WASHINGTON DC: Amid heightened optimism about Egypt’s economic prospects at the “Egypt: Forward Forum,” an MOU for a multi-billion dollar petrochemicals project was signed by prominent US and Egyptian companies Tuesday.
Basil El-Baz, founder and CEO of Egypt Basic Industries Corporation (EBIC), as well as Chairman and CEO of Carbon Holdings, inked the first of a series of agreements for the development of a $3.5 billion naphtha cracker and olefins complex project that will be jointly developed with US companies.
Financed by the Export-Import Bank of the United States, the mega project is expected to create some 3,000 jobs.
The signing of the MOU crowned what most delegates described as a successful forum, which, above all, aimed to boost the confidence of US businesses in Egypt as well as emphasize partnerships and trade as the way forward, setting the scene for the rise of a new generation of entrepreneurs in the “new Egypt” following the fall of the previous regime.
According to the United States Trade and Development Agency, which hosted the forum and oversaw the signing of the MOU, the first phase of an ambitious 20-year plan to develop Egypt’s petrochemical industry at an overall cost of $10 billion was completed in 2008 at a cost of $3.8 billion.
The majority of the existing petrochemical plants are producing under-license from US companies, which have a market share of approximately 26 percent. Market demand for petrochemicals in Egypt is estimated at 6 percent annually.
In 2009/10 Egypt produced 1.8 million tpa of petrochemical products worth $768 million; 836,000 tpa of which were exported worth $373 million. Equipment for petrochemical factories have historically been imported primarily from the UK, US, Italy, and the Far East, often depending highly upon feasibility study requirements and/or recommendations.
Attendees of the forum stressed the importance of infrastructure development as a catalyst for economic growth and job creation, especially in light of the fact that 750,000 Egyptian university graduates enter the job market each year.
Creating the right conditions to encourage private enterprise and entrepreneurship to support small and medium enterprises was also a widely discussed topic in which there was near consensus that the perception of political and social stability in Egypt will have an instant effect on access to financing.
During a panel discussing the economic outlook for Egypt, Seif Allah Fahmy, chairman of Egypt’s Competitiveness Council, emphasized the need for a clear vision in a country that has been “functioning without a vision” for the past 30 years.
On a brighter note, panelist Hesham Fahmy, CEO of the American Chamber of Commerce, stressed the importance of looking at Egypt as a hub that offers great value through trade agreements such as with Africa, the Gulf countries and Europe.
He hailed the extraordinary resilience of a country with “no parliament, no president and no constitution” but with a functioning economy that is open for more business.