South Asian Petrochem inks MoU to set up PET plant in Egypt

27-Dec-06

To benefit from the advantages of logistics and cheap power in Egypt, South Asian Petrochem plans to incorporate a subsidiary in Egypt, with equity participation from Egyptian Petrochemicals Holding Company (Echem). For this, South Asian Petrochem has signed a memorandum of understanding (MoU) with Echem for jointly setting up a 315,000 tpa polyethylene terepthalate (PET) resin manufacturing plant in Egypt. SAPL will hold a 70% stake in the venture and Echem will hold the balance 30%. Investment outlay is estimated at US$95 million for the plant, work for which is to commence in August. It will take about 20 months to complete the project, that will cater mainly to markets in Europea and USA. The plant is likely to be located on Alexandria or Damietta port and will be supplied almost 250,000 tons as feedstock by a tie up of SAPL with Mitsubishi PTA of Haldia. The plant in Egypt is coming up follows the withdrawal of the anti-dumping duty on imported PET resin in the US, increasing global scope and markets. To tap this opportunity, SAPL has already set up a subsidiary in Atlanta in 2005-06.. At present, SAPL also procures from Mitsubishi, which has decided to set up a second unit at Haldia.