Integrated Agro-Industrial Parks in Egypt

Piloting the concept in Qalyoubia Governorate

Prepared by:
2 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

TABLE OF CONTENTS
WEIGHTS & MEASURES 3
1. OVERVIEW: AGRICULTURE & FOOD PROCESSING IN EGYPT 4

2. AGRO-INDUSTRIAL PARKS: THE TOOL NOT THE GOAL 5

The Developmental Role of Agro-Industrial Parks 5
Planning and Designing Agro-Industrial Parks 6

3. QALYOUBIA’S SUGGESTED AGRO-INDUSTRIAL PARK 11

Qualyoubia Governorate: Key Features 12
Suggested Business Units 16
Agro-Industrial Park Location in Qalyoubia: Main Features 19
Assumptions for the Qalyoubia’s Agro-Park Conceptual Design 19
Conceptual Layout for the Agro-Industrial Park 20
Suggested Management Structure 22
Value-added of Qalioubia AIP 23
3 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

WEIGHTS & MEASURES

1000 kg = 1 metric ton (t)

1 kilometer (km) = 0.62 miles (mi)
1 meter (m) = 1.09 yards (yd)
1 square metre (m2) = 10.76 square feet (ft2)
1 acre (ac) = 0.405 hectares
1 hectare (ha) = 2.47 acres
1 feddan (fd) = 0.42 hectares
1 hectare (ha) = 2.38 feddan

Abbreviations and Acronyms

CAPMAS Central Agency for Public Mobilization and Statistics

CSP Concentrating Solar Power
EU European Union
F&V Fruit and Vegetable
FAO Food and Agriculture Organization of the United Nations
FDI Foreign Direct Investments
GTI The Green Trade Initiative
HPLC High Pressure Liquid Chromatography
R&D Research and Development
RTD Research and Technological Development
SME Small and Medium-sized Enterprise
STE Solar Thermal Electricity
SWOT Strengths, Weaknesses, Opportunities and Threats
UNIDO United Nations Industrial Development Organization
GDP Gross Domestic Product

Definitions
Agro-Industrial Park:
Shared facilities and services in the form of a community built for the processing of agricultural
products.
Eco Park:
An industrial park in which businesses cooperate and interact with the local community to share resources
and reduce waste.
Clusters:
Geographical concentrations of inter connected enterprises and associated institutions that face common
challenges and opportunities.
4 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

OVERVIEW: AGRICULTURE &

FOOD PROCESSING IN EGYPT
The development of the Agriculture and Agri-business sectors in Egypt hinges on addressing the constraints
present in the value-chain. Despite contributing by 11.3% in Egypt’s GDP and 28% of all jobs (FY 2015/16),
the agriculture sector, and hence agribusiness growth, are both hampered by institutional deficiencies.
Smallholder farmers constitute around 80% of agricultural land ownership and production in Egypt1. The vast
majority of these producers are not part of any organized networks or associations, and do not have access
to formal value-chains. The food-processing sector in Egypt is also considered underdeveloped, highly
fragmented, and dominated by the informal sector. For example, 79% of the dairy market in Egypt is artisanal,
leaving a sizeable processing opportunity untapped2. Moreover, the food retail supply chain is highly
fragmented among a large number of distributors, wholesalers and retailers. This kind of fragmentation
results in poor economies of scale, thus leading to the manufacturing of products of sub-optimal quality, and
packaging that negatively affects the trade balance and prices of final products3.

Egypt has a trade deficit in agricultural products (fresh produce) of around USD 2 bn excluding grains (2015).
In the year 2015, agricultural products exports amounted to USD 2.2 bn, and total imports of USD 6.3 bn.
Egypt remains highly dependent on food imports and remains the world’s largest importer of wheat, and is
therefore highly vulnerable to fluctuations in global commodity prices. Agricultural imports are mainly
focused on Fruits and Peanuts & Leguminous crops, which both accounted for a total of USD 926 million in
20154. Egypt also faces a deficit in processed food products that reached around USD 4 bn in 2015, with
exports reaching USD 2.6 bn versus USD 6.5 bn of imports.

Adding to the challenges mentioned above are the expected further price surges, in both imported and local
fresh produce and food products, as a result of the recent economic reform measures, including the
floatation of the Egyptian Pound, and the streamlining of fuel subsidies. This will in turn shape demand,
directing consumption towards local rather than imported goods, putting more pressure on growers and
manufacturers to meet the expected demand, in terms of both quantity and quality. Linking smallholder
farmers to formal value-chains would significantly assist in achieving economies of scale, which would in turn
reduce costs of production, provide higher-income generation activities, as well as the creation of job
opportunities. Targeting the development of agro-industries by addressing the limitations in the value-chain
(that ranges from the limited access to information, financing, and technologies) would accelerate economic
development, and achieve Egypt’s industrial development goals. Within that context, adopting Agro-
Industrial Parks (AIPs) as a concept on a national scale presents itself as a promising contributor in achieving
these goals.

