EFG-Hermes Investment Bankinghas been mandated by a group of EFC shareholders to advise on a possible initial public offering (IPO) or direct sale of their stakes in the company, which operates a 400,000/650,000-tonne-a-year (t/y) ammonia/urea plant in the North West Gulf of Suez industrial zone near Ain Sokhna. The high level of interest from both local and international investors is understood to have made initial plans for an IPO less likely than a strategic sale of assets, and a decision is expected before the end of August. EFC's output is largely export-oriented, with an annual turnover of $104 million in 2003.

EFC is also the client on one of two ammonia/urea projects of equal size being built by Germany's Uhde. The client on the second project, located at Abu Qir, is Alexandria Fertiliser Company (AlexFert). Uhde is also in negotiations with Helwan Fertilisersfor the construction of a third complex, which will have an identical capacity of 1,200 tonnes a day (t/d) of ammonia and 1,925 t/d of urea. A group of 16 banks, led by Misr International Bankand Banque Misr, on 27 June signed a $202 million loan agreement with Helwan, which will be used to part-finance the estimated $300 million-325 million project. The majority of the new capacity, which is due to come on stream in September 2006, is planned for export (MEED 9:1:03).

Strong domestic demand is also driving the expansion of local capacity. Egyptian Company for Salts & Minerals (Emisal)has awarded a turnkey contract to China National Technical Import Corporation (CNTIC)for the construction of a 27,000-t/y fertiliser plant on the shores of Lake Qaroun, in the Fayoum Oasis. Scheduled to come on stream in mid-2007, the £E 120 million ($19 million) plant will account for about 5 per cent of total world output of magnesium sulphate - known colloquially as Epsom salt - which is used both as a fertiliser and a pharmaceutical product.

While most of the output is expected to be sold into the local market, company officials say as much as 30 per cent could be exported. The scheme is part-financed by a Eur 1.9 million ($2.3 million) concessionary loan from Kreditanstalt fuer Wiederaufbau, which prioritises support for environmentally friendly industrial projects.

The magnesium sulphate plant will derive some of its feedstock from wastewater from Emisal's existing sodium sulphate plant in Qaroun.