“A Shared Future”
(October 23 – 25, 2018)
AmCham Egypt in conjunction with the U.S Chamber of Commerce, the U.S.-Egypt Business Council and the Egypt-U.S. Business Council, organized a major U.S. Business Mission during the period from October 23rd through October 25th. With more than 110 business leaders representing 44 companies participating, this sizeable group demonstrated the U.S. business community’s commitment to the bilateral relationship and its optimism for the country’s future given the positive momentum witnessed following the economic reform measures adopted by the government in close collaboration with the International Monetary Fund.
The delegation was accompanied by Sarah Kemp, Acting Deputy Under Secretary of Commerce; Greg Lebedev, Senior Advisor to the president and CEO of the U.S. Chamber; and Khush Choksy, Senior Vice President for Middle East and Turkey Affairs at the U.S. Chamber.
Leaders from the Egyptian side included Tarek Tawfik, President of AmCham Egypt and Omar Mohanna, Chairman of the Egypt-U.S. Business Council.
Furthermore, the delegation included senior representation from the U.S Trade and Development Agency as well as the Overseas Private Investment Corporation (OPIC), among others.
During their visit to Egypt, the delegation acknowledged Egypt’s proactive steps towards creating a business friendly environment, underscored the longstanding commitment of the American business community to Egypt’s long-term stability and prosperity; and explored prospective investment and business opportunities.
On October 23rd, members of the delegation met with President Abdel Fattah El Sisi. Also attending were members of the Egyptian Cabinet. During the meeting, the delegation praised the reforms adopted by the government to boost economic activity and attract investment, and expressed their aspiration to expand their presence in the country.
The meeting was followed by a special session titled “U.S. Corporate Impact on the Community.” It featured welcoming remarks by U.S. Charge’ D’Affaires, Thomas Goldberger and Keynote Address by Egypt’s Minister of Social Solidarity, Ghada Waly. During the event, Waly shared the government’s efforts to combat poverty and unemployment. This was followed by a series of presentations by major U.S. Companies participating in the Mission, including Apache Corporation, Microsoft, MasterCard, Pfizer, and PepsiCo, who highlighted their corporate sustainability programs.
The day ended with a special welcome dinner reception hosted by Marriott International at the newly acquired property, Marriott Mena House. The reception was attended by members of the delegation, Members of the Egyptian Cabinet, diplomats as well as select AmCham members.
The following two days witnessed a number of events hosted by AmCham Egypt jointly with its partners, including ministerial panels featuring: Ministers of Planning and Follow Up, Public Business Sector, Supply and Internal Trade, Finance, Military Production, Petroleum and Mineral Resources, and Information and Communication Technology, as well as a keynote address by Egypt’s Prime Minister. These events were open to the entire membership to attend.
Furthermore, a number of closed meetings and breakout sessions were held for the delegation with several ministers and government officials including Ministers of Supply and Internal Trade, Information and Communication Technology, Health and Population, and Tourism. In addition, a limited roundtable meeting was held with key members and heads of committees at the Egyptian Parliament.
Mission events were attended by more than 2,500 members and guests, including government officials, diplomatic corps representatives, business associations, parliamentarians, academics, in addition to well as select media representatives.
A special session addressing “Project Financing: Opportunities for Private Sector Engagement” was hosted on October 24th. Panel participants included senior representatives from the Overseas Private Investment Corporation, the U.S Trade and Development Agency (USTDA), the European Bank for Reconstruction and Development (EBRD), and the International Finance Corporation (IFC).
The final day began with a delegation visit to the new Investment Service Center and the Suez Canal Economic Zone, hosted by Minister of Investment and International Cooperation, Sahar Nasr. Members of the delegation listened to a presentation by Nasr on Egypt’s efforts to promote foreign direct investment, the investment map, and the new economic zones. They also met with Admiral Mohab Mameesh, chairman and managing director of the Suez Canal Authority, who shared latest developments in the Suez Canal Zone.
Minister of Social Solidarity, Ghada Waly
The government’s plan to halve Egypt’s reduce the poverty rate by 2020 and eliminate it by 2030 presents many opportunities for the private sector, explained Minister of Social Solidarity, Ghada Waly. “At the very least,” she said, “corporate social responsibility (CSR) efforts will be more focused and therefore have a greater impact.”
