The government has announced plans to establish its first small and medium sized petrochemical industrial parks, and a new holding company to run the project.
The industrial parks are planned to provide petrochemical products that can be used in areas such as construction, plastic packaging and the automotive industry.
Ismail El-Nagdy, chairman of the Industrial Development Authority (IDA), a government body affiliated to the Ministry of Industry and Foreign Trade, said the IDA signed a protocol of cooperation with the Egyptian Petrochemicals Holding Company (ECHEM), the Social Fund for Development (SFD), and the Industrial and Mining Projects Council (IMPC) to establish the parks.
Board members of the IDA unanimously agreed to contribute to the establishment of a holding company to overlook the parks’ operation and development.
Projected registered capital equates to EGP 50 million and issue capital is EGP 20 million. El-Nagy said that the paid-up capital will be funded equally by the four bodies.
“Establishing a holding company is to guarantee efficiency,” Essam El-Koryshy, general manager of the SFD, said. It is hoped that having a holding company to run the project will yield higher efficiency than having a government-affiliated body overseeing the project.
Besides contributing to the company’s capital, state-owned SFD will be tasked to provide technical services and vet investors.
The process of selecting investors will not be through the bidding system; “committees, where the four bodies are represented, will carry out the investors’ selection process,” El-Koryshy pointed out, adding that the selection committees will issue an official announcement to receive investors’ tenders.
“Details about the formation of selection committees are still under discussion,” El-Koryshy added, noting that the four bodies involved are working to ensure the objectivity and the efficiency of the selection process.
Hany Suleiman, former chairman of ECHEM, said “It’s a very good idea, if it succeeds in practice,” noting that the parks represent a very good opportunity for small investors and will create a lot of jobs.
Suleiman urged that banks should support the project by softening the pre-conditions for investors; “banks should take it easy on small investors and refrain from demanding heavy collaterals such as making land ownership a pre-condition, which not all investors can meet in spite of their reliability.”