CAIRO, 23 March 2005 — Once again the Egyptian fertilizers sector has captured the limelight. The excitement this time began last February when Egyptian Minister of Investment Mahmoud Mohieldin announced that Egyptian Company for Fertilizers in northwest Suez Gulf region will be offered for sale.
“The public shares represent 45 percent of the total shares of the company” he said. “The company achieves annual surplus of $62 million, as well as it represents 45 percent of the paid capital and 25 percent of the revenues on ownership rights.” He added that the company represents a successful investment opportunity as it will achieve an annual income of $120 million to the national economy.
While speculators are still wondering which company will win the fierce battle raged over the acquisition of the company’s stakes, they all agree that petrochemical giant Saudi Basic Industries Corp. (SABIC) seems to be the lucky winner. SABIC made an offer for 88 percent of the company, the reminder is held by a Kuwaiti company. The Saudi group was awarded a contract in 2003 to establish a fertilizer plant in Egypt at a cost of $300 million. Officials at the Egyptian Company for Fertilizers told Arab News that a delegation from SABIC, headed by the company’s Deputy Chairman Suliman Al-Awlami, has met with high-ranking officials to discuss the offer. The price proposed for the stakes has not been made public yet but is estimated at some $500 million.
SABIC is expected to face a fierce competition next week from the Egyptian Kuwaiti Holding Company that hold 12 percent of the company’s shares and a couple of Indian and Canadian investors. “The Saudi company has better chances because they have great experience in the filed of fertilizers, has mega investment in the region and has dealt before with the Egyptian market,” said an official at the Egyptian company who asked to remain anonymous. “The Egyptian company is looking for the best price and experience,” he said.
The same view was echoed by Salah Eddin Moumen, chairman of the state-owned Egyptian Chemical Industries Co. (KIMA) who added that SABIC is also a well-known name in the Egyptian market.