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Plastic fantastic. (Cover Story Egypt Petrochemicals).

Article Excerpt
As foreign firms queue up to exploit Egypt's gas reserves, Cairo is courting investors to help kick-start a multi-billion dollar petrochemicals investment programme. Digby Lidstone reports on an ambitious strategy to become a leading player in the international chemical markets.

Few things faze the average Cairene, so the plastic palm trees that have sprouted along the left bank of the Nile over the last month draw only the occasional wry remark from passers-by. Lurid green by day, neon by night, defying both drought and decorum, these urban accessories are the latest fling in a long consumer affair with all things plastic. A commonly heard joke is that the government is planning to cut its food import bills by growing plastic dates.

The quip is not far from the mark. The government does indeed intend to help balance the budget by setting up a home-grown plastics industry. But the scale of the project is rather more ambitious. The development over the next two decades of a worldscale petrochemicals industry in Egypt will require at least $10,000 million of investment: not the sort of money that grows on trees.

Some 1.2 million tonnes of polyethylene, polyvinyl chloride (PVC), polystyrene and other plastics are consumed by the domestic market each year -- over 18 kilogrammes of plastic for every Egyptian. A fragmented local industry accounts for a small proportion of local demand, about 470,000 tonnes a year (t/y). Most of the remainder is imported from countries with well-developed petrochemicals industries such as Saudi Arabia, South Korea and India. The task ahead is not only to slash the annual import bill, but to take on those producers in the world markets.

"We have to compete with other countries in this area," says Petroleum Minister Sameh Fahmy, who joined delegates at the First MEED Petrochemicals Conference in Cairo on 22-23 January to outline progress on the government's long-term ambitions for the sector. Those aspirations are bold ones. "The overall masterplan envisages 14 petrochemicals...

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