Egypt’s phosphate revolution a boon for Aswan industrial zone

Egypt is investing heavily in phosphates. (AFP)
Updated 06 May 2018

Egypt’s phosphate revolution a boon for Aswan industrial zone

  • Phosphate rock producers are integrating in order to add value and meet the demands of Asian customers
  • The fertilizer sector is also growing domestically, with Egypt consuming 14.3 million tons of nitrogenous and phosphate fertilizers per year

LONDON: Cairo is upping its game in the global phosphates market by funding a new multimillion-dollar phosphate industrial zone in Aswan, as well as expanding Safaga Port on the Red Sea, a major hub for agribusiness exports to India. 

Phosphates and potash are part of a group of fertilizers that boost crop nutrition, and increase the yield from soil used to grow food. A report in Egypt Today said that since 2015, Egypt’s Industrial Development Authority had approved about 10 new projects in the field of phosphate fertilizers, with two already in production.

Phosphate rock producers are integrating in order to add value and meet the demands of Asian customers who find it more cost-efficient to buy intermediate or finished products since the price of phosphate rock has more than doubled since 2006. 

That makes it harder for Asian middlemen to make money when they sell the raw material up the supply chain. It also means more manufacturing opportunities for Egyptian phosphate producers and suppliers, the prime targets of the new phosphate industrial zone in Aswan.

The fertilizer sector is also growing domestically, with Egypt consuming 14.3 million tons of nitrogenous and phosphate fertilizers per year, according to the annual report of the Chamber of Chemical Industries (CCI), affiliated with the Federation of Egyptian Industries. Egypt could achieve self-sufficiency before too long, as well as bolster exports, the CCI said. The international phosphate landscape is changing as US production declines and American mines become depleted.

The US has recently been an importer of phosphate rock, which means a bigger role for non-US producers such as Egypt. Asian customers can buy cheaper from North Africa as it is closer, putting the US at a disadvantage, and this spurs investment in the region. Phosphate production was slowing in China, but growing strongly in places such as Morocco, Jordan, Saudi Arabia and Egypt, according to a US Geological Survey report last year.  OCP Group of Morocco is the largest phosphate producer in the world. Morocco has the biggest phosphate rock reserve base in the world, accounting for about 75 percent of worldwide estimates, according to the report.


Fawaz Alhokair’s M&S deal in Saudi ends, still partners elsewhere

Updated 16 min 44 sec ago

Fawaz Alhokair’s M&S deal in Saudi ends, still partners elsewhere

  • M&S still has a partnership with Alhokair in Armenia, Georgia and Kazakhstan

DUBAI: Saudi Arabia’s Fawaz Abdulaziz Alhokair said on Wednesday its franchise agreement in the kingdom with British retailer Marks & Spencer had ended, along with similar deals with a number of “non-performing” brands.
Marks & Spencer (M&S) said in an email that its franchised stores in Saudi Arabia were transferred to Al-Futtaim Group in 2018. M&S has 15 franchised stores in Saudi Arabia.
“We are focused on continuing to work with Al-Futtaim Group to develop and grow our business in Saudi Arabia,” M&S told Reuters.
M&S still has a partnership with Alhokair in Armenia, Georgia and Kazakhstan, according to M&S’s website.
M&S has more than 400 stores outside the United Kingdom, where it is a mainstay of shopping streets with more than 1,000 outlets. Its international business has been struggling, however, with revenues falling 14% and underlying operating profit down 6% in the year ended March 30, 2019.
Alhokair also said on Wednesday it made a first-quarter net profit of 224 million riyals ($60 million), down 10.1% from the same period a year earlier.
The firm, which owns franchise rights for brands including Mango, Zara and Banana Republic in the Middle East, said a decline in sales during the quarter was driven by the closure of non-performing stores and the disposal of weak brands as the group presses ahead with a “portfolio optimization strategy.”
($1 = 3.7504 riyals)