1 Promoting Agricultural Value Chains In the OIC Member Countries. Standing Committee for Economic and Commercial
Cooperation of the Organization of Islamic Cooperation (COMCEC), 2015.
2 Egypt Economic Recovery Plan: Agriculture and Agribusiness Sector Analysis and Initiatives. Booz and Co, 2014.
3 Egypt Economic Recovery Plan: Agriculture and Agribusiness Sector Analysis and Initiatives. Booz and Co, 2014.
4 Sources: General Organization for Export and Import Control (GOEIC)
5 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

AGRO-INDUSTRIAL PARKS: THE

TOOL NOT THE GOAL
________________________________________________________________

The Developmental Role of Agro-Industrial Parks

Agro-Industrial Parks (AIPs) as defined in literature, are units which add value to agricultural products, both
food and non-food, by processing them into products which are marketable, or usable, or edible, or by
improving storability, or by providing the link from farm to market or part thereof. It is an integrated
clustering model that combines different agro-production chains, thus maximizing operational synergies,
economies of scale, and income generation activities for the community it is located in. By targeting the
vertical and horizontal integration of value-chains, AIPs aim at achieving sustainable development goals in
the area in which they are established.

The general objective of the agro-park is to support Box 1: Agro-Industrial Parks (AIPs)
several distinct areas dedicated to processing,
More specifically, a park1:
logistics platforms, R&D, training, and technology
transfer, business incubators, service areas, and  Is an industrial space with a central management
other common facilities. Basically, the Agro-park system where agribusinesses and agro-industries
has to fit in a network containing three strategic (of all sizes) co-locate;
functions:  Usually occupies between 10 and 160 hectares of
urban or semi-urban land;
 Rural Transformation Centre: combining  Promotes value addition through processing and
collection and storage of farmers’ products storage of food, feed and biofuels;
with rural development services;  Provides common facilities, services, utilities, and
waste disposal;
 Agro Production and Processing: combining
 Can also provide a marketing channel, and/or
production, processing, collection, R&D,
export services including packaging;
trade, and social functions;  Can also place an emphasis on agro-ecology (agro-
 Consolidation Centre: serves a metropolitan ecological park) or science and technology/R&D
market in a consumer responsive way (science or technology park or technopole).
throughout the year.

In the context of an overall development strategy, AIPs exist for common goals aiming at boosting the value-
chain, retaining the local market, creating employment, and developing and protecting local SMEs. The
common facilities and services, and value-chain linkages created, help enhancing the competitiveness of
smallholder farmers and manufacturers in the community. They form centers of growth and innovation,
supporting local development, and contributing to a more sustainable development model.

An agro-industrial park, indeed, is not a simple physical aggregation, but an agro-industrial strategy targeting
economic development and employment generation. Economic development and employment growth in
rural areas are mostly led by the growth of commercial agrifood systems, which are efficiently run and
responsive to evolving market demands5. Agro-industries generate significant levels of direct and indirect

5 Agro-industrial parks: Experience from India. FAO, 2006

6 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

employment per unit of investment, through the backward linkages to agricultural suppliers (especially
smallholder farmers), and forward linkages to retailers and markets. Experiences from other countries show
that one agro park (50-100 feddans) can create a range of 2,000 to 4,000 direct and indirect jobs, in addition
to raising incomes of smallholder farmers. Poverty reduction will be achieved through the integration of
smallholder farmers, and small-scale processing industries in the value-chains. In turn, this will increase local
value-addition, create additional jobs in rural areas, and improve the overall efficiency of the agricultural
value-chain. The efficiency of post-harvest handling, processing and marketing operations, is a major
determinant of the prices paid by urban and rural poor, and is an important factor in ensuring household
food security. Improvements in the performance of the agro-processing and distribution sectors also
contribute to the safety and quality of food for all households. Agro-enterprise development has the
potential to provide employment for the rural poor in off-farm activities such as handling, packaging,
processing, transporting, and marketing of food and agricultural produce. Similarly, input suppliers have an
important role to ensure that the farm sector has access to inputs and materials at competitive prices6.

Planning and Designing Agro-Industrial Parks

The use of AIPs as a tool for agricultural value addition and competitiveness is quite recent in both
industrialized and emerging economies, and the last decade has seen continuous efforts in developing
various versions of AIPs. The various formats for AIPs are developed according to planned industrial activity,
space use, and more importantly their developmental objectives, as shown in the table below:

6 Agro-industrial parks: Experience from India. FAO, 2006

7 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

Table 1: Types of AIPs7

Classification Type Feature
Industry targeting  Specialized agropark  Focus on agro-industry
 Mixed or hybrid industries park  Several industries, including agrifood
Premises and  Intensive agro-industrial parks  Agro-industrial and logistics
services  Mixed-use parks  Agro-industrial, commercial and residential uses
 Integrated social agroparks  Community involvement and other social
features
Development  Basic agro-industrial park  Agro-industrial competitiveness
objectives  Agro techno- or science park  Innovation and technology transfer
 Agro eco-industrial park  Green agroprocessing
 Agropark with SEZ status  Special regulatory and fiscal regime
Ownership  Public agroparks  Mostly public sector driven
 Private agroparks  Mostly private sector driven
 Public-private agroparks  Public-private driven
Starting-point  Brownfield initiative  Based on existing development
 Greenfield initiative  Developed from scratch

There are both differences and similarities between Agroparks, Agricultural parks, Eco‐Industrial Parks (EIPs),
and Technopoles. However, recently, EIPs became subjects of high interest by governments and businesses,
due to their ability in providing solutions for the use of recycling, waste, and emissions that benefit the local
environment and neighboring communities. The success of AIPs in achieving their developmental goals rests
on initial key criteria that highly depend on the objectives of decision makers in each country’s context.
Generally as a model, AIPs should be adopted by governments as a tool to add value in agriculture through
processing, support a multiplicity of agrifood chains, and develop cities and their agricultural locality. In this
respect, departing from this initial criteria would render AIPs as the most efficient instrument.

