작성일자: 2014.4.30

상품명: Mining GET (Ground Engaging Tools-Tooth, Adapter) & Construction GET

작성자: 카이로 무역관 조은범 (manoa.hawaii@gmail.com), Pakinam Hassan (pakinam.kotra@gmail.com)

 

 

1. Demand Trend

 

□ Construction Industry

 

Egypt's Construction and Infrastucture Industry, Historical Data and Forecasts

	2012	2013e	2014f	2015f	2016f	2017f
Construction Industry Value (EGP bn)	67.4	76.7	88.3	100.2	113.2	128.0
Construction Industry Value (US$ bn)	11.1	11.2	12.6	14.1	16.0	18.5
Construction Industry, real growth (% y-o-y)	3.3	5.9	4.6	4.0	4.6	5.5
Construction Industry (% of GDP)	4.3	4.4	4.5	4.5	4.4	4.4

Source: BMI

 

 ○ According to the Egyptian construction report published by the General Authority For Investment and Free Zones(GAFI), Egypt is home to the largest population and market in the Middle East, this implies a steady, if not growing, need for residential and commercial property. The construction industry is booming based on massive demand for residential real estate serving population of over 86 million. Real estate is one of the most important sectors contributing to economic growth and affecting more than 90 industries related to construction. It is considered a labor-intensive sector as it accommodates at least 8% of the total labor force.

 

 ○ There is a great demand for residential construction in Egypt where there is a high population growth rate and a high urbanization rate, such demand is mainly driven by the demand for low and middle income housing; a gap that is yet to be satisfied. It is important to know that 29% of the population is under 40 years old and almost half of the Egyptian population is under 19 years old implying a growing demand.

 

 ○ Experts expect that the Egyptian construction sector growth rate will be reached 5.63% in 2014, leading it to conclude that Egypt is one of the most sustainable markets for infrastructure investment in the region.

 

 ○ In addition the growth of the building and construction sector is expected to attract investments of around US$ 7.3 billion by 2015, making it one of the country’s biggest revenue sources and driving the continued expansion of related industries, including metals, cement, furniture, and power generation, according to International press reports.

 

 ○ With a growing middle class, there is a growing demand for retail and commercial real estate. The commercial real estate sector in Egypt is undersupplied. While regarding infrastructure, the government’s Public Private Partnership (PPP) projects have stimulated and are expected to continue stimulating the construction of infrastructure, especially in the energy and transport sectors.

 

 ○ The value of real estate investments in Egypt has witnessed continuous increases since 2001/02 when it recorded 7.9 billion EGP reaching about 31.8 billion EGP in 2012/2013 with 27.5% growth rate. The investments of the private sector have always represented the highest share of the total activities with a percentage amounted to 98% in 2012/2013. Housing unit needs are estimated to be 8 million units during the period from 2007~2022, especially by adding current housing needs in 2014. New urban cities in Egypt have reached 27 new cities including 5 under construction; total investments implemented by the private sector in those cities have reached 400 billion EGP. Most real estate and urban expansion projects are focused on the capital and the two new cities New Cairo and 6th of October.

 

□ Heavy Construction Machinery and its Parts

 

 ○ The Central Agency for Public Mobilization and Statistics(Capmas), the official source for provision of data, statistics, and reports, according to Presidential Decree 2915 for 1964, reported that the demand for construction equipment and road construction equipment was 2036 designed in year 1993. The total number of equipment demanded was amounted to 2502 in year 2007, an increase of 466 (22.9%).

 

 ○ Recently, the Capmas reported that the construction sector ranked the first in having the largest number of construction and road construction equipment, 33.3% of the total, followed by the chemical industries, 21.1% of the total.

 

 

 ○ All the previously mentioned factors reveal that there is a significant potential and demand for constructions projects; hence the demand for heavy construction equipment and its spare parts, including ground engaging tools, are high because they are primarily used for real estate construction, road construction, and all other construction projects.

 

 ○ Some of the heavy earth moving construction equipment companies said that the market demands ground engaging tools for famous brands such as Caterpillar, Kobelco, Komatsu, Hitachi excavators, and Caterpillar dozers. The market also demands South Korean ground engaging tools for Volvo, Samsung, Hyundai, Halla, Doosan, and Daewoo excavators. The market also demand a wide range of products which include tooth points (tips), adapters, side cutters, rippers, shanks, tooth pins, and rubbers/ washers.

