The Egyptian Arms Industry
Key Judgments
Information available
as of I May I 985
was used in this report.
Egypt is the only Middle Eastern state other than Israel with a significant arms production capability. Unlike Israel,
Egypt’s defense industry lacks the modern technological base and manufacturing infrastructure necessary
to design and produce its own advanced tanks, aircraft, or missiles. Current production is limited to assembling
French- and Brazilian-designed aircraft and to copying many of the Soviet weapons supplied to Egypt before 1975.
Egypt is unlikely to realize its goal of achieving self-sufficiency in modern arms production by the mid-1990s because of weak Information available
as of I May I 985
was used in this report.
Egypt is the only Middle Eastern state other than Israel with a significant arms production capability. Unlike Israel,
Egypt’s defense industry lacks the modern technological base and manufacturing infrastructure necessary
to design and produce its own advanced tanks, aircraft, or missiles. Current production is limited to assembling
French- and Brazilian-designed aircraft and to copying many of the Soviet weapons supplied to Egypt before 1975.
military planning and budgeting systems, inefficient work habits, shortages of skilled manage-ment and labor, continued
dependence on foreign technology, and an inability to compete successfully in the international arms market.
Institutional factors play an important role in delaying further develop-ment of the arms industry:
- The lack of a coherent and centralized planning, programing, and budgeting process means weapons production and
procurement decisions are influenced as much by the personalities, contacts, and gratuities of the services’ “old-boy” networks as they are by any long-range require-mcnts or projected capabilities shortfalls.
~ The lack of a marketing organization denies the defense sector the kind of information it needs to develop and market more exportable weapons.
Social and cultural factors also constrain arms industry modernization:
‘unwillingness to accept responsibility,
illiteracy, and limited English-language capability among managers and workers preclude the rapid introduction of new technologies
and production processes to the defense sector.
~ Neither Egypt nor its foreign partners appears willing to undertake the costly and time-consuming reeducation and
training programs necessary to address these skills shortcomings
Egypt’s foreign partners are likely to deny it the technology necessary to independently design and produce modern weapons because:
~ They want to maintain their market shares, reduce competition, and limit unauthorized technology transfers to third parties.
~ They are likely to be deterred by the limited prospects of recouping the heavy ca ital investments required to provide the necessary
technology to Despite these shortcomings, the military production sector provides several important benefits to Egypt’s economy:
v Much-needed employment opportunities for Egyptian scientists and engineers, as well as for larger numbers of semiskilled and
unskilled workers.
~ The production of civil and military goods and services that Egypt otherwise would be forced to procure from outside sources at
higher cost.
- Foreign exchange earned through arms The United States will benefit over the long term as Egypt moves to strengthen its defense
production sector:
~ There will be greater potential for Western influence as Egyptian managers are introduced to new skills and production processes
to replace the old Soviet ones.
- Continued acquisition of Western weapons and technology will reduce Egypt’s interest in obtaining spare parts and new equipment
from the USSR
Egypt’s 27 arms factories employ nearly 100,000 civilian workers in the manufacture or licensed assem-bly of a wide variety of Western- and Soviet-designed small arms, ammunition, artillery, vehicles, and air-craft.‘ According to Egyptian officials, in 1984 these
factories provided about $350 million worth of goods to the Egyptian armed forces and exported nearly $200 million worth of arms, principally to Iraq
hese accomplishments mask serious underlying problems within the defense production sector. Over-staffed, poorly managed, short of skilled personnel, l and overly dependent on foreign technology, Egypt’s defense industries are incapable of independently
developing and producing in quantity the modern arms desired by the Egyptian armed forces
Defense Industry Organization and Decisionmaking The arms industry is organized in a relatively
straightforward manner under the Defense Ministry, although we believe planning and decisionmaking
probably depend as much on personal contacts as on organizational relationships. The Minister of Defense