The actual implementation of AIPs on a national scale includes challenges and complexities that have to be
taken into consideration and tackled through a consultation process, as well as an economic analysis process,
in order to ensure its success and the early buy-in of stakeholders. The success of an AIP depends largely first
on setting clear objectives and aligning stakeholders on these objectives. For AIPs to be implemented on a
national scale, a political will must be present to assume the responsibility of initiation and coordination.
Furthermore, the design should be based on sound economic viability that includes a cost benefit analysis to
ensure that the intended objectives (including economic sustainability), are going to be met by AIPs. A solid
design process typically combines elements of business, scientific and engineering research, that may take
the form of techno feasibility studies, prefeasibility studies, comprehensive feasibility studies, and master-
planning, complemented with process evaluations, aiming to generate further knowledge. The design of the
park encompasses location, physical design and institutional choices. Table 2 below shows some of the main
challenges and solutions related to the design phase.

7 “TERRITORIAL INVESTMENT TOOLS – AGRO-INDUSTRIAL PARKS AND SEZs”. Agricultural and Food Marketing Association for Asia
and the Pacific.
https://www.google.com.eg/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&cad=rja&uact=8&ved=0ahUKEwiMlJqN_rTRAhWmI8A
KHYE6B1AQFgg6MAY&url=http%3A%2F%2Faigaforum.com%2Farticle2016%2FEthiopia-Competitiveness-Forward-with-Agro-
Industry.htm&usg=AFQjCNF6rv4PMZdyUIvt8wEuHK5ibfTcww&bvm=bv.142059868,d.ZGg
8 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

Table 2: Agropark institutional design: challenges and solutions8

Element Challenges Solutions
Objectives  Lack of clear objectives  Conduct multistakeholder meetings to align objectives
 Objectives not consistent with the  Elaborate a park plan or clearly stating the mission,
agropark model vision and objectives of the agropark
 Significant differences between  Assess whether the park model is the right policy tool
partners in terms of objectives, to achieve the stated objectives
managerial style and other crucial
topics
Enabling  Legal framework that does not  Revise relevant legal framework to fill gaps, correct
environment and support the development of agropark inconsistencies and improve enforcement (by
Rule of Law (inconsistent, incomplete, inadequate, developing special/dedicated enforcement
not enforced) arrangements for the park, in line with its
 Wrong policies “experimental” nature)
 Political instability  Revise policies impacting agroparks
 Introduce mechanisms to prevent or cope with
political instability, or to isolate agroparks from it
Transparency,  Lack of transparent criteria and  Elaborate, publish and use transparent criteria for
equity and processes to select park operators and selecting park tenant companies and operators
inclusiveness tenants  Generate data disaggregated by origin and scale to be
 Bias against park companies on the used as decision-making inputs
basis of their origin (domestic versus  Introduce a system of checks and balances to avoid
foreign) or scale (small versus large) discriminating against companies on the basis of their
scale/origin
 Introduce a system of checks and balances to fight
against corruption
Participation and  Key agropark stakeholders not  Launch multistakeholder consultations at the
consensus involved or involved at a later stage design/inception phase to align views and objectives
building  Lack of coordination mechanisms and ensure participation and consensus
among park stakeholders  Favour governance models that ensure the
participation of public and private park actors and
foster coordination among them, e.g. PPPs
 Set up park tenant associations
 Ensure representation of farmers and other key
stakeholders in the management structure of the
agropark
 Establish high-level and/or technical coordination
arrangements among relevant public sector
institutions dealing with agroparks (interministerial
committees, focal points liaising with central and
decentralized agencies, etc.)
Responsiveness  Bureacratic burden, delays and/or lack  Set up agile governance arrangements such as one-
of response stop-shops for streamlined delivery of public services
 Privilege private sector involvement in operation and
maintenance of agroparks
Scaling-up  Too ambitious a project in relation to  Develop a concept proposal
strategy the funds available and/or the  Demonstrate a proof of concept
capacities of stakeholders for funding,  Design and implement scaling-up strategy
building and organizing the park

8 “TERRITORIAL INVESTMENT TOOLS – AGRO-INDUSTRIAL PARKS AND SEZs”. Agricultural and Food Marketing Association for Asia
and the Pacific.
https://www.google.com.eg/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&cad=rja&uact=8&ved=0ahUKEwiMlJqN_rTRAhWmI8A
KHYE6B1AQFgg6MAY&url=http%3A%2F%2Faigaforum.com%2Farticle2016%2FEthiopia-Competitiveness-Forward-with-Agro-
Industry.htm&usg=AFQjCNF6rv4PMZdyUIvt8wEuHK5ibfTcww&bvm=bv.142059868,d.ZGg
9 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

2.2.1 Setting Objectives

There is a strong emphasis that is laid on the importance of investigating the economic underpinnings of
AIPs. Economic analysis of projects and operations requires the correct identification of costs and benefits,
which are calculated based on available data and well informed assumptions. In particular, the feasibility and
Cost Benefit Analysis (CBA) are conducted in order to determine whether there is sufficient socio-economic,
financial, and technical justification to undertake the AIP’s investment.

