Malaysia chemicals company and Tanzania firm to build US$800mn chemical plant in Tanzania

Malaysian chemicals company, Huchems Fine Chemicals, and Tanzania's Gro Energy and Infotech Investments are to build East Africa's first ammonia-based chemical manufacturing plant after signing a contract to invest US$800 million into the project.

The plant will use gas, recently discovered in huge quantities in Tanzania, and is expected to create up to 1,000 jobs as well as allowing local Tanzanian companies to exploit their partnerships in the gas sector.

The chairman of Infotech Investment Group, Ali Mufuruki said the energy sector needed sophisticated technology that was in many cases not available locally and therefore needed partnerships.

He said the chemical plant represent an important development in the African energy and petrochemical sectors, tapping local energy supplies to produce domestic industrial products rather than exporting it and locally producing chemical products critical to other sectors of the domestic economy such as fertilizer for agriculture.

The CEO of Huchems Fine Chemical Corporation and Huchems Malaysia Sdn. Bhd, GyuSung Choi, said that the deal was a “win-win” for his company and for Tanzania. He highlighted the combination of Huchems long-term experience in the petrochemicals industry and Tanzania's natural resources, saying that both would contribute to Tanzania’s socioeconomic development and to the expansion of agriculture in the country.

Gro Energy, an Africa-focused advisory firm, praised the partnership with the Asian company, saying that the project could be a model for the development of Africa's energy resources, drawing on the “expertise of the best-in-class” global manufacturers to create products that would have an economic impact across multiple sectors, not just the energy sector.

Tanzania’s economy has continued to record strong export growth and the country’s medium-term growth prospects are around 7%, boosted by its recently discovered recoverable reserves of natural gas estimated to be around 41.7 trillion cubic feet (tcf).