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OCI and Iowa Fertilizer Company Project Overview June 2012 June 2012
OCI and Iowa Fertilizer Company Project OverviewJune 2012June 2012
About Orascom Construction Industries (Project Sponsor)
Orascom Construction Industries (OCI)
OCI is a leading fertilizer producer and construction contractor based in EgyptUSA institutional investors
The Sawiris family collectively owns 54% of the ordinary outstanding shares
The largest company listed on the Egyptian Exchange, with Global Depositary Receipts (GDRs) listed on the London Stock Exchange and American Depositary Receipts (ADRs) listed on the US Over‐the‐Counter market on the NASDAQ
own 13% of OCI, including Ohio State Teachers Pension Fund, Lazard Asset Management, BlackRock, and Vanguard
Market capitalization of US$ 8.5 billion as of 6 Jun 2012
Currently employs over 72,000 people worldwide
Construction GroupFertilizer Group
OCI Construction Group is one of the largest contractors in the Middle East and Africa (MEA)
The group specializes in infrastructure, industrial and hi h d i l j
World’s 3rd largest nitrogen fertilizer producer with production capacity approaching c.7.0 mtpa in 2012
Owns and operates production facilities in Egypt, Algeria, h N h l d d h U i d S high‐end commercial projects
2011 Turnover: US$ 3.2 billion
FY2011 Construction backlog: US$ 6.4 billion
the Netherlands and the United States
Controls a global distribution platform spanning Africa, Europe, Latin America and North America
2011 Turnover: US$ 2.4 billion
2
OCI – A Global Employer
2011 total workforce exceeded 72,000 (including 17,000 BESIX employees)
OCI Fertilizer Group is expected to exceed 2,900 employees excluding the non‐technical employees and corporate group by end of 2012 after the commissioning of Sorfert
Orascom Construction employs approximately 3,500 engineers
North America1%
EU
Afghanistan10%
Employee Breakdown by Nationality
EU10%
Egypt57%
Algeria7%
Asia15%
3
57%
OCI Fertilizer Group Overview
The OCI Fertilizer Group Profile
Five production plants in North Africa (Egypt, Algeria), Europe (the Netherlands) and the USA (Beaumont,
Texas) have a combined capacity of c.7.0 million metric tons per annum (mtpa) of nitrogen‐based fertilizer
OCI overview
The OCI Fertilizer Group is the world’s 3rd largest ) p y p ( p ) g
Fertilizers produced include ammonia, urea, calcium ammonium nitrate (CAN), urea ammonium nitrate
(UAN) and other intermediary products; also resells ammonium sulphate¹ out of the Netherlands
OCI is also the largest melamine (urea derivative) producer in the world with 250 thousands metric tons
capacity and production plants in the Netherlands Indonesia and China
nitrogen fertilizer producer by capacity
OCI will ship nearly 800,000 tons of urea
capacity and production plants in the Netherlands, Indonesia and China
OCI’s North African facilities are among the lowest‐cost producers in the world
OCI has a global distribution network with a strong presence in Europe and strategic joint ventures in
Brazil and the U.S.
fertilizer to the USA during 2012 from its plants in Algeria and Egypt
Production Capacities ‐ ktpaAmmonia Fertilizer tons
Plant Gross Net Urea UAN CAN for sale Methanol Melamine
Egyptian Fertilizers Co 800 ‐ 1,550 325 ‐ 1,875 ‐ ‐3
2
Egypt Basic Industries Co 700 700 ‐ ‐ ‐ 700 ‐ ‐OCI Nitrogen 1,130 450 ‐ 200 1,450 2,000 ‐ 250Sorfert 1,600 800 1,300 ‐ ‐ 2,000 ‐ ‐OCI Beaumont 250 250 ‐ ‐ ‐ 250 750 ‐Total 4,480 2,200 2,850 525 1,450 6,915 750 250
Note: All tonnage is metric¹ Distribution agreement with DSM comprising 750 ktpa² Table not adjusted for OCI’s stake in considered plant3 UAN line constructed to capitalize on seasonal UAN price premiums over urea and will produce UAN only when margins are favourable to urea (swing capacity)
5
OCI Fertilizer Group Production Facilities
OCI Nitrogen (100%)
Netherlands‐basedCapacity: − 1.45 mtpa of CAN
Egyptian Fertilizers Company (EFC) (100%)
Egypt‐basedCapacity:
— 1.3 mtpa of urea, increasing to 1.6
All of OCI’s production plants utilize state‐of‐the‐art production control
OCI Beaumont (100%)
USA‐basedCapacity: 0.25 mtpa of ammonia and 0.75 mtpa of methanol
− 1.05 mtpa of gross ammonia− 500 ktpa of urea− 200 ktpa of UAN− 250 ktpa of melamineGas procured through spot market
mtpa by 2012— 325 ktpa of UAN
25‐year natural gas supply agreement with Egyptian General Petroleum Corporation (EGPC) ending 2032
systems to ensure safety and proven pollution control technologies to protect the environment
Gas procured through spot market
Egypt Basic Industries Corp. (EBIC) (60%)Egypt Basic Industries Corp. (EBIC) (60%)
Egypt‐basedCapacity: 700 ktpa of ammonia20‐year natural gas supply agreement with Egyptian General Petroleum Corporation (EGPC) ending 2023
Notore Chemical Industries Sorfert Algérie (51%)
Al i b d
(EGPC) ending 2023
Nigeria‐based
A minority stake in the only fertilizer producer in Nigeria
Capacity: 500 ktpa of urea and 800 ktpa NPK blending unit
Algeria‐basedCapacity: 800 ktpa of ammonia & 1.2 mtpa of ureaProduction begins April 201220‐year natural gas supply agreement with Sonatrach
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OCI Fertilizer Group Distribution Network
OCI has developed a global distribution network with offices in
OCI Terminal Europoort B.V. (100%)
Netherlands‐basedOwner and operator of ammonia storage tanks with a combined storage capacity of
The Gavilon Group (16.8%)¹
USA‐basedLargest independent importer/ distributor of fertilizers in the USA. Gavilon also trades and