and War Production provides overall direction and makes final decisions on administration, operation,
programs, plans, and budgets. Daily administration and operation of the defense industry probably reside
with two other officials. The Minister of State for War Production oversees the 15 factories of the ammunition and armaments sector,
while the chair-man of the Arab Organization for Industrialization (AOI) administers the 12 factories of the aerospace Sector
ppendixes A to C describe in detail the history, organization, and capabilities of Egypt’s defense production sector. Shipbuilding and
chemical/biological weapons are not discussed in this paper. The Defense Ministry uses civilian shipyards—both foreign and
domestic for ship overhaul, maintenance, repair, and construction rather than operate its own facilities. The chemical and biological warfare production facilities are operated independently from the defense tem. Under the “old-boy” system, programs succeed
or fail more on the basis of who sponsors them than on their merits, and institutional coordinating mechanisms such as the War
Production Authority Board are ignored in favor of direct meetings with well-placed associates or decisionmakers (b)('l )(b)(3)
production sector
In early 1984 Defense Minister Abu Ghazala formed a War Production Authority Board to consolidate and
coordinate armaments production requirements and scheduling among the services and with the Defense
Ministry staff. Chaired by the Minister of State for War Production, its members include the command-
ers of the Air Force and Air Defense Force and the chairman of the Defense Ministry’s Armaments Au-thority. The board so far a ears
to have accom-plished
uncoordinated strategy for procuring and producing arms because of the military “old-boy” network and the Defense Ministry’s lack of a sophisticated and coherent planning, programing, and budgeting system. Under the “old-boy” system, programs succeed
or fail more on the basis of who sponsors them than on their merits, and institutional coordinating mechanisms such as the War Production Authority Board are ignored in favor of direct meetings with well-placed associates or decisionmakers
Arms Production Goals: Still Unattained This opinion, of course, depends on the thought of the Americans, while the Egyptians had a policy in this regard to produce weapons through the Eastern and Western systems and for Egypt to become a source of Western and Eastern weapons, but it lacked management and competencies to manage this thought, and this defect still exists due to the presence of the military and government employees who are chosen. According to loyalty and seniority, this is the cause of the disasters that Egypt suffers from
Egyptian goals for the arms industry have remained remarkably consistent despite disagreements over priorities and changes of personnel. On the basis of our analysis of Defense Ministry documents and official pronouncements, we believe that these goals are:
- Self-sufficiency in the production of modern arms and ammunition. Egypt intends to expand and update with US and French
assistance its existin
Financial Aspects of the Arms Industry The financial dimensions of Egypt's arms industry are murky. Output of the military production
enter prises is excluded from official tabulations of nation-al income and product, and even the operating expenses of these public-sector companies are excluded from the government's budget. Moreover, military exports and imports are not included in official
Egyptian balance-of-payments statistics
Although the lack of data prevents confirmation, we suspect that the net impact of the public-sector military enterprises on Egypt's operating budget and the economy is only moderately negative. Substantial financial allocationsfor these industries are balanced
by the goods and services they provide the Egyptian military, which otherwise would be forced to procure
everythingfrom bullets to batteries from foreign suppliers. These enterprises also produce some civilian products that from personal observation appear to be of higher quality than those roduced in nonmilitary Egyptian factories.
The military production enterprises are also significant earners offoreign exchange. We estimate Egyptian military exports totaled about $500 million in 1984 and may have reached $1 billion in I982 when Egypt provided a large quantity of arms and ammunition to Iraq. These exports, however, include sales of Soviet equipment from Egyptian inventories as well as new production by military enterprises. We
suspect that the military has used a large share of these earnings for purchases of non-US weapons,
turningfunds over to the Central Bank only when foreign exchange is insufficient to cover other important defense-related obligations.
