Boston, MA -- (ReleaseWire) -- 06/10/2014 -- The Egyptian petrochemicals industry is beginning to make tentative steps towards expansion in spite of lingering uncertainty under the interim government. While the risks are high, the local market's potential and the plentiful domestic supply of ethane still makes it an attractive place to invest in the long term.
A lack of fresh foreign investment could affect the start-up of new companies, and consequently the country's manufacturing sector and polyolefins demand. Meanwhile, the central bank's poor standing will also present difficulties for converters when they attempt to open letters of credit recognised by banks abroad, which are necessary to purchase PE and PP for import. Such difficulties could have the effect of supporting domestic production.
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Over the past quarter, BMI has revised the following forecasts:
- An Indo-Egyptian joint venture (JV), The Egyptian-Indian Polyester Company (EIPET) (70% Dhunseri Petrochem & Tea, 23% EChem, 7% Engineering for the Petroleum & Process Industries (ENPPI)), commissioned a polyethylene terephthalate (PET) bottle resin plant in Egypt in January 2014. The new two-line PET plant in the deep sea port on the Red Sea at Ain Sokhna has combined capacity for 420,000tpa. The plant is the first of its kind in North Africa and one of the largest such units in the Middle East. The facility will meet Egypt's domestic demand, which is covered by imports, and will facilitate exports of PET.
- Carbon Holdings, a local chemicals development company, is seeking funding for a major project at Ain Sokhna in Suez. The Tahrir Petrochemicals Project will include a world-class naphtha cracker, which will be the first such facility in Egypt. The project will also manufacture 1.35mn tpa polyethylene (PE), as well as propylene, butadiene, and benzene. Work is due to begin in H214 and completed in 2019.
- In the Middle East and Africa Petrochemicals Risk/Reward Ratings (RRRs), Egypt maintains its 10th place position this quarter, with its score rising 0.2 points to 44.7 out of 100 following a 2.3 points rise in the previous quarter. Its improvement in score is the result of a rise in its country risk scores, as the political and economic stabilises and generates an improved business environment. It now lies 3.5 points behind Algeria and 8.1 points ahead of Nigeria. Egypt may see its score improve over the year if elections lead to greater certainty and investment plans remain on track.
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