore the Arab market and the global Muslim market.
“Its strategic geographic location combined with policies for attracting foreign investments and commercial agreements signed between Egypt and other countries are competitive advantages that could benefit Brazilian companies in the process of going international,” Chohfi said.
According to figures from 2020, 95% of the total exports from Brazil traveled by sea. Fifty-six percent of them go through the Suez Canal to reach their destination. These operations account for USD 6 billion in Brazilian exports do Saudi Arabia, Bahrain, United Arab Emirates, Yemen, Iraq, Jordan, Oman, and Sudan. The information is from the ABCC Market Intelligence department.
As for imports, they fetch USD 2.2 billion for the Arab countries that supply the Brazilian market, and all of them go through the Suez Canal.
Rio de Janeiro-based Brazil-Lebanon Chamber of Commerce president Adel Abou Rejeili pointed out that next month, on August 4, we’ll the one-year anniversary of the Beirut port tragedy, and he expressed his solidarity for the millions of dead by COVID-19.
ABCC vice president Ruy Cury finished the event. He said that the technical information given during the panels is proof that the matter doesn’t end there, and that we’ll see new meetings aimed at improving the trade flow and reducing the hardships found in Brazilian and Arab ports such as cutting costs.
Source: Brazil-Arab News Agency (ANBA)