Egypt is actively reshaping its petrochemical industry into a high-value, globally competitive manufacturing hub. This transformation is guided by the National Petrochemical Plan, a strategic blueprint designed to localize production, diversify the economy, reduce dependence on imports, and significantly boost exports. At its core, the plan is driven by the goal to utilize  Egypt’s abundant natural gas and oil reserves, turning it to  value-added products.

To achieve this vision, the government is spearheading a series of ambitious, large-scale projects and specialized industrial zones across the country.

The Rationale for Localization

Egypt has finalized a comprehensive National Petrochemicals Plan through 2040. The Egyptian government is moving forward with a multi-billion-dollar plan to modernize its petrochemical industry in collaboration with leading global companies. This strategic initiative aims to boost the value of the country’s oil and gas products and reduce import costs for essential industrial materials, while also allowing for the export of a portion of the production.

The new wave of petrochemical projects represents a cornerstone of Egypt’s strategy to localize and strengthen its industrial base. As part of this national effort, ten major projects are currently underway, collectively projected to add seven million tons to the country’s annual petrochemical production capacity. These initiatives are not only expanding output but also introducing 20 new industrial products to the local market for the first time, products that were previously imported. This shift is expected to generate over $8 billion in import savings, significantly boosting economic self-sufficiency.

As of March 2025, the Egyptian Cabinet reported that the sector’s existing annual production capacity stood at 4.5 million tons, underscoring the transformative scale of the upcoming developments.

Flagship Projects and Products

Egypt is making significant strides in localizing and expanding its petrochemicals sector through several key flagship projects. These initiatives are designed to maximize the value of the country’s natural resources, reduce import dependency, and support a wide range of local industries. “These projects don’t just add tons of production to the market but also elevate the local economy by creating thousands of jobs and opening new horizons for business opportunities, including  business to consumers (B2C) industries. They also strengthen Egypt’s position globally, presenting the country as a safe and attractive destination for investment and showcasing its readiness in terms of talent and capabilities.” Mohamed Esmael, Operational Excellence Engineer at TCI SANMAR Chemicals and Petrochemicals, told Egypt Oil & Gas.

One of the cornerstones of this strategy is the Ethylene and Polyethylene Complex in Alexandria, operated by the Egyptian Ethylene and Derivatives Company (ETHYDCO). This facility is  one of Africa’s largest ethylene plants  producing 460,000 tons per year (t/y) along with a 20,000 t/y year butadiene extraction unit.  Ethylene is the most important chemical industryand is used to produce Polyethylene, the world’s most used plastic.

Further expanding Egypt’s capabilities is the Alamein Petrochemicals Complex, a massive $7 billion investment led by Shard Capital and Al-Qahtani Group. Located in New Alamein, this project focuses on producing advanced petrochemical derivatives using sustainable technologies. Its output will serve key industries such as automotive, construction, and packaging, while also supporting the broader goal of making the most of Egypt’s natural resource wealth.

Besides, the Egypt’s Soda Ash Project, led by the Egyptian Soda Ash Company (ESAC) in New Alamein, is set to produce 600,000 t/y of soda ash and its derivatives. Also known as sodium carbonate, soda ash is a vital input for numerous industries. It’s used in glass manufacturing to lower the melting temperature of sand, and it’s a key ingredient in detergents, soaps, paper, and water treatment.  This project is particularly impactful as it will eliminate Egypt’s need to import approximately 450,000 t/y of soda ash, thus fostering new industrial growth and self-sufficiency.

In this regard, Esmael explains that petrochemical products like soda ash, PVC, caustic soda, and polyethylene “reduce reliance on imports, increase domestic production, and accelerate supply chains for large-consuming industries. These products support a stronger national economy by saving substantial amounts of foreign currency during this critical stage where economic growth and preserving foreign reserves are essential.”

Egypt’s Strategic Advantages in the Petrochemical Sector

The Suez Canal Economic Zone (SCZONE) plays a vital role in localizing several industries in Egypt, including petrochemicals. This comes as SCZONE is seamlessly connected to Egypt’s new, modern road network. Its direct links to the new Suez Canal tunnels significantly improve transportation between the zone’s two banks.

In July 2025, Egypt and China sealed an agreement to implement the Red Sea Petrochemical Project in SCZONE.

The Red Sea Project holds significant competitive advantages that make it highly appealing for investment. Its strategic location near the Suez Canal, the availability of production unit licenses, and a ready-to-implement plan set it apart. These factors are especially crucial given the increasing global demand for products like polyethylene and polypropylene.

The future of localizing the petrochemicals industry in Egypt looks promising. This comes as Egypt’s strategic location makes it well-positioned to become a regional petrochemical hub. Its proximity to major markets in Europe, Asia, and Africa streamlines export operations. By being a part of regional trade blocs, Egypt also gets preferential access to neighboring countries. The country’s commitment to adhering to international quality and safety standards ensures its products meet global market requirements. By leveraging these factors, Egypt aims to increase its share in the global petrochemical market, according to Anchorage Investments’ article ‘Egypt’s Vision 2030: A Blueprint for Industrial Growth’.

Yet for Egypt—across its government, public sector, and private enterprises—to firmly establish itself as a regional petrochemical powerhouse, it must prioritize the completion and scaling of key projects, secure a consistent and competitively priced feedstock supply, and invest in robust infrastructure to support export growth, according to Esmael.

“Equally important is developing downstream industries that can convert these raw materials into higher-value products, while also fostering skilled talent and not only look for reliable operations but to go to operations excellence. Together, these steps will strengthen Egypt’s industrial base, attract further investment, and position the country as a leader in the regional petrochemical market,” Esmael points out.

With Egypt’s ambitious projects, the country is strategically positioning itself to become a key player in the global petrochemical market. The government’s proactive National Petrochemical Plan, combined with the country’s strategic location and flagship industrial zones, is driving economic diversification and reducing reliance on imports. By focusing on completing these large-scale projects, securing a consistent supply of feedstock, and developing a skilled workforce, Egypt is on track to not only meet domestic demand but also to significantly boost its export capacity.