Egyptian president urges state-owned companies to partner up with private sector to eradicate mismanagement

CAIRO – 28 December 2021: President Abdel Fatah al-Sisi inaugurated Tuesday the new Aswan’s Urea and Ammonia Plant, which is part of KIMA petrochemicals company, as well as the scutcher of Fayoum.

During the ceremony, the president urged carrying out good pricing, management, and governance of revamped public enterprise factories so they would not deteriorate again. He underscored that one of the repercussions of the mismanagement of state-owned factories is overstaffing due to nepotism.

In that regard, President Sisi stressed that to ensure that such practice would be eradicated is partnering up with the private sector.

The chief of state told the public enterprise minister to talk to clients about pricing, saying they would understand, as the Egyptian public in general has been accepting to endure the impact of reform over the past years because they longed for a long-term improvement.

Speaking of reforms, the minister of public enterprise said, “we aim to achieve a mutation in KIMA’s profits so it would be followed by an IPO.”

The new Aswan’s Urea and Ammonia Plant produces 1,220 tons of ammonia and 1,590 tons of urea per annum, as it is targeted at bridging the gap between supply and demand in the fertilizers market in Egypt.

Minister of Public Enterprise Hisham Tawfik stated that the new factory saves 150 megawatts compared to the old one. He further elaborated that the plant supplies 55 percent of its production to agricultural associations for LE4,500 per ton. As for the rest of production, the minister pointed out that fertilizers compose six percent of Egyptian exports.

In that context, the president showcased that adopting modern irrigation systems reduces the amount of fertilizers needed.

Tawfik said that there is a plan to introduce an energy-efficient unit that produces ammonia in Daqahlia’s Talkha, and that the establishment of another in Suez is underway in partnership with the private sector.

Discussing the textile industry, the public enterprise minister revealed that Egyptian cotton will be traded through an exchange starting 2022. The minister underscored that 95 percent of Egyptian cotton was sold in 2021, and that cotton products by Egyptian public companies will be marketed under a new brand named “Knit.”

Minister Tawfik notes that the scutcher inaugurated in Fayoum Tuesday is the only in Upper Egypt. He added that three other scutchers to be launched in Delta governorates soon, while the foundation of three others is still under-progress and will be completed in 2022.