Waly illustrated the ministry’s different projects, starting with the development of a complete database in 2014 of Egyptians in need of aid. “This allowed us to create a poverty index, which is important in matching the needs of eligible individuals to existing ministry programs,” she said. The index helped eliminate redundancies, allowing the ministry to build more efficient programs, and help private sector CSR initiatives better target low-income families.
The minister also discussed the changes to the distribution of cash assistance. “With the Takaful and Karama programs, we moved from an unconditional cash transfer program to a conditional one,” explained Waly. “This makes our support go where we want, which is building human capacity by giving those eligible access to healthcare and education.”
Other ministry programs include feeding 11 million students; distributing more food ration cards, with 67 million already in circulation; adding 2.5 million families on top of the current 1.6 million to the cash assistance program; and building 200,000 social housing units.
Furthermore, she highlighted the Forsa program, implemented in eight governorates, which links businesses with skilled workers.
Waly emphasized the ministry is open to cooperating with private businesses in any of these programs. “For example, food companies are welcome to supply food in the school feeding program,” she said, singling the Adopt a Village initiative as the project with the most partnership potential, where the ministry matches businesses with NGOs to help improve living conditions in small cities. “The initiative would see companies pay 20 percent of development costs,” she said, “while we contribute 80 percent.”
Private Sector Efforts
With a massive global scale and undeniable role in social responsibility and economic growth, U.S. companies are irreplaceable partners in the development of Egyptian communities. “What distinguishes [U.S. companies] is their focus on being good citizens wherever they operate and contributing to societies in which they invest,” said Thomas Goldberger, chargé d'affaires at the United States Embassy in Cairo. “They do this in the spirit of service to their customers and society.”
Such involvement has made U.S. companies in foreign countries part of the social fabric, commented Steve Lutes, executive director of U.S.-Egypt Business Council. “It is an important story to tell. U.S. companies play an important role in (President Abdel Fattah el Sisi’s) vision of benefiting the Egyptian people,” he added.
One example is Apache, whose Springboard initiative has educated schoolgirls in rural and impoverished areas for 15 of the company’s 22 years in Egypt. According to David Chi, regional vice president and general manager of Apache Egypt, the program has taught more than 10,000 girls to read and write. Of those, 2,200 have gone on to middle and high school. Moreover, Apache has eight schools for more than 350 Bedouin girls in locations where it operates. Other social initiatives include orphanage support, teaching orphans vocational skills, securing clean water, upgrading sanitation infrastructure, and petroleum engineering scholarships.
PepsiCo Egypt focuses on finding future football stars. According to Chairman and CEO, Mohamed Shelbaya, 12 players on the national football team, including Liverpool striker Mohamed Salah, were discovered while playing in the Pepsi Schools League. Each year, 75,000 students compete in 278 matches nationwide, with one team emerging as the winner. “We have scouts, who are ex-football players, looking for talent in every match,” noted Shelbaya. “We nourish them until they hit their stride.” In 15 years, the program has graduated 1 million players from 5,500 schools.
Meanwhile, Pfizer cooperates with the Ministry of Health on treating trachoma, the world’s leading cause of preventable blindness. “This disease appears mostly in impoverished areas and is contagious,” said Oualae Alami, vice president of Pfizer Egypt, Levant, and Iran. “In Egypt, there are 1.8 million infected people. Through this cooperation, we aim to eradicate 80 percent of the disease using antibiotics.”
Similarly, MasterCard Egypt has signed an agreement with the Central Bank of Egypt (CBE), several commercial banks, and telecom operators to build a mobile platform for transactions between banked, unbanked individuals, and institutions. “This will make it much more convenient to execute transactions, thereby increasing the growth and competitiveness of [institutional] users,” said Omar el Moataz, business development director at MasterCard Egypt. “With mobile penetration over 100 percent of the population and 85 percent of them unbanked, digital transformation can really make a difference.”
Finally, Microsoft Egypt has agreements with various government agencies to digitize their operations. “We were heavily involved in the last population census by CAPMAS,” said Azza el Shinnawy, the company’s director of public sector business. “We are working in line with the Digital Egypt government initiative.” Other efforts by Microsoft Egypt include philanthropy work and a tech training agreement with the Ministry of Youth that includes 1.4 million young people.
Private Sector International Funding, Locally
Aside from domestic commercial banks, international multilateral financing institutions see huge potential in helping companies invest more in Egypt.
