Egypt industry looks beyond turmoil to growth: Industry body

Investors prepared to brave the aftermath of political turmoil and the threat of a faltering global economy to Egypt's industry will be able to benefit from strong underlying demand, officials at one of Egypt's most influential industry bodies said.

Many Egyptian manufacturers have seen sales plunge since a popular uprising toppled President Hosni Mubarak in February and worried households cut back on purchases, officials at the Egyptian Chamber of Metallurgical Industries told the Reuters Middle East Investment Summit.

Legal challenges to state land sales and privatizations had left investors nervous and the number of factories and warehouses being built has halved, they said, adding that plans to raise energy prices had also been a cause for concern.

A clearer business environment might not emerge for more than a year as Egypt holds elections for a new civilian government and the army-backed interim government avoids major policy moves without a strong mandate.

"Of course there will be turbulence over the coming year or so," Khalil Kandil, chairman of the industry group, said.

However, local demand held up relatively well through the turmoil, a booming population required huge infrastructure investment while a swathe of Egyptian industry exports to other Middle East economies were performing well, he said.

"Business plans are built on five and 10-year horizons and are regional plays. Most of the problems we are discussing now are really quite minor," he said.