SomaliPress.com

Orascom to build phosphate based fertilizer plant

Published on Monday 19th May 2008

Egypt (Reuters) - Egypt's Orascom Construction Industries (OCIC) will spend $800 million over three years to build a phosphate-based fertilizer plant, the firm's chief executive said on Monday.

Orascom would build the plant in one of five countries in the Middle East, including Tunisia, Jordan, Egypt, and Morocco, Nassef Sawiris told reporters at the World Economic Forum.

Recently Egypt's Orascom Construction Industries OCIC.CA said 2007 net income grew by almost half from the previous year to its highest ever on a record number of construction contracts. Orascom said 79 percent of its revenue came from outside Egypt, including from the Gulf Arab region, where more than $2 trillion of infrastructure projects have been announced or are under construction.

Egypt's largest builder by market value said net income, including discontinued cement operations, jumped 42.5 percent to $661.8 million.

"We will launch the project before the end of the year," Sawiris said. "We have already had some encouraging discussions in Morocco ... May the best site win."

He said the plant would start production after three years.

"It complements our global business," Sawiris said.

Phosphate-based fertilizers comprise about 30 percent of global farming fertilizer needs, he added.

"Generally speaking, (fertilizers) are a lucrative business," said Tarek Shahin, analyst at Beltone Financial in Cairo. "Demand is high, and they make sure they have manageable cost structures."

Orascom Construction has said it would focus on fertilizers after agreeing to sell its cement unit to French company Lafarge (LAFP.PA: Quote, Profile, Research) for 8.8 billion euros ($13.73 billion) last year.

OCI said in February it was taking over the fertilizer activities of UAE company Abraaj Capital in exchange for cash and shares worth about $1.59 billion.
The Egyptian government has abolished the tax and custom privileges of energy-intensive companies, including fertilizers, in free zones as part of a budget amendment approved by parliament on Monday.

Source: www.reuters.com

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