Agrium optimistic on Egypt outlook, proceeds with expansion

09 February 2011 19:04  [Source: ICIS news]

TORONTO (ICIS)--Agrium is “cautiously optimistic” about the political and economic outlook in Egypt, even if that country’s government should change amid the ongoing unrest, the chief executive of the Canadian fertilzer major said on Wednesday.

Meanwhile, Agrium’s Egyptian affiliate, MISR Fertilizer Production Company (MOPCO), was proceeding with work on tripling capacity, said CEO Mike Wilson. Agrium holds a 26% stake in MOPCO’s 675,000 tonne/year urea facility at Egypt’s port city of Damietta.

“We remain cautiously optimistic that a peaceful resolution to the political situation will unfold,” Wilson told analysts during Agrium's 2010 fourth-quarter earnings conference call.

Wilson, responding to an analyst’s question, said any new government would want to keep the country’s economy going and continue to generate export revenues.

“I can’t see a new government coming in and saying we are going to destroy the economy,” he said.

Wilson added that MOPCO continued to operate and export at normal levels during the unrest, “although this is not true for all Egyptian nitrogen facilities”.

Ron Wilkinson, Agrium senior vice president and president of the company’s wholesale business, said work on MOPCO’s expansion was about 50% complete.

Urea production from the first train of the expansion could begin in 12 months, “all going well”, with both trains expected to be completed by June 2012, Wilkinson said.

MOPCO had a natural gas price contract in place and Agrium expected that contract would be honoured, he added.

In related news, Egyptian fertilizer firm Orascom Construction said this week its plants had continued to produce at normal rates during the unrest and several shipments had been completed. Orascom last year bought DSM's fertilizer and melamine business groups.

Last week, Canada-based methanol major Methanex said it decided to evacuate its international staff from Egypt in response to the unrest.

Commissioning activities at Methanex's new 1.3m tonne/year joint venture EMethanex methanol plant at Damietta had been curtailed and the site was currently staffed at minimal levels, the company said.

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By: Stefan Baumgarten
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