September 26, 2017 / 7:22 PM / 2 years ago

Suez Canal chief says Mercedes-Benz to establish new facility in economic zone

CAIRO (Reuters) - Mercedes-Benz is set to return to Egypt with a 50,000 square meter distribution facility in the new economic zone near the Suez Canal, Suez Canal Authority Chairman Mohab Mamish said on Tuesday.

A Mercedes-Benz sign is seen reflected on a building in Warsaw, Poland July 6, 2017. REUTERS/Laszlo Balogh

The Suez Canal Economic Zone, a mega-project launched in 2015 to create an international hub for global manufacturers along the canal, is expected to eventually make up about a third of the country’s economy.

A Mercedes spokesperson was not immediately able to comment on the agreement about a distribution center — although she said no decision had been taken about starting local production of passenger cars in Egypt.

“Mercedes is continuously examining conditions in all markets and regions with a view to market growth and sales prospects and adjusts it’s market strategy accordingly,” the spokesperson said.

Mamish said the new facility it would also be a logistical redistribution center that will service local and regional markets.

He was speaking at a news conference following a meeting attended by Prime Minister Sherif Ismail and the company’s regional director.

Egypt has been on a drive to reform the economy and lure back foreign investors who fled after the 2011 uprising.

It enacted a new investment code which is expected to boost badly needed investment by cutting bureaucracy, especially for starting projects, and providing more incentives to investors looking to put money into Egypt.

The zone will be eligible for these new incentives.

Mercedes-Benz ended local production of passenger cars in Egypt in 2015 over fears that free trade agreements the country signed with the EU would make assembly not profitable in the long run.

Reporting by Momen Abdel Khalek and Nadine Awadalla in Cairo Additional reporting by Georgina Prodhan and Andreas Cremer Editing by Jeremy Gaunt

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