OCI Nitrogen Distribution Network (100%)
Netherlands‐basedStrategic sales and distribution network with branch offices across Europe
Dubai, the USA, Brazil, France, Germany and Egypt among others
OCI’s global
30,000 tons Permitted to receive up to 600,000 tons per year of ammonia and to deliver up to 550,000 per year
distributes grains and other energy products FY 2011 distribution capacity to include 1mt CAN, 150kt UAN, 400kt AS and 450kt OCI Nitrogen urea
distribution network mitigates the effect of regional demand seasonality
Through a joint venture with Brazil’s Fertipar, OCI has captured a significant market share of Brazilian urea market
OCI is also a significant exporter of ammonium sulphate to Brazil
FITCO/Fertipar (50%)
Brazil‐based
Egyptian Fertilizer Trading (100%)
Dubai‐based
On May 29, 2012, OCI sold its stake in Gavilon to Japanese trading Marubeni for $605MM, part of a
Strategic alliance and 50/50 joint venture with FITCO/Fertipar, 2nd largest fertilizer distributor in Brazil for the exclusive supply & import of granular urea and the non‐exclusive supply & import of ammonium sulphate
Strategic sales and distribution office for both OCI and OCI‐branded third party product
1 OCI stake diluted from 18.1% after DeBruce acquisition. On May 29, 2012, OCI sold its stake in Gavilon to Japanese trading Marubeni for $605MM, part of a $3.6Bn takeover 7
$3.6Bn takeover
Fertilizer Construction and Operational Experience
OCI Owned Plants
Egyptian Fertilizers Company (EFC):
OCI Fertilizer Construction Experience
OCI has constructed multiple fertilizer plants in the Middle East and has managed the Currently the world’s third largest nitrogen fertilizer
OCI Fertilizer Operational Experience
gyp p y ( )— Capacity: 1.55 mtpa of granular urea— OCI constructed both EFC lines between 2000
and 2006Egypt Basic Industries Corporation (EBIC):
full rehabilitation of plants in Europe and the US
OCI has partnered with several technology providers
producer with production capacity approaching c.7.0 million mtpa
Fertilizer Group operates plants in Egypt, Algeria, the Netherlands and the US— Capacity: 0.7 mtpa of ammonia
— OCI completed the plant construction in 2009Sorfert Algérie:— Capacity: 1.2 mtpa of granular urea and 0.8 mtpa
f i
including Uhde and KBR Netherlands and the US
Global fertilizer distribution network extending across the Middle East, Europe, and North & South America
of ammonia— OCI is constructing the € 1.6 bn plant, currently in
commissioningOther:— OCI has lead various revamp and rehabilitation
Experienced technical team with the ability to operate and maintain both modern plants (e.g. EBIC, Sorfert) and older plants (e.g. OCI Nitrogen, OCI Beaumont)
— OCI has lead various revamp and rehabilitation projects in EFC, OCIN and OCI Beaumont
Third Party Plants
Helwan Fertilizers Company, Egypt:
Technical team has managed the rehabilitation and debottlenecking projects that have occurred in EFC, OCIN and OCI Beaumont over the last two years
— Capacity: 2 mtpa of granular urea— OCI constructed the over 27 months completing it
in 2007Suez Fertilizer Company, EgyptKi F ili Pl E
8
Kima Fertilizer Plant, Egypt
OCI Construction Group Overview
OCI Construction Group Profile
Ownership: 100%Number of Employees: c. 45,000 Core markets: Egypt, Algeria, and Abu Dhabi Expertise: Infrastructure and industrial projects2011 ENR Rankings: 94 on International Contractors list; 128 on Global Contractors listHydro Power Plant –
Hydro Power Plant ‐ Egypt
The OCI Construction Group ranks among the world’s top global contractors and has completed numerous g ;
Total equipment value: more than US$ 300 millionHydro Power Plant
Egypt
Ownership: 50%
Number of Employees: c. 17,000
Core markets: GCC, Benelux & select African & European marketsC l
completed numerous landmark infrastructure, industrial and commercial projects
Expertise: marine, high‐end commercial and infrastructure projects
2011 ENR Rankings: 52 on International Contractors list; 92 on Global Contractors list
Coentunnel ‐Amsterdam
Ownership: 100%
Number of Employees: c. 7,000
Core markets: Qatar, Bahrain and Afghanistan
Expertise: large‐scale social infrastructure
2011 ENR Rankings: 79 on Top 400 US Contractors list
SIDRA Medical Center ‐ Qatar
Science & Technology Park
Sokhna Port ‐ Egypt
‐ Qatar
Algerian Cement Company Line I &II‐ 5 MTPY
El Kuraymat Solar Power Plant
‐ Egypt
Burj Khalifa ‐New Cairo Wastewater Treatment Tornado Tower‐
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Al Reem Island – Abu Dhabi j
DubaiNew Cairo Wastewater TreatmentPlant – Egypt’s First PPP Qatar
Contrack and the US Army Crops of Engineers
Contrack is specialized in US Government funded defense projects in the Middle East and Central Asia A f 31 D 2012 C t k h d t ti b kl f US$ 614 illi ith th US A
US Army Corps of Engineers
Contrack International is based in Mclean Virginia As of 31 Dec 2012, Contrack had a construction backlog of US$ 614 million with the US Army
The contractor has been involved in over 15 airfield, airport and distribution projects in the last 5 years for the US Army Corps of EngineersKey past and current projects include:− Camp Bastion Airbase, Afghanistan
based in Mclean, Virginia and was established in 1985. After successfully completing several subcontracts, Contrack was awarded its first US
− Bagram Airfield, Afghanistan− Kandahar Airfield, Afghanistan− Waterfront Development Program, Bahrain− Mudeirej Bridge in Beirut, Lebanon
Army Corps of Engineers prime contract in 1990.
