- CAC plans to invest $270m in its first manufacturing facility outside China.
- The investment is intended to reduce exposure to tariffs, trade tensions and future geopolitical disruptions.
- CAC sees Egypt as a strategic export hub with easier access to Europe and the Americas.
The Shanghai-headquartered company plans to invest $270m in the Egypt facility, which will have an annual capacity of 80,000 metric tonnes and is expected to take two years to build.
If approved, the facility will be CAC’s first overseas manufacturing site, complementing the company’s four plants in China, which are located in Jiangxi and Jiangsu.
The proposed plant represents a significant overseas manufacturing investment for the company and reflects its broader efforts to diversify production capacity closer to export markets.
Speaking to AgTechNavigator, Norman Wu, commercial vice president at CAC Nantong Chemical, highlighted three main drivers behind the company’s decision to establish a factory in Egypt.
First, the company views Egypt as a strategic manufacturing and export hub, offering easier access to Europe and the Americas compared with China.
Egypt’s infrastructure would help lower production costs and strengthen supply-chain resilience as CAC expands manufacturing beyond China.
Second, the project is intended to help overcome China’s capacity bottlenecks.
Wu said chemical companies face increasing difficulties in obtaining production permits in China for certain generic active ingredients as authorities tighten approvals.
“For some of the really old generic molecules, it’s really challenging to get production permits because of the overcapacity.”
Wu was speaking at an industry event in Singapore hosted by Pacific Agriscience on 9 July.
Fostering resilience in uncertainty
The planned Egypt facility is intended not only to expand manufacturing capacity but also to provide greater flexibility as agrochemical producers navigate an increasingly fragmented global trade environment.
Wu cited trade tensions and tariff barriers as a key reason for expanding overseas, saying a facility in Egypt would help reduce the company’s exposure to trade restrictions.
Products manufactured in China can face significant tariffs in some export markets amid trade tensions between China and major economies, particularly the US and EU.
Wu said it was too early to specify which active ingredients or products would be produced at the proposed Egypt plant.
Beyond these challenges, Wu described the investment as part of a long-term strategy to prepare for future uncertainties, including potential changes in trade policy and disruptions to global energy supplies.
For instance, he said energy availability had not been a concern before the conflict involving Iran, but had since become a major issue, highlighting how quickly operating conditions can change.
“You never know what can happen. You won’t know what new US tariff policies will be like in 2028.”
Wu clarified that the project remains subject to regulatory approvals in both China and Egypt.
In the meantime, the company will work towards securing approval from China’s central government before proceeding with its plans.
The company must also work with Egyptian authorities on energy-related approvals, an issue that has become increasingly important as global geopolitical developments reshape energy markets.
