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 This information is provided by RNS The company news service from the London Stock Exchange
Orascom Construction Industries announces OCI/Sonatrach JV Company
| Source: Orascom Construction Industries
Cairo -- (MARKET WIRE) -- March 20, 2007 --