Egypt - Country Commercial Guide
Safety and Security

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2020-09-15

Overview

There is steady growth of the safety and security market in Egypt with continuous demand for specialized, state-of-the art technology to manage security issues ranging from security for the general public to transparency of commercial transactions. The sector is expected to enjoy an increased demand of 15-20 percent over the next few years.

The GOE plans to dramatically enhance its security measures, which will require security upgrades of all airports, seaports and public facilities. Both the government and the private sector are reevaluating and upgrading security systems and technologies at various sites to meet the GOE’s stated goals.

Major buyers are government entities such as the Ministry of Interior, the Ministry of Defense and the Intelligence Department. The Ministry of Interior is expected to have continuous demand for advanced security technology and has plans to develop the sector in Egypt. Police agencies have as a primary goal of staying abreast of the latest innovations and strive to be familiar with the various manufacturers and corporations operating in the field. Companies with a reputation for cutting-edge technologies will have an advantage here. Although Egypt has always been a price-sensitive market, quality is also an important factor, particularly in this field. The main suppliers to the market are French, Russian, German, Italian, British and American companies.

It is highly recommended that U.S. companies enter the market gradually using a well-established representative. Agents and distributors must be well-positioned to deal with both public and private-sector concerns. They are also responsible for finalizing transactions and coordinating after-sales service with the buyer.

Below are the main areas of interest in the past few years:

  • Aircraft spare parts
  • Ammunition and artillery
  • Armored vehicles
  • Bomb detection and diffusion equipment
  • Border and perimeter control equipment
  • Surveillance and jamming equipment
  • Improvised explosive device (IED) detectors and diffusers
  • Survivability equipment

Market Demand

The Egyptian market has always been receptive to U.S. safety and security products. Governmental, industrial and tourism sector entities are legally obliged to install certain security systems. Shops, stores, schools and small companies do not generally rely on security equipment.  In some cases, safety equipment may be used, but most commercial entities are not obliged to install safety and security equipment.

The Egyptian security market requires sellers to have local expertise as well as advanced awareness of the global market. Successful participants have enhanced working knowledge of the government and its bureaucratic regulations. In some cases, applications for U.S. export licenses were significantly delayed or were not approved. 


Market Data

There are various ways for handling security products according to the place, sensitivity, nature of the target, security level needed, funding availability, size of the project, rules and conditions for license and other factors. Generally, small projects with low-to-medium sensitivity levels are implemented via small in-country offices, which place direct procurement orders. 
However, large projects with high-sensitivity levels may require more supervision in the design process, with cooperation from specialists in the Ministry of Interior, Intelligence Department, Ministry of Defense, and others. Some components of security systems may be obtained in the local market using direct procurement or through a competitive bidding process, or they may be obtained via an open request for quotation (RFQ) issued by the Egyptian Procurement Office (EPO) in Washington, D.C. Interested companies should first register with the
EPO.  

Figures on defense spending are not released by the Egyptian government. However, various publications have estimated defense expenditures at approximately $8 billion in 2019. 

The United States is very well known for its state-of-the art technology, particularly in x-ray inspection machines and walk-through metal detectors. Sometimes European companies offer similar technologies without the need for an export license, putting U.S. companies at a disadvantage. Also, during the past two years U.S. companies at times have faced challenges obtaining export licenses for products sold to Egypt, leading to a decrease in market share.


Competition
 
French, British and Italian suppliers have captured 45 percent of the Egyptian market for complete lines of equipment. This is attributable to the fact that they operate through Egyptian agents. Another 35 percent belongs to Germany and Eastern European suppliers. The U.S. market share is about 20 percent (non-governmental).

There are numerous competitive factors, including, but not limited to, technological advancement, high quality and after-sale services (low-cost maintenance).  U.S. products have a critical price advantage over European products. However, lengthy procedures in obtaining an export license disadvantages U.S companies.


Ministry of Defense agencies (Buyers)

There are three classes of end-users: governmental, industrial and commercial. Within the governmental sector, the Ministry of Interior and Ministry of Defense maintain the highest purchasing capacity.

The industrial sector includes oil and gas companies, chemical plants, manufacturing plants, ports and real estate contractors. The Ministry of Housing, Utilities & Urban Development requires these establishments to install fire-sensing and-detection equipment, fire alarm systems and extinguishing equipment.          

In addition, all public entities are legally obliged to install safety products. Some of the main commercial entities include banks, conference halls, hospitals, hotels, malls, museums, schools and universities, and theaters and entertainment facilities.  The market for security-sensing and -detection equipment is growing in Egypt, as both the Egyptian public and private sectors realize that such equipment enables them to combat security threats more effectively.  As a result, prospects for future sales of high-quality U.S. safety and security products, particularly sensing and detection equipment, are positive.

For selling defense equipment to the Egyptian Military the gateway is through the Egyptian Armaments Authority (EAA). The bid process for national mega projects is managed by military-owned firms, such as the Arab Organization for Industrialization (AOI), the National Service Products Organization (NSPO), and the Military Engineering Authority.

Defense Exhibition:

Every two years, under the patronage of President Sisi and the Ministry of Defense, Egypt hosts one of the largest defense exhibitions in the Middle East and Africa (EDEX). In 2018, EDEX hosted 43 U.S exhibitors at the show.

Commercial Specialist in charge of the oil and gas sector: Mr. Basim Sedki