Contrack has completed numerous wastewater d th d l t land other developmental
projects for USAID
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Iowa Fertilizer Company (IFCo, Proposed Project)
A Greenfield Nitrogen Plant in the Corn Belt
OCI has identified an attractive opportunity to develop, build, own and operate a new state of‐the‐art nitrogen
Ammonia Technology:- Proven “off‐the‐shelf” ammonia plant from
Summary Overview Technology OverviewOCI plans to make the largest investment ever in the state of Iowa at approximately $1.3 billion
production facility in eastern Iowa to supply fertilizer for the U.S. Corn Belt
Total estimated investment cost: $1.3 billion
Final sellable products include ammonia, urea, UAN, as ll Di l E h t Fl id (DEF)
either KBR (USA) or Uhde (Germany)Urea/DEF Technology:- Urea plant from either Stamicarbon
(Netherlands) or Toyo (Japan)UAN T h l
OCI on‐track to achieve first‐mover advantage, most likely only one fertilizer plant of this scale will be built in the USA
well as Diesel Exhaust Fluid (DEF)
The plant will generate 165 full time high quality jobs and create numerous jobs for suppliers and distributors, 2,500 workers will be needed during construction
UAN Technology:- UAN plant from either Uhde (Germany),
Weatherly (USA) or Tecnicas Reunidas (Spain)OCI believes east Iowa / western Illinois is the best location for a new greenfield fertilizer plant
Construction timing: 33‐36 months from June 1, 2012
Orascom Engineering & Construction is expected to be
Construction OverviewThe new plant will create jobs for the local community, tax revenues for Iowa, and an essential product for farmers in
OCI intends to invest approximately $500 million of equity in the projectI E i D l A h i (IEDA)
Financing Overview
g g pthe overall EPC Contractor, Orascom has constructed five fertilizer plants in the last five years
Contrack International will be part of the construction consortium; Contrack has undertaken work for the US Army Corps of Engineers globally for more than 20 years
product for farmers in the US Corn Belt
Iowa Economic Development Authority (IEDA) Board unanimously approved a state financial incentive package for the project on Feb 17, 2012 which is expected to provide tax relief and other forms of assistance on the order of $30 million
Army Corps of Engineers globally for more than 20 years
Engineering and Procurement Contractors will be selected based on technology choices made
Every effort will be made to maximize involvement of local subcontractors and labor
Iowa Finance Authority approved up to $1.2 billion of bonding authority under its Midwestern Disaster Area bond program to help support the project
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local subcontractors and labor
Proposed Fast Track Project Timeline
Dec 2011Significant progress to date
Strong government and local commitment to projectFeb 2012
Apr 2012
− Strong government and local commitment to project− Iowa Economic Development Authority approved financial incentives package− Iowa Finance Authority approved use of Midwest Disaster Area bond financing− State air permit application submitted , without site‐specific modeling
Jun 2012 Selection of technology providers, award of principal plant engineering, procurement and construction contracts, begin mobilization and site preparationFinalize site selection
Oct 2012 Obtain air permit (TBD), begin construction civil works
Aug 2012 Selection of Owner’s Representative Engineer, award of balance of plant engineering, procurement and construction contracts, selection of bond financing underwriter
Dec 2012 Begin construction mechanical and electrical works, issuance of project bonds
Jun 2015 Commissioning and start of commercial production
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Product Overview
Ammonia (NH3) is the simplest form of nitrogen fertilizer and can be applied directly as fertilizer to
UAN is a liquid fertilizer produced by combining ammonium nitrate and urea with a nitrogen content of 32%
Ammonia UANNitrogen Fertilizer
Nitrogen fertilizer is essential for the growth and development of plants
increase yields
Ammonia has the highest nitrogen content at 82% and offers the best value per unit of nitrogen
The main challenge with ammonia is the need to t t i i d t k
The product is easy to apply and can be conveniently mixed with other nutrients and chemicalsUsage is increasing among farmers in the corn belt as a result of ease of transport (no need to refrigerate or pressurize) and ease of use
development of plants, helping determine growth, vigor, color and yield
Nitrogen fertilizer accounts for 60% of fertilizer use globally and is the most
transport in pressurized tanksp )
important nutrient to ensure higher crop yields
DEF
DEF is a new product DEF is an aqueous urea solution used in Selective Catalytic
DEF
Urea is a white crystalline solid fertilizer that is
Urea
required by many heavy‐duty trucks, pickups, and SUVs delivered after January 2010
DEF is used to destroy harmful emissions in the exhaust and meet the EPA's
Reduction (SCR) to lower nitrogen oxide (NOx) emissions from diesel engines
DEF is non‐hazardous and consists of 67.5% de‐ionized water and 32.5% urea