Organization to broker deals with foreign firms to utilize the defense sector’s civil production capabilities to manufacture the vehicles, home appliances, electronics, and building materials Egypt otherwise would have to import
Constraints to Success
We believe Egypt’s failure to reach the ambitious
goals it set for its arms industry is due in large part to
two policy decisions that undercut the industry at
critical points in the past:
~ Nasir purchased large quantities of Soviet arms in
the 1960s to quickly match Israeli capabilities rath-
er than await the uncertain results of Egypt’s costly
arms development efforts. This decision virtually
shut down the arms industry and led to the cancella-
tion of the most promising aeronautical research
and development programsWe believe Egypt’s failure to reach the ambitious
goals it set for its arms industry is due in large part to
two policy decisions that undercut the industry at
critical points in the past:
~ Nasir purchased large quantities of Soviet arms in the 1960s to quickly match Israeli capabilities rather than await the uncertain results of
Egypt’s costly arms development efforts. This decision virtually shut down the arms industry and led to the cancellation of the most promising aeronautical research and development programs
President Sadat signed a peace treaty with Israel in 1979, which stalled the arms industry just as significant Arab-funded development was beginning. The treaty led Saudi Arabia, Kuwait, Qatar, and the United Arab Emirates to withdraw financing from Egypt’s newly created Pan-Arab arms production program, the Arab Organization for Industrialization, and to close their markets to Egyptian arms exports
These decisions only partly explain Egypt's failure to develop a modern, self-sufficient defense industry. We believe other factors, such as cultural attitudes toward work, excess manpower, shortages of skills and experience, dependence on foreign technology, and the
failure to grasp basic marketing concepts have been, and will continue to be, key factors affectin the success or failure of the arms industry
Attitudes Toward Work
US officials report that a combination of low pay, long hours, poor working conditions, and a fatalistic “if God wills it” attitude leads Egyptian workers to perform only the minimum necessary work. This results in low productivity, industrial accidents, equip
ment breakdowns, and the production of shoddy, substandard items with a reputation among foreign purchasers for poor quality.
In addition to hindering
Failed administration in Egypt since 1952
The military and state employees work to fight any development and rely on not giving good salaries or incentives, but rather stealing the efforts of any successful person, so they always fail. Corruption is widespread due to low salaries, to the point that retired military personnel are interfering in the local economy for personal interests alongside those in the service, and they imagine that they are successful despite this. Failure because of them continues until this moment
As a simple example, every year we complain that the state gives a bad price in exchange for the supply of local wheat when the supply price was raised this year to a good number for wheat. Although the supply will continue until July, but 70%
It has been supplied and it is expected that the supply will be 120%
Simply because the farmer took his right, which is the same reason why the supply of sugar cane failed and the production line was closed. Low supply prices. The Egyptians have innovations in armaments that they refuse to present to failed bodies like AOI and MOAP because they want to steal these innovations and give them in exchange for this a certificate of appreciation for who they are as failures. Of course, the Egyptians run away with their innovation outside. Egypt, so that this gang does not rob them, and the administration itself does not want to cooperate with the Egyptians. They say that we want Gulf Arabs because they will pay us bribes under the table without anyone knowing, and the Egyptians are rejected because they will not pay us. The result is as usual, they are losers and the economy is poorly managed.
arms exports, this reputation has led the Egyptians themselves to prefer more ex ensive but better quality foreign-produced arms
Egyptian productivity also is hurt by the belief that an academic degree is a better measure of worth than job-related training or work experiencel academic titles and degree rather than productivity
are used to justify positions and salaries at the Banha electronics factory. We believe the practice is widespread in Egyptian industry. The
focus on education over experience reinforces the attitude among managers, supervisors, and technicians that theory is superior to practice and that only those who lack education need perform hands-on work. US officials report that this leads management
personnel to become aloof and critical in their dealings with subordinates, always willing to expound
theories but generally unwilling (and unable) to demonstrate how things should be done. We believe it also
facilitates an avoidance of responsibility because each manager passes problems on to the next higher, and supposedly better educated, layer for decision
Excess Labor, Illiteracy, and Skills Shortages Long the employer of last resort for Egypt’s unskilled workers and college graduates, the Egyptian Government has burdened factories in both the civil and defense sectors with excess employees. As a result, US
officials report most Egyptian arms factories appear overstaffed, often with at least twice as many employees as comparable
Western plants.’ In addition, many of these excess employees serve no productive function. For example, a US official estimated that about
10 percent of each factory’s staff consists of messengers, errand boys, and tea servers. These excess employees consume resources that could be used to create the smaller, more highly specialized work force that modern production processes require.
We believe that a high level of worker illiteracy will retard efforts to modernize the arms industry because costly and time-consuming retraining will be required before introducing or changing production processes.
