Egyptian auto importer and manufacturer Ghabbour Auto said on Thursday it agreed to a $70 million joint venture with Brazil's Marcopolo to build a bus assembly facility in Suez on the Red Sea.

A subsidiary of Ghabbour Auto will own 51 percent of the new company while the Brazilian bus manufacturer will have the remaining 49 percent, Ghabbour said.

The new facility is expected to start production in 2009 with a targeted capacity of 1,500 buses in the first year of operation to be increased to 8,000 annually by 2014.

"Production will target the fast-growing Egyptian market as well as select Middle Eastern, African and European export markets," it added.

Ghabbour nearly doubled its net profit in the first quarter of the year to 91.1 million Egyptian pounds ($17 million) on higher sales for passenger cars and commercial vehicles.

Shares in the company were trading 6.6 percent lower at 48.12 pounds by 0805 GMT. -Reuters