SOURCE: Orascom Construction Industries

March 20, 2007 08:27 ET

Orascom Construction Industries announces OCI/Sonatrach JV Company

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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