Egypt most attractive emerging market for Midlands manufacturers

Egypt has been identified as the most attractive emerging market for Midlands manufacturers to invest in, based on an assessment of potential risk and reward, according to the annual PricewaterhouseCoopers EM20 Index. The Middle Eastern country replaces Vietnam, which topped the Index last year and this year achieved 5^th position.

After Egypt, Bulgaria and Serbia are ranked second and third, with Romania in seventh place. Those three countries make up a ‘golden triangle’, as they also feature in the top ten of the services index, which is headed by Poland. The PricewaterhouseCoopers EM20 Index report notes that while there are still downsides to these markets in terms of infrastructure and governance issues, south east Europe deserves to be given serious attention as a region with considerable potential.

The EM20 Index is a unique model, developed by PricewaterhouseCoopers economists, which seeks to assess the attractiveness of emerging markets around the world for overseas investment, based on an analysis of both risk and reward. The Index is designed to support businesses in deciding where to invest.

Sue Rissbrook, partner and emerging markets specialist at PricewaterhouseCoopers LLP in the Midlands, said:

“The purpose of the Index is to give businesses in the region a good initial view of their options when it comes to overseas investment, on a global scale.

“Most companies in the region will be familiar with the benefits that can be gained by setting up manufacturing facilities in places like India, China and Eastern Europe. However, relatively few are likely to have considered the potential gains that could be achieved by investing in smaller, developing economies in places like Egypt, Serbia and Vietnam – all of which offer excellent investment conditions, based on an analysis of risk and reward.”

For manufacturing companies seeking to invest in businesses overseas, low production costs are a key requirement, which is generally indicated by a low GDP per capita. Other important factors to consider are political risk, which may be greater in countries where there has been recent unrest, proximity to market and corporate tax rates.

Businesses seeking to establish services overseas, as opposed to manufacturing facilities, will need to consider different criteria when choosing the right place to invest. In such cases higher GDP per capita rates are likely to be more attractive because they are likely to have more established domestic markets. The Index reveals that the top five most attractive locations for investments in services are Poland, Chile, Russia, Romania and Bulgaria respectively.

Contact details
Email: Sue Rissbrook
Tel: +44 (0) 121 265 5294