Egypt’s petrochemicals sector became of increased importance as the country seeks to leverage its natural gas reserves and industrial capacity to drive economic growth. As global demand for plastics, fertilizers, and other downstream products continues to rise, Egypt is positioning itself as a regional hub for petrochemical production and investment. The sector not only supports domestic economy but also contributes significantly to exports.
Buoyant Exports Performance
The petrochemicals sector constitutes approximately 12% of Egypt’s total industrial output, generating around $7 billion annually, and it contributes 3% of Egypt’s Gross Domestic Product (GDP), according to the Information and Decision Support Center (IDSC). The Chemicals and Fertilizers Export Council stated, that the sector’s exports surged by 23% in 2022, reaching $8.629 billion.
Moreover, the Council Chairman Khaled Abu Al-Makarem said during the Seventh Green Economy Forum that fertilizers and chemicals exports increased by 12% during the first five months of 2025, recording about $4 billion. “This increase came on the back of the establishment of new production facilities in addition to the high global demand on the plastics, chemical, medicine, fertilizers, and rubber products, as well as a mild recovery in the global trade and supply chain” Mustafa Shafie, the Head of Research at Al Arabiya Online, an online securities brokerage firm, said to Egypt Oil and Gas (EOG).
Also, Abu Al-Makarem told EOG that the Egyptian government has provided various incentives to support exports, including export burden rebate program, facilitating shipping and logistics procedures, and providing competitively priced energy for strategic projects.
The country targets exports of chemicals and fertilizers sector to exceed $11 billion at the end of 2025.
Pursuing Self Sufficiency
Egypt has been expanding petrochemical production to reduce $8 billion worth of production inputs imports annually and boost self-sufficiency. The overall production capacity in the petrochemical industries currently stands at approximately 4.5 million tons per year (mmt/y) The sector’s output soared from 2.1 million tons (mmt) in 2015/2016 in to over 4.3 mmt in the fiscal year (FY) 2021/22. This surge in production is driven by projects’ expansion supported by the government’s efforts to strengthen the petrochemical industry and lessen reliance on imports.
Additionally, Egypt aims to increase petrochemical production capacity by 170% compared to current levels. “New investments under the National Petrochemicals Plan are expected to double production and export capacity within 5–10 years, strengthening Egypt’s role as a regional hub,” the Chairman of Chemicals and Fertilizers Export Council added.
The National Petrochemicals Plan, announced in March 2025, includes setting up 10 major new petrochemical projects, this will add seven mmt of annual production capacity by 2035 and introduce 20 new industrial products manufactured locally, with the aim of reducing imports. The most important petrochemicals produced by Egypt, currently, are polyethylene, polypropylene, methanol, and urea. In the FY 2022/23, Egypt produced 275,000 tons of polypropylene tons, 552,000 tons of polyethylene , one million tons of methanol of and two million tons Urea, a report released by the Information and Decision Support Center revealed.
Robust export advantages
“Egypt has great petrochemicals export potentials due to its distinguished geographic location between Asia, Europe, and Africa, the availability of modern ports on the Red Sea and the Mediterranean, and free trade agreements that grant Egyptian exports preferential access to major markets,” Abu Al-Makarem said. Top export destinations for the Egyptian chemicals and fertilizers include Turkey followed by Italy and Saudi Arabia in the third place, according to a report released by the Chemicals and fertilizers Council.
Some of these markets are competing markets to Egypt such as the Gulf states, Turkey, and some Asian countries, Abu Al-Makarem noted. He also explained that Egypt’s competitive advantage lies in its abundant raw materials, relatively low production costs, advanced infrastructure, and geographical proximity to consumer markets. Shafie said “the Egyptian petrochemical sector is very attractive for the foreign investments due to incentives provided by the government especially in the economic zones. This will be reflected on the local production and exports growth.”
On the global level, China represents the largest producer as well as exporting country of petrochemicals in 2025, recording exports of $3.51 trillion, according to Worldostats ranks. It is followed by US which exported petrochemicals valued at $3.05 trillion.
A positive outlook
The Egyptian petrochemicals sector continues to offer promising investment prospects. “[Egypt’s] promising products include polyethylene, polypropylene, nitrogen fertilizers, and methanol, products with growing global demand,” the Chairman of Chemicals and Fertilizers Export Council elaborated. He recommended that Egypt can address the competitiveness by focus on quality, enhancing added value, diversifying markets, and intensifying cooperation with supply chains.
A report by the international rating agency, Fitch, forecasts an increase in Egyptian petrochemical production capacity in 2027, compared to 2022, by 826.9%, for polypropylene, polyethylene by 532.8%, ethylene by 460.5%, methanol by 74.9%, polyethylene terephthalate by 38.6%, polyvinyl chloride by 33.1%, and ammonia by 8.6%.
