Mayor Andy Berke addresses a delegation of Egyptian leaders at the Roadtec training center in Chattanooga on Thursday to talk about contracts for major highway construction projects.The road to prosperity in Egypt may be paved, in part, with help of Chattanooga's Astec Industries.
An Egyptian delegation charged with buying equipment to help build thousands of miles of new Egyptian highways came to Chattanooga this week to see firsthand the new road-building, maintenance and control technologies offered by a half-dozen Tennessee companies, including Astec, Miller Industries and Aqua Shield.
By the end of the week, the Egyptian military generals and other government leaders in the buying mission said they would like to buy 10 of Astec's integrated milling, recycling and paving machines, projected to cost about $20 million.
"We shook hands over the deal, but I'll feel more comfortable when I see the irrevocable letter of credit," Astec Chairman Don Brock said Friday. "Egypt has been a good customer of ours for other orders in the past, although most of those have come through (the U.S.) Corps of Engineers" foreign assistance programs."
In the past three years through the Corps of Engineers, Astec has already sold Egypt three asphalt equipment plants and $10 million of water well rigs through Astec's Gefco division.
Miller Industries, the Chattanooga-based wrecker and hauling equipment maker, also has sold equipment to the Egyptian military.
But Egypt's new government is moving ahead with an ambitious road building plan to add more than 1,060 kilometers of new or upgraded roads as part of a $3.5 billion economic stimulus package announced last year. Egypt is planning key infrastructure projects in transportation, roads, bridges, airports, housing and renewable energy.
Hesham Mahgoub, an Egyptian native and associate professor of civil and environmental engineering at South Dakota State University, likened the road building plans to America's building of the interstate highways after World War II. The new highways will open new travel routes and development areas from west to east, not just along the usual south-to-north routes along the Nile River.
"New roads open up new areas and markets and are key to the growth of Egypt," said Mahgoup, a consultant to the Egyptian buying mission. "This is the beginning of a new era."
Chattanooga Mayor Andy Berke welcomed the Egyptian delegation on Thursday prior to the group's visit through Astec's facilities in south Chattanooga. On Friday, the start of a meeting with other East Tennessee businesses was delayed while leaders briefed top officials in Cairo about their mission.
"This is tremendous opportunity and we're delighted to have you in Chattanooga," Robert Leach, director of the Department of Commerce's U.S. Export Assistance Center, told the Egyptian delegation after the group arrived in Chattanooga from earlier visits to Los Angeles and Sacramento, Calif.
With 85 million people and 7 million cars, Egypt is one of the biggest road-building markets in the Middle East and offers a rich potential for exports of U.S.-made products.
Last year, Tennessee exports grew to a record $32.3 billion and Leach said he hopes to grow that volume even more through improved exports to countries like Egypt.
On Friday, East Tennessee businesses pitched products ranging from water filtration systems for rainwater to traffic control cameras that can help better route motorists along existing highways. Organized by Chattanooga businessman Jim Frierson, the local companies making presentations to the Egyptian group included AquaShield, AldisGridsmart, Miller Industries, Jarden Zinc Products and Water Blasting Technologies.
Brock said Astec got nearly half of it business from international markets during the Great Recession in the United States during 2009 and 2010. Astec now generates about 35 percent of its nearly $1 billion-a-year in sales outside of the United States.
Brock said the Egyptian delegation was impressed with the training facilities in Chattanooga that Astec operates to help operators learn to use and maintain the paving and milling equipment it sells.
"Both Astec and Roadtec have some of the best training facilities anywhere and that's very important for people to know how to use our equipment around the world," Brock said.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.