Egypt is advancing construction of a $120mn methanol derivatives plant in Damietta with capacity to produce 140,000 tonnes of specialised chemicals annually, supplying domestic fertiliser, furniture, wood-products and construction industries.
By; Middle East Observer Staff
The Egyptian Petrochemicals Holding Company (ECHEM) reviewed progress at the Suez Methanol Derivatives Company (SMD) project on August 10, focusing on remaining construction work, occupational health and safety and preparations for trial operations.
ECHEM chairman Alaa El-Din Abdel Fattah inspected the site alongside SMD executives and representatives of Egyptian Maintenance Company (EMC), the project’s main contractor. ECHEM called for coordination among stakeholders and adherence to the execution timetable as work moves towards completion.
The project has faced delays. Methanex said in April 2025 that operations were expected to begin in October of that year, but construction has continued into 2026. ECHEM’s latest inspection focused on completing outstanding work and moving the facility towards trial operations.
Speciality chemicals for Egyptian industry
The plant is designed to produce 87,000 tonnes a year of urea-formaldehyde products and 53,000 tonnes of sulphonated naphthalene formaldehyde (SNF), taking total annual capacity to 140,000 tonnes.
Its products will supply industries including fertilisers, furniture, wood panels, medium-density fibreboard and ready-mix concrete. Applications include anti-caking materials for urea fertilisers, adhesives for wood manufacturing and chemical additives used to improve concrete performance.
The project is intended to substitute some imported industrial inputs while extracting greater value from petrochemical feedstocks already produced in Egypt.
The Ministry of Petroleum has said the facility will use methanol produced by Emethanex, urea supplied by MOPCO and caustic soda from Egyptian Petrochemicals Company, linking existing chemical producers with downstream manufacturing.
For Methanex, SMD will create a significant new domestic customer. The Canadian methanol producer completed a 450-metre pipeline in 2025 connecting its neighbouring Damietta facility directly with the SMD plant.
Under its agreement with SMD, Methanex can supply up to 160 tonnes of methanol a day, equivalent to 58,400 tonnes annually, and provide maintenance services for the pipeline. The company has estimated that the derivatives project could increase annual methanol sales by about 58,000 tonnes.
SMD has previously said about half of the plant’s output is intended for the domestic market, with the remainder targeted for export. Actual import substitution and export volumes will depend on commissioning, plant utilisation, domestic demand and the competitiveness of its products once commercial production begins.
Part of an $11bn petrochemical programme
The Damietta plant forms part of ECHEM’s broader 2026-2030 petrochemical expansion programme, which targets 10 projects with estimated investment of about $11bn, combined production capacity of 7.5mn tonnes a year and the localisation of more than 20 petrochemical products for domestic and international markets.
The strategy seeks to move more of Egypt’s hydrocarbon and chemical production downstream into higher-value materials used by domestic manufacturers, while developing export capacity where production exceeds local demand.
For SMD, however, the immediate test is execution. With construction continuing beyond the project’s earlier timetable, completing outstanding works and progressing through trial operations, commissioning and the subsequent ramp-up to commercial production will determine when the $120mn investment begins translating its planned capacity into actual output.
Related news:
Madbouly Unveils $6.5bn Sokhna Industrial Drive
Domestic Buying Broadens Market Gains as EGX30 Pauses After Rally
Read also:
Weaving Prosperity: Şirikçioğlu’s $20 Million Venture in Egypt’s SCZone
Syria Turns to Chinese Smart Industrial Model to Drive Reconstruction and Investment