I J 2010 i i l i l ti i t f
widely used in the agricultural industry
Urea has the highest nitrogen content of all solid nitrogen fertilizers at 46% and can therefore be transported at the lowest cost per unit of nitrogen
O li d h il i f d iexhaust and meet the EPA's latest strict environmental standards
Stringent environmental regulations introduced in recent years have resulted in
In January 2010 emissions legislation came into force across the US requiring diesel vehicles to significantly reduce harmful emissions of NOx and particulate matter
− Daimler, PACCAR, Volvo, Mack, Isuzu, Hino, Ford, GM and others are using SCR and DEF, while Navistar is
Once applied to the soil, urea is transformed into ammonium and then nitrate before being absorbed by the plants
The transformation process is slow and difficult to predict at very low temperatures resulting iny
substantial use of DEF in Europe and increased adoption in North America
a d ot e s a e us g SC a d , e a sta sexpected to adopt the technology soon
In 2011 some agricultural, construction and forestry equipment will have to meet more stringent emissions standards and a number of manufacturers including John D d C ill ill SCR d DEF
predict at very low temperatures resulting in nitrogen and efficiency losses
15
Deere and Caterpillar will use SCR and DEF
Iowa Fertilizer Plant to be Located in Heart of US Fertilizer Demand
Key Market Statistics
Plant will be located at the heart of the corn belt where the demand forwhere the demand for nitrogen fertilizer is highest
Amount of ammonia consumed as fertilizer inconsumed as fertilizer in Iowa, Illinois and Wisconsin is 4x amount produced and UAN is 1.4x 1
Location – East Iowa
Total US imports in 2011:
− 6.6 MM tons of NH3 2
− 3.5 MM tons of UAN 3
− 5.8 MM tons of Urea 3
Source: MacKenzie
Significant quantities imported each year to satisfy regional demand
1 Blue Johnson (Rentech IPO Prospectus)
1616
Blue Johnson (Rentech IPO Prospectus)2 CRU Ammonia 10 yr outlook – Dec 20113 Profercy Report Week 7, 2012
IFCo to Provide Stable Supply Source for Fertilizer in Region…
IFCo Import Substitution (Nationwide) 1
Ammonia ‐ 2015 UAN ‐ 2015Urea ‐ 2015
IFCo will provide a stable and local supply source that will help prevent supply shortfalls and price spikes during
Imports35%
Imports16%
IFCo7%
US Production36%
and price spikes during application
Despite being one of the largest plants in North America, IFCo product will
IFCo
US Production64%
US Production77%
Imports61%
IFCo
36%target replacing a relatively small fraction imports , providing more local supply
1%IFCo3%
Stable Supply
IFCo will help displace imports coming from Trinidad, Eastern Europe, the Middle East and Southeast Asia, thereby providing a stable source local to the Midwest, alleviating the supply shortfalls and price spikes experienced by farmers in recent yearsImported fertilizer and distant plants tend to have a greater risk of missing the short periods of favorable weather conditions during which application of nitrogen fertilizer and planting may occurFurthermore, the short application seasons coupled with supply shortages in recent years have resulted in significant logistical problems and pushed the import logistic infrastructure to capacity, forcing some farmers to delay planting− In Feb 2012, Reuters reported that “[Fertilizer distributors were] unable to accommodate a last‐minute buying
spree, meaning farmers who wait to buy may have to delay plantings or grow something besides corn”2
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1 CRU Ammonia Ten Year Outlook 2011, CRU UAN Market Outlook 2011, CRU Urea Ten Year Outlook, Profercy Week 7 2012, Jeff Mackenzie Report2 Reuters, 13 Feb 2012. “Analysis: US Farmers may fail in fertilizer face‐off”
spree, meaning farmers who wait to buy may have to delay plantings or grow something besides corn
… Coupled with Positive Economic and Social Impact to Scott County
OCI believes East Iowa and Western Illinois is the
Employment and Social Impact
The plant will directly generate an estimated 165 full‐time high quality jobs during operation yearsand Western Illinois is the best location for a new greenfield fertilizer plant
OCI would like to locate its new plant in Scott
Another approximately 2,500 workers will be needed during the 3 year construction and pre‐commissioning phase
Additionally, given the required supply chain to support operations, the plant is expected to create numerous peripheral jobs for contractors, suppliers, distributors and other ancillary businesses
The presence of fertilizer and engineering experts will likely be leveraged with the local universities and colleges to i li d i i i idCounty to leverage the
key logistical advantages
create a specialized training program to support community residents
Locally produced nitrogen fertilizer will also benefit the farmers in the region by providing a secure supply and lower transportation costs with estimates in the tens of millions of dollars 1
1 “ l ld l f l l ”
Economic Impact
The presence of a US$1.3 billion nitrogen production fertilizer facility will both boost and diversify the local manufacturing industry