The IFC, the private sector arm of the World Bank Group, specializes in business loans, equity investments, and other tools. Its global portfolio stands at $40 billion, with $1.5 billion in Egyptian infrastructure, financial institutions, non-bank financial institutions, and manufacturing. The IFC offers advisory services in such areas as corporate governance, said Walid Labadi, IFC country director for Egypt, Libya, and Yemen. “We find [that the] partners that want to invest in Africa or Asia come to us because we can help them build their business through our connections,” he noted.
To qualify for funding, he explained, the IFC looks for “viable projects where there are business plans and people are advanced in their thinking and [know] where they want to go.” In addition, the minimum loan is $10 million. “After the devaluation, it has become harder to find [domestic] companies that can take on that amount of debt [...] but I am sure we can identify more who can work with us,” he added.
Another financing institution with Egypt on its radar is the OPIC, a U.S. government agency that helps U.S. businesses tap into emerging markets. According to William Pegues, OPIC director for structured finance and insurance, the agency’s loan portfolio is $24 billion and represents 95 countries. Egypt accounts for $800 million of that, which is invested in SMEs and housing. This is in addition to around $750 million worth of investments in the pipeline earmarked for projects such as gas-firing projects and renewable energy stations.
Not all companies are eligible for OPIC funding. “There is a U.S. connection requirement because our mandate is to help deploy U.S. capital investments in the markets where we work,” said Pegues. Looking ahead, this condition has become “less stringent” after a legislative update that doubled the OPIC investment ceiling from $30 billion to $60 billion.
The USTDA is another government entity similarly working with a large budget. “This means more resources will be allocated for countries in the Middle East and North Africa region (MENA),” said Carl Kress, USTDA regional director for East Asia, MENA, Europe, and Eurasia. The USTDA connects American and Egyptian businesses and government officials via trade missions. Additionally, it funds feasibility studies, pilot projects, and technical assistance. “This budget can be anywhere from $400,000 to $900,000, depending on the project,” said Kress.
The USTDA specializes in transportation, including aviation and railroads. However, it also has programs for oil and gas infrastructure development, as well as information and communication technology projects such as data centers, cybersecurity, and undersea cables.
According to Kress, eligible projects must be national priorities with the potential for significant U.S. content, valued at more than $10 million, and not compete with other American companies. “Clients don’t need to have a financing agreement when they first come to us. However, they need to come with some vision of how the project will be financed,” he added.
Lastly, Khalid Hamza, EBRD’s associate director, said his bank has private sector clients in 38 countries. “Egypt is the bank’s largest country of operation,” noted Hamza, with EUR 1.4 billion ($1.59 billion) in investments in 2017 and a similar figure expected this year. “We focus on infrastructure, the financial sector, corporate loans, and SMEs,” he said, pointing out that 33 percent of the EBRD’s portfolio is in energy projects, 29 percent in infrastructure, and 12 percent in industry and commerce.
The bank offers loans, equity instruments, and trade financing, among other commercial tools valued at $1 million to $500 million. “We have a diverse clientele with very different needs,” he explained, adding that the EBRD is expanding its footprint in Egypt. “We are soon opening offices in Alexandria, Ismailia, and Upper Egypt.”
Minister of Public Sector Enterprises, Hisham Tawfik
Overseeing all commercial operations owned by the state, Hisham Tawfik, minister of Public Business Sector, looks to transform a sector that spans eight holding companies, 121 subsidiaries, and 300 joint ventures. “From day one, I mandated that the head of every holding company do an extensive SWOT (strengths, weaknesses, opportunities and threats) analysis,” said Tawfik. A month later, the ministry announced a plan to restructure the sector.
Tawfik divided these state-owned companies into three categories. The first of which includes 48 loss-generating companies. These reported a total net loss last fiscal year of EGP 7 billion and negative net worth of EGP 39 billion. “We took the 26 enterprises with the most losses—combined they accounted for 90 percent of the total—and came up with a very specific plan to recover them,” he added. “An initial estimate indicates we need EGP 2 billion.”
The remaining 73 profitable companies, which made a total of EGP 15 billion last fiscal year and had a net worth of EGP 69 billion, were divided into two categories. “There were those that had the potential to significantly increase their revenue with a revised strategy, while the rest were deemed ready to go public,” Tawfik said.
