Cairo -- (MARKET WIRE) -- March 20, 2007 --
OCI / Sonatrach Incorporate JV Company
OCI / Sonatrach to establish two industrial projects including a
1 million ton per year urea plant and a 0.7 million ton per year ammonia
plant in Algeria
Cairo, Egypt - 20 March 2007: Orascom Construction Industries announced
that the incorporation of Sorfert Algerie (Sorfert) was completed
yesterday by OCI and Algerian state-owned oil & gas company Sonatrach
which has been established to construct a greenfield ammonia/urea
fertilizer plant with an annual capacity of 1 million tons in addition to
an ammonia plant with an annual capacity of 0.7 million tons. OCI has 51%
in the new venture while Sonatrach owns the remaining 49%. The plants
will be located in the industrial zone of Arzew in Wahran province near
the Mediterranean coastline to facilitate export operations. As part of
the shareholders' agreement, Sonatrach has committed to enter into a 20
year gas supply agreement with Sorfert. OCI is acting as the lead
developer of the project. White & Case (London) is the appointed legal
counsel and Societe Generale is the appointed financial advisor to the
Sorfert project. Initial equity payments will be immediately used to
complete engineering plans for the new plants and secure critical
components of the plants equipment which are considered long lead items.
The negotiation of all other project agreements is well underway and is
nearing completion. OCI expects 70% of the total investment cost to
be solicited from Algerian and international banks as project
finance debt in a limited recourse structure. OCI targets to
commission the production lines during 2010.
The signing ceremony was attended by his Excellency the Algerian
Minister of Energy & Mining - Dr. Chekib Khalil, the President of
Sonatrach, the Vice President of Sonatrach and the Governor (Wali)
of Wahran, the Sonatrach Project team and senior OCI management.
OCI Chief Executive Officer Nassef Sawiris commented "our new joint
venture with Sonatrach is a further expression of our commitment to
the Algerian market. We are very pleased with our partnership and
grateful for the support we have received from of the Algerian
Government. OCI continues to tap into Algeria's best human
resources with a current employee force exceeding 7,000 skilled
Algerians." Mr. Sawiris also added "Sorfert Algerie will contribute
substantially to our consolidated growth in 2010. Together with
the ammonia plant under construction in Egypt which is scheduled
for completion by end of 2008, these projects stand to benefit
from the historic high prices for fertilizers which are being
partially fueled by the rising demand for the use of
agricultural-based commodities such as corn-based ethanol and
soybean biodiesel as an alternative fuel."
About Orascom Construction Industries in Algeria
OCI currently owns and operates a cement production plant in
central Algeria through its wholly owned subsidiary Algerian Cement
Company (ACC), with a total maximum annual capacity of 5 million
tons. OCI expects to commission a greenfield cement production
plant owned its wholly owned subsidiary Ciments Blanc d'Algerie
(CIBA) in northwest Algeria with an annual capacity of 2.5 million
tons of grey cement and 0.55 million tons of white cement during
2007.
In construction, OCI Algeria continues to provide engineering,
procurement and construction services on large and complex projects
across Algeria including projects such as the Blida military
hospital, the Ciments Blanc d'Algerie white cement plant, and the
Hamma-Algiers water desalination plant operated by Hamma
Water Desalination SpA, a jopint venture between GE Water and the
state-owned Algerian Energy Company SpA (a subsidiary of
Sonatrach).
In late 2006, OCI completed the acquisition of minority stakes in
Mehsas National Bag Company, of which OCI owned 50%. The official name
of the currently 100% owned subsidiary has been changed to Algerian
Bag Company (ABC). OCI acquired a 50% stake in MNBC two years ago to
ensure a consistent high quality supply of cement bags to its cement
operations in Algeria. The acquisition was completed for a total sum
of US$ 3.8 million. OCI will invest an additional US$5 million to
expand the cement bags production capacity ahead of it's the
commissioning of its greenfield operation in northwest Algeria.
OCI has also launched its ready-mix concrete and aggregates business
in Algeria through Ready-mix Algeria expects to operate four
aggregates quarries with an annual capacity of 3 million tons of
aggregates by end of 2007. Ready-Mix Algeria operates 5 ready-mix
batch plants with an annual production capacity of 800,000 cubic
meters of concrete.
For additional information CONTACT:
Investor Relations Department:
Hassan H. Badrawi - Director
Sarah Makiya
Omar Darwazah
Tel: +202 2461 1039/1036
Fax: +202 2461 9409
Email: hassan.badrawi@orascomci.com;
sarah.makiya@orascomci.com;
omar.darwazah@orascomci.com
Orascom Construction Industries
Orascom Construction Industries (OCI) is a leading cement producer
and construction contractor active in emerging markets. Based in
Cairo, we employ more than 40,000 people in over 20 countries.
Working together with our employees, business partners and
customers, we are helping to build the future in developing
countries around the world.
As a cement producer, we own and operate cement plants in Egypt,
Algeria, Turkey, Pakistan, northern Iraq, and Spain which have a
combined annual production capacity approaching 21 million tons.
Our new investments in northern Iraq, Turkey, Nigeria, Algeria,
the United Arab Emirates and Saudi Arabia will increase our
annual production capacity to 36 million tons. Our Cement Group
exports primarily from Egypt to customers in more than 30
countries including the USA, Europe, Africa and the Middle East.
We produce and distribute aggregates and ready-mix concrete in
Spain, Egypt and Algeria. We also manufacture cement bags in
Egypt and Algeria.
As a contractor, we provide engineering procurement and
construction services on large, complex and demanding
industrial, commercial, water/sewage, transportation,
telecommunications, maritime, tourism and railway projects for
private and public customers principally in the Middle East,
Africa and Central Asia. Our Construction Group is active in
over 100 projects in more than 20 countries. Through
partnerships with industry leaders, we also manufacture
fabricated steel products as well as architectural curtain
walling and window systems. As part of our long-term strategy
to create a sustainable flow of construction opportunities, we
also have investments in natural gas industries, including
fertilizers and in infrastructure concessions including a port
operator and an industrial park developer.
For additional information on OCI: www.orascomci.com
Orascom Construction Industries (OCI)
Nile City Towers - South Tower
2005A Corniche El Nil, Cairo, Egypt
Tel: +202 461 1111, Fax: +202 461 9400,
OCI stock symbols: OCIC.CA / ORCI EY / OCICqL / ORSD LI
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