China and Egypt sign deal for $1bn Sokhna chemical plant

Chinese chemical producer CJN is joining with Egypt’s El Sewedy Industrial Development company to build one of the Middle East’s largest chemical and phosphate plants at a cost of $1 billion.

The project, to be based in the Sokhna industrial zone in the western Gulf of Suez, will be executed in three phases and will target the Middle East and other foreign markets.

Officials said the project is expected to generate nearly 10,000 direct and indirect jobs when it is completed after nine years.

CJN, a major phosphate producer, and El Sewedy will undertake the project in line with an agreement they signed in the administrative capital on Thursday with Walid Gamal El-Din, Chairman of the Suez Canal Economic Zone Authority.

“This project is one of the largest specialized phosphate chemical industrial complexes in the Middle East,” said a statement published by the cabinet on its Facebook page.

Spanning over 900,000 square metres, the project will be implemented in three consecutive phases with a total investment of $1 billion, the statement said, adding that most of its output would be exported to markets in South Asia, the Middle East, Africa and South America.

Phase one of the project, producing phosphoric acid and fertilizers with an annual capacity of 600,000 tonnes, will be launched in 2026 and is expected to begin commercial operations in 2028.

Phase two will start in 2029 and will focus on producing high-purity specialized phosphate chemicals such as purified phosphoric acid in both industrial and food grades, along with potassium dihydrogen phosphate. 

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Phase three, to be launched in 2032, will produce battery materials. The project should be fully completed in 2034.

Chinese companies are among the largest foreign investors in Egypt, mainly in its industrial zones. They are considered a key part of the country’s push to boost exports within reforms intended to reduce imports and tackle a persistent trade gap.

In July, Abdul Aziz Al-Sharif, chairman of the Egyptian commercial services, a government trade promotion organization, said there is a target to double China’s current investment of $8 billion within four years.