March 11, 2008

Engro Chemical Pakistan Ltd confirmed on Monday that it was going to form a joint venture with Ferphos of Algeria to produce DAP, sulphuric acid, phosphoric acid and associated utilities. The project is expected to be constructed in a period of four years in Algeria after the completion of feasibility study by the joint venture, Engro said in a notification to the Karachi Stock Exchange.

“Engro is interested in forming a joint venture with Ferphos, the national iron ore and mining company of Algeria, for establishing a phosphatic fertilizer complex in Algeria after conducting a detailed feasibility study”, the statement said.

The complex will consist of one, 3,000 tonnes per day unit of DAP; three 4,500 tonnes per day units of suphuric acid, three 1,500 tonnes per day units of phosphoric acid and associated utilities facilities, it added.

The company explained that it had participated in an open and transparent international tendering process that took place in May 2007 and secured the top position as Ferphos preferred partner for creation of this joint venture.

However, the official communication of this was not made as certain approvals from the government of Algeria were awaited.

In February 2008, the Algerian Council for state participation, relevant Algerian government body for taking decisions on foreign investments, approved the creation of the joint venture between Ferphos and a foreign partner (i.e. Engro). But for some reasons, the name of Engro was yet to be disclosed in Algerian media.

Engro Chemical Pakistan was still waiting for the official confirmation of its selection as the Ferphos partner from the government authorities concerned in Algeria.

This decision is expected within the next few weeks after the resolution of some issues regarding the exact location of the project site, the company added.