1 PJstar, 31 May 2012. “Legislation could lure fertilizer plant to Peoria County.”
manufacturing industryIFCo’s total income and property tax is expected to raise substantial funds for Iowa and Scott Community that will benefit the local communityThe increased logistics traffic that will be driven by the plants annual production of 1.4 to 1.8 million tons of fertilizer is also expected to have a sizeable positive economic impact on the region“Th t b f j b l l b t t ld fi d k D di h t l d th i“That number of jobs means local subcontractors would find work. Depending on what company lands the primary contractor contract, some out‐of‐state workers would surely descend upon the area. That means construction workers will be renting hotel rooms, eating at local restaurants, filling gas tanks and purchasing supplies … The ripple effect to the area's economy would be humongous. New companies and new jobs lead to new taxes, which leads public entities to improve infrastructure and schools, and thus bettering communities. And decent wages lead to people buying
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homes, cars and other products that fuel the economy.”2
1 PJstar, 31 May 2012. “Legislation could lure fertilizer plant to Peoria County.”2 The Hawkeye, 18 March 2012. “Iowa Fertilizer Co. plant could produce ripple effect”
Corporate Social Responsibility at OCI – Overview of Core Commitments
Wh ibl OCI d l l l i t t d l th i kill dMaximize the
Commitment DescriptionWe believe that good corporate citizenship can provide business benefits and improve business performance by enhancing
Wherever possible, OCI draws local people into our company to develop their skills and chooses local partners to supply materials and other services
Use of Local Resources
Socially We strive to always work in a socially responsible way – following accepted best
our corporate reputation, lowering our risk profile, increasing our attractiveness as an employer, improving our relations with potential investors and our access to
Responsible in Every Activity
We strive to always work in a socially responsible way – following accepted best practices for corporate governance, corporate citizenship and sustainable development
D l t f
We contribute to sustainable development and provide training and sponsorships in the communities in which we operate; our commitment to the social and economic
investors and our access to capital, encouraging creativity and innovation inside our company, differentiating our company from our competitors,
Development of Our
Communities
communities in which we operate; our commitment to the social and economic development of Egypt, our home country is absolute
Our mandate focuses on development through education and social healthcare, but is not limited to our core focuses
We take precautions to mitigate possible environmental threats and seek out ways to
increasing our operational efficiency, and ensuring our ability to operate uninterrupted in the communities we serve
Environmental
We take precautions to mitigate possible environmental threats and seek out ways to reduce our carbon footprint; we abide by all legal environmental permits and conditions issued or enforced by our clients and government agencies
We have educated our ‘superintendents’ and ‘crew’ employees to monitor environmental threatsEnvironmental
Sustainability We undertake initiatives to promote greater environmental responsibility and encourage the development and implementation of environmentally friendly technologies. We seek specialist advice on environmental issues to ensure a full understanding of emerging environmental concerns and the development and implementation of effective environmental policies
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effective environmental policies.
Corporate Social Responsibility at OCI – Fostering Education
OCI has aggressively directed resources to the entire education ‘value chain’, from building schools to funding training and scholarship programs for teachers and students
OCI believes that the key to poverty alleviation and sustainable human
Constructed or
World Class Education
Three life skills and
Teacher Development
development is a high quality, well‐rounded education
Constructed or refurbished several schools including SohagMilitary School for Boys (Egypt)
D d f d f
Onsi Sawiris Scholarship Program which has fully funded 57 Egyptian students at top US universities
Three life skills and entrepreneurship classes for underprivileged students with Injaz Egypt
Corporate Social R ibili S i l
Scholarships to four public school teachers to attain Postgraduate Professional Educator Diplomas in Educational Leadership from the
First private company in Egypt to establish full scholarship program
Donated funds for state‐of‐the‐art technology including laboratories and A/V equipment
Sponsored curriculum development of Cairo University’s faculty of Political Science & Economics by University
Responsibility Special Competition of SIFE Egypt, in which teams of university students compete to develop CSR conscious business plans
pAmerican University in Cairo (AUC)
Program for Cairo University Political Science and Economics
p p g
y yof Chicago professors
Established a visiting professorship program between Cairo University and the University of
p Science and Economics Dean and professors to receive specialized training and development instruction from University of Chicago
Educational Infrastructure
and the University of Chicago Curricular &
Extracurricular Development
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Case Study ‐ Contrack Training Program in Afghanistan
We believe strongly in supporting and protecting the local communities in which we live and work
We are committed to
Since Contrack started working in Afghanistan, we established a Construction Training Center and Training Program in Kabul to provide job training and employment opportunities for local skilled labor
The Construction Training Center is a model program visited frequently by high‐ranking officials from the United Nations, the Afghan Ministry of Education, USAID and the US Army Corps of EngineersWe are committed to
acting in accordance with international best practices for corporate governance, corporate citizenship and
t i bl d l t
the Afghan Ministry of Education, USAID and the US Army Corps of Engineers
Program Highlights:
The Training Center offers daily classes 6 days per week, 8 hours per day with focus on practical skills such as plumbing, electrical work, painting, masonry, steel fixing, HVAC, welding, and carpentry
sustainable development All students are required to learn safety and quality control methods as part of their training. The trainees receive a daily stipend in addition to food and transportation and are awarded a certificate of completion once their courses requirements have been met
We have graduated over 1,800 students (including 113 deaf students and 49 mine victims). More than 80% of the graduates of the program are employed by Contrack on its various construction projects throughout Afghanistangraduates of the program are employed by Contrack on its various construction projects throughout Afghanistan
The Center is truly a success story on how to work with the local Afghani population, enhance their skills and knowledge and increase their participation in the reconstruction efforts
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Appendix A – OCI Fertilizer Group
Egyptian Fertilizers Company (EFC)
Product Startdate
Capacity After Expansion (ktpa)
Urea 2000 775
Facility OverviewEFC DebottleneckingEFC is the largest private sector integrated nitrogen fertilizer producer in Egypt and the largest Egyptian
In 2010, EFC began revamping lines I & II in order to increase total urea capacity by about 20% to 1 55 million tons per Urea 2000 775
Urea 2006 775 Total 1,550
Plant Location
the largest Egyptian exporter of fertilizers. Both EFC production lines were constructed by OCI in 2000 and 2006.