Although several workers are assigned to each job, only one usually is present. The others are working at jobs in other factories,
n vacation, sick, or “in training.” All are paid
On the basis of reports (b)(1 )
survey teams, personal observation, and official statements from the Egyptian Defense Ministry, we estimate that worker illiteracy could be as high as 75 percent in some of the arms and ammunition plants and at least 50 percent in the AOI’s aircraft plants.
Egyptian manager are more involved in making working-level decisions than engaging in long-range planning like their Western
counterparts. ln addition, a highly stratified management style denies production management experience and authority to the lower management layersl
Another shortcoming that is likely to become increas ingly critical is the low level of English-language skills among managers and workers. This slows the absorp tion of new equipment and technology because additional time and resources are required to ensure full
comprehension of written manuals and production processes. We believe this lack of English-language skill and a shortage of qualified translators also explain why Egyptian managers are less well read on management techniques than their Western counterparts
dependence on Foreign Technology Egypt’s efforts to become self-sufficient in the production of modern arms——particularly in the aerospace sector—ironically have increased, rather than decreased, its dependence on foreign technology. Unlike
a decade ago, Egypt now relies on countries other than the Soviet Union for technology to produce its advanced weapons. Almost all of this technology is French, but North Korea, China, the United Kingdom, Brazil, and the United States also have important roles or potential roles
France. France became Egypt’s primary source for arms production technology after the British with drew from the AOI in 1979 under pressure from the Arabs after Egypt signed its peace treaty with Israel.
The French offered, and Egypt accepted, facilities to assemble under license
Alpha Jet and Mirage 2000 aircraft,
Gazelle helicopters, and related avionics and engine component sub assemblies.
The French also provided technical assistance to help Egypt reverse engineer the Soviet SA-7, RPG-7, and AT-3 weapons, as well as work on development of a mobile antiaircraft weapon system that would utilize Egypt’s reverse-engineered 23-mm gun, the “23rd of July.”
Even though the Egyptians now operate their own subassembly and assembly lines for the Alpha Jet and Gazelle, the French still control either critical technologies or key steps in the assembly process. French technicians, for example, continue to supervise assembly operations, and they also perform all quality control inspections required before final acceptance.
Critical components such as avionics, inertial navigation systems, engine compressor blades, and graphite
composites are all made in France, as are many of the airframe components critical for maintaining structural integrity.
French propulsion and electronics
technology also has been critical to improving the performance of Egypt’s reverse-engineered SA-7 (the “Sakr Eye”) and the mobile 23-mm antiaircraft gun.
We doubt France will supply Egypt the capability to produce any of the critical items it supplies until either the technology is nolonger up to date or is available elsewhere
North Korea and China. Egypt appears to rely on North Korea and China for production assistance on four reverse-engineered weapons: the 130- and 122-mm guns, the 122-mm multiple rocket launcher and rocket, and the 23-mm antiaircraft gun
North Korean and Chinese factory technicians and occasional visiting technical delegations have been actively assisting
these programs since at least the early 1980s. We believe the North Koreans and Chinese have been assisting the Egyptians to overcome casting, forging,
and assembly problems on the 130-, 122-, and 23-mm guns and ammunition and on case fabrication and fuzing problems with the 122-mm rocket. The Egyptians probably rely on the Chinese and Koreans more because of foreign policy considerations and a desire to maintain arms technology diversity than to obtain specific technical capabilities
United Kingdom. Egypt depends on the United Kingdom for production assistance on the advanced Swingfire antitank guided missile and for development assistance on one of the competing prototype D-30 self-propelled howitzers. With the Swingfire program
winding down and the self-propelled howitzer program far from production, we anticipate that Egypt
will be dependent for the near term on UK firms only for the technology to produce lasers and night sights
at the AOI optronics factory
Brazil. Egypt is rapidly becoming dependent on Brazil for the components and technology to assemble and produce the Brazilian Tucano trainer. Because Egypt’s Tucano production lines are not scheduled to be completed at the AOI Kader and Hulwan engine
factories until at least 1987, Egypt until then will be as dependent on Brazil for Tucano parts, assemblies,
and production technology as it is now on France for Alpha Jet and Gazelle components
United States. The projected programs to coproduce US weapons—many of which we doubt for economic
reasons will ever go forward—also would create a total dependence on the United States for production
technology and critical components. Like the French, the United States also would retain control of sensitive technologies to prevent unauthorized access or transfer to competitors or hostile powers. Thus, some electronic components on AN /TPS-59 and TPS-63 radars
would have to be controlled, as would selected avionics, composites, and engine production technologies
for the F-16 and F-20 aircraft. Egypt likewise Egypt likewise would have to accept less than complete technology transfe
if it was still determined to coproduce an M-l—type tank or improved TOW antitank guided missile
Implications for the United States The United States should benefit over the long term
as Egypt moves to strengthen its arms industry: There will be greater potential for Western influence at the working level in Egyptian ministries and factories as Western civil and military managers and technicians introduce Western organization management philosophies to their Egyptian counterparts.
