Orascom Construction Expects Fertiliser Plant Back on Track Soon

Orascom Construction Industries, Egypt's largest listed company, expects natural gas to flow back to its fertliser plants in a week's period, company officials told Ahram Online. Two of OCI's fertiliser production lines shut down due to low pressure and disruption of gas supply. The stoppage is part of plans announced by E-Gas, the state-owned natural gas supplier, to reduce supply to perform "emergency maintenance" in some of its gas fields. "We expect gas flow to resume in a week's time, as per the plan," Omar Darwazah, Investor Relations Manager at OCI told Ahram Online.

Neither the company nor the Investor Relations Manager have disclosed the production volume loss the company is expecting to incur due to this stoppage. Cairo-based investment firm, Beltone Financial, however, estimates that they will incur a 4 per cent loss in production volume this year due to the two-week stoppage. "We may utilise the production stoppage to carry out maintenance in the plant," Darwazah, added. OCI fertiliser plant saw a drop in natural gas supplies for a week, but it reached a critical level leading to the plant stoppage, according to Darwazah.

Tax glitch
A recent media report in Egyptian daily Amwal Al-Ghad alluded on Monday that OCI and the Egyptian Tax Authority have reached an initial agreement over an alleged LE14 billion ($2.28 billion) of tax evasion from the company's side. The agreement, the newspaper reported, entails the reduction of LE2 billion ($32.6 million) from the outstanding amount on OCI.

OCI officials declined to comment on the news, saying that negotiations have not yet concluded. President Mohamed Morsi said in a 6 October speech that a cement factory sale deal in 2008 has egregiously evaded paying taxes. Many connected the president's remarks with a sale between OCI and Lafarge in 2008. OCI was quick to issue a statement denying tax evasion, however, it did go into negotiations with the tax authority later in the month.