Samsung to set up mobile phone factory in Egypt

The plant is expected to create 1,400 direct and indirect job opportunities in the country

Samsung Electronics' chip production plant at Pyeongtaek, South Korea. Reuters

Samsung Electronics, the world's biggest mobile phone and memory chips manufacturer, has agreed to set up a new mobile phone factory in Egypt as the country seeks to attract investment to support its economy.

Construction of the plant, which will be located in the Beni Suef governorate, south of Cairo, is expected to begin in the fourth quarter of 2023, Egypt’s Ministry of Communications and Information Technology said.

The plant, which will produce the latest versions of mobile devices, will create 1,400 direct and indirect job opportunities in the country, especially in Upper Egypt.

“Egypt has become an attractive destination for many major companies operating in electronics design and manufacturing,” said Amr Talaat, minister of Communications and Information Technology.

“Businesses choose to manufacture in Egypt to serve the local market and export to regional markets.”

The investment by the South Korean company comes after Egypt, the Arab world's third largest economy, introduced a round of legislative and economic reforms to boost private sector participation.

The amendments were made last month following repeated complaints from Egyptian and foreign private sector investors that red tape, variable tax laws and favouritism towards state companies were discouraging them from investing in the country.

Increasing the role of the private sector and reducing the role of state companies in the Egyptian economy was a key condition upon which the International Monetary Fund agreed to give Egypt another round of funding worth $3 billion earlier this year.

The latest deal with Samsung is part of the CIT ministry's “Egypt Makes Electronics” presidential initiative, aimed at doubling the country's electronics exports and boosting jobs growth for engineers, researchers and technicians.

It aims to attract investors to manufacture “promising electronic products with high and fast payoffs”, such as mobile phones, tablets, GPS tracking devices, light-emitting diode (LED) lighting, smart meters, LED TVs and displays, and solar energy systems, according to the ministry's website. ​​

The initiative offers a range of incentives for companies, including tax breaks, land discounts and access to training and research facilities.

It also provides support for start-ups and small businesses through its incubation and acceleration programmes.

“The establishment of the new Samsung factory in Beni Suef is a continuation of the successful co-operation with Samsung, which has already resulted in the manufacturing of educational tablets in Egypt,” Mr Talaat said.

“We are committed to enacting new incentives and policies for investors in addition to providing highly skilled professionals in the supporting sectors of the electronics industry,” he added.

In April, Samsung led the mobile device market in Egypt with a market share of about 26 per cent, according to Statista.

Chinese smartphone maker Oppo and Apple were in the top three with shares of around 17 per cent and 15 per cent, respectively, the data portal said.