The minister emphasized that the Egyptian and U.S. private sectors are welcome to work with the ministry as it attempts to save struggling companies or significantly improve those with profitable potential. “Our plan calls for various strategies for turning around companies,” said Tawfik. “They range from a simple overhaul to full renovation to full modernization.”
Negotiations are ongoing with SAP, Microsoft, and Oracle on development of a networked computer system for all state-owned enterprises, according to Tawfik. Moreover, he is talking to information and communication technology companies to develop e-ticketing, e-booking, and e-marketing solutions for state-owned Misr Travel.
Minister of Planning, Administrative Reform, and Follow-Up, Hala el Said
“Egypt was suffering from major economic imbalances less than two years ago,” said Hala el Said, minister of Planning, Administrative Reform and Follow-Up. “At the time, the government was very consistent and embarked on major structural reforms that helped the country regain its macroeconomic balance.” She highlighted how quickly inflation dropped from 32 percent to stabilize at about 15 percent as of September. “Our economic growth nearly doubled since the reforms, and it came from all sectors. This is balanced and diverse growth,” el Said added.
Among the biggest opportunities for private sector involvement are government-led national project investments. They include the New Administrative Capital and Suez Canal Economic Free Zone, as well as the world’s largest solar park at Benban village in Aswan Governorate. In addition, there are many investments in infrastructure elsewhere, including extending roads, the national electricity grid, and building other new cities. “These investments increase Egypt’s competitiveness and credit ratings,” said el Said. “Any investor needs a good road network, energy facilities, and ports.”
She cited how legislative reforms aim at significantly reducing bureaucracy via a new civil service law. “This will be simultaneous with digital transformation of government processes and services,” el Said said.
Furthermore, a national training academy was launched to develop the government’s workforce. “We had long suffered from random capacity building efforts that were neither efficient nor effective,” she said.
Finally, to entice foreign investors to come to Egypt, according to el Said, the country’s first sovereign wealth fund was created. “We want to maximize the use of local assets,” she explained. “The fund will invest across all sectors where profit and development can be achieved. It can set up sub-funds and companies to cooperate with the [local and foreign] private sector on certain national projects.”
Minister of Supply and Internal Trade, Ali el Moselhi
Cooperating with the Ministry of Supply and Internal Trade to address investors’ concerns may prove invaluable. A major concern is the lack of infrastructure to promote domestic commerce, which Minister of Supply and Internal Trade Ali el Moselhi believes is the reason for high produce prices. Another concern is maintaining at least a three-month supply of commodities, many of which remain heavily subsidized. Further, Egypt imports half of its food needs and 90 percent of its oil, according to el Moselhi.
In addition, the minister also highlighted great potential for partnering with private companies when it comes to converting the current umbrella subsidy program to a cash payment, targeted system. “We are committed to building a national switch infrastructure for subsidy cards, as well as increasing financial inclusion among individuals,” said el Moselhi. “This is a national project that needs to be done now. Its benefits for the country will outweigh the costs, no matter how high they are.”
Another area of huge potential is expanding the number of monitored and structured wholesale markets across the nation. “It is hard to believe that in a market of 100 million people, only four wholesale markets exist,” he noted. Two of them are around Cairo, one in Alexandria, and another in Ismailia. “We also don’t have proper logistics hubs with proper automation and mechanization. Not even at the ports,” he said. Currently, the ministry has finalized a master plan to promote internal trade. It includes internal and international logistics parks to send and receive goods from abroad, and more structured wholesale markets in Upper Egypt and the Nile Delta. Perishable goods trading would benefit the most from these investments, according to el Moselhi.
“Investors working with us on these projects will not have to worry about dealing with the administrative side of the government,” he stressed. “We will handle all the paperwork and licensing at our end.”
Minister of Finance, Mohamed Maait
After years of uncertainty and confusion, Egypt is finally stable enough to reap benefits from its wide-ranging, deep-rooted structural reform program. “The story of Egypt in the past four years [started] from the edge of total collapse, to reform and stabilization, to growth,” said Minister of Finance Mohamed Maait. “The numbers tell this story and showcase this country’s bright economic prospects.”
