Vietnam’s Vinachem has signed an MoU with Egypt’s Kayan to secure a stable supply of apatite ore, a critical input for phosphate fertilisers.

The agreement is designed to mitigate risks from geopolitical tensions, trade restrictions, energy costs, and supply chain disruptions by strengthening upstream supply security.

Beyond raw material supply, the agreement opens opportunities for Vinachem to introduce its products into Egypt and neighbouring markets, with Kayan acting as distributor or facilitator.

The Vietnam National Chemical Group, known as Vinachem, has recently signed a memorandum of understanding (MoU) with Kayan, aimed at securing supplies of apatite ore, which is essential for the production of phosphate fertilisers. This agreement was announced by Vietnam’s Ministry of Agriculture and Environment (MAE) following the signing ceremony held in New Cairo on April 14.

As highlighted in the press statement, the partnership capitalizes on complementary advantages, including competitive pricing and improved logistics efficiency.

“The MoU signing between Vinachem and Kayan is not merely a commercial story of importing ore; it also reflects a mindset of cooperating from the root of the supply chain. This aligns with Vinachem’s orientation towards high-tech development, a green economy, and international market expansion in this new phase,” a spokesperson commented.

Kayan boasts a significant presence as one of Egypt’s largest apatite mining and exporting enterprises, holding a 40% share of the national market.

This strategic move signals Vietnam’s increasing focus on secure upstream supply chains amid a backdrop of global fertiliser market volatility influenced by geopolitical tensions, trade restrictions, energy costs, and logistics disruptions.

Both parties are set to outline specific provisions around quality, pricing, delivery schedules, and payment terms in separate commercial contracts that will be finalized soon. Import activities will be conducted by Vinachem through a dedicated commercial unit in Vietnam.

Exploring Expansion Opportunities in the Middle East and North Africa

Apart from securing apatite supplies, this agreement paves the way for broader commercial collaboration. The two companies have agreed to investigate market development opportunities for Vinachem’s products across Egypt and its neighboring countries.

This exploration will encompass an array of products, including fertilisers, detergents, tires, batteries, and additional industrial and consumer chemical goods. Under the framework of the agreement, Kayan will serve as a distributor, facilitating access to both local and regional distribution networks.

This strategic collaboration could potentially enable Vinachem to establish a foothold in the Middle East and North Africa, both of which exhibit rising demand for agricultural inputs and industrial chemicals.

Vinachem and Kayan are committed to fostering a sustainable strategic partnership, leveraging their respective strengths in resources, production capacity, and distribution systems to enhance value for both entities. To ensure effective collaboration, a Joint Cooperation Steering Committee (JCSC) will be established, allowing senior representatives to monitor progress, address challenges, and endorse specific cooperation agendas.

This development aligns with the broader call from Vietnam’s Prime Minister Le Minh Hung, who has emphasized the need for the domestic agriculture sector to transition from volume-driven growth to enhanced productivity, improved quality outputs, and stronger market orientation.