28 November 2012 13:34 [Source: ICIS news]
LONDON (ICIS)--Egypt’s Orascom Construction Industries (OCI) is still waiting for the governmental green light to commence operations at the group's new $2bn (€1.6bn) fertilizer plant in Algeria but expects the final go-ahead shortly, the company said on Wednesday.
The Cairo-based firm had hoped to start production at subsidiary Sorfert Algeria in late 2012, but delays in obtaining the necessary operational, environmental and export licences, mean that target has now slipped to early next year.
“Sorfert Algeria expects to complete all mechanical works on Line II at the end of December,” said OCI chairman and CEO Nassef Sawiris in a statement accompanying the group’s third-quarter results.
“Once these works are complete, all necessary permits will be obtained during the first quarter of 2013 ahead of the planned fully-fledged commercial production. Our team is working closely with our partner to ensure all planned works are completed on time and all necessary permits are obtained. We expect Sorfert Algeria to start contributing to earnings during the first half of 2013,” he added.
Turning to the current fertilizer market conditions, the senior executive stated the outlook was bright and operations at two of the group’s American units, OCI Beaumont and Iowa Fertilizer Company (IFCo), were going well.
“We continue to expect strong demand for our fertilizer products supported by strong fundamentals,” he said. “Farmers in the United States have witnessed record income despite the fall in yields. A drop in yields and growing demand for crops (especially corn and wheat) will bode well for fertilizer prices.
“Both OCI Beaumont and IFCo have made noticeable progress over the last several months. OCI Beaumont's ammonia and methanol lines are now operational.
“The plant is now producing ammonia at the designed capacity of 250,000 tonnes/year and methanol at 70-80 % of designed capacity of 750,000 tonnes/year.”
OCI posted a 31% year-on-year slide in third-quarter net income to $126.8m. Consolidated revenues for the third quarter edged up 1% year on year to $1.37bn.
The group noted that its fourth-quarter revenues and profit will be negatively impacted by recent natural gas curtailments in Egypt which halted ammonia and urea production for several weeks.
($1 = €0.77)
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