Methanex is celebrating its 10th anniversary in Egypt this year, how do you describe the company’s journey in Egypt throughout the past years?
I believe that Methanex has been on a continuous journey of learning, collaboration, and growth over the past years, and since we started operations in 2011. In Egypt we are a joint venture (JV) of Methanex Corporation, the world’s methanol leader, Arab Petroleum Investments Corporation (APICORP) and Egyptian Ministry of Petroleum partners Egyptian Petrochemicals Holding Company (ECHEM), Egyptian Natural Gas Holding Company (EGAS) and Egyptian Natural Gas Company (GASCO), representing a successful model of partnership that delivers value to our employees, partners, customers, shareholders and the community at large whether on the national level or around our plant in Damietta.
Through our power of agility, strong culture, and commitment to the Responsible Care ethics, Methanex Egypt has been able to establish a safe methanol plant with a strong experienced and trained team supplying both the local and global markets. We were also able to create impact beyond our walls through aligning with Egypt’s Vision 2030, United Nations (UN) Sustainable Development Goals (SDGs) 2030, and the Ministry of Petroleum’s modernization project, empowering members of our community in Damietta towards a brighter future, and driving significant transformation within the Egyptian oil, gas and petrochemical sectors towards safer processes.
How do you see Methanex’s contribution to the country through its position as the sole methanol producer in Egypt and the largest exporter in the petrochemical sector and through its different partnerships?
Our contribution to the country comes through three key positions: being a large investor in the country ‘the biggest Canadian investment in Egypt’, being a strong player in the sector, and being a responsible neighbor.
Our $1 billion Methanex JV operation is one of the achievements of the Egyptian petroleum sector, realized through the national petrochemical sector’s plan and the Ministry of Petroleum and Mineral Resources’ strategy for substituting exports with domestic products. Throughout the past 10 years, our domestic methanol marketing and sales agreement with ECHEM has been key to meeting the growing local demand, and supporting local industries dependent on methanol as a key feedstock as we reserve up to 15% of our production to the local Egyptian market.
ECHEM is also building a Formaldehyde plant next to our plant in Damietta which we will be supplying with methanol and utilities essential for the production of formaldehyde products and thus supporting the government’s vision of maximizing the value of the country’s oil and gas resources. Of equal importance areour exports which represent about 85% of our production and exported via ships to various destinations around the world, mainly in Europe, providing revenues that further contribute to the country’s economy. Methanex also exports methanol through the Damietta Port, generating economic benefits to the Port as well, and needless to say, Methanex’s presence in Damietta generates direct and indirect economic opportunities in and around Damietta.
On the sector level, and through our ongoing collaboration and partnership with the Ministry of Petroleum and Mineral Resources, Egyptian General Petroleum Corporation (EGPC) and other key holding companies such as ECHEM, EGAS and Ganoub El Wadi Petroleum Holding Company (Ganope), we were able to start a rich dialogue around Process Safety Management (PSM) within the sector and to take real steps on the ground towards turning our joint PSM vision of safer processes, assets, and operations, into a reality through creating the three-year roadmap to guide all petrochemical, oil and gas companies on their PSM journeys, aligning with HE the Minister of Petroleum’s vision for the modernization of the sector.
We also provide training programs to graduates from different Egyptian universities to enrich the pipeline of talent available to Egypt’s oil & gas and petrochemicals sector through an intensive training program with Methanex, the country’s only methanol production company.
As a responsible neighbor, since the start of our plant operations in 2011, we have been strongly committed to bringing positive change to Damietta communities through grassroot and sustainable initiatives in different fields including health, education, empowerment, training and many others. We have supported the community through offering university scholarships to high school students, renovating local nurseries, supporting the main Damietta hospitals with much needed medical supplies and devices, having annual medical caravans and supporting families with food boxes throughout the pandemic.
Then comes our latest partnership with the UN’s International Labour Organization(ILO) to extend the full-scale of their successful project, Decent Jobs for Egypt’s Young People to Damietta, which represents the core of our social responsibility strategy and program and focuses on empowering Damietta youth and women with the needed entrepreneurial skills and knowledge, creating better and decent employment opportunities for them. This project is aligned with Egypt Vision 2030 and UN’s SDGs 2030.
What are the key factors that contributed to the successes achieved by Methanex Egypt?