' Egyptian production of modern Western weapons provides tangible evidence of the benefits of participation in the Middle East peace process and of being at peace with Israel.
~ The Egyptian military is likely to become more self confident and assured of its capabilities against its
radical neighbors as domestically produced, modern Western weapons increasingly supplant obsolete Soviet systems.
' Egypt’s interest in obtaining spare parts and equipment from the Soviet Union will lessen as domestically produced Western weapons are integrated into the armed forces.
- Egypt’s acquisition of Western weapons and their associated production facilities and logistic organizations will enhance Cairo’s capabilities to support US military operations in Southwest Asia and the Middle East
Appendix A
Origins of Arms Industry
The Nasir government established Egypt’s first modern arms factories in 1954 with the objectives of aiding full employment and economic development and achieving self-sufficiency in arms. Nasir’s arms production program involved an across-the-board effort to manufacture as many types of Western arms in as many turnkey plants as possible. Ammunition factories were the first priority, followed by aircraft
production at the Hulwan complex, armored vehicle production at the Kader Factory, and finally surface-to-surface missile production at Heliopolis. Despite claims of arms self-sufficiency, Egypt recognized its dependence on Western aerospace technology only
after West German scientists in Egypt ended their work on advanced aircraft and surface-to-surface
missiles and withdrew shortly before the 1967 Arab Israeli war. This over dependence, in addition to inefficiency, bad planning, overcapacity, incompetent marketing, and lack of coordination with the military,
finally led Nasir to abolish the Ministry of War Production and declare that the arms plants were to manufacture civilian oods under the auspices of the Ministry of industry
President Sadat restored the Ministry of War Production in 1971. He initiated new arms and ammunition licensing agreements with Britain and France to supplement Moscow’s agreement in December 1970 to permit licensed production of Soviet weapons.
Sadat’s decision, following the 1973 Arab-Israeli war, to use the arms industry to provide employment for a peacetime military and obtain needed foreign exchange through arms sales was the impetus that led to the formation of the Arab Organization for Industri-
alization (AOI) in 1975. Opportunities for sales to Arab states dried up when Egypt signed its peace
treaty with Israel in 1979. The Iran-Iraq war and Western willingness to assist Egypt in producing arms to replace its inventory of aging Soviet weapons continue to nurture the belief among Egyptian officials that Egypt may yet become the arms supplier to the Arab World
Appendix B
Egyptian Military Factories
The Egyptian Ministry of Defense operates some 15 military factories in and around Cairo and Alexandria. Operating under the auspices of the Minister of State for War Production and under the nominal control of a National Authority for War Production,
these factories supply arms and ammunition to the Egyptian military and for export. A catalog produced by the National Authority shows these factories organized into six groups: arms, ammunition, chemicals and explosives, metal forging and pressings, engines, and electronics.
Arms Factories
The Al Ma 'adi Company for Engineering Industries (Military Factory [MF] 54) produces small arms,
machineguns, and edged weapons for the military and sporting arms and surgical instruments for the civil sectorl l
the factory is underutilized and overmanned. Even factory officials admit they are capable of producing four times their current annual level of 50,000 AKM (“Misr”) Rifles
factory produces acceptable quality weapons despite operating Soviet-designed machines built to Polish specifications that
process materials manufactured under Czechoslovak, French, Polish, and Soviet standardd the factory will continue to encounte
resistance to its products from foreign customers unless its estimated 6,000 workers take more pride in their work and produce better quality weapons
The Abu Za'bal Company for Engineering Industries (MF 100) is Egypt’s most modern arms factory.
