Once a modest player in the global market, Egypt’s chemical industry has rapidly grown, significantly contributing to the country’s gross domestic product (GDP), and driving economic growth to the country.
The petrochemical sector accounts for about 3 percent of Egypt’s GDP and 12 percent of its industrial output, with an annual value of around USD 7 billion (EGP 354.76 billion), according to Arab Finance.
The sector encompasses a diverse range of subfields, including plastics, rubber, paper, detergents, paints, chemicals, fertilizers, and glass.
“[The] chemicals industry is one of the leading sectors for Egyptian exports, significantly contributing to employment GDP,” Heba Salah, economic expert and policy analyst at the Information and Decision Support Center (IDSC), told Arab Finance.
The industry accounts for 10 percent of manufacturing jobs and output, and 15.5 percent of exports from 2018 to 2020, primarily producing plastics and fertilizers using the country’s petroleum and gas resources, the Organisation for Economic Co-operation and Development (OECD) 2021 report reveals.
In the first half of 2024, chemical exports reached USD 4 billion (EGP 202.72 billion), making the sector the second-largest contributor to non-oil exports. However, despite these export gains, Egypt still relies on imports for certain chemical products, such as mineral and chemical products, which represent 25 percent of total imports.
Investments in the sector, including the establishment of new factories, such as the USD 30 million (EGP 1.52 billion) Chemtics Egypt Chemicals factory, which launched in Ain Sokhna in September 2024, will produce over 40,000 tons of calcium hypochlorite annually, supporting efforts to localize production and reduce imports.
With the USD 7 billion (EGP 354.76 billion) petrochemical complex in New Alamein City, a complex expected to produce 3.1 million tonnes of specialized products annually, the industry is poised for expansion.
Additionally, the nation is actively working to enhance the competitiveness of its chemical industry through measures such as lowering energy costs for manufacturers and offering targeted support to exporters to access key markets. There are also plans to establish new factories, revamp existing plants, and offer tax incentives, Under Decree No. 77 of 2023, to attract more investment.
The petrochemical sector, a vital sub-sector, is also undergoing significant development.
Minister of Petroleum and Mineral Resources, Karim Badawi, emphasized the importance of this sector in promoting local industries and reducing imports. Several new projects are underway, he added, including the production of wooden panels from rice straw and sustainable aviation fuel, both aimed at reducing imports and promoting environmental sustainability.
By the end of 2025, the Chemical and Fertilizers Export Council aims to achieve USD 10 billion (EGP 506.8 billion) in exports. During the same time, the chemicals market is projected to generate USD 1.8 billion (EGP 91.22 billion) in value-added, with an anticipated annual growth rate of 3.23 percent from 2025 to 2029.
In the meantime, Egypt’s chemical industry stands at a critical juncture, balancing its impressive growth trajectory and the challenges of reducing import dependency. As investments pour in and strategic projects take shape, the sector is set to strengthen its role in the global market.
