Gov’t is using the petrochemicals industry to fuel its industrial localization plans: The state is moving ahead with a multi-bn USD roadmap to develop the country’s petrochemical industry in a bid to lower the import bill for intermediate industrial products, make the most of oil and gas resources, and boost exports. As part of the plan, the government is working to add 7 mntons to the industry’s current production capacity of 4.5 mn tons across 10 new projects, leveraging the industry to turbocharge the state’s localization drive.

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A sweeping glance of the projects: The 10 industrial projects will be spearheaded by the Egyptian Petrochemicals Holding Company (ECHEM), chairman Ibrahim Mekki told EnterprisePM. The projects will localize the production of 20 industrial products currently imported by Egypt, with projected export revenues of over USD 8 bn, Mekki said.

A closer look: Here’s the rundown of the projects, which the government is working on in collaboration with local and international partners:

• Ramping up capacity at existing industrial complexes, such as those run by Misr Fertilizer Production Company (Mopco), Egyptian Linear Alkyl Benzene (Elab) and ECHEM.

• A c. USD 900 mn green ammonia project in Damietta involving Belgium engineering group John Cockerill, Norwegian firms Scatec, Yara International, ECHEM, and Mopco. The parties will produce around 150k tons of green ammonia annually in Mopco’s factories.
• A sustainable aviation fuel production facility in Alexandria by US conglomerate Honeywell that’s slated to produce 120k tons annually in its first phase before doubling production in phase two to 240k tons.
• A formaldehyde project by Suez Methanol Derivatives that will produce an annual 87k tons of formaldehyde and 53k tons of sulfonated naphthalene formaldehyde. The project, which will enter production this year, will use methanol produced by Methanex, urea produced by Mopco, and caustic soda produced by ECHEM, supplying essential materials for the furniture and wood panel industries.
• A bioethanol project that uses molasses in the production of renewable fuel that can be mixed with gasoline to reduce carbon emissions from vehicles.
• A silicon metal complex in Alamein that is expected to produce 45k tons per year to support the manufacture of solar panels.
• A soda ash project that targets an annual output of 600k tons to supply the local glass and detergent industries.
• A petrochemicals complex in the Suez Canal Economic Zone with an annual production capacity of 4 mn tons. Feasibility studies are complete.
• A wood panel project that uses rice straw. The project is currently in its pilot phase and set to begin commercial operations within months, promising to cut emissions by 360k tons annually.
• A USD 660 mn project that will see Alexandria Supply Chain Company build, operate, and maintain liquid and gas bulk facilities at Dekheila Port, supporting ethane imports.

The projects carry significant economic potential: The new projects are expected to raise the petrochemical sector's contribution to the country's GDP to 7.5% by 2030, from just 3% at the end of 2024, Mekki explained, noting that eight of the projects alone could turn USD 1.2 bn worth of feedstock into high-value output worth over USD 3 bn. Petrochemicals fuel a broad range of industries — from paints, rubber, plastics, and detergents to pharmaceuticals, cosmetics, fertilizers, and textiles — making the sector a vital cog in Egypt’s industrial machine, said Executive Director of the Chemical and Fertilizer Export Council Mohamed Mageed. Egypt’s petrochemical exports grew 103% y-o-y to USD 1.6 bn in 2024, Mageed said.

The plan will also support Egypt’s ambitions to become a regional petrochemicals hub, which would expand Egypt’s export base to over 50 countries, create jobs, and unlock more value from its natural gas, Chairman of the Export Council for Chemical Industries and Fertilizers Khaled Abul Makarem told us.

The government expects to see results from efforts to stimulate industrial investments over the next two years, a government official told us back in November, adding that the restructuring of the sector and the development of specialized industrial zones and services will have a big role to play in that regard.

The sector features prominently in Egypt’s localization drive: Polyester and soda ash are amongst the 23 industries that the government is looking to localize by offering incentives and facilities to attract investments.

Petrochemical production costs could also take a hit from the expected cuts in energysubsidies, which could hike production costs, adding to the financial challenges facing the sector. Meanwhile, incoming investments in research and exploration aren’t enough to uncover new resources or boost production.

And there are other hurdles to clear: Limited investments in research and exploration constrain growth, while Egypt faces tough regional competition from resource-rich and experienced players like Saudi Arabia and the UAE. Abul Makarem cited infrastructure upgrades as essential to meeting growing demand, adding that global oil price swings and tightening environmental standards mean the industry must also invest in cleaner tech.

Your top industrial development stories for the week:

• China’s SBH Kibing Solar New Energy plans to build a USD 700 mn solar panel glass plant in the Suez Canal Economic Zone. The two-phase facility will produce 1.5 mn tons of solar glass and 1.1 mn tons of silica sand annually, mostly for export.
• Vitabiotics’ local partner Aptecure is investing EGP 600 mn to expand itspharmaceutical production line in support of the government’s localization strategy. The company also signaled plans to deepen cooperation with the Egyptian Drug Authority, according to a statement.
• India’s Sterlite Power is mulling a USD 5-6 bn electricity grid specifically for green hydrogen projects. The project aims to enhance Egypt’s energy infrastructure and support the country's transition toward clean energy. (Statement)