Real gross domestic product (GDP) growth went from an annual average of 2.3 percent from fiscal year (FY) 2011/2012 to FY 2013/2014 to topping 5.3 percent in FY 2017/2018. According to Maait, the forecast for FY 2018/2019 is 5.8 percent and 8 percent for FY 2021/2022.
Total manufacturing output increased 6.2 percent between FY 2016/2017 and FY 2017/2018. “This is good progress,” said Maait. “Moreover, in the Purchasing Manager Index, we are moving in the right direction.” This growth resulted in unemployment dropping from 13.3 percent in FY 2013/2014 to 9.9 percent in FY 2017/2018.
As for the budget deficit gap, it decreased from 16.7 percent of GDP in FY 2013/2014 to 9.8 percent in FY 2017/2018. “We aim to cut it to 8.4 percent this year and 3.9 percent by FY 2021/2022,” said Maait.
He credits these metric improvements for enabling the country to increase its revenue by 43 percent last year, while seeing around 20 percent increase in costs. “This gives us more options to mobilize cash where it is most needed,” said Maait, who added that cutting the deficit will eventually reduce the need for loans and cut debt-servicing costs.
Meanwhile, money saved from the annual reduction of energy subsidies will be used to finance other subsidy programs, including food, and the targeted cash program currently under development, he added.
Minister of State for Military Production, Mohamed el Assar
“We feel Egypt’s story is not communicated very well in the U.S.,” said Mohamed el Assar, minister of State for Military Production. This story, el Assar noted, is Egypt’s regional leadership, skilled and trainable workforce, large market, location, and young population. “These factors render Egypt an invaluable partner to the U.S. in advancing a broad range of mutual interests,” said el Assar.
He pointed out that relations between the two countries are not limited to trade and investment. “It is a meaningful functioning alliance on a range of issues that extends to the highest levels of government, passing through business and commercial relations,” he said. “It extends to the private sector and public-private partnerships in both countries, as well as people-to-people exchanges on different levels.”
El Assar went on to say his ministry not only meets the needs of the Egyptian military, but the excess capacity of its 17 affiliated companies is used to manufacture low-cost goods. “Our assets include the latest technological advancements in manufacturing, research and development, training facilities, and information technology centers,” he explained.
For private investors, the opportunity involves supporting the ministry, which has been leading investment in projects of national importance since the New Suez Canal project started in 2014. “This means joint-venture opportunities,” said el Assar, adding that the ministry’s affiliated construction companies, for example, present private companies with opportunities to invest in new cities. This is a boon for the construction sector as a whole, he said. El Assar highlighted the role of the private sector as the engine of growth.
Minister of Communication and Information Technology, Amr Talaat
Egypt’s digital transformation is in full swing, despite some challenges, according to Amr Talaat, minister of Communication and Information Technology (MCIT), and represents a great opportunity for private companies to partner with the ministry on large and small projects. “We base our strategy on three main pillars,” he said.
The first is to build skills and capacity. “The more we can pump skilled and educated people into the market, the more this industry will grow in telecoms and information technology,” said Talaat, noting that MCIT has trained 4,000 individuals so far. “Our aim is to train 45,000 people in the next three years,” he added.
To support startups and innovation, the ministry is working to increase the number of incubators, accelerators, and venture capitalists. Further, it has established mini-MCITs at local universities. “It is in eight universities,” said Talaat, noting it is not in Cairo or governorates that already have technology parks.
The second pillar is to create a digital economy. “There is so much to achieve here,” said Talaat. “And it is our responsibility to enable digital transformation in other sectors.” The largest challenge is the majority of the population is either not tech savvy or uncomfortable using technology. “We have developed four service delivery channels: mobile, web portals, the postal service, and call centers,” he explained. “The user chooses which is best.”
The ministry started by unifying 60 government databases, which is necessary for digital delivery of government services. The MCIT is also working with the CBE on a unified payment card for transactions with the state. “This project will add 27.7 million accounts [in banks or post offices],” said Talaat. “It will be a leap for financial inclusion.”
The third pillar is increasing the sector’s contribution to GDP, which last FY stood at 3.1 percent. “We want to reach 5 percent in three years,” said Talaat. “This would require the sector to grow at twice the pace of GDP.”
