Maher El-Abd, the head of investor relations in the Egyptian Chemical Industries Company (KIMA), said that the company has paid EGP 1.3bn by the end of 2016 to the Italian company Tecnomont. The money is meant to be spent on construction and operational processes to establish new production units, and carry out the rehabilitation of their old factory in Aswan.
KIMA contracted with Tecnomont in 2011 to implement expansion works of its affiliated fertiliser factories for $796.5m, where they will be carried out in two phases. The first phase involves establishing two ammonia production units with investments worth $658m, and a capacity of 1,200 tonnes per day. The second phase will focus on the rehabilitation of a factory working with natural gas, costing $138.8m.
El-Abd stressed that construction and rehabilitation works began in January and is scheduled to be finished by November 2018. He explained that the amounts paid to Tecnomont were collected through self-financing and increasing the company’s capital in the stock exchange by nearly EGP 1bn in 2015.
El-Abd noted that his company exports 85% of the products they produce, which the company greatly depends on in order to obtain US dollars. This also coincides with depending on the local market in the obtainment of raw materials. El-Abd stressed that this equation reinforces the investment feasibility and the company benefits from the increase in the dollar price, reducing the fears from increased investment costs to carry out development works.
In December, the Egyptian Financial Supervisory Authority (EFSA) announced that it does not mind calling upon shareholders to take part in the offering of shares to increase the company’s capital by EGP 857m, bringing the capital up to EGP 2.9bn. The first step was planned to be implemented this January.
KIMA achieved net profits of EGP 111.78m in the fiscal year (FY) 2015/2016, compared to EGP 86.5m in FY 2014/2015, registering a 29% increase.
KIMA works in the field of fertilisers and ammonium nitrate production, with a capital of EGP 1.9bn, distributed over 394 shares, with a nominal value of EGP 5 per share.