The the factory is dependent on foreign plant’s approximately 2,000 workers assemble Egypt’s reverse-engineered Soviet 23-mm ZU-23M antiaircraft gun (the “23rd of July”) and 122-mm D-30 howitzers and also are working on a prototype of the
North Korean version of the Chinese 130-mm M-59-lM gun. The factory has been involved with the 105-mm gun upgrade program for Egypt’s T-54/55 tanks, production of 115-mm gun barrels for the T-62 upgrade project, the US/UK 122-mm D-30 selfpropelled howitzer competitive prototype development ll
program, and the competition between the French firms Dassault (“Sinai 23”) and Thompson-CSF
(“Nile 23”) to develop a mobile air defense system that uses the “23rd of July” 23-mm gun
US industrial survey teams and reliable sources of the complex report the factory is neat, clean, and orderly
by Egyptian standards. They also report it is equipped with numerous good-quality Czechoslovak, East German, Swiss, and Yugoslav machine tools. Production
management concepts have been described as outdated but proven, while the plant management has been characterized as one that sets realistic objectives to achieve quality production
the factory working on the 130-mm gun, and at least a half dozen Chinese technicians assisting in the
manufacture and assembly of the 23-mm antiaircraft gun. All specialty steels must be imported, a dependence that sometimes leads to production bottlenecks
The plant also suffers from a lack of forging, heat treatment barrel straightening, and testing facilities.
management’s positive, production-oriented attitude is offset by its inex-perience, its lack of expertise and technical know-how,
and the traditionally lackadaisical Egyptian attitude toward industrial safety
The Hulwan Company for Machine Tools (MF 999) and its 2,000 employees produce 60-, 82-, and 120 mm mortars and also manufacture barrels and assemblies for the Egyptian “23rd of July” 23-mm antiair-craft gun It also produces machine tools lathes and
punching machines for the civil sector.
removed items from repoet the factory is capable of quality precision machining and i willing to produce an order for as few as five items.
he factory trains about 1,500 students each year. Major problems are poor housekeeping, excess labor, and overcapacity.
Ammunition Factories Abu Qir Companyfor Engineering Industries (MF 10)
produces pressure caps, gas masks, and filters for the military and cookware and aluminum pots for the civil sector
the factory is capable of producing 500,000 rounds of b 1 7.62 x 54-mm ammunition daily
factory was overstaffed with 4,000 employees and that this large work force directly contributed to management’s inability to accurately
estimate production costs
hubra Company for Engineering Industries (MF 27) b 1 produces 50-caliber, 7.62 x 39-. 9-, 12.7-, and 14.5 -mm ammunition.l
the plant is capable of producing 1.5 million roun s o 7.62 X 39-mm ammunition daily,
with an approximate 20-percent reject rate. He estimates 50- caliber production probably does not exceed
35,000 rounds per day. A plant brochure shows civilsector production limited to electric motors and
switches. Reports of poor safety practices among the plant’s estimated 5,000 employees were confirmed in
June 1984 when a worker’s carelessly discarded cigarette caused an explosion that destro ed Shubra’s b 3 black powder storage facility
AI Ma'sarah Company for Engineering Industries (MF 45) produces the 23-mm ammunition for Egypt’s revelrse-engineered “23rd of July” 23-mm antiaircraft gun the plant is capable of producing 150,000 to 200,000 rounds of 23-mm ammunition monthly. Be-
sides production of 23-, 30-, 37-, and 40-mm antiaircraft rounds, fuzes, and primers for the military, the factory manufactures nails, screws, bal bearin s and utility company meters for the civil sector
The Heliopolis Company for Chemical Industries (MF 81) produces mortar, tank, antiaircraft, and
general artillery ammunition in calibers from 57 mm to 155 mm. Other items include: antitank mines;
smoke grenades; detonators, fuzes, and blasting caps; gas masks and filters; rubber coatings for tank road
wheels; aircraft bombs up to 2,000 kg; and napalm bombs. Civil-sector production is mostly paints, chemical fillers, and explosives
mately 4,000 employees worked in what by Egyptian standards was a modern, clean, and safe facility. The
factory’s longtime director evidently had created a small welfare empire, with workers receiving good
wages, full medical care, and subsidized food and housing the plant’s production capability to be up to 1,500 artillery rounds per day, even on the line manufacturing the US-designed 105-mm tank round. The 130-mm line, however, was
capable of only 500 rounds daily. X-ray quality-control procedures were described as adequate, although not to US standards.