The soundness of the feasibility and CBA will depend on the accuracy of data, the comprehensiveness of
preparatory work, and the process of decision-making with regards to the objectives (including socio-
economic considerations), the industry and value-chain focus, and selection of the location of the AIP. The
priority selection criterion should be dependent on the type of agro-industries that would meet the
developmental priority objectives and policies of the government. The priority agro-industries for the
government could be determined by, but not limited to, the availability of supply of raw materials, markets,
and labor. The prioritization should also consider the inter-industry linkages and triggering effect by analyzing
the potential linkages with existing industries that could trigger further industrial development.

2.2.2 Site Selection

The site selection for the AIP is a key strategic decision, and should be based on justified economic
considerations. Ultimately, the objectives set for the establishment of AIPs would direct the analysis required
for the location. The main elements that need to be studied are: the existing potential value-chains, suitability
and access to infrastructure, availability of enough demand, proximity to markets, raw materials (fresh
produce), and labor. Determining the availability of the land, its ownership, required size, and price should
also be considered. These data will ‘guide the overall establishment process, serve as inputs to techno-
feasibility study, feasibility studies, and the design of the master plan for the Park. Below are the
consideration/data needed in determining the best location for the AIP:

 Infrastructure facilities: The presence of power, road network, water, railways, airport terminals
and telecommunication infrastructure.

- Power –The presence of power stations, sub-stations and transmission lines within or near
the parks.

- Road network – Road network densities

- Water – The availability of water for both agriculture and industrial processing by
considering the mean annual rainfall, availability of river systems, availability of natural and
artificial reservoirs, and groundwater potential.

- Railways, dry port, airport terminals and telecommunication – Railways and dry ports to be
evaluated considering the current and oncoming national networks/projects.

 Market potential: A viable market for the products and services available in the park is essential for
the successful establishment of enterprises and the long-term commercial viability of the park.

 Access to commercial and support services: Commercial and support services such as universities,
research centers, technical vocational education and training centers; farmers’ cooperatives and
unions; and financial institutions, are very important in providing services demanded by the park.
Their proximity to the parks needs to be assessed.
10 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

 Concentration of enterprises and attractiveness for investors: The existence of an industrial base
and facilities such as import/export logistics, housing, recreation centers, schools, and other social
facilities, are very important for attracting investors/manpower, and retaining those that may
establish firms or work there. The density and proximity of these facilities should be taken into
account.

2.2.3 Economic and Financial Analysis

In order to ensure the developmental role of the AIP,
Box 2: Public vs Private
impact assessments should be included as an integral
part of the feasibility study. The effect on smallholder Agro-industrial parks range from fully public-driven to
farmers, effect on employment, and effect on fully private-driven initiatives, with most of them being
environment, are to be analyzed and substantiated by public-private driven. Leadership and role allocation
numbers, to form a key performance indictor for the among public institutions, entrepreneurs, and other
private actors, are key issues throughout all the stages
monitoring of the AIP. Roles and responsibilities of the
of park design and implementation. These include
different stakeholders should be set according to the
location selection, design and dimensioning, through
objectives of establishing the AIP. Potential options for
operation and maintenance, and monitoring and
organization, management, financing and contractual evaluation (M&E) .
arrangements (park facilities owned and operated
purely private, purely public or PPP), should be studied The park manager can be a private or public entity
in the context of the overall objective. Based on the which:
decision on the methodology to run the AIP, policies  provides infrastructure, logistics and facilities
related to the role of stakeholders, redistribution of and specialized high-quality services to tenant
gains, and costs, needs to be set. companies located in the park premises;
 fosters the creation of competition-cooperation
Conducting the full feasibility study should either be relationships among park firms;
the role of the Public Entity responsible, if the AIP is to  links park firms to academic and research
be publicly owned and operated, or the role of the institutions, so as to form and attract skilled labor
private entity, if the AIP is to be established through and improve access to innovation and new
PPP or purely private. In either cases, and in order to technologies.
estimate the socio-economic and financial costs and
revenues in the feasibility study, a techno-feasibility
study is to be conducted to guide the design of the
master plan, and provide the inputs that would affect the financial analysis in the feasibility study; mainly the
CAPEX and OPEX (e.g. suggested industries, their capacities, equipment, services, facilities, infrastructure,
equipment etc.). Following the feasibility study, the decision to establish the AIP should be based on a careful
and detailed cost-benefit analysis, in order to estimate the potential gains/losses of a park. Ideally, the
analysis must evaluate real options comparing the net present value of alternative solutions.
11 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

QALYOUBIA’S SUGGESTED
AGRO-INDUSTRIAL PARK

Taking into consideration the Egyptian agricultural and agribusiness context, and international experiences,
the applicability of the AIP concept shows a potential to succeed in addressing value-chain constraints
present in the market. Hence, the objective of this section is to present the main analysis of a techno-
economic feasibility study9 that was conducted for the purpose of establishing an agro-industrial park in
Qalyoubia governorate in Egypt. The study was further verified and a preliminary master plan was designed.
The techno-economic feasibility study’s objectives:

 Identify viable businesses that could be promoted/established at small and medium scale in the
suggested AIP land (based on a territorial mapping, as well as market and value chain analysis);

 Identify agro-processing facilities needed in the AIP, capacities, and surface area needed for the
suggested businesses and facilities (verified with industry stakeholders);

 Suggest forward and backward linkage opportunities to existing industries and recommend institutional
and informal solutions to improve relationships, communication, and networking, among existing
industries within the AIP area and between the AIP area and the market;

 Identify common facilities and services needed and advise on the business model for such facilities and
services;

 Design a preliminary master plan based on the study findings.

