Kunming Chuanjinuo Chemical Invests $265 Million in New Phosphate Chemical Project in Egypt

On April 18, Chuanjinuo Chemical, a Chinese phosphate chemical company, announced plans to invest 1.9 billion yuan (US$265 million) to build a plant in Egypt to reduce raw material and export costs. Boosted by the news, Chuanjinuo Chemical's stock price soared. The company's net profit in the first quarter increased nearly threefold.

Chuanjinuo Chemical's first quarter financial report revealed that the industrial company, which has extensive experience in the Egyptian market, will build facilities to produce a range of intermediates and finished products in Egypt, a North African country. The construction period of the plant is three years.
The plant produces 800,000 tons of sulfuric acid and 300,000 tons of diammonium phosphate per year. Other core products include phosphoric acid and sodium fluorosilicate.

According to the feasibility study, when the plant is fully operational, it is expected to have annual revenue of more than 2 billion yuan and a net profit of 300 million yuan (US$41 million). In addition, it is expected to bring more than $300 million in foreign exchange earnings to Egypt, create hundreds of jobs, and bring in tax revenue.

Chuanjinuo Chemical said Egypt's strategic location at the intersection of three continents, coupled with its position as the world's third-largest phosphate reserve country, will optimize the company's business operations and significantly reduce raw material and export transportation costs.

The company added that it has been importing phosphate rock from Egypt since 2022, and has a comprehensive understanding of local supply dynamics to ensure stable raw material procurement.

Chuanjinuo Chemical's first-quarter financial report showed that the company's revenue was 721 million yuan (about 99 million US dollars), a year-on-year increase of 24%, and net profit soared nearly four times to 72 million yuan (about 9.9 million US dollars). The company attributed the growth to flexible production adjustments, focus on high-margin products and improved cost control.

Chuanjinuo Chemical has two production bases: one in Kunming and the other in Fangchenggang, a port city in the southern Guangxi Zhuang Autonomous Region. The annual report shows that last year, more than half of the company's revenue came from exports, mainly to South Asia, Southeast Asia and South America.