Egypt will set up a 210 million euro ($228 million) facility north of Cairo that will convert rice straw into wood, the oil ministry said in a statement on Thursday, in a bid limit air pollution resulting from its burning.
The plant, in the Nile Delta's Beheira, will produce 205,000 square meters a year of medium-density fiberboards (MDF), using technologies by Germany's plant engineering firm Siempelkamp, which will help carry out the project.
Burning agricultural waste, mostly rice straw, has for years posed a major environmental challenge and caused severe air pollution in the already highly-polluted country. Experts have said rice straw has plenty of potential uses.
A deal for the project was signed on Thursday between newly-established state wood technology company WOTECH and state-owned oil firm Petrojet during an international energy conference in Cairo. Another agreement was signed with the German firm.
The project will help support government's efforts "to transform rice straw from an environmental challenge into an economic opportunity," the ministry said.
It is part of the ministry's plans to expand in the petrochemical industry and set up new projects to provide main production materials for many local industries, the ministry said.
The project was first announced in October. The ministry said at the time it is the first of its kind in Africa and the Middle East and the second globally after the United States.
The plant will produce high-quality local products that will be used in various sectors like furniture, construction, and decoration, the ministry added.
The project's shareholders include the Egyptian Petrochemicals Holding Company, the Egyptian General Petroleum Corporation, SEDPC company, and Petrojet.