Factory production to meet almost 20 percent of local demand of soda-ash
CAIRO: China National Chemical Engineering Corporation (CNCEC) and The National Bank of Egypt (NBE) announced Monday a new partnership to build a soda-ash factory in Fayoum. The chemical is primarily used in glass manufacturing.
The memorandum of understanding (MOU), signed Sunday, says the first phase is expected to cost $90 million (LE 514 million), but does not specify the projected capacity of the factory or the cost of investment upon completion. A Ministry of Foreign Trade and Industry (MFTI) statement says the MOU-signing paves the way for contract-signing early next year.
The factory is expected to become the first of its kind in Egypt, which now imports all of its needs mainly from the United States and Europe. Speaking to The Daily Star Egypt, a senior MFTI official, who declined to be identified because he is not authorized to speak to the press, said CNCEC plans to reserve its entire production of the chemical for the local market. The official added the factory is expected to satisfy almost 20 percent of local demand.
The official said information about the project s timeline, projected capacity, and total investments has not yet been made available by either side of the agreement.
CNCEC has also partnered with Kuwait s Kharafi Group to establish a $700 million chemicals and petrochemicals manufacturing complex in Fayoum, though an agreement is yet to be signed. MFTI says it expects a formal announcement of the investment to be made in January, 2007.
When finalized, the project will become CNCEC s first in Egypt and the Middle East, although the company is already present in 40 countries, including countries in Africa. According to CNCEC and MFTI officials, negotiations are now underway to increase the company s investments in Egypt in oil refinement, though no further details have been released.
This deal is one result of the sustained efforts by Egypt to strengthen and deepen, its economic ties with China, Minister of Trade Rachid Mohamed Rachid said. We want to attract Chinese investors to use Egypt as a production base, and a natural gateway to Europe, the Middle East and Africa.
CNCEC s entrance into the Egyptian market is the latest among several others made by Chinese manufacturers. In August, Chinese auto maker Cherry Automobile Co. announced its plans to establish a vehicle assembly plant in Egypt and begin production in 2007. Cherry s announcement was followed by another one concerning an $800 million (LE 4.5 billion) aluminum plant to be established in a Chinese-Egyptian partnership. Citic, Chinas largest public-sector company will finance 85 percent of the project.
The MFTI official said work is underway on both projects, but added details of specific progress are yet to be released.
