Shipping Arabia, October 15, 2026 – Egypt’s El Wehda for Industrial Development, part of El Garhy Steel Group, is negotiating with Chinese and Dutch companies to participate in the Damietta ship recycling project, which targets an annual recycling capacity of approximately 2 million tons during its first phase.
According to Al Borsa News, the negotiations aim to secure international technical expertise in vessel dismantling and introduce advanced recycling methods that meet environmental protection requirements. Egypt’s Ministry of Transport has been seeking a foreign partner with specialized experience in ship recycling to support the adoption of modern technologies.
The project involves investments running into the billions, although the report does not specify the currency or total investment value. It aims to establish a major ship recycling operation that will also supply recovered steel scrap to Egypt’s domestic steel industry.
Damietta Ship Recycling Project Targets 2 Million Tons Annually
The Damietta ship recycling project will occupy approximately 2 million square meters in the western area of Damietta Port. The facility will dismantle vessels and process recovered materials into commercially tradable scrap in accordance with international standards.
During its first phase, the development aims to achieve an annual ship recycling capacity of approximately 2 million tons. The proposed involvement of Chinese and Dutch companies forms part of efforts to obtain the technical expertise required for modern recycling operations.
The project’s scope extends beyond vessel dismantling. It also includes the construction of new ships and the provision of scheduled and emergency vessel repair services at Damietta Port.
In September 2024, the Holding Company for Maritime and Land Transport and El Wehda for Industrial Development signed an agreement to establish a company responsible for managing the ship recycling and shipbuilding project, alongside the planned and emergency repair activities.
The initiative was originally introduced in 2024, with implementation expected to begin around the current period. However, according to the source cited by Al Borsa News, work is now anticipated to commence within the next two years.
Recycled Ship Steel to Supply Egyptian Steel Mills
A principal objective of the Damietta ship recycling project is to supply Egypt’s steel manufacturers with scrap recovered from dismantled vessels. The recovered materials are intended to help address the existing shortage of steel scrap in the domestic market.
According to the report, scrap obtained from ships is characterized by its high quality and relative ease of cutting, processing and melting. These characteristics make it suitable for use as raw material in steel production.
El Wehda for Industrial Development plans to begin concluding supply agreements with domestic steel mills to receive the scrap generated by the project. These arrangements would establish a market for recovered materials once recycling operations begin.
The initiative comes as Egypt’s steel industry faces a substantial gap between domestic scrap availability and manufacturing requirements.
Egypt currently produces approximately 8 million tons of reinforcing steel annually, while the combined production capacity of licensed factories stands at around 16 million tons per year.
Meanwhile, the country obtains approximately 1.5 million tons of steel scrap annually from domestic sources and imports an additional 3 million tons from international markets.
These figures highlight the steel industry’s reliance on imported scrap to supplement local supplies. By directing recovered ship steel to domestic manufacturers, the Damietta project aims to contribute to meeting part of the industry’s existing raw material requirements.
Foreign Expertise and Project Implementation
The ongoing negotiations with Chinese and Dutch companies represent an important element of the project’s development process.
According to the source, the Ministry of Transport has been interested in identifying an international partner capable of providing the technical knowledge needed for ship recycling activities. The objective is to introduce modern dismantling techniques while maintaining environmental protection standards.
The planned recycling operations will therefore combine vessel dismantling with material recovery, allowing steel extracted from ships to enter Egypt’s industrial supply chain.
Although the project’s implementation timetable has shifted from the original expectations, the targeted recycling capacity and plans to supply domestic steel producers remain central to the development.
The next phase is expected to involve advancing the proposed international partnerships and preparing commercial arrangements with steel manufacturers ahead of the project’s anticipated implementation.
Source: Al Borsa News