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Egypt: AlGioshy Steel intends to establish a new production line worth one billion pounds

The Egyptian AlGioshy Steel Company is negotiating with several Italian companies, most notably Danieli and Cedar Engineering, to add a new production line during the next year at an investment cost ranging between 500 million and 1 billion pounds.

Tarek AlGioshy , the company’s chairman, said in an interview with Al Arabiya Business that, in addition to negotiating the supply of equipment, negotiations are also underway for the supplying company to finance the new line and pay the cost in easy installments.

Egypt’s exports of rebar increased by 22% in Q1 of 2024

He added that if an agreement on financing is not reached, negotiations will be made with banks to obtain financing to implement the new line. AlGioshy Steel Factory is located on an area of ​​40,000 square meters, and its establishment began during 2011-2012, and production operations began in 2016. It includes one production line with a maximum capacity of 300 thousand tons of rebar of various diameters.

The factory’s current investments amount to two billion pounds, and were made through self-financing, according to AAlGioshy.

He said, “Before 2011, we had experience in trade and import, and we were renting steel factories to operate them. We thought of having a factory with a competing brand in the market, so it was the AlGioshy Steel Factory.”

The company aims to produce between 200 and 240 thousand tons by the end of this year, compared to production levels recorded at about 100 thousand tons in the year 2023.

AlGioshy said that since the floating of the pound against the dollar last March, the market has witnessed stability and a greater ability to purchase various production requirements of steel and scrap, which gives iron production companies ease in estimating the cost of production.

“During the last period of last year and the beginning of the new year, there was great difficulty in procuring the dollar, and a challenge in estimating the cost, as the price of the currency in the parallel market changed violently every day, which was reflected in production operations during the last period,” according to AlGioshy.

The stability of the national currency’s exchange rate against the dollar gives it competitiveness in penetrating new markets, and Egypt’s steel exports over the past year achieved a 65% growth to reach $2.331 billion, according to a report issued by the Egyptian Export Council for Building Materials and Metal Industries last February.

He said that AlGioshy Steel Group directs its production to the local market at the present time, but the company is considering entering African markets during the coming period, which gives the company diversification in foreign cash flows and exploiting them in new investments and purchasing production requirements.

New license and listing on the stock exchange
AlGioshy indicated that the company will seek, during the coming period, to obtain a new smelting license to produce iron from the General Authority for Industrial Development, affiliated with the Egyptian Ministry of Industry, so that a smelting line that produces billets will be added to provide integration for the group.

The company aims to offer on the Egyptian Stock Exchange after 3 years without specifying the target offering percentage, noting that during the past four years the challenges were great, both in relation to the Corona crisis and then the currency crisis, and the offering process was postponed to determine the company’s financial position and choose the appropriate time for the offering.

The head of AlGioshy Group stated that the giant national projects launched by the government during the coming period will contribute to increasing the production of iron factories in conjunction with the stability of the exchange rate of the national currency.

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