Cairo-based private equity firm, Egypt Kuwait Holding Co. (EKHO.CA) plans to start building a $2.3 billion fertilizer plant in Idaho early next year.
The company is evaluating bids from two contractors to build the facility, which will begin production by 2018, Chairman Moataz Al-Alfi said yesterday. The factory will produce 1.3 million tons of ammonia, urea and urea-ammonium nitrate per year, he said.
“We are discussing the technical sides of the bids,” Al-Alfi, who is also the company’s chief executive officer, said in an interview at his Cairo office. “After finishing this we will look into the financial side. The atmosphere is positive and banks are ready to finance.”
Egypt Kuwait, which completed a $34.1 million capital increase this year, is seeking to expand outside the North African country after its Egyptian operations were hit by energy shortages and security concerns, forcing its fertilizer factory to shutdown in August and its oil fields to operate at minimal capacity. The company is in talks to obtain a new energy concession in Niger and Egypt, and is seeking to get a cement license in Saudi Arabia, Al-Alfi said.
The holding company has been receiving about 75 percent of its natural gas needs for fertilizer production in Egypt this year, even after the government raised gas prices to $4.5 per million British thermal units in July, Al-Alfi said. Its plant is operating on about 60 percent of its capacity. Egypt Kuwait is negotiating with energy firms in the country to buy natural gas from them independently.
In Egypt, a hydrocarbon factory in Ain Sokhna, in which Egypt Kuwait owns 36 percent stake, will start operation at the beginning of next year, Al-Alfi said. It will produce 370,000 tons per year of mining grade Ammonium Nitrate, most of which will be exported.
Source: Bloomberg
