Cairo, Egypt – August 20, 2025

Egypt’s economy is poised for a significant boost with a new $1 billion deal with China’s Sailun Group to build a massive tire factory in the Suez Canal Economic Zone (SCZone). The project, officially signed on August 13, 2025, in a ceremony witnessed by Prime Minister Moustafa Madbouly, is a cornerstone of Egypt’s strategy to localize its automotive industry and reduce reliance on imports.

The Deal’s Details and Strategic Importance

The high-profile industrial project will be built in three phases within the TEDA Egypt industrial zone in Ain Sokhna. Covering a vast area of 350,000 square meters, the factory is expected to be completed in three years. The first phase, slated for completion in 2026, will have an annual production capacity of 3 million passenger car tires and 600,000 truck and bus tires.

 * Meeting Local and Export Demands: Once fully operational, the plant’s total production will exceed 10 million tires annually. This dual-purpose capacity aims to meet the rising demand in the local market while positioning Egypt as a key tire export hub for Africa, the Middle East, and Europe.

 * A Cornerstone of Automotive Localization: The SCZone chairman, Waleid Gamal El-Dien, has highlighted that the tire manufacturing project is a crucial pillar of the zone’s strategic vision. The goal is to establish integrated industrial clusters for vehicle manufacturing and its related supply chains, moving Egypt from a vehicle assembly market to a full-fledged automotive production market.

Economic Impact and Future Outlook

The investment is expected to have a transformative impact on Egypt’s economy by creating jobs, attracting further foreign direct investment, and improving the trade balance. The factory will provide high-value employment and contribute to the country’s skill development in the automotive sector.

 * Job Creation: The project is anticipated to create hundreds of direct and indirect jobs, providing skilled employment opportunities for Egyptians.

 * Reduced Import Bill: By localizing tire production, Egypt will significantly reduce its import bill, helping to narrow its trade deficit.

 * Attracting Foreign Investment: The investment in the SCZone further solidifies the area’s reputation as an attractive destination for foreign capital, particularly from China, which has a growing presence in Egypt’s industrial and infrastructure sectors. The SCZone’s strategic location, with its tax incentives and proximity to global shipping lanes, makes it an ideal manufacturing hub.

The partnership with Sailun Group, a global leader in the tire industry, reflects the deepening economic ties between Egypt and China, a relationship that has grown significantly in recent years as part of the Chinese Belt and Road Initiative.  The new tire plant is a tangible example of this cooperation, demonstrating a shared commitment to industrial development and economic growth.