Egypt’s Investment-Friendly Policies Shape Growth of Country’s Paints and Coatings

Egypt’s economy has been on a rebound as the recent government-driven economic incentives meant to entice foreign and local investments begin to bear fruit. This is evidenced by a steady surge in project funding and expansion of existing businesses across sectors, including industrial manufacturing, such as in paints and coatings.

Analysts estimated Egypt’s economy expanded by 4.4% in 2025, equivalent to an 83% increase compared to the previous year’s growth of 2.4%, driven largely by impressive performance of several market segments, including information technology, tourism and industrial production.

According to the African Export and Import Bank, “Egypt continued to drive the regional disinflation trend, with inflation falling to 20.4% from 33.3% as currency stabilisation and lower import cost pressures took effect.”

Government Monetary Policies

This economic performance is partly credited to the government’s deliberate fiscal and monetary policies that have shaped the latest foreign direct investments, inflow of project financing and expansion of industrial operations, especially in the manufacturing sector.

For instance, Egypt’s current Investment Law (Law No. 72 of 2017) gives multiple incentives to local and foreign companies investing in any economic sector. This includes investors being exempted from the stamp tax, notary fees, registration of the Memorandum of Incorporation of the companies, credit facilities, and mortgage contracts associated with their investments for at least 60 months from the date of official registration.

Some government-driven incentives are of a special nature, such as businesses that were established within three years of the date of the issuance of the Investment Law (Law No. 72 of 2017) “enjoy a perpetual deduction from their net profit subject to the income tax.”

The government also deducts up to 50% of depreciated investment costs from taxes, infrastructure fees, and cost of lands for projects in regions the government has identified as most in need of development, as well as designated projects in designated regions, particularly the Suez Canal Special Economic Zone and the “Golden Triangle” along the Red Sea between Safaga, Qena, and El Quseer. However, businesses in other areas in Egypt get a similar deduction but determined at 30% deduction.

Egypt, which is a member of the World Trade Organization (WTO),  the African Continental Free Trade Agreement (AfCFTA), the Greater Arab Free Trade Area (GAFTA) and the Common Market for Eastern and Southern Africa Free Trade Area (COMESA), “is increasingly focused on attracting FDI and has stated its intention to create a more conducive business and investment environment” according to the US International Trade Administration.

Egypt’s Paints and Coatings Industry

Egypt’s paints and coatings industry is among the economic sub-sectors benefiting from the country’s latest economic boom, with two of the leading market players attracting project financing as the other reporting ramping up its investment in Egypt by US$100 million in the last three years.

International Group for Modern Coatings (MIDO), a manufacturer of specialty paints and coatings has recently received a financial boost after private debt investor Vantage Capital, which is one of Africa’s largest mezzanine debt fund managers, announced a US$ 45 million of mezzanine debt funding for debt refinancing and working capital funding, enabling the company to unlock its production capacity.

“By unlocking MIDO’s production capacity, Vantage Capital’s investment will directly support the generation of hard currency inflows into Egypt while creating skilled employment across manufacturing, research & development, sales, and logistics, contributing to job creation and skills development in Alexandria and beyond,” the fund manager said in a statement.

Company CEO Ibrahim El Shamy, who unveiled the new production of the Passive Fire Protection (PFP) products in Egypt, said that with the latest company investments, the company’s exports’ quality and quantity have increased, especially to key markets including  Libya, Kenya and the United States.

The MIDO financing has been announced as another leading market player, Jotun Egypt, revealed it has, in the past 36 months, invested US$ 100 million in a new manufacturing facility in 10th of Ramadan City in the Sharqia Governorate, and which is said to be the most industrialized in Egypt.

For MIDO,  which operates two state-of-the-art, vertically integrated manufacturing facilities in Alexandria, encompassing a total area of 47,100 square meters and a combined production capacity of over 100,000 tons per annum, the new financing will not only ease the company’s current debt burden but inject new vitality in its manufacturing performance across production segments, including automotive refinish paints & coatings, wood coatings, unsaturated & saturated polyester resins, adhesives, and other industrial products.

Vantage Capital, in a statement detailing the transaction, said the current MIDO management, including founder and chairman  Dr. Aly Ghaly and CEO Ramy Galal, “will continue to lead the business following the transaction, combining deep institutional knowledge with broad functional expertise.”

The fund manager recognized the role Dr Ghaly has played in the growth of MIDO “from a small local workshop into a fully integrated, export-oriented industrial platform.”

Vantage said it is optimistic the transaction will “drive meaningful economic and social impact across Egypt and the broader African continent.”

MIDO’s CEO Galal is excited about the injection of new financing into the company, saying the funding “gives us the firepower to unlock substantial latent capacity in our facilities and accelerate both our local and export growth ambitions.”

 He lauded MIDO’s management team founders, who he said have in the last 50 years “built MIDO into a business that competes on technical complexity, product quality, and the breadth of its offering across a diverse range of markets.

“Our key differentiators are our manufacturing infrastructure, R&D capabilities, distribution relationships, and strong brand equity,” he added.

MIDO’s growth strategy and innovation were a key factor in Vantage Capital’s decision to provide US$45 million in combination of debt and equity, with the fund manager’s associate partner Omar Gharbawi saying the Egyptian coatings company “is a case in point of a successful, homegrown pan-African industrial platform.”

“Management has built the company from the ground up into one of Egypt’s top three specialty coatings players, with products now sold in more than 50 countries.”

He said that as MIDO embarks on the next phase of growth, the company has demonstrated resilience through some of the most challenging macroeconomic and geopolitical headwinds, underpinned by strong fundamentals and deep industry expertise, and is only beginning to realise its full potential.

The Vantage Capital financing for MIDO comes less than one year after another Egyptian paints and coatings company, Delta Holdings, announced investment from a consortium of investors – including SPE Capital, through its SPE PEF III fund, Proparco, and Amethis via its MENA Fund II.

Delta Holdings, an Egypt-based manufacturer of specialty additives for the paint and coatings industry, said the investment would be utilized in broadening its product offering and accelerating its export-oriented initiatives.

Meanwhile, Jotun Egypt, a subsidiary of the Norwegian-based multinational chemical group Jotun, seems to have taken advantage of Egypt’s increasingly friendly investment policies to invest US$ 100 million in the past 36 months, particularly in 10^th of Ramadan City, located in the central southern part of East Nile Delta.

Jotun Egypt CEO Ibrahim El Shamy, who spoke during the launch of the company’s SteelMaster product, said the company is committed to increasing its investments in Egypt and making the country into its manufacturing hub for serving the African market.

He estimated company exports from Egypt, including paints, marine coatings, and protective coatings, to have increased by 50%, including to its key buying markets in Africa and North America, promising to explore additional international markets for its products in the near future.

With Egypt still fine-turning its investment policies to attract more local and foreign funding to grow its chemical manufacturing sub-sector, the country’s paints and coatings market appear destined for phenomenal growth even as the economy expands triggering a surge in construction projects across this country of 120 million people.