The following two important elements have been taken into consideration when devising this study:

 The AIP has to be part of an investment facilitation direction in agro-industries and agro-logistics with a
focus on SMEs.

 The AIP has to address the creation of an investment environment attractive to investors who are ready
to venture in a place where their corporate social values or ‘shared corporate-social values’ can be
implemented.

The methodology adopted in conducting the study included the following steps:
1. Analysis of: (i) Baseline data and value-chains; (ii) understanding of stakeholders (objectives,
concerns, and requirements); (iii) Comparative analysis to international experiences in Agro-
Industrial Parks.
2. Identification of the strategic framework of the agro-park.
3. Design of the park, including business development units (identifying agriculture & infrastructure
requirements, and recommending value-chains).
4. Identification of a model of governance.
5. Preliminary master plan.

9 The study was financed by UNIDO/GTI and conducted by D’Appolonia (full study is attached)
12 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

Qalyoubia Governorate: Key Features

3.1.1 Location
Qalyoubia Governorate is located near Cairo in the Nile Delta Region. The governorate is a central area for
some agricultural production (vegetables, poultry, milk), and its proximity to Cairo makes it a central logistic
point that supports large retailers in Cairo for fresh produce. From a logistic viewpoint, the governorate acts
as an agricultural market and a distribution platform. The governorate is a central governorate for particular
agricultural production, including, among others, vegetables, poultry and dairy.

Box 3: Key Facts: Qalyoubia

 6th governorate in terms of labor force. (4.9% of

total Egyptian workforce)
 7th most populated governorate (5,265,000
citizens)
 7th governorate in terms of contribution to total
production in Egypt (3.3% of total production in
Egypt)
 7th governorate in terms of contribution to total
added value with 2.4%
 8th governorate in terms of number of
establishments (6.5% of total establishments)

Source: CAPMAS

3.1.2 Economic Activity (Market Supply and Demand)

Agriculture and agrifood sectors are the backbone of economic activity but with different roles along the
value-chain. The Governorate occupies a position of leadership in some vegetable products with respect to
the Egyptian production as shown in the table below.

Table 3: Qalyoubia vegetable production and contribution to the Egyptian market 10

Product Production of Qalyoubia / Production of Qalyoubia /

total Egypt Lower Egypt
(%) (%)
Celery 100 100
Turnip 21 28
Strawberry 19 31
Carrot 18 20
Lettuce 17 29
Beet 14 33

Cabbage 11 9

10
Ministry of Agriculture, Economic Affairs Sector, average 2012-2013
13 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

Green peas 7 9

Cauliflower 5 11
Spinach 5 19
Squash 3 6

Qalyoubia Governorate is also a central area of production of poultry meat and eggs. Baladi chicken eggs,
improved breed resulting from the crossing of native and exotic breeds, are mainly produced in the
governorate (69.8% of all eggs) from traditional hatcheries (THs), followed by Fayoum (24%). On the other
hand, duck eggs production amounts to 11.9% in Qalyoubia, fourth market after Gharbia (38.5%), Beheira
(26.7%) and Sharqia (14.6%) governorates.

Though the production of milk is high in the governorate, the sector is still largely traditional with a majority
of the population consuming unpasteurized milk, often delivered straight to the households or through
vendors. This traditional sector is estimated to represent nearly 80% of the total milk consumers (around 74
liter/capita/year), and about 50% of the produced milk is used for cheese making.

The manufacturing activities represent the biggest share of total added value in the governorate, with more
than 78.2%, followed by wholesale trade and retail with only 10.3%11. The following table shows the
number of formal companies working in the agro-industrial sector.

Table 4: Number of Agro Industries in Qalyoubia12

Industry No. of companies/ plants

Dairy products 13

Jam and Juice 3

Fruit & Vegetables Preparation 80

Food canning (KAHA) 1

Chicken slaughterhouse and refrigeration 2

Flour mill 8

Rice mill 2

Sesame paste 5

Animal fodder 5

Pasta industries 8

Grain purification and packaging 4

Sweets, snacks and chocolate 5

On the demand side, the price index of food consumption is increasing at a rate of 4-5% annually driven by
the urban market. This means that the domestic market of Qalyoubia agrifood products is demanding a

11 CAPMAS
12 Kompass
14 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

higher quality and added services. Thus, the domestic market cannot be seen as an alternative way to allocate
lower quality products not suitable for the European market. This means a process of market differentiation
is in progress. On the opposite side of quality demanding markets, there is a food consumption pattern of
vulnerable households. These show poor dietary diversity and an over-reliance on bread, grains and roots
(consumed 7 days a week by 100% of households surveyed), with subsidized bread consumed most
frequently (6.4 days a week). Oil, butter and sugar were also consumed daily, and legumes and dairy products
consumed 5 days a week, while vegetables and fruit were consumed 6.4 and 1.8 days, respectively. Meat,
poultry and fish were consumed just over once a week, with eggs forming the main source of animal protein.
High and fluctuating food prices have compounded poorer households’ over-reliance on cheaper calorie-
dense food with adverse nutritional implications.