I believe the key factors contributing to our success over the last 10 years are our agility, our people, our successful partnerships in Egypt and our commitment to safety. The power of agility is our key differentiator and one key contributor to our success over the years. Being agile and rapidly adapting to external and internal changes has always ensured that our team safely and reliably delivered a secure supply of methanol to global and local customers despite challenges such as the current COVID-19 pandemic.
Our employees are central to everything we do. It is through their hard work, resilience, and perseverance that we were able to build an asset we can all employees, contractors, partners, lenders, customers, community, and national industry be proud of. This was achieved through building upon the solid foundation of Methanex’s Core Values of Trust, Respect, Integrity, and Professionalism that have always guided how our team works.
We can also attribute our success on the different fronts to our successful partnerships in Egypt whether on the industry or community levels. Our success as a Methanol producer and supplier and a process safety champion in the sector would not have materialized without the support of the Ministry of Petroleum and Mineral Resources, our partnership with ECHEM and the holding companies in the sector.
On the community level, our long and ongoing collaboration with local partners within the community and our recent partnership with the International Labor Organization have been essential for protecting our license to operate and have always ensured we bring positive change to Damietta communities through sustainable initiatives that stem out of real community needs.
Last but not least is our commitment to safety; our number one priority. We design and manage our occupational safety and process safety programs to ensure the safety and wellbeing of our people as well as the integrity of our operating plant and processes to ensure the safety of our people, community environment and assets and thus the sustainability and reliability of our operations. This is followed in all phases of methanol production and distribution and we work hard on promoting it with our customers, distributors, partners, employees and other stakeholders.
What is the company’s strategy and plans to maintain its production rate to meet the local and global demand especially amidst the current pandemic?
Our strategy remains the same, yet what has changed is the way we work and operate. With a pandemic like this, it all comes down to safety which is no stranger to us at Methanex as it has always been the company’s number one priority.
We were one of the first companies to respond to the rising number of infected countries in January 2020 and started working on response plans, guidelines and internal communications materials, while closely monitoring the evolving situation worldwide. After COVID-19 was announced as a pandemic and as the number of infections significantly rose globally, we immediately activated our response plan and shifted to minimum manning and working from home starting March 15, 2020 to ensure maximum safety of our team while maintaining our full operations to meet market’s and customers’ obligations and needs.
Methanol is a key feedstock for many industries. What are your plans to enable a more solid future for methanol locally?
As the only methanol production business in the country so far, this means that our joint venture substantially provides most of the country’s methanol needs. In alignment with this, we have signed an agreement with the Suez Methanol Derivates Company (SMD), an ECHEM affiliate, to provide them with methanol feedstock and utilities for the production of formaldehyde products. The project is the first of its kind in Egypt with total investments of ca. $50m and aims to produce 18,000 tons of urea-formaldehyde, and concentrate 85, 34,000 tons per year of urea formaldehyde 65 and 26,000 tons of sulphonated naphthalene formaldehyde per annum.
We have always expressed our readiness and willingness to supply the local industries with methanol and to support the ministry’s vision in order to maximize the value of the country’s oil and gas resources and set up a chain of synergetic petrochemicals industries that further contribute to Egypt’s economic growth. Our agreement with SMD aligns with this strategy and is considered the first step in our vision to create a more robust and informed local market for methanol.
From a workshop to a three-year road map for the whole sector, tell us more about Methanex’s experience with regards to leading and paving the road to embed Process Safety Management in the industry and being part of the Egyptian PSM Steering Committee and how you see the PSM future moving forward?
We have always been very proud of being a member of the Egyptian petrochemicals’ industry and have always been keen to share our knowledge to enable a step-change towards safety within the oil, gas and petrochemicals industry as part of our commitment to Responsible Care ethics and to safety in particular.
In 2018, we saw an opportunity through our partnership with ECHEM to share and extend our PSM vision towards safer processes, assets and operations with other companies in the Egyptian Oil and Gas sector. We reached out to Saad Helal, the Chairman of ECHEM, with the proposal to partner in launching the first PSM workshop and conference. His enthusiasm matched ours,there was a clear need to start a wide dialogue about this critical topic. We hosted, in partnership with ECHEM, two conferences in 2018 and 2019 that brought a total of 800 representatives from across Egyptian Petrochemicals, and Oil & Gas sector companies where world renowned speakers ran PSM focused workshops introducing PSM, sharing case studies and starting a wide discussion about the topic. This allowed for establishing a common understanding of PSM within the industry catering to the huge appetite within the sector to establish and implement PSM systems.
