Considerable forethought has gone into a number of commercial developments at the port and the North West Suez Economic Zone (NWSEZ), with projects such as a $120m sugar refinery and a $17.5m plant that will process plant oil into environmentally friendly diesel underway and a $500m magnesium smelter in the planning stage.
The smelter project was attracted to the port by the competitive power and gas prices, as well as the tax-free and investment incentives that Sokhna offers. The lead investor is Magnesium International Limited (MIL), an Australian-listed company that since 1999 has owned the exclusive rights to use Dow's electrolytic smelting technology for magnesium production. Another unit of the Amiral Group has been a major investor in MIL, to form the Egyptian Magnesium Corporation.
MIL's vision is to become the world leader in the magnesium industry, which is in great demand from car makers due to its excellent strength-to-weight ratio. The Sokhna project is supported by a sales agreement with ThyssenKrupp Metallurgie and it is hoped the German company will take all the smelter's output for the next 15 years. The smelter will be built in two phases, producing 100,000t per year after five years. The low-cost plant will benefit from its location in a free trade zone with no import duties on exports to the EU, a key market for the metal. MIL's managing director, Patrick Elliot, says that with the port's capacity to discharge dry bulk carriers rapidly and move containers at very competitive prices, costs to get ore to the smelter, and then to export the metal, will make the Sokhna smelter the world's lowest-cost producer of magnesium metal and magnesium alloys and ideally located to supply both European markets and Asian auto plants.
Another project set to take advantage of European markets is the bio-diesel refinery. This is being driven by the EU's requirement that...