total urea capacity by about 20% to 1.55 million tons per annum
Total investment cost: EUR 74.4 million
Line II will commission first during the summer of 2012, followed by Line I in Q1 2013
SuezSynergies with EBIC plant –shared CO2
pipeline
Commissioning has been staggered to minimize impact turnarounds on sales volumes
Additional natural gas required is already covered by the existing supply agreement
Sokhna Port
p pNear Sokhnacommercial port, 40km south of Suez
Red Sea
EFCEBIC
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Egypt Basic Industries Corporation (EBIC)
Business Description
Egypt Basic Industries Corporation (EBIC) is an export‐focused greenfield ammonia plant built by OCI
Facility overview
Product Start date Capacity (ktpa) Ammonia 2009 700g p y
EBIC is the only merchant ammonia producer in the Middle East and is the 5th largest chemicals exporter in Egypt
In May 2009, EBIC produced and sold 3.2% of the world’s seaborn ammonia
Port facilities
During 2010, EBIC penetrated 8 new target markets including France, India, South Africa, Japan, Vietnam, Senegal, Singapore and Sweden to attain a total of 21 markets served since the start of commercial operations in May 2009
EBIC sells its ammonia through Sokhna port where it owns two storage tank facilities of 0.40mm metric tons capacity eachg p yThe use of Panamax sized vessels allows EBIC to benefit from lower freight costs when shipping to distant markets such as the US
24
OCI Nitrogen
Business Description
OCI Agro’s nitrogen fertilizer production complex consists of four interconnected plants producing ammonia, calcium ammonium nitrate urea ammonium nitrate captive nitric acid
Global manufacturing footprintOCI acquired DSM’s nitrogen and melamine Netherlands‐based business units in June
OCI Melamine facilitiesOCI Agro facilities
nitrate, urea ammonium nitrate, captive nitric acid
OCI Melamine is the largest global producer of melamine
OCI Melamine also produces melamine through two joints venture in Indonesia (60% ownership) and China (49% ownership)
2010. These units were rebranded as OCI Agro and OCI Melamine, together forming OCI Nitrogen
( p) ( p)
Expansion Projects
OCI Nitrogen has embarked upon several expansion projects at its Geleen site
Calcium Ammonium Nitrate (CAN):‒ OCI Nitrogen is currently expanding its CAN line to increase
capacity by approximately 25% to 1.45 mtpa‒ Commissioning has begun with required speeds achieved for
moderate outside temperatures
Melamine:
‒ OCI Nitrogen is also restarting a 30 thousand ton melamine plant in Geleen which has been shutdown since 2008
‒ The plant is expected to start operations by year end
Ammonium Nitrate (AN) Liquor:Ammonium Nitrate (AN) Liquor:
‒ OCI Nitrogen is also debottlenecking its AN liquor capacity, which is the main feedstock in the production of UAN
‒ This will allow us to maximize our production capacity of urea ammonium nitrate (UAN)
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Sorfert Algérie Construction Progress
Business Description Facility overview
Product Start date Capacity 2012 (ktpa) Urea 2012 1,200
In 2006, OCI and Algeria’s state‐owned oil and gas conglomerate, Sonatrach, formed a
C i i i f Li I h d i h Li II Ammonia 2012 800 Total 2,000
Port facilities
joint venture to create Sorfert Algérie, a nitrogen‐based fertilizer production complex
Commissioning of Line I has commenced with Line II to follow in Q3 2012
When complete, the facility will be capable of producing 0.8 mtpa of merchant anhydrous ammonia and 1.2 mtpa of granular urea per annum
Azew Port – Urea Export
Winter Intake Pipe
Upon commissioning, Sorfert Algérie will become the largest nitrogen fertilizer producer in Africa
mtpa of granular urea per annum
Ammonia Storage TanksBethioua Port -Ammonia Export
Pipeline Corridor
SorfertAmmonia/Urea Plant
p
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OCI Beaumont
Business Description
OCI acquired the Beaumont plant from Eastman Chemical Company in May 2011. Previously, the Beaumont plant was
Facility overview
Product Start date Capacity 2012 (ktpa) Methanol 2012 750
OCI Beaumont is an integrated ammonia and methanol facility located on the Gulf Coast in Beaumont, p y y y, p
owned by Terra Industries and Dupont
OCI Beaumont is equipped with two 20,000 tons methanol storage facilities and one 18,000 ton ammonia storage facility
OCI Beaumont’s 250 ktpa ammonia production line commissioned at the end of November 2011 selling its first
Ammonia 2011 250Total 1,000
Texas, United States
The plant is located in Beaumont, Texas, on the Gulf Coast of the
commissioned at the end of November 2011, selling its first shipment on 3 January 2012
The 750 ktpa methanol line is scheduled to commission in Q2 2012
The plant has a pipeline connection to adjacent customers and
United States
port access with dedicated methanol and ammonia import/export jetties and will ship both products along the Gulf Coast
Development OverviewPlant Location Development Overview
May 2011: OCI acquires idled plant and begins renovation/
rehabilitation program
October 2011: OCI acquires minority stakes to own 100%Beaumont
Plant Location
October 2011: OCI acquires minority stakes to own 100%
November 2011: Ammonia production starts
January 2012: First shipment of ammonia is sold
Q2 2012: Methanol production starts
Beaumont, Texas
27
Ramp‐Up of Fertilizer Group Capacity
Acquired EFC and 20% of Notorefrom AbraajCapital for US$ 2 6 BN
Announced expansion of EFC product portfolio with UAN lines and urea revamp to 1 6
Acquired Royal DSM BV’s fertilizer and melamine businesses to
EFC’s 325ktpa UAN blending unit commissionsRestart OCI Melamine’s 2nd
Urea and ammonia lines start‐up at SorfertMethanol and ammonia lines start‐up at OCI Beaumont
As a construction contractor, OCI built EFC and Sorfert working together with Uhde and EBIC working together 2.6 BN
Acquired 18.1% of Gavilon Group for US$ 340 million OCI doubled
urea revamp to 1.6 mtpa by 2012EBIC commissioned in May 2009Established 50/50 joint venture with
