By Eiman Rashed – Moharram Fouad
The argument currently is that every product in Egypt has been made in China Unfortunately, this argument is quite true despite its negative dimension; it is still valid and it is of significant benefit to merchants and millions of Egyptians.
We all know that Chinese products are available in affordable prices and probably in prices that are lower than its competing products. Moreover, businessmen who are importing from China benefit from such a fact why can’t we manufacture those products by Egyptian hands?
Importing from China is quite complicated and it is not as easy as some people who have no experience in the trade with Chinese market might think. Very briefly, it does not depend on China but mainly on the Chinese factories! However, local markets in your country and means of distribution and sale are also one of the most important factors. China produces many products, you can find one product offered in different prices.
So, here is an advice for anyone who want to become a businessman, you need to slow things down and carefully consider gain and loss, risks, capital and your resources. The Middle East Observer is going to give below the most important ideas, advises, and basic information that you will definitely need to start producing alternatives to the Chinese products:
First: Identifying Products:
You need to identify precisely the required products and its specifications, such as raw materials, packaging and quality.
Are those products home furniture, children’s toys, raw materials, garments or shoes etc.? However, you should be aware of the fact that one product can have many specifications, such as raw materials, quality, packaging, quantities, colors, accuracy, and product general specifications.
Some people only focus on the price of the product without going into details that are a key to determine the a product’s price.
For example, bedrooms: Are they made of natural wood or artificial wood? Are they made of recycled industrial waste and painted to look like wood? Are they European, western or arabic-style bedrooms? How many bedrooms are required? What is the room space and shipping cost? What are customs charges? Storage and surrounding environment?
Any further details that are essential to determine product price.
Second: Local Market and Prices:
You need to consider local market prices in order to be fully aware of your market prices (for example, in retail market, you need to be aware of wholesale price, trader price, importer price) and get clear about the real price of the product and how to compete in the future.
In fact, you will find that the product price in your country is lower than its price in the Chinese market because there are importers who manufacture products at Chinese plants. Then, why cannot we build those plants here in Egypt and benefit from our long years and broad experience in trade with China?
Third: Customs Rules and Regulations:
You must be aware of customs laws applicable in your country as well as rules and regulations that must be applied in order import products into your country. It should be noted that these laws and regulations vary from one country to another, such as customs duty to be paid and data to be included in product label, such as «made in China» phrase, voltage, technical information etc.
Moreover, you need to submit required documents for each shipment, such as certificates of origin, packing lists, bill, technical information, and any other documents requested by the Customs Authority in every country in order to clear goods and products.
You may also hire a company or customs brokers in your country to seek advice before importing products.
When you calculate all those expenses, you can determine the price of the product in the Chinese market and you will realize that this product is cheaper in Egypt.
There are importers who manufacture products at Chinese plants. Then, why cannot we build those plants here in Egypt, a move that will considerably contribute to building a strong economy that can compete with chinese plans and other producing countries.
50 Commodities Banned From Being Imported Into Egypt:
Given the current foreign exchange shortage, which increased the rate of the US dollar on the black market to exceed EGP 13, the Minister of Foreign Trade and Industry Engineer Tariq Qabil issued the first decree to tighten control over imports into Egypt. 50 goods, mostly food commodities and ready-made garments, were banned from being imported into Egypt unless the General Organisation for Export and Import Control (GOIEC) would register names of factories that produce these goods at its records. The move aims at minimizing the import of poor quality goods that are imported by a number of traders at the expense of the Egyptian consumers. Those goods will not be cleared unless they are produced by the factories registered at the GOIEC.
The following is the list of goods banned from being imported into Egypt:
- Ready-to-sell juice products
- Sugar confectionery
- Ready-to-Sell dried fruit at retail.
- Ready-to-Sell oils and fats at retail.
- Ready-to-Sell Milk and dairy
products - Cosmetics and perfumes.
- Mineral and sparkling water.
- Floor coverings, utensils and
kitchenware. - The decree also included a number of
cosmetics, such as soap and ready-to-
sell laundry detergent products as well
as hygienic paper, cosmetic paper, sani
tary towels and baby diapers. - The iron and steel products and home
appliances were also included in the ban
unless their factories are registered at
the GOIEC. - Home and office furniture.
- Watches
- Bikes and motorbikes.
- Home-use lights
- Children’s toys
- The ministerial decree also included
a number of goods and products that will
be announced in detail in order to control
its imports from the beginning of Febru
ary 2016.
The above-mentioned goods and products imported into the country and the Egyptian market consume annually up to USD 10 billion. In cosmetics industry, the Egyptian market consumtion reaches more than USD one billion of the imported goods.
Some noted that many traders and importers have resorted to the black market over the last period to get a hold of hard currency after the Central Bank of Egypt’s stricter procedures, lack of US dollar in the official banks and allocating USD to particular importers. A large number of importers has asked to make US dollar available at the banks in order to eliminate the black market and avoid lack of US dollar on the Egyptian market.
How we all work together to build plants here in Egypt and produce high-quality products that can compete with products of other countries? How can we export these products to European and Arab countries instead of importing them? How can we provide the US dollar and eliminate the foreign exchange black market?
We will shed light on how to start a business in the next issue, stay tuned.
