Egypt's chemicals sector to boom on more projects underway

CAIRO - 26 November 2017: Egypt's chemical sector is considered to be one of the strategic sectors as it adds value to the mineral resources of the country.

A breakthrough is expected as there are several expansionary projects in the sector; such as installing new production units in Misr Fertilizers Production Company (MOPCO) and the Egyptian Ethylene and Derivatives Company (ETHYDCO), with $4 billion in investment.

Another LE10 billion project is also underway as the Egyptian Chemical Industries Company (KIMA) is building a new facility for fertilizer manufacturing at the existing site of the company's Aswan fertilizer complex.

Production from the facility is expected to reach 1,200 tons of ammonia and 1,500 tons of urea per day.

Total investments in the chemicals sector reached a total value of $36 billion, Head of the Chamber of Chemical Industries Sherif el-Gabaly said Sunday.

In a seminar organized by the German-Arab Chamber of Industry and Commerce, Gabaly noted that Egypt's chemical exports recorded $3.3 billion in 2016.

"The chemical industries are important as they enter in fertilizers and glasses manufacturing," he said, adding that fertilizers exports register 300,000 tons per year, while glasses exports amount to 1,850 tons per year.

As for the petrochemicals sector, local and international companies operating in that field in Egypt implemented seven projects in 2016 with a total worth of $7.5 billion in Suez, Port Said, Damietta and Alexandria, according to the Ministry of Petroleum and Mineral Resources.

Developing the petrochemical industry will result in an improvement in plastics industry, fibers industry and other related industries.

The fertilizers sector is also growing as Egypt consumes approximately 14.3 million tons of nitrogenous and phosphate fertilizers per year, according to the annual report of the Chamber of Chemical Industries, affiliated to the Federation of Egyptian Industries.

Due to the presence of several fertilizer producers, Egypt could achieve self-sufficiency in that field, pushing export figures of this industry.

As a proof that the fertilizer sector is expanding, the Industrial Development Authority (IDA) had approved in 2015 some 10 new projects in the field of Phosphate fertilizers, with two of them already started production.

Meanwhile, the glass industry has also kept expanding as its production capacity registered 1.85 million tons per year in 2015, up from 1.75 million tons per year in 2010.

Egypt’s chemical exports increased by 37 percent to reach $1.7 billion in the first five months of 2017 compared to $1.2 billion year-on-year, according to a report released by the Chemicals & Fertilizers Export Council (CEC).

Plastic and rubber exports rose by 19 percent to reach $545 million by the end of May compared to $460 million in the same period of the previous year.

In the same five months, fertilizers and paper products’ exports hiked 67 percent and 13 percent to reach $246 million and $214 million respectively.

Organic chemicals exports surged 362 percent to $151 million, while non-organic chemicals inched up 6 percent to $103 million.

Moreover, Egypt recorded a 74 percent hike in the detergents’ exports to reach $141 million and a 5 percent increase in the glass products reaching $64 million by the end of May.

The chemicals sector as a whole is said to account for 3 percent of GDP and 12 percent of the industrial sector's volume, according to official figures.

By 2020, Egypt plans to produce more than three million tons of chemical products, under a 20-year national plan, which involves a range of products from ethylene and polyethylene to olefins and aromatics.