Ezz Steel seeks USD 362 plant to finance its DRI plant
Friday, 04 Sep 2009
Bloomberg quoted Al Ezz Steel Rebars SAE as saying that it’s seeking EGP 2 billion loans to finance a direct reduced iron plant.
Mr Kamel Galal head of investor relations said that the plant will have a capacity of 1.8 million tonnes.
Mr Galal said that Al Ezz expects to start production from the plant during the H2 of 2011. The company plans to finance 70% of the project through debt which is being raised by the National Bank of Egypt and Banque Misr.
He said that Al Ezz Steel has more than 60% of the Egyptian market. The company has a total capacity of 5.3 million tonnes of finished steel. The company also expects production from a new billet unit to start in the Q1 of 2010. The unit has a production capacity of 1.2 million tonnes per year.
Mr Ismail Sadek an analyst at Egyptian investment bank Beltone Financial said that Al Ezz Steel’s expansion will help meet growing domestic steel demand. There is a shortage in the market, which has a buy recommendation on the stock. Egypt imported 1.5 million tonnes of steel from Turkey in the first 4 months of 2009.
Al Ezz Steel said that strong demand spurred by government infrastructure spending may help increase Egypt’s steel imports 10 fold to 3 million tonnes this year.
A head of IMF forecasts that construction in Egypt expanded 11.4% in the year through June helping the economy of the most populous Arab country grow 4.7%.
Al Ezz Steel reported a 94% decline in Q2 profit on August 26th 2009 mainly due to lower steel prices. Net income fell to EGP 34.9 million compared with EGP 582.6 million per year earlier. Meanwhile, it was reported by Almasry Alyoum that the National Bank of Egypt with Banque Misr will arrange an EGP 1.8 billion loan for El Ezz Steel Rebars to fund the company's new direct reduced iron project.
