Power Hungry Egypt Presents Huge Market Potential for LED Manufacturers

Egypt is Africa’s third largest economy, and the largest consumer market in Middle East and Africa. It is also one of the fastest growing emerging markets and economies. Egypt has signed free trade agreements with Middle East and other African countries indicating foreign investors in Egypt will also have access to neighboring regional markets. Potentially, the Middle East and African region combined has billions of consumers. Additionally, Egypt has a large volume of cheap labors.
In regards to market size, the Egyptian government plans to save up RMB 20 billion (US $3.14 billion) in energy subsidies by 2020. The proposed subsidies are used to lower costs, and to make energy facilities more energy efficient.

Lighting’s energy consumption amounts for 25% of the country’s energy consumption, while household and commercial lighting consumption makes up the majority 73%s. Hence, the country hopes to turn to professional smart lighting solutions to replace traditional lighting applications and reduce energy.

Egypt plans to roll out a massive lighting upgrade after 2020, and use energy efficient products to replace traditional lighting. Government buildings, residential lighting and other regions and governorates outdoor lighting will all be replaced with LEDs. The country has procured 250 million LED bulbs for residential lighting applications. In addition, the government has promoted other LED lighting projects.

The country’s Ministry of Electricity Energy will be issuing 1.7 million LED bulbs within the next four months, according a report from The Cairo Post in June this year. These bulbs will be distributed to nine provinces in Egypt, and believed to be one of the solutions to the country’s energy crisis issue.

Severe power shortages have become frequent in the country in the aftermath of the Egyptian Revolution in 2011, and locals are becoming accustomed to two to three blackouts per day.

Ministry of Electricity Energy is recommending public to use LED bulbs instead, and keep air condition temperatures above 25°C. At the same time it has asked public to refrain from operating multiple electronic equipment at the same time to help the country conserve energy.

Egyptian government has promised it will be providing a part of these subsidies. Since they need to reduce their costs, benefits of the subsidies will be optimized.

Additionally, manufacturers that establish factories in Egypt will be able to tap into a market with potentially 1.6 billion consumers, since the country has signed tariff free agreements with countries in Europe, Middle East and Africa.

This is also to imply that the production of sapphire used to produce LED film will go up accordingly.

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