As a result of the rich dialogue started through the two PSM events, a committee from all holding companies of the Egyptian Oil & Gas and Petrochemicals sector and Methanex Egypt was formed to lead a three-year roadmap towards the adoption of PSM within all the companies operating under the umbrella of the Ministry of Petroleum and Mineral Resources’ holding companies aimed at institutionalizing PSM within the industry in accordance with the ministry’s Modernization Program and international best practices, guidelines and standards.
This was formalized during the Egypt Petroleum Show (EGYPS 2020) conference, through the signing of the MoU between Methanex Egypt and EGPC. The MoU was a truly crowning achievement of two years’ worth of collaborative work between multiple organizations who formed the founding core for creating an Industry PSM Committee and is a part of our strong commitment to PSM.
After signing the MOU, COVID-19 was declared as a pandemic, however, meetings of the PSM committee continued to take place online as scheduled over the past year despite the challenges of COVID-19, thanks to the dedication of the committee members and their commitment to expediting the journey towards safer processes within the sector, ensuring adherence to the timeline proposed within the MoU. In February 2021, we were able to hold a webinar titled “Modernizing Process Safety Management: From Vision to Reality”, in which the Egyptian PSM Steering Committee shared the three-year roadmap and provided an update on the progress delivered during a challenging year in 2020 as well as presented the recent and newly launched website – www.PSMEgypt.com – providing the sector with credible information about PSM.
With the huge interest and appetite we felt from the different companies working in the sector towards PSM and the outmost dedication felt and received from all the PSM Steering Committee members as well as the support of the Ministry of Petroleum and Mineral Resources, in addition to the real steps actually are being taken on the ground following the three-year roadmap, I am very optimistic and confident about the future of PSM in Egypt. I believe that we as a PSM committee will be able to not only impact our sector but also embed PSM and Asset Integrity in all process and manufacturing industries in Egypt, in accordance with the Egyptian Ministry of Petroleum and Mineral Resources’ vision for modernizing the sector.
Methanex’s agreement with ILO in 2019 to extend the “Decent Jobs for Egypt’s Young People” project to Damietta represents a shift of focus in Methanex’s Social responsibility strategy. Can you elaborate more on this shift and your cooperation with the ILO?
Since our first production 10 years ago, Methanex Egypt has been committed to making a difference to its neighboring communities in Damietta, through a focus on Social Investments in health, education, empowerment, and training. Over the years, we have accelerated our company’s social responsibility journey through strengthening its sustainability and maturity, and ensuring that positive impacts experienced by the community and local partners are enhanced and meaningful to their existence. The ILO partnership signed in 2019 was one of the key milestones in this journey and constitutes a significant shift in the way we deliver Social Responsibility projects. This partnership ensures we invest in developing and empowering members of our surrounding community through successful, tried and tested interventions that have delivered proven results all over the world. In that way, we continue to honor the true spirit of Responsible Care, the governing ethic that drives our Social Responsibility work.
We are very proud of this partnership as it aligns our Social Investment strategy with Egypt’s Vision 2030 and the UN SDGs) extending the full-scale of the International Labor Organization’s Decent Jobs for Egypt’s Young People project to Damietta, and addressing one of Egypt’s most pressing challenges, that of youth unemployment and underemployment.
The project aimed to create decent employment opportunities for youth in Damietta, through promoting entrepreneurship and facilitating job matching processes. It also aimed to building capacities of local partners on the ground for improved services to support unemployed youth and job matching processes and should address key cross cutting themes including occupational safety and health (OSH), the inclusion of people with disabilities and gender mainstreaming.
This partnership is a unique example of Public Private Partnership which enables the creation of over 500 jobs in Damietta over the duration of the project. Under the agreement, we have trained more than 650 men and women from Damietta so far.
In recognition of this work, Methanex Egypt received the International Council for Small Business (ICSB) Humane Entrepreneurship Award, presented at the UN HQ in New York, in recognition of its contribution to the enrichment of micro, small and medium-sized enterprise (MSME) culture in Damietta.