The Hulwan Company for Engineering Industries (MF 99) is Egypt’s principal manufacturer of mortar shells, shell casings, bomb casings, and associated metallic parts. It also produces fire extinguishers, regulators, pistons, gun parts, and gasoline pumps for
the civil sector
the factory sold nearly $90 million worth of military equipment in 1983, and it anticipated that sales of some 300,000 “items” would bring in
over $100 million by the end of plans were under way to ou e production in 1985
he factory’s managers indicated
it employed about 7,000 workers. Personality conflicts between managers and with the management of Heliopolis Factory 81 also affected production quantity and quality
The Defense Ministry’s Armaments Authority has taken action to circumvent some of these problems. For example, the factory has been
authorized to procure US tungsten penetrators for use in the Egyptian-produced US 105-mm tank round
because a similar penetrator could not be successfully (b)(1) or economically produced in Egypt. More significantly, another
supply the plant with some 30,000 122-mm artillery casings
articular agreement reflects the Armaments Authority’s doubts about the plant’s ability to produce either the quantity or quality of shell casings needed to support Egypt's arms sales to iraq
Chemical and Explosives Production Factories
The Abu Za'bal Company for Specialized Chemicals (MF 18) employs 3,000 workers to manufacture single- and double-base powders, dynamite and other explosives, mortar charges, solvents, and extruded and cast double-base rocket propellants. We believe the
Fplant also may have formerlly produced napalm.
djacent to MF 18 is the recently completed Abu Za'baI MF 90. This facility was constructed specifi-
cally to supply the triple-base propellant for the US-designed 105-mm tank round produced by Heliopolis
possessed advanced physical, chemical, and calibration laboratories and was similar in configuration and management procedures to US
(b)(3) facilities. He also described the work force as competent and knoeldgeable
Qaha Companyfor Chemical Industries (MF 270) produces primers, blasting caps, dry batteries, and tracers, flares, and other pyrotechnics. The facility also appears to be Egypt’s most poorly laid out, badly maintained, inefficient, and unsafe military factory
Production capability was 180,000 to 240,000 primers and 50 000 to 100 000 tracer units per eight-hour shift.
Metal Forging/ Metal Pressings Factories
The H ulwan Company for Ferrous Products (MF 9), recently modernized with new equipment, provides
general and precision cast iron and steel forgings for Banha’s 2,500 employees include 300 engineers, all diesel engines. automobile crankcases, and gun carriages military business represented only a small part of the 25,000 tons cast in 1983. This probably indicates the facility has not yet broadened
its output into the more specialized steels now in demand bv the other arms factories.
The companion to the iron foundries is the Hulwan poor housekeeping and
Company for Nonferrous Products (MF 63). Al-
though its equipment is old,
Engine Factory The Hulwan Company for Diesel Industry (MF 909)
is Egypt’s major producer of civil and military diesel engines, diesel-electric generators, and air compresors the plant is capable of producing 3 000 ngines per year, although in 1982 it only produced 2,000, half of which were for the military.
lectronics Factory
The Banha Company for Electronics Industries (MF144) and its “Al Nasr” civil com onent assemble
small radio transmitters and receivers, printed circuit boards, and other small electronic components
Banha’s 2,500 employees include 300 engineers, all of whom speak fluent English, and about 400 techni-
cians, only about a third of whom speak any English at all. Pay and benefits are about a third higher for
Banha employees than for other, comparable civil electronics factories. Banha also has sought to develop
its own work force through a technical training
program, and it is one of the few Egyptian defense related firms that em lo s women on a production line
