Petrochemicals industry body set-up
Egypt, Economics, 5/12/2001
Egyptian President Hosni Mubarak yesterday chaired an expanded ministerial meeting to probe future plan on developing petrochemicals industry.
Minister of Information Safwat Al-Sherif said that the meeting was held to probe a report on the national plan of the future of the petrochemicals industry in Egypt.
President Mubarak listened, at the beginning of the meeting, to a report from Oil Minister Engineer Sameh Fahmy on the plan and its broad and main lines, the future of the plan and studies conducted in this connection.
President Mubarak then listened to a full report from a major international consultant firm which carried out wide and specialized studies in the field of petrochemicals in the world, and in particular the future of the petrochemicals industry in Egypt.
Al Sherif said that elements of this study are represented in the national plan of the petrochemicals industry in Egypt.
The review made at the meeting aimed at getting acquainted with the petrochemicals industry in the world, the components of this industry and their availability in Egypt.
A review was also made of the plan to set up the new petrochemicals complex and the various stages to carry out the national plan for this industry. The study dealt with proposals to develop the petrochemicals industry.
President Mubarak listened to this detailed study which indicated that petrochemicals in Egypt are produced from derivatives of crude oil and natural gas with the aim of covering the shortage in natural sources. This industry provides substitutes such as wood, iron, wool, cotton, aluminum and rubber.
It meets the needs of industries and the various sectors in addition to maximizing the added value of this industry.
Al-Sherif said that this industry yields returns which should be known to public opinion because it is included in the production of greenhouses and materials used in lining canals, electricity pipes, electric cables insulators and pipes which carry natural gas.
It also serves the industries of textiles, heavy textiles, refrigerators, frames of electric appliances, bags, bottles, tubes and tyres, carpets and car batteries. And also the industries of oil, artificial sponge and printing ink.
This industry also serves the paints industry and provides the substitute of natural rubber, artificial wood industry, artificial spinning, needles and medical requirements.
Al-Sherif said that President Mubarak listened to a report on elements of the development of the international petrochemicals industry and explanation and a review of projects of petrochemicals in the world at present and in future.
President Mubarak reviewed a study on anticipated demand on petrochemicals up to 2020, world prices, competitive prices, and anticipated prices of the Egyptian product.
A report was read on the experience of some countries whether they were positive or negative and the experience of some successful countries in the field of using technology and marketing and providing a product at competitive prices in these countries.
Al-Sherif said that President Mubarak listened to a report on the assets of the petrochemicals industry in Egypt.
The study indicated that assets of the petrochemicals industry are based on basic elements which are all available in Egypt and are represented in relatively high advantages which include elements of attracting foreign investments, markets, the infrastructure, utilities, services, technical experience, manpower and raw materials.
These assets are available in Egypt through the prevailing elements of political and economic stability, support of the State, advanced systems to attract investments, Egypt's geographical position and the fact that it is near world markets, development of demand in the local market, the reasonable prices, distinguished technical experience in the field of refining and fertilizers, skilled labour and a cost any less than cost (elsewhere) and also the availability of natural gas at competitive prices in Egypt.
The Petroleum Minister explained that Egypt has a confirmed reserve of gas which amounts to 53 trillion cubic feet.
The probable reserve, according to scientific studies, amounts to 67 trillion cubic feet.
Al-Sherif said that the study indicated clearly and answered a question, the answer to which President Mubarak was keen to listen to and discuss, namely; Why the petrochemicals industry in Egypt?
The answer was:
First: To maximize the added value and support national economy.
Second: To support the balance of payments of foreign currency.
Third: To make optimum use of the reserve of natural gas.
Fourth: To realize self-sufficiency in petrochemical products.
Fifth: To provide raw materials and support national industries.
Sixth: To make maximum benefit of the available infrastructure.
Seventh: To provide new direct and indirect job opportunities.
Al Sherif said that President Mubarak reviewed the national plan as regards setting up new communities and the stages of carrying out the national plan.
President Mubarak was keen to listen to a report on the first stage of the plan which refers to the petrochemicals complex in the first stage which will produce 300,000 tons of propylene 900,000 tons of ethylene which are the two main components of the project.
The study showed that the first stage has investments totaling 1.3 billion dollars. The annual return reaches 450 million dollars, which is a very high percentage in the field or realizing returns.
Al-Sherif said that President Mubarak listened to these studies from the Oil Minister and from representatives of the consultant firm.
The President said that the national plan of the petrochemicals industry in Egypt is a scientific approach to laying down this base.
The President stressed that Egypt has no alternative but to work to realize success in laying down the technological base for the future of the coming generations.
The President said that the challenge is to realize our aspirations within the limits of available potentials and optimum use of natural resources and capitalizing on Egypt's distinguished geographical position.
This represents an added value which reflects on the life of the people and provides job opportunities in addition to meeting the needs from basic services such education, health and services the burdens of which increase year after year as a result of the increase in population.
Hence, it is important that there should be an added value of our projects in the field of laying down the technological base.
Al-Sherif said that the study to which President Mubarak listened indicated that investment in the field of the petrochemicals industry hinges on the derivatives of natural gas and calls for limiting consumption in order to make maximum use of the product of these derivatives with the aim of filling the gap in natural resources of wood, iron, wool, cotton, aluminum and rubber and represents inputs for the future of Egyptian industry and its competitive ability in addition to maximizing the added value in the raw material, (natural gas) so that it may be possible to export it as a manufactured product.
President Mubarak said that attention given to this industry reflects on other industries in order to realize the largest added value of our raw materials.
The President stressed that the first stage of the study should be an overall and wide study. It should include more study on the availability or markets which can absorb the Egyptian product as regards the price, volume, continuity and to maximize the competitive edge for the future of this industry and to guarantee its stability and realize a return.
The President said that it was important to take into consideration the volume of the Egyptian production vis-à-vis world production within the framework of a future vision of projects of petrochemicals production in the world in the coming ten tears.
President Mubarak discussed previous experience of some countries and lessons drawn as regards the influences and the positive and negative politicizes.
The President said that it was important to know the mistakes of others in order to take the right course from the beginning.
President Mubarak stressed that it was important to spread out complexes in the various stages in accordance with the alternatives offered in a manner which allows for a geographical distribution to provide job opportunities in several areas and not to concentrate on one place.
Dr. Ebeid stressed that the study referred to President Mubarak was an accurate study and wide experiences were used in drawing it up. He said that the first stage will take five years. Other stages will follow.
Al-Sherif said that it was agreed at the end of the meeting to begin a detailed feasibility study on the first stage which includes the first complex as regards the position, the required area, the infrastructure and the raw material and all the details related to technology, and to fix a deadline to finish this study.
The study will cover finance alternatives of foreign investment, the volume of Egyptian contribution and the volume of the share of foreign partner which will provide technology and will participate in marketing.
An entity will be set up to be responsible for carrying out this national plan and supervise planning at the national level, coordination and promotion.
The President asked the government to draw up a draft Republican Decree to set up a planning authority for the development of chemical industries.
Al-Sherif said that the first stage complex will provide about 1,000 job opportunities which will rise to 100,000 in the various stage in addition to providing services and subsidiary job opportunities and job opportunities in complementary industries.
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