As with most governorates in the Delta Region, Qalyoubia is characterized by rapid urbanization and an
increasingly more affluent urban population, thus demanding and requiring more food and higher quality. In
addition, the potential of export markets and the increased role of large modern retailers require high
standards of final food products.

3.1.3 SWOT Analysis

To determine opportunities in the governorate, a SWOT analysis (presented in the below table) in addition
to a value-chain analysis to potential products, were conducted. The SWOT analysis has been carried out to
address the strategy of development of the whole agricultural area in the governorate.

Table 4: SWOT Analysis Matrix

Strengths Weakness
Strategic location: Lack of demand-driven orientation:
Qalyoubia has an ideal geographical location to Little market intelligence conducted to understand
supply shelf-life sensitive crops locally and customer demand.
internationally (Europe, Middle East, Africa). Poor promotion of exports.
Little leverage of all distribution channels to provide
Qalyoubia’s produce.
Favorable climate:
Qalyoubia has favorable soil condition, its water Lack of coordination among exporters:
supply and climate provide an open-air greenhouse Fierce competition among exporters.
for agricultural commodities. No effective body to coordinate efforts of public-private
Qalyoubia’s latitudinal span offers ideal conditions to agriculture export stakeholders.
expand growing seasons’ windows.
Transportation:
Insufficient reefer container capacity.
High air shipping prices charged by quasi-monopolistic
cargo operator.

Finance:
Access to finance might be also considered as a
weaknesses, together with limited use of contract farming
(and specific law enforcement).
Opportunities Threats
Untapped potential of small farmers: Demand-Driven Strategy Components
Large untapped potential from small growers Assess key target markets and trends.
towards export. Understand key stakeholders in the value chain.
Substantial human capital development needs for
small farmers. Product Characteristics
Understand end-customers’ tastes and regional preference
Capacity issue: for agricultural commodities in various target markets.
Inadequate educational system and vocational
training. Provide overall service level that meets clients’
expectations.
15 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

Capacity building needs for certification, traceability

and sanitary or phytosanitary (SPS). Promotion
Weak public extension services. Differentiate commodity offering through branding
association, lack of coordination may be exacerbated by a
Qalyoubia small producers have not managed to fragmented agricultural export sector.
promote their products that are often perceived as
simple commodities, with inadequate quality Product and Service Requirements of Agriculture
standards. Commodities Importers.
Associating products to the natural heritage of
specific regions. Retailers are increasingly requiring high quality products by
imposing certain certification standards, including Global
Business Development Services: Good Agricultural Practice (GAP) or British Retail
-Market Information Services Consortium (BRC) Certification.
-Technical Services
-Strategic Alliances
-Strengthen Trade Associations

Qalyoubia presents a clear specialization in production of vegetables, poultry and dairy products but the
production is quite fragmented and not organized in value-chains. Consequently, the quality is also quite
compromised compared to a demand, domestic and international, requiring higher quality and food safety
standards. Specific critical points are highlighted from the SWOT matrix as following:
 Fragmentation of agricultural holdings. Average area of less than 2 feddan/holding, and many with
1 Feddan. There is no institutional framework to address this problem;
 There is an agricultural drainage problem in most of the lands of the region due to the lack of an
open or tile drainage system;
 Agricultural extension workers’ capabilities are low;
 Youth of the region avoid working in agriculture, many of them migrate to cities or travel abroad
seeking better working opportunities, and there is a serious shortage of skilled labor in addition to
the lack of training centers;
 Poor capital available to cooperatives, consequently their inability to function on an economic basis,
and shortage of administrative and technical skills of the administrative machinery as well as of the
elected boards of cooperatives;
 Lack of specialized agricultural marketing companies, lack of sorting, grading and packaging stations,
as well as poor availability of marketing information for farmers and their inability to benefit from
available information; and
 Inability to use land as collateral to obtain medium- and short-term credit, due to problems in
obtaining title deeds.

Based on both the SWOT analysis, and value-chain analysis on the governorate of Qalyoubia conducted by
D’Appolonia Techno-feasibility study, the industries/business units that were suggested to be included in the
design of the Agro-Park as a direction based on collected data and analysis are; Dairy, Fruits and Vegetables,
and Poultry. These were examined in terms of estimated capacities that the Agro-Park can hold. Capacities
were based on assumptions that were verified from companies working in the same fields, in addition to
soliciting input on the suggested facilities to be present in the Agro-Park. Further modifications were made
on the assumptions, and the types of facilities, that were then considered in developing the conceptual
design of the Agro-Park presented in the next section.
16 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

Suggested Business Units

Based on the previous context analysis, a priority order of the business units is based on market opportunities
or gaps/bottlenecks hampering the development of the value chain within the governorate. The below tables
show the assumptions, capacities, and suggested equipment for each Unit; Dairy, Poultry and Vegetables.

Table 5: Vegetables Unit’s Assumptions:

Workforce needed Specifications Equipment
and relative
production
Assumptions

Assumption of: Focus on Celery, Turnip, Strawberry, Carrot, Coolers, chillers, toilet facilities,
1.000 farmers Lettuce, Beet, Cabbage, Green Peas, condensers, refrigeration units, washing
4Feddan /household Cauliflower, Spinach & Squash through sinks, wrapping equipment, various
5 ton / Feddan different lines of products and possibly play utensils, scales, conveyors, cling wrap,
a double role of aggregating production from net bags, polystyrene trays, cartons,
the surrounding area and as platform, adhesive labels, disposable gloves.
supporting the market in Cairo and export. High pressure processing equipment -
Main tasks: High hydrostatic pressure processing
1. Management of the cool chain to qualify (HPP) for processing industry & Ultra
the fresh produce. high pressure processing (UHP)
2. Processing the product to reduce losses
and product surplus due to short shelf life
during the season in order to stabilize the
final price
3. Improvement of the agronomic practices
to identify proper varieties and sowing or
transplanting.

