Egyptian Petrochemicals Holding Company to Develop Plastic Industry in Egypt

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Researched by Industrial Info Resources (Sugar Land, Texas)--Egyptian Petrochemicals Holding Company (Echem) (Cairo) has adopted a plan to invest $20 billion in Egyptian petrochemicals projects through 2020. This plan covers the construction of 14 petrochemical complexes, including 24 projects and 50 production units, to produce 15 million tons of petrochemical products annually to meet local demand for polyethylene, polyvinyl chloride, polystyrene and other plastics. The projects will generate 100,000 job opportunities in the petrochemicals sector and supporting sectors.

According to a statement announced at Plastex 2010, the 12th international African-Arabian exhibition for plastic industries, the plastics sector in Egypt consists of both polymer production and plastics conversion, with annual domestic consumption reaching about $2 billion. There are more than 1,200 plastic manufacturing factories across the country, with total investments of about $3.62 billion and a total market volume of $4.03 billion.

This year, Ahmed Abdel-Salam, vice chairman and managing director of the National Company for Plastic Products, revealed that the company will cooperate with Echem to build the first factory in Egypt to produce plastic portable gas cylinders from polyethylene instead of steel, requiring an estimated investment of about $75 million.

Abdul Salam said that the factory will include the construction of 10 production lines in two phases. Six lines will be constructed in 10 months in the first phase, and four lines in the second phase, with the estimated total production for both phases of 1.2 million items from each line a year. He added the production of the factory will provide 50% of production to the local market to cover a 25% shortage in steel replacement products, while the remainder will be exported to Jordan and Sudan.

Abdel-Salam said that the company will self-finance the plant, and will rely on European technology through cooperation with a German company (the identity of which has not been released), which is a leader in the field. It will be the first project for the German company in the North Africa and African region in this field.

In October 2010, South Asian Petrochem Limited (BSE:532452) (Kolkata, West Bengal), India's second-largest manufacturer of polyethylene terephthalate (PET), and Echem set up a joint venture to establish a 420,000-ton-per-year greenfield PET resin plant in the Eldorado Integrated Development and Free Zone, which is in Sector 2 of the Southern Region of the Economic and Industrial Zone, northwest of the Suez Gulf at Ain Sokhna on Egypt's Red Sea coast. SAPL will hold a 70% share in the joint venture, which is known as Egyptian Indian Polyester Company. Echem will hold 23%, and Engineering for the Petroleum & Process Industries, another government agency, will hold the remaining 7%. The project has an estimated cost of approximately $160 million. The project will be completed in the first quarter of 2013.

For related information, see March 23, 2011, article - Egypt's Economy Recovers Strength after Revolution and April 13, 2011, article - Egypt to Increase Chemical Production for Home and Abroad.

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