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Egypt Petrochemicals Report Q1 2013 - New Market Research Report

New Energy research report from Business Monitor International is now available from Fast Market Research


Boston, MA -- (SBWIRE) -- 01/28/2013 -- BMI's latest Egypt Petrochemicals Report examines the impact of the transition to democratic civilian rule on the petrochemicals industry, but warns that market growth in 2013 will be sluggish in some segments as investors wait to see what the new government will offer in the way of economic policy. This report also looks at planned capacity expansion, which is focused on the ethylene, polyethylene (PE) and fertiliser sectors and should see Egypt become self-sufficient in certain products over the next five years.

There was a concerted effort to develop domestic capacities in the final years of President Hosni Mubarak's rule, although production targets were not met due to a lack of investment and delays. Nevertheless, the programmes put in place under the previous regime are likely to be completed in coming years, providing the basis for growth through the value chain. Ethylene capacity is set to rise to 1.66mn tonnes per annum (tpa) by 2016 - from the current 300,000 tpa - on the back of planned projects, which look set to pick up as the civilian government stabilises. This will support a significant expansion of PE capacity, which should rise from 225,000 tpa to 1.58mn tpa over the forecast period.

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In 2012, the main development in the country's petrochemicals industry was the mid-year completion of Egyptian Fertilizer Company (EFC)'s debottlenecking initiatives, which led to a 20% increase in the capacity of EFC's Line II. The completion of the upgrade programme increased EFC's urea capacity by 250,000 tpa to 1.55mn tpa. This brought national urea capacity to 5.94mn tpa, bolstering Egypt's position as a global supplier of chemical fertiliser.

Over the last quarter, BMI has revised the following forecasts/views:

- Overall, our long-term outlook for the Egyptian petrochemicals industry is increasingly bullish. BMI believes that Egypt remains ripe for investment in petrochemicals due to the potential in its domestic market, its trading relations with other markets in Africa, the Middle East and southern Europe, and the scale of its upstream resources.
- The main downside risk will be a growing and assertive civil society that may gorw more vocal over controversial projects. The external climate is also likely to prove less than favourable in the near term, with the eurozone (which absorbs one quarter of Egyptian exports) having recently entered what may prove to be a protracted recession.
- In the Middle East and Africa Petrochemicals Risk/Reward Ratings (RRRs), Egypt remains in ninth place with 44.4 points, down 0.4 points since the previous quarter due to a deterioration in its country risk score.

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