 

 

 

2. Competitive Trend

 

 ○ There is no local production of ground engaging tools; therefore the competition is taking place between the export countries and their heavy earth moving construction equipment and ground engaging tools’ manufacturers. Some heavy earth moving construction equipment importers, commercial agents, and construction companies shared the following information regarding the leading brands of heavy earth moving construction equipment and their parts including ground engaging tools:

 

Brand	Origin	Market Share (%)	Authorized Agent
Doosan	South Korea	25	Otrac Heavy Equipment
Caterpillar	United States	20	Mantrac Egypt
Komatsu	Japan	15	Egyptian International Motors (EIM)
Hyundai	South Korea	15	Egypco Trading Co.
Others		25

Source: heavy earth moving construction equipment importers, commercial agents,

              and construction companies

 

 ○ As shown in the previous table, Doosan, Caterpillar, Komatsu, and Hyundai have acquired around 75% of the market share and the remaining 25% belongs to other brands such as Daewoo, Kobelco, Hitachi, Volvo, Samsung, and Halla.

 

 ○ According to some of the interviewed buyers, they said that the competition is mainly classified by the country of origin and the brands of the heavy earth moving construction equipment itself. In other words, heavy earth moving construction equipment are always keen about the ground engaging tools’ country of origin and after that they check their compatibility with famous heavy earth moving construction equipment brands.

 

 ○ Reference to heavy earth moving construction equipment importers, commercial agents, and even construction companies, the majority of ground engaging tools are usually imported from China. The Chinese ground engaging tools are considered to be the market leaders for their convenient prices that appeal to the Egyptian market. These Chinese ground engaging tools do not have a significant brand name in the Egyptian market. However, there is a province in China which is very famous for manufacturing these ground engaging tools and it is called ‘Quanzhou’.

 

 

3. Pricing Trend & Distribution System

 

□ Pricing Trend

 

 ○ The earth moving construction equipment companies said that the prices of ground engaging tools differ according to many variables such as:

  - Brand or the country of origin/ manufacturer of the tools

  - Brand of the construction equipment, its model, and year model

   · For example: the prices of ground engaging tools installed for Caterpillar may differ from those installed for Kobelco, Komatsu, Hitachi, Volvo, Samsung, Hyundai, Halla, Doosan, or Daewoo

  - Materials by which the ground engaging tools is made of

  - Size of the ground engaging tools

 

 ○ Reference to Eng. Ahmed Hossam, Owner of El-Rayah Co. which is specialized in heavy equipment parts, the prices of bucket teethes, pins, and washer locking which are compatible for Doosan excavator bucket model S300LC-V and S290LC-V can be presented in the below table:

 

Description	Price (EGP)
Point; Tooth	160
Pin; Locking	20
Washer; Locking	20

 

□ Distribution System

 

 ○ Most foreign firms operate through local commercial agents or distributors. According to the Egyptian law, foreign companies wishing to engage in any type of consulting or other services, or to tender on government agency bids (except sales to the Ministry of Defense) may do so only through a registered local agent or intermediary. A foreign company cannot establish in Egypt a scientific, technical, or consulting office or any similar kind of offices unless it appoints an Egyptian commercial agent.

 

 ○ Other foreign firms choose to appoint distributors who sell products in the country on its own account by buying the products directly from the foreign supplier or from the foreign supplier’s agent and re-sell at a profit. A foreign producer may appoint both an agent and a distributor, which is common. The agent would carry out the marketing on behalf of the foreign producer as well as the importation process, and the distributor(s) would buy from the agent and re-sell for their own account. Generally, the distribution or supplying network of the mining GET(ground engaging tools-tooth, adapter) and construction GET can be presented through the following diagram:

 

 

 

4. Reference Companies

 

 ○ The following companies were interviewed and they were asked about their feedback regarding the Mining GET(Ground Engaging Tools-Tooth, Adapter) & Construction GETs’ demand, competition, price trends in addition to the distribution system:

 

El-Rayah Co.

Contact Person	Eng. Ahmed Hossam (Owner)
E-mail	info@elrayah.com
Website	www.elrayah.com
Mobile	+20 122 1827172
Telephone	+20 2 26262396, +20 2 26529968
Fax	+20 2 22788130
Address	21 El-Gamee St., Ezbit El-Raiys, Mataria, Cairo, Egypt
Established Year	1999
Number of Employees	20
Company Overview	El-Rayah Co. is specialized in supplying heavy equipment parts, especially excavator parts; Korean excavator spare parts, undercarriage parts, hydraulic pump parts, ground engaging tools, hydraulic cylinders, hydraulic seal kits, slewing ring bearings/swing bearings, hydraulic breaker/ hammer parts, Korean dump truck parts, Korean bus parts, and Korean automotive car parts.

 

 

Generate Engineering Solutions

Contact Person	Eng. Ramy Radwan (Managing Partner)
E-mail	rradwan@generate-es.com
Website	www.generate-es.com
Mobile	+20 100 1169996
Telephone	+20 3 5458711
Fax	+20 3 5232822
Address	6 Roshdy Pasha St., Roushdy, Alexandria, Egypt
Established Year	2011
Number of Employees	25
Company Overview	Generate Engineering Solutions is a young Egyptian company, established in 2011, specialized in the construction equipments. Generate Engineering Solutions trades(imports /exports), rents and maintains used heavy equipments.