Minister of Petroleum and Mineral Resources, Tarek el Molla
The oil and gas sector has been at the heart of Egypt’s economic reforms, not just in terms of reducing subsidies, but in how the government deals with international oil companies and concessions, according to Tarek el Molla, minister of Petroleum and Mineral Resources. “We are working under a 2035 sustainable energy strategy that aims to restructure the gas sector and promote energy efficiency and decreasing greenhouse gases,” he added.
The strategy is to develop an integrated oil and gas program to create an attractive investment environment, said el Molla, adding, “We aim to simplify the sector structure with autonomous and independent [government] entities.”
Accordingly, the ministry adopted a strategy to secure enough energy to meet local demand and avoid shortages like those seen in 2013; as well as add value to the country’s natural oil and gas resources, thereby reducing the cost of importing refined fuel; and build efficient national human capacity. The strategy necessitated technical modifications to concession agreements signed with international oil companies, he noted.
For private production and service companies, it is an ideal time to invest in Egypt. In addition to the plan to go public with 11 state-owned oil and gas companies, el Molla pointed out that 2017 and 2018 are “record years.” He highlighted the simultaneous launch of four major drilling projects, including the Zohr field, which helped Egypt reach natural gas self-sufficiency. “We reduced arrears payments to international oil companies to a third of what they were in 2012. Moreover, we are launching the first seismic tests in the Red Sea,” he said, citing the new law that allows private natural gas companies to supply the local market.
Prime Minister, Mostafa Madbouli
With a commitment to meet the benchmarks set by the Sustainable Development Strategy: Egypt Vision 2030, announced in February 2016, Prime Minister, Mostafa Madbouli, believes Egypt is more attractive than ever for investors. “A reflection of our efforts is that Egypt received the most direct U.S. investments of any country in Africa in 2016, accounting for 38 percent of the total,” said Madbouli. “That same year, it was the second-highest recipient of American investment in the Middle East.” As of June 2018, U.S. capital invested in Egypt topped $2.6 billion, he noted.
Those figures were reached during four years of wide ranging and deep-rooted fiscal, monetary, and structural reforms to achieve comprehensive and sustainable economic, social, and environmental development, according to Madbouli. “These reforms were necessary as [previous] challenges caused the deterioration of macroeconomic indicators and growth rates, investment, employment, and public revenue,” he said. “This led to the decline of reserves and increasing payment deficit. The region’s economic and political variables only increased these challenges.”
“These measures and reforms required new laws and regulations to raise the efficiency of institutions and promote [a favorable] business environment,” said Madbouli, citing a new civil service law to reduce bureaucracy, and industrial licensing and investment laws. Other legislative updates only modified how certain agencies operated. “These reforms aim to simplify the establishment of projects and businesses,” he added.
In the next four years, the prime minister wants to continue to increase private sector investment by further streamlining paperwork, which would reduce the cost of doing business in Egypt. Another goal is to boost investment in industrial zones currently under construction to create better hubs for companies. In addition, the government stimulates entrepreneurship by improving access to financing, supporting innovation hubs, and further legislative reforms, said Madbouli.
Furthermore, the cabinet is updating the country’s investment map that highlights opportunities valued at a total of EGP 3.4 trillion over the next four years. “These projects should increase FDI during this period by $47 billion,” he noted, emphasizing that he wants to increase the industrial growth rate by 10.7 percent in FY 2021/2022, compared to an expected 6.3 percent for the current FY. “We aim to create 900,000 jobs annually to decrease employment to 8.4 percent by FY 2021/2022,” he added. “This growth will be fueled by internal trade, agriculture, and manufacturing in addition to linking SMEs to mega and national projects.”
In the coming years, Madbouli hopes to build 800,000 affordable social housing units and 400,000 middle-income units; complete 2,000 kilometers of roads in addition to the 5,000 already under construction; develop water and sanitation projects; and expand the social safety net to cover 60 percent of the population living below the poverty line.
The prime minister intends to list 23 government-owned companies on the stock exchange with 15 percent to 30 percent of their shares privately held. “This money will go into further developing those companies,” said Madbouli.
Lastly, to improve Egypt’s access to international markets, he noted that the government is negotiating preferential trade agreements with the 13 countries in Europe and Asia. “This adds to Egypt’s trade agreements with Turkey and the European Union, as well as Gulf and African countries,” said Madbouli.
Overall, the events and participants highlighted Egypt’s strong recovery, a clear vision, and favorable economic climate, rendering the local market a lucrative investment opportunity for U.S businesses.