Table 6: Poultry Unit’s Assumptions:

Workforce needed Specifications Equipment
and relative
production
Assumptions

About 200 small 1. Organize mobile processing of Chicken slaughters

farmers local poultry breeds in cool chain For daily or weekly usage directly in farms
2.000 broiler / to facilitate small farmers to inn or to be distributed to local market.
breeding per cycle; reduce the market of live animals Structure:
4 cycles of production 2. Improve feeding by managing and Electronarcosis dazer, Funnel shaped
per year; 2 Kg of stocking local production of grains slaughterhouse with blood holder,
weight per broiler (maize, soybean) Scalding tank (birds) or hides container
3. Specialized milling for animal feed (rabbit), Ultimate bird plucker machine,
Double basin with knives sterilizer,
Conveyor with suitable hooks,
Evisceration and washing station, Packing
table, Refrigerated room for dazing and
storage.
17 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

Table 7: Dairy Unit’s Assumptions:

Workforce needed Specifications Equipment
and relative
production
Assumptions

200 farmers Requires modern facility of cool chain and The milk / mini-dairy transformation unit
Production of 20 two isothermal vehicles includes machines realized in full
liters / day per cow Facility split into compliance with norms that regulate the
per 10 months in a • Area for milk receipt milk processing. The unit offers the
year for a total of 6 • Area for laboratory analysis and possibility of pasteurizing and bottling
tons of milk per quality control milk for direct sale and to transform it in
year per cow; 3 • System for milk transformation order to obtain dairy products.
cows per household • System for seasoned cheese The mini-dairy is composed of:
• Cheese Salting Area Electrocoagulator of different types and
• Area for packaging & labeling capacity, Electroagitator, Trolley electric
pump, Curdled milk conduit, Molding and
stewing trolley bath, Shelf holding fresh
cheese, Shelves for maturing cheese,
Vapor suction, Refrigerated room.

Further analysis was conducted to verify the assumptions with industry stakeholders, and accordingly the
capacities, and thus the areas needed were estimated to the above. In addition, the consultations conducted
in that area revealed the potentiality of adding a Bio-gas unit, which would entail the park to be Eco friendly.
By having a biogas unit from waste (industrial waste and waste water), the park will be self-independent in
fuel and electricity, in addition to having fertilizers as a byproduct. Consultations have also revealed the
potentiality of having a market area inside the park in order to have an integrated value-chain. In terms of
suggested facilities and services, besides the utilities:
 Labs for quality controls: The presence of a laboratory is important in an industrial area to support
the application of international standards of quality of food safety.
 Changing rooms and toilets for personnel: Each business unit and also the labs include a changing
room and washing facilities for the personnel.
 Mobile units for semi-processing on site: The mobile unit can be moved and each day based in a
different area. About 15-20 small farms in the surrounding of the area can benefit from the service
in a day, for a total of 70-100 SMEs per week. Every 20 days, the processing unit can complete the
tour covering about 250-300 SMEs.
 Other services that were recommended through consultations: OSS-Operations support system,
Logistics Centre, and Utility Management and General Maintenance and Repairs.

Below are representations of the Units in the Park, and the input-output flow:
18 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

Figure 3 Cycle of the Agropark

19 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

Agro-Industrial Park Location in Qalyoubia: Main Features

The available area allocated to the park is 50 Feddans (about 210,000 m2), publicly owned by GAFI. The land
is directly adjacent to the new regional ring road currently near completion, which provides the ability to
boast efficient communication and transportation abilities, as well as competitive advantage in its
infrastructure facilities. The distance of the Agropark from key locations is another advantage when analyzing
the location. The distance from ‘downtown Banha’ is 4km, and with the completion of the regional ring road,
the access to all major cities and ports are going to be within few kilometers, giving the industries inside the
Park a strategic advantage. After the completion of the regional road, the distance from the Pak to ‘Cairo
airport’ is going to be 66km, to ‘Suez road’ 78km, to ‘Suez port’ 160km and to ‘Alexandria’ 170km.

Figure 4 Location of the Agropark in Qaliobeya

Assumptions for the Qalyoubia’s Agro-Park Conceptual Design

The area allocated for buildings is 60% of the land, based on information gathered from the Governorate.
The businesses considered to be hosted in the Park were based on the available production of inputs and the
value-chain analysis conducted. The Units’ areas were estimated based on the suggested capacities that were
based on the available inputs, as shown in the table below (minimal modifications were made when designing
the master-plan to reflect the actual area):

Area Assumptions Actual area

(m2) (m2)
Total Land Area 210,000 210,123
Roads and Landscape 35,000 34,578
Common Service Areas 45,000 53,756
Cold Storage 15,000 15,856
3 stories building
5,000 5,263
R&D and Admin Offices including labs
FG Warehouses 10,000 17,550
Local market Area 15,000 15,088 20 outlets
Services & Utilities 2,500 2,785
Biogas & Waste Management 30,000 27,705 5 MWH
20 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

