Egypt's Suez Canal Signs 9 Deals Worth Over $1.1B With Chinese Firms
Egypt's Suez Canal Economic Zone (SCZone) has signed nine contracts worth $1.1 billion with multiple Chinese companies for building various projects in the country, especially for manufacturing chemicals, according to a Facebook post by the Cabinet.
SCZone deals
The deals cover the first project of its kind in Egypt and the Middle East and Africa (MENA) region for the bromine industry and chlor-alkali project.
SCZone and Chinese companies also signed contracts for food products, supply chains, and energy production.
The Chinese companies that won the project contracts included Shandong Tianyi Chemical, China Glass Holding, Binhua (Befar) Group, Elite Solar, Dahui Glucose & Tiba Starch, and Kaks Investment.
The signing event was held on the sidelines of a forum on China-Africa Cooperation Summit in Beijing, as part of Egypt's promotional tour for the canal.
In October 2023, SCZone signed a deal worth $6.75 billion with China Energy for building green ammonia and green hydrogen projects in the Sokhna Industrial Zone. It also signed a deal with Hong Kong-listed United Energy Group to set up a potassium chloride complex with an expected investment of up to $8 billion.
Suez Canal performance
The Suez Canal revenues dropped by 23.4% year-on-year to $7.2 billion in the 2023-24 fiscal year from $9.4 billion the previous year due to some shipping companies opting for alternative routes to avoid attacks by Iran-aligned Houthis in the Red Sea.
The number of ships using the canal fell to 20,148 in 2023-24 from 25,911 in the previous year, SCZone chief Osama Rabie said in July.
Revenues from the Suez Canal have plunged by 40% to 50% earlier this year amid attacks on international shipping by the Houthi group in the Red Sea.
In the first six months of the year, Suez Canal receipts declined by more than half when compared to the same period in 2023, according to a recent report by the International Monetary Fund (IMF).
Surprising fact
Income from the Suez Canal is an important source of foreign exchange for Egypt, with its current account receipts averaging over $700 million per month before the disruptions in the Red Sea, the IMF showed.