(MENAFN- Brazil-Arab News Agency (ANBA))
Cairo – The Egyptian Financial and Industrial Company (EFIC ), which operates in the fertilizer sector, intends to invest USD 600 million over the next five years to increase production capacity and add new products to its current portfolio of monophosphate fertilizers.
ANBA interviewed chemist Abdel Azim Al-Abbasi (pictured above), president and general manager of EFIC, to learn more about the importance of the fertilizer sector for the Egyptian and global economy, the future of investments in this strategic sector, and company expansion plans.
Al-Abbasi said the fertilizer sector is one of the most promising for the Egyptian economy due to its link to food and clothing, which increases its significance in the face of the continuous increase of the local and global population; therefore, it requires greater attention from the government and private sector.
Answering ANBA on the attractiveness of the fertilizer sector for local and foreign investors, he explained investment depends on two main criteria: General investment climate in the country and availability of raw inputs.
He pointed out the fertilizer sector in Egypt is divided into three main products. Phosphate fertilizers, whose raw material is abundant in several provinces in south Egypt, the Red Sea, and Abu Tartour, are one of the most attractive due to the availability of inputs, technically skilled labor, and low financial cost.
The president said the second main product is nitrogen fertilizers, whose production depends on nitrogen and hydrogen, which rely on natural gas; as long as it is available, this sector could become very attractive for investment too. The third is potassium fertilizers, which Egypt depends on importing inputs to fabricate, limiting productivity and attractiveness.
Al-Abbasi explained Egypt has a production capacity of around 17 million tonnes of nitrogen fertilizers, of which it consumes approximately 9 million tonnes a year, with the remainder exported to foreign markets. While it produces approximately 1.5 million tonnes of phosphate fertilizers, consumption ranges between 800,000 and 900,000 tonnes per year, the rest being exported.
Regarding potassium fertilizers, production capacity sits at about 400,000 tonnes a year, with local consumption reaching around 120,000 tonnes and the rest being exported.
Al-Abbasi explained the fertilizer sector in Egypt had been affected recently by the global crises. He highlighted the Egyptian economy in all its sectors managed to overcome the COVID-19 crisis without significant impact, one of the few economies in the world that managed to achieve favorable growth rates at the height of the pandemic, thanks to the balance between preventive measures and production continuity enforced by the local government.
According to him, the impact of the Russian-Ukrainian war crisis on the fertilizer sector was positive for Egypt since the price hike in some raw inputs used in this industry was offset by a more significant price increase in the final product, which allowed the sector to obtain positive returns. The war also led the government to focus on self-sufficiency in grain crops, especially wheat.
The company started exporting in the 1990s. Brazil accounts for 90% of the company's exports.
The general manager confirmed EFIC is one of the most senior in the field of phosphate fertilizers in Egypt; it was established in 1929 to manufacture phosphate and sulfuric acid. In the mid-1990s, the company started exporting globally after studying the needs of global markets with demands for granulated fertilizers.“This led us to develop our production lines and manufacture granulated fertilizers according to international specifications, which allowed us to export to Pakistan, Bangladesh, India, France, Italy, and Spain,” he declared.
Al-Abbasi explained from 2020 to 2021, work was intensified to improve the quality of products to supply foreign needs and“enter new and promising markets such as Latin America, mainly Brazil, which currently represents about 90% of our total exports.”
He pointed out EFIC annually produces about 800,000 tonnes and exports between 30 and 40%, equivalent to 200,000 to 300,000 tonnes a year, positively reflecting the company's performance and the country's economy in general.
The company intends to double its export capacity to Latin America. He explained the biggest challenge to increasing exports to this market is logistics and transport, mainly because Egypt's competitors are Moroccan companies, which are closer and have direct access to the Atlantic Ocean. Al-Abbasi added EFIC has a competitive edge represented by lower production costs than Morocco, in addition to quality and price.
EFIC is an official sponsor of the Economic Forum Brazil & Arab Countries. He explained the company will participate in the event and believes in the importance of the Brazilian market and the need to intensify the efforts to maintain this strategic market for the company, in addition to seeking expansion opportunities and increasing its customer base through participation in the forum.
Regarding his company's production and exports plan for the next five years, he revealed it intends to change its policies based on the production of just one product, anticipating changes that could affect the market for this product in the future.
He pointed out diversification is at the forefront of the company's priorities in the coming years, as it aims to triplicate superphosphate output, which drives the EFIC to produce phosphoric acid on another site in southern Egypt.
The company's second initiative depends on the effort to produce monocalcium phosphate and dicalcium phosphate, which make part of cattle, fish, and poultry fodder, to achieve self-sufficiency and export later, especially since the product is needed worldwide.
He said the company's plan for the next five years also hinges on maintaining, developing, and improving production capacities for export to Latin American single superphosphate markets to sustain this critical market.
Concerning the financial value of the company's expansion plan, he explained the first part of the phosphoric acid project would cost around USD 75 million, while the first phase of the phosphoric acid production project would tally about USD 215 million, as well as the first phase of monocalcium phosphate, and dicalcium phosphate, also estimated at USD 215 million, bringing the company's total planned investments over the next five years to approximately USD 600 million.
Translated by Ahmed El Nagari & Elúsio Brasileiro
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