businesses to form OCI Nitrogen for € 310 millionAcquired an ammonia
Melamine s 2nd
melamine plant of 30 ktpaCommissioning begins for urea line at Sorfert in Algeria
300 ktpa CAN capacity increase at OCI NitrogenRamp‐up of EFC’s urea capacity to 1.55 mtpa
with KBR
OCI grew its Fertilizer Group from a n initial 30% stake in EBIC to a top 5
1 450
525250300
6,000
7,000
8,000
(ktpa)
OCI doubled stake in EBIC to 60%
joint venture with FITCO in Brasil
ammonia storage terminal in Rotterdam
at Sorfert in Algeriaglobal nitrogen fertilizer producer in 5 years
2,200
1,450
200 525220220
4,000
5,000
duction Capacity (
1 300 1 300 1 300 1 300
2,750700
1,150 1,150
1,150 1,150
1,000
2,000
3,000
Sellable pro
1,300 1,300 1,300 1,300
0
2008 2009 2010 2011 2012
Urea Merchant ammonia CAN UAN Melamine Other
28
1 Urea capacity 2012 includes 1.6mtpa from EFC and 1.2mtpa from Sorfert2 Ammonia capacity 2010 and 2011 include 700ktpa from EBIC and 450ktpa from OCI Nitrogen3 Ammonia capacity in 2012 includes 800ktpa from Sorfert and 250ktpa from OCI North America4 Other includes 300ltpa AS in 20125 Capacity does not include OCI North America methanol capacity of 700ktpa
Appendix B – Corporate Social Responsibility Case Studies
Fostering Education – The Onsi Sawiris Scholarship Program
We believe that a high quality, well‐rounded education promoting critical thinking and entrepreneurship is
Established in 2000, the Onsi Sawiris Scholarship Program has provided scholarships to 57 extraordinary Egyptian graduate and undergraduate students
The scholarships are awarded based on merit and character as demonstrated through academic excellence, extracurricular activities, and entrepreneurial initiative. The scholarships include full tuition, a living allowance, travel
imperative to the advancement of our communities
extracurricular activities, and entrepreneurial initiative. The scholarships include full tuition, a living allowance, travelexpenses and health insurance
Universities Attended Fields of Study
16
222
2
1 1
1 1
7
1
1 1
96
3
2
29
18
9
Harvard University of Pennsylvania
Stanford University of California, Berkeley
Massachusetts Institute of Technology University of Illinois
Business Engineering
Economics Public AdministrationUniversity of Michigan University of Chicago
Duke Cornell
California Institute of Technology Northwestern University
University of Washington University of London
Finance Education
30
Fostering Education – Reconstruction of the Sohag Secondary School for Boys
During 2009 and 2010, we supported the development of the SohagMilitary Secondary School for Boys, a historic building established in 1927 under King Fouad I’s rule in Egypt.
Under the first phase of the project, our construction group completed the interior and exterior restoration of the Refaa El Tahtawy building and the installation of the state‐of‐the‐art OnsiSawiris Audio‐Visual Conference Hall.
During the second phase, OCI renewed the school’s sports complex, including a multipurpose gymnasium fitted with wood flooring and state‐of‐the‐art athletic equipment, fitted the playgrounds, fences, gardens, exteriors and corridors with completely rewired lighting infrastructure and system, re‐landscaped the schools gardens and refurbished the fountain, resorted the school’s walls to their original architectural style and rebuilt auxiliary buildings including completelyarchitectural style and rebuilt auxiliary buildings including completely upgraded utilities systems, wiring, carpentry, blacksmithing and ventilation.
OCI’s total contribution to the project over a two year period hasOCI s total contribution to the project over a two year period has exceeded EGP 8.3 million (US$ 1.5 million)
31
Internal Corporate Talent Development
We are constantly looking to create effective solutions which will enhance our people’s performance and create
Initiatives Description
value for OCICollaborating with Leading Universities
OCI collaborates with top regional and international universities to provide our corporate team with training programs tailored to their needsOCI also supports employees pursuing Executive MBA programs at top institutionspp p y p g p g p
Talent Scouting
Through the Onsi Sawiris Scholarship program, OCI has first access to Egypt’s most talented young professionals pursuing careers in their home countryOCI currently employs more than 15% of our scholarship graduates with degrees fromTalent Scouting OCI currently employs more than 15% of our scholarship graduates with degrees from Harvard, Duke, University of Chicago, the Wharton School of the University of Pennsylvania, California Institute of Technology and the University of Illinois
OCI in collaboration with SHL designed and implemented an organization wideProfessional Enhancement
OCI, in collaboration with SHL, designed and implemented an organization wide leadership model and competency framework for all employees. The framework creates a foundation to develop OCI’s selection, succession planning and performance management practices
32
Appendix C – OCI Health, Safety and Environment
Fertilizer Group Focus on Health, Safety & Environment
Health and Safety KPI’s and InitiativesOCI is constantly looking for ways to maximize integration and business synergies amongst its
EFC EBIC OCI Nitrogensynergies amongst its fertilizer production assets
In 2011, EFC has already
Operated 1.36 million man hours without injury in 2010 and 1.3 million man hours without injury in 2011No LTIR incidents in 2009 or 2010, one in 2011
Working with DuPont, a leading science‐based products and sustainable solutions services company, to assess and improve EBIC’s safety cultureImplementing a comprehensive global
Lost Time Injury Rate (LTIR) of 0.46 in 2011, a 33% improvement over 2010Accreditation includes:
— ISO 9001:2008 for Quality Management Systemsoperated 1.3 million
man hours without injury
OC i ’ i
in 2011Accreditation includes:
— ISO 9001:2008 for Quality Management Systems
— ISO 14001 for Environmental M t S t