Production Areas 97,500 91,300

One processing factory
Dairy 30,000 22,407 plus tanks
One factory + slaughter
Poultry 35,000 34,758 house
Fruits & Vegetables
Processing 17,500 16,300 One or more units
Packaging Facilities 15,000 17,836 Units

As indicated in the previous sections, two major modifications were added to the preliminary suggested
business units and facilities, those are: a Biogas and Waste Management Unit and Local Market. The main
business units that the agro-park will focus on are processing, packaging and storage for the 3 main facilities
of dairy, poultry and vegetables. These units are operated using services such as electricity, water sanitation
for processing, waste disposal, labs for quality controls, changing rooms and toilets, animal feed, and mobile
units for on-site semi-processing. The administrative building will include offices for marketing, R&D and
innovation, human resources and management. The waste obtained from the three main units will be used
to generate energy production through biogas units, and having fertilizers as a byproduct, which will be a
self-sustaining cycle for the agro-park.

Conceptual Layout for the Agro-Industrial Park

The master plan developed focused on the main processing units such as dairy, fruits & vegetables to be
centered inside the agro-park, with the surrounding lots dedicated to packaging, ware housing, retail and
biogas waste management. The design criteria looked at grouping of related functions together, while
minimizing the internal roads network to provide clear and smooth accessibility to all plots.

The design objective was focused mainly on four points. A) “Flexibility”: Reaching a flexible master plan that
provides an easy expansion for most of the function plots “modularity”. B) “Efficiency”: Making the most
possible benefits from the site area in the most efficient way. C) “Well Engineered Planning”: Overcoming
site limitations, and making the best use possible from site exposure. D) “Sustainability”: To make the best
rational benefits from site recourses, with a wise understanding of the importance of good orientation of
buildings providing self-shading. The design took into consideration renewable energy technology
implementation, and environmentally cautious water treatments, encouraging the use of recycled materials,
and creating a comfortable overall urban/ architectural environment.
21 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

Figure 5 The Master Plan of the Agro Park

22 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

The main design concept is to provide a “single internal transportation ‘one way’ system” that connects all
functions. In the same time, it provides flexible maneuvering connections wherever needed to cut the
vehicular trip time within the site premises, while considering the nature of the functions in order to avoid
air and noise pollution on site. A one-way circulation internal road was provided to arrange for an
uninterrupted connection for all facilities smoothly and with no traffic nodes, considering that parking lay-
bys will be provided within every facility to avoid blocking the internal road circulation.
Also, there are only two connections with “two way circulation” that act as a short cut for the vehicular trips
within the site limits. Furthermore, there is a separate entrance/exit road with proper parking for the local
market area, which facilitates accessibility for visitors with no interruption on the site’s internal traffic
network.

The orientation of the units have been decided where all malodorous functions are allocated in the far
south/south east direction, whereas bio gas generation and water treatment facilities are allocated to the
south direction. Packaging and storage facilities are allocated at the northern area of the site. All the common
services (“cold storages”) are allocated in the middle to be accessible to all functions, and to minimize the
energy supply cables from the Bio-Gas energy generation areas. All fruits and vegetables are allocated in the
middle, with direct connection to both cold storages and to packing facilities, while dairy facilities are also
allocated in the middle, but with a close connection to cold storage and to packing facilities.

Suggested Management Structure

Regardless of the specific corporate structure, an agro-park should be based on a close private-public
partnership (PPP). The private sector plays the role of competing as enterprise and managing operative
marketing actions. The public sector has to create the condition of long term competitiveness by supporting
innovation, marketing trust, at international level, and local social spillover improving human resources.

The structure of the park should be managed through a simple hierarchal pyramid led by the CEO, heading
the marketing and training director, sales director, utility manager, and Chief Financial Officer (CFO). The
effectiveness of the organization, however, stands in its ability to have representative membership to be able
to tackle directly and fast any concerns. Therefore, a steering committee comprised of elected
representatives from the industries in the Agro Park, along with an IDA/GAFI representative, and the CEO,
will lead the board.
23 INTEGRATED AGRO-INDUSTRIAL PARKS IN EGYPT

Value-added of Qalyoubia AIP

Besides the added financial value, a social-economic value has to be considered as well. The value of the park
is thus direct and indirect:
 Direct values: price stabilization; reduction of loss of fresh product; higher market positioning for
price and for market share (facing modern retailers). It is estimated that the added-value of products
could rise at 20%.
 The target is building the capacities of 200 skilled workers and an additional 200 positions in services,
logistics and spillover economy. Indirect values: shift of jobs from low skilled farm work to higher
skilled work in processing and managing value-chains; creation of job positions for higher educated
technicians and managers. Wages would be 30% higher. Also, farmers will be driven to improve their
work conditions, making farming more attractive for youths as well.
 About 1.000 household farmers will benefit from the facilities to be organized in small
co-ops of 30-40 members each.
 Improvement in the quality of work in farmers and environmental effects: the application of
standards of good agricultural practices such as Global GAP13 (AF 3. Workers Health, Safety and
Welfare; AF 4. Waste and Pollution Management, Recycle and Re-use; AF 5. Environment and
Conservation) to match the European retail standards, will facilitate the international market access
and the quality of work and environment as well.

13 http://www.globalgap.org