SOURCE: Orascom Construction Industries

February 08, 2006 13:04 ET

Orascom Construction Industries announces Fertilizer Project in Algeria

Cairo -- (MARKET WIRE) -- February 8, 2006 --NEWS RELEASE

OCI & Sonatrach to Co-invest in Fertilizer Project in Algeria

OCI and Algerian state-owned Sonatrach sign initial agreement for the establishment of a new ammonia/urea fertilizer project in Algeria

Cairo, Egypt - 8 February 2006: Orascom Construction Industries (OCI) announced that it has signed an initial agreement with the Algerian state-owned oil & gas company Sonatrach for the establishment of a one million ton per year greenfield ammonia/urea plant in Algeria for a total investment cost of US$ 746 million. OCI initiated the project with a detailed proposal and feasibility study that was presented to Sonatrach and will act as lead project developer. Societe Generale has been appointed as the financial advisor and White & Case (London) has been appointed as the appointed legal advisor for the new venture. OCI will have a 51% stake in the new venture while Sonatrach will own the remaining 49%. The plant is expected to be built in the industrial zone at Arzew near the Mediterranean Sea shoreline. OCI intends to obtain the required long-term project finance debt in a limited recourse structure from a combination of local Algerian and international banks. The project will be shortly submitted for approval to the Algerian National Council for Investments. Based on the agreement and following necessary approvals, Sonatrach will also enter into a 20-year gas supply agreement with the new venture.

OCI Chief Executive Officer, Nassef Sawiris commented "Algeria is a core market for OCI. We continue to be extremely bullish on the economy and the investment climate in Algeria. We are further motivated by our successful experience in the Algerian construction and cement markets. OCI employs more than 2,000 Algerians across a variety of group activities and will continue to tap Algeria's pool of talented human resources for future projects. OCI has already received several expressions of interest from international fertilizer traders to enter into long-term off-take agreements for the plant's output. This new venture is in keeping with our strategy to expand into natural gas-derivative industries that capitalize on the region's competitive advantages. This new venture will help us maintain our growth momentum in 2009 and beyond."

In October 05, OCI announced an investment in the fertilizer industry through a 50% stake in the Middle East Petrochemical Company (MEPCO) that in turn owns 60% of Egyptian Basic Industries Corporation (EBIC) which is currently constructing a 2,000 ton per day greenfield ammonia plant in Ain Sokhna - Egypt for a total investment cost of US$ 540 million. The EBIC plant is scheduled for start-up during early 2009.


CONTACT: Hassan H. Badrawi
Investor Relations Director
Tel: +202 461 1039/1036

Orascom Construction Industries

Orascom Construction Industries (OCI) is a leading cement producer and construction contractor active in emerging markets. As a cement producer, we own and operate cement plants in Egypt, Algeria and Turkey which have a combined annual production capacity of 14 million tons. Our new investments in Egypt, Pakistan, northern Iraq, Nigeria, Algeria, the United Arab Emirates and Spain will increase our annual production capacity to 30 million tons by 2007. As a contractor, we provide engineering procurement and construction services on industrial, commercial and infrastructure projects for private and public customers principally in the Middle East, Africa and Central Asia.

For additional information on OCI:

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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