Implementing a comprehensive global safety standards policy during 2012, guaranteeing that all efforts were made to ensure a safe working environment for its employeesR i d C lt l E l ti d t
Management Systems— RE ACH registration from the
European Chemicals Agency
OCI BeuamontOCI Nitrogen’s Lost Time Injury Rate (LTIR) is currently 0.46 for 2011
Management Systems — OHSAS 180001:2007 for Occupation
Health and Safety — RE ACH registration from the
European Chemicals Agency
Received Cultural Evolution award at Dupont’s 2011 Global Safety Awards. Second Egyptian company to receive an award in the last 10 years. In addition, DuPont’s annual HSE
Lost Time Injury Rate (LTIR) of 0.36 in 2011. This is ten times better than the industry average
newsletter applauded EBIC for it’s HSE standards and results throughout 2010 and 2011No LTIR incidents in 2009 or 2010, one with two minor injuries in 2011Obtained ISO 9001 and 14001 certifications in 2011Working to obtain OHSAS 18001 certification in 2012
34
Fertilizer Group Focus on Health, Safety & Environment
Environment
Reduction of CO2 Emissions at EBICEFC‐EBIC Shared CO2 Pipeline
‐40
‐20
0
2009 2010 2011
ers of CO
2
In 2009, OCI installed a CO2 pipeline between EFC and EBIC, allowing EBIC to pump its CO2produced in the ammonia process to EFCEFC is able to produce additional urea using EBIC’s CO2In 2011 EFC was able to produce an additional 103 thousand
‐80
‐109 ‐114‐120
‐100
‐80
‐60
illion cubic meteIn 2011, EFC was able to produce an additional 103 thousand
tons of urea through the tie‐inEBIC is able to significantly reduce its GHG emissions by delivering its CO2 to EFCIn 2011, EBIC reduced GHG emissions by about 114 million cubic meters the equivalent of emissions from the electricity
EFC EBIC OCI Nitrogen
mcubic meters, the equivalent of emissions from the electricity use of 426,605 homes in North America
In 2010, EFC invested $ 1.2 millionfor the construction of two irrigation ponds capable of holding up to 10,000 cubic meters of waterThe water is used to irrigate 50 acres of
In 2010, EBIC installed an evaporation pool to efficiently dispose of water, a byproduct from the production process
OCI Nitrogen’s plants all operate at excellent energy efficiency rates, with energy consumption and CO2 emissions that are at levels close to the chemical and physical minimum, thereby leading g
forestry near the plant in an environmentally friendly manner
p y y gto a positive CO2 balance under the current European Trading Scheme for CO2 emission trading
35
Construction Group Focus on Health and Safety
OCI: ‐ ISO Certifications: 9001:2008 and 14001:2004 ‐ Safety personnel are trained and certified by OSHA
Quality, Health & Safety Certifications Lost Time Injury Rates (LTIR)OCI achieved 8,000,000 man hours worked without recording a 'lost time injury‘ during the construction of Egypt Basic Industries
1
Safety personnel are trained and certified by OSHA‐ Safety personnel are trained and certified by NEBOSH
BESIX: ‐ ISO Certifications: 9001:2008 and 14001:2004 VCA 2008/05 i l di BTR C tifi ti (VCA i
Corporation
BESIX achieved 7.9 million hours worked without recording a ‘lost time injury’ during the construction of 0 082 0 071‐ VCA 2008/05 including BTR Certification (VCA is a
Safety, Health, Environment Checklist for Contractors and BTR is a railway addendum)
‐ OHSAS 18001
during the construction of the QIPCO Tower in Doha, Qatar and 4.5 million hours on the Ras Laffan project in UAE
Th US G t
0.082 0.0710.033 0.0230.024 0.0250.014 0.0250
OCI Contrack
2008 2009 2010 2011
OCI: all employees and laborers must complete extensive Safety and Environment Orientation Programs which include an orientation program an employee health and safety indoctrination program onsite safety training programs and must
Training & Audit Programs
The US Government recognized Contrack for its outstanding safety record in Afghanistan, where over 63 million man hours were logged with a Lost‐Time Injury Rate (LTIR) of 0 054 orientation program, an employee health and safety indoctrination program, onsite safety training programs and must
adhere to a buddy systemBESIX: all construction sites have undergone a thorough audit aimed at identifying key areas for improvement in relation to the H&S management system as well as technical safety issues. The results were used as a basis for setting out the strategic direction for the H&S programs and activities. Additionally, all technical employees and site management must complete a
( )
Injury Rate (LTIR) of 0.054
For OCI’s commitment to health and safety, and for no ‘lost time injuries’, the group has received safety awards d i i l f 2 day Job Safety Analysis (JSA) program as well as a technical training programand recognition letters from
several international partners and clients, including the U S Army Corps of Engineers, KBR and Uhde
36
Construction Group Safety Certification
Health , Safety and Environment
Follows OSHA Standards or the client’s if more stringent
Regular Safety Audits are conducted on all sites and activities
Extensive HSE & qualityOCI is ISO Certificated 14001 : 2004 For Environmental Management
Regular Corporate Safety Audits are conducted on all sites
E t i T i i P ( i h d b thi d ti )
Extensive HSE & quality training programs (in‐house and by third parties)
Extensive Training Programs ( in‐house and by third parties )
Close tracking of HSE Records and Statistics
Conducts an intact Equipment Maintenance and monitoring program
Incentive program and associating bonus with safety in projects
HSE awards in different Mega
projects have been executed by OCI y
[including international
projects
37
Construction Group Quality Certification
Quality
Fully committed to assure full implementation, development and improvement of OCI’s QA and QC Internal systems.
ISO Certification 9001 : 2000 for quality
Regular Quality Audits are conducted on sites , departments, and activities
St i t t QC M lStringent corporate QC Manual
38
ISO 9001:2000 ASME Certification
