The heavy machinery market in Egypt

Posted on 30 September 19

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An overview

For the past four years, Egypt has been witnessing a strong heavy machinery market. With a population of just under 100 million living in Egypt, the northern African nation is bound to grow even more to meet the economic standards. The major contributors to Egypt’s economic development are the construction and transportation industries. In fact, with cranes towering high in the Egyptian skyline and billboards boasting of new residential projects, universities, and malls, Egypt is experiencing a boom in its construction sector. The impact of all these construction developments has been a significant surge in demand for heavy equipment in Egypt particularly from cities like Cairo, Alexandria, and Port Said.

 

Factors influencing the growth of the heavy equipment market in Egypt

  • Infrastructural projects are being demanded at an increasing rate due to the ever-growing population and a shortage of housing facilities. This implies an impending boom in residential and commercial real estate, with an expected growth of 70% by the year 2020. This, in turn, promises a substantial increase in the demand for heavy equipment.
  • Being the largest oil and natural gas consumer in Africa, Egypt has already signed 12 new exploration and production concessions. The government is also currently open to bids for the exploration of the Red Sea in search of oil and gas. This reflects an upcoming rise in the demand for construction equipment in Egypt.
  • In an attempt to improve the healthcare system, the Egyptian government has already initiated the development of 26 new hospitals which has increased the government's need for heavy equipment to complete the project.
  • The renewable energy equipment market, a part of the heavy equipment market, in Egypt is worthy of several billion dollars. The Integrated Sustainable Energy Strategy of Egypt is planning to increase the share of energy generated from renewable sources to 42% by 2035. This is indicative of a further rise in the demand for heavy equipment in this sector.

 

The Egyptian heavy equipment rental market 

The contributions of the heavy equipment rental market towards the overall heavy equipment market in Egypt are not capable of being overlooked. As a result of heavy investment in infrastructure development projects along with huge upcoming construction projects in the country, the heavy equipment rental market seems to be gaining momentum at an unbelievably high rate.

 

 

Sectors like transportation, construction, energy and power exhibit tremendous growth rate. For example, a total of around $3 billion is being invested by the Egyptian government towards the refurbishment of its national railway network system within the next five years which includes the addition of 1000 new train cars. This calls for a considerable upfront capital investment which leads contractors to opt for rental equipment to reduce costs of operations. And this is very likely going to fuel the demand for heavy equipment rentals in Egypt.

 

Furthermore, research conducted by various organizations states that the Egyptian heavy equipment rental market will thrive due to the emergence of new technologies and new construction opportunities. The heavy equipment rental market is expected to grow at a CAGR of 8.4% by the year 2025, with earth-moving equipment acquiring the largest share of this growth.

 

To summarize, the growing sectors, along with the government's large-scale initiatives, promise a bright future for the heavy equipment market in Egypt.

 

 

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