CAIRO: Egypt's chemical and petrochemical exports topped $10 billion in the first half of 2008, marking a significant milestone for a burgeoning industry. This figure illustrates a substantial increase from 2007 when exports amounted to $6.8 billion, according to statistics released by the Chemical and Fertilizers Export Council. Growth of exports in the sector exceeded the 25 percent target set by the Ministry of Trade and Industry last year. Exporting chemicals and chemical-derived products, which include fertilizers and glass products as well as plastic and rubber - which are derived from petrochemicals - has long been a staple of Egypt s economy. Recent efforts by those in both the public and private sectors, though, have made Egypt even more competitive on the world stage. Plastic and rubber exports, for example grew 58 percent from the first half of 2007 to the first half of 2008. Pesticide exports grew 77 percent and paint and ink exports increased 38 percent over the same period. Two years ago, under the auspices of the Ministry of Trade and Industry, the Egyptian government began offering incentives for companies to export goods. For example, the government subsidized up to 30 percent of the export cost of plastic wrapping and glassware. This sort of incentive was necessary, said Mostafa El-Gabaly, executive director of the Abu Zaabal Fertilizer and Chemical Company, to add competitive advantage to the product. An increase in exports has drawn greater attention to the sector, which, he added, has had the benefit of increasing foreign investment in these sectors. In fact, a number of major chemical and petrochemical processing plants are under construction now with the help of foreign investment. These plants will help feed a growing global demand for chemical-based products. Europe serves as Egypt s main export market. They are closing plants in Europe and leaving it to us, said Walid Helal, chairman of the Chemical and Fertilizers Export Council. France is Egypt s most robust partner in the industry, purchasing 11 percent of Egypt s chemical exports. Italy and Turkey each account for 8 percent of Egypt s total chemical exports. The petrol-rich Gulf countries serve as Egypt s direct competitors in the industry. "We cannot sell in the Middle East, said El Gabaly, because the Middle East is our competitor. He noted that only Saudi Arabia and Syria import any significant amount of Egypt s chemicals and petrochemicals. Discussing Egypt s competitive edge, El Gabaly observed, We have the advantage of being on the Mediterranean. We can say that we have the West and they have the East, he added, discussing how Egypt and the Gulf informally divide up the market. Chemical exporters have faced their share of hurdles in recent years with the surging costs of raw materials. The price of sulfur, for example, which is a staple in many chemical-based products, grew from $80 per ton in 2006 to $800 per ton in 2008. These rising production costs have bolstered the government s decision to provide incentives to exporters who have seen their profit margins dwindle with the rising cost of raw materials. Despite these challenges, the Chemical and Fertilizers Export Council hopes to outdo its explosive first half numbers, setting an export target of $14 billion for the second half of the year.
