Police identified the terrorist who was killed in a bomb blast outside Sars el Lian Mills in Menoufia late on Wednesday.
The terrorist was identified as 37-year-old Ahmed Abdel Azim Mohamed, an employee in the petroleum sector.
He was killed when the home-made bomb he was carrying exploded in his face before planting it outside the mills.
Two other bombs were found in the trunk of his motorcycle.
While combing the area after the blast, police arrested the terrorist's companion identified as Ahmed Hassan Gazar, 27.
The man traded fire with policemen before being caught. He sustained head injuries and leg fractures.
In statements, Menoufia security chief Momtaz Fahmi said acts of terrorism are meant to jeopardize security ahead of the economic conference, to kick off in Sharm el Sheikh on Friday.
"These acts make us more determined to fight terrorists and uproot terrorism," he added.