RIYADH: Egyptian company Elsewedy Electric is all set to establish a new firm in Saudi Arabia with a capital of SR500,000 ($133,048), as trade relations between the countries deepen.
According to a bourse disclosure, the decision was made after its Board of Directors approved the proposal to open a new company in the Kingdom.
The bourse disclosure further noted the location of the new company is yet to be decided, with Riyadh under consideration.
The company’s name will be decided by either Elsewedy Electric or Saudi Arabia’s Ministry of Investment, the bourse disclosure added.
The decision to open a new operation in Saudi Arabia comes at a time when Elsewedy Electric reported a consolidated net profits of SR510 million in the first nine months of 2022, up by 32.66 percent from SR380 billion during the same period of the previous year.
As trade relationships between both countries deepen, Saudi Arabia is exploring investment opportunities in Egypt’s real estate sector following the African country's decision to remove restrictions on foreign ownership of land.
Earlier in November, Saudi Arabia’s Real Estate National Committee met with the Egyptian Businessmen’s Association at the headquarters of the Federation of Saudi Chambers in Riyadh to discuss potential real estate investments, Saudi Press Agency reported.
Saudi Arabia and Egypt are also strengthening their relationship in the energy sector, as multiple deals were signed between companies of both countries earlier this year.
Saudi Arabia’s Minister of Trade, Majid Al-Qasabi, in June, said that the volume of Saudi companies’ investments in Egypt is $30 billion, while 574 Egyptian companies operate in the Kingdom with a capital of $1.3 billion.
In November, Saudi Arabia’s ACWA Power Co. also signed an initial agreement with Egyptian entities to build a 10 gigawatts project to produce electricity from wind energy in the north African country.
The deal was signed in Riyadh when Egyptian Electricity Minister Mohamed Shaker met Saudi Energy Minister Prince Abdulaziz bin Salman.
ACWA Power, in June, also invested $1.5 billion to develop, build, and operate the 1,100-megawatt wind farm, located in the Gulf of Suez in Egypt.
In June, a spokesperson for Ajlan & Bros Holding told Al-Arabiya that the firm signed six agreements with Egyptian entities, worth $5.5 billion, in the fields of tourism, food and ports.
According to the Federation of Saudi Chambers, the volume of trade exchange between Saudi Arabia and Egypt hit its highest value in history, at about $14 billion in 2021, with an 87 percent jump compared to the year 2020.