Ahmed Kamel – Egypt Daily News
In a landmark step toward solidifying its ambitions as a regional automotive manufacturing hub, Egypt has signed a $1 billion agreement with China’s Sailun Group to build a major tire production facility in the Suez Canal Economic Zone (SCZone). The agreement, signed in the presence of Egyptian Prime Minister Mostafa Madbouly, marks a significant milestone in Egypt’s ongoing efforts to localize the automotive industry and integrate it into global value chains.
The new factory, to be developed over a 350,000-square-meter site within the TEDA Egypt industrial area, will be constructed in three phases over three years. Once fully operational, the facility is expected to produce more than 10 million tires annually, serving both domestic markets and exports to Africa, the Middle East, and Europe. The first phase, scheduled for completion by 2026, will produce three million passenger car tires and 600,000 truck and bus tires annually.
Prime Minister Madbouly emphasized the project’s alignment with Egypt’s strategy to deepen local manufacturing and reduce reliance on imports, particularly in the automotive sector. He praised the SCZone’s role in attracting high-quality investments, citing recent infrastructure developments in roads, tunnels, and ports that make the zone highly attractive for foreign direct investment.
He called for stronger public-private collaboration to enable Egypt to become a regional leader in vehicle production within a short timeframe.
The Suez Canal Economic Zone, strategically positioned along one of the world’s busiest maritime trade routes, comprises six ports and four industrial zones. It has been granted special legal, fiscal, and regulatory incentives to attract foreign investment. According to SCZone Chairman Waleid Gamal El-Dien, the tire factory is a cornerstone of the zone’s broader plan to establish integrated industrial clusters focused on automotive manufacturing and its supply chains.
He revealed that recent promotional tours in China included engagements with leading electric vehicle and battery manufacturers, as well as discussions with six of China’s top auto parts makers.
The agreement was signed by Cao Hui, CEO of TEDA Egypt, and Xie Xiaohong, President of Sailun Group, a global tire manufacturing giant founded in 2002. With major facilities in China and Vietnam and a sales network spanning over 180 countries, Sailun brings advanced technology and global experience to the Egyptian market. The planned facility in Sokhna is expected to become a central production and export base in the region, reinforcing Egypt’s role in global automotive value chains.
Beyond the automotive sector, the project is emblematic of the broader and rapidly expanding economic ties between Egypt and China. In recent years, the two countries have forged deep partnerships across a wide array of sectors, from infrastructure and energy to technology and finance. This partnership is underpinned by a shared strategic vision aligning Egypt’s Vision 2030 with China’s Belt and Road Initiative to drive sustainable development.
Chinese investments in Egypt are currently flourishing, particularly within the China-Egypt TEDA Suez Economic and Trade Cooperation Zone, which hosts over 160 Chinese enterprises. These firms are engaged in key sectors such as electronics, electric vehicles, artificial intelligence, and renewable energy.
The Benban Solar Park, one of the largest solar installations in the world, includes significant Chinese participation. Additionally, projects like the Iconic Tower and the Central Business District in Egypt’s New Administrative Capital underscore China’s growing role in Egypt’s urban and infrastructure transformation.
Transport cooperation is also evolving, with Chinese firms contributing to a $10 billion electric train project and a 543-km high-speed rail network linking Cairo with other major cities. These infrastructure projects are not only modernizing Egypt’s internal connectivity but also reinforcing its positioning as a trade and manufacturing hub for the wider region.
Financial cooperation has similarly gained momentum. The Central Bank of Egypt and the People’s Bank of China have signed several memorandums of understanding aimed at enhancing financial integration. These include local currency settlement agreements, currency swap deals, technical cooperation, and the issuance of Panda bonds.
Efforts are also underway to link payment systems and expand the presence of Chinese financial services like UnionPay in Egypt, with fintech collaborations already underway with Egyptian platform Paymob.
Cultural and educational exchanges are reinforcing the long-term nature of the partnership. Chinese language and culture programs have been introduced across 30 Egyptian universities and more than 20 secondary schools. Joint archaeological missions and cultural festivals further reflect the growing soft power dimension of bilateral ties.
These developments come as the two countries prepare to celebrate the 70th anniversary of diplomatic relations in 2026. High-level visits throughout 2025 have laid the groundwork for even deeper strategic cooperation across defense, education, industry, and technology. Notably, in April 2025, China and Egypt conducted their first-ever joint air force drill, highlighting a new dimension of military collaboration.
Egypt’s broader strategy in the automotive sector includes attracting global automakers and part suppliers, such as BMW and Sumitomo, while promoting upstream investments like the new Sailun tire facility. In 2024–2025, Egypt allocated EGP 1.5 billion to support localization, with initiatives such as Sumitomo’s massive wiring harness plant expected to create 10,000 jobs and serve European markets.
By integrating tire production into the automotive value chain, Egypt not only meets a critical industry need but also elevates its competitive standing. The move signals a shift from being a car assembly market to a comprehensive automotive manufacturing base. The new tire plant is projected to generate thousands of jobs, upskill the local workforce, and stimulate ancillary industries.
According to the General Authority for Investment and Free Zones (GAFI), around 2,800 Chinese companies are currently active in Egypt, with cumulative investments exceeding $8 billion. GAFI expects that number to grow to $12 billion by the end of 2025.
The Sailun tire facility stands as a high-impact symbol of the multifaceted partnership between Egypt and China rooted in mutual economic interests and a shared vision for industrial modernization, regional trade leadership, and long-term strategic alignment.
