 GOING PUBLIC |
In the coming months, ENAP (the National Paint Manufacturing Company) and ENGI (the National Company of Industrial Gas) will be listed on the Stock Exchange. Indeed, ENAPis ready to go public thanks to positive financial results, a production capacity of 150,000 metric tons, and a turnover of US$ 80 million. Created 30 years ago, ENAP holds 80% of the national market with its production essentially intended for the building industry, railroad and naval services.
Madjid Hassaine, Chairman of ENA Pexplains that "ENAP' s main concern is to find a partner, not a partner with money, but simply a partner who will help to develop, perpetuate our activity in Algeria, and extend our business to the whole African continent". According to Hassaine, the objective is to privatize and offer majority shareholding to a potential investor. They are selling shares up to 20% on the Stock Exchange, but Hassaine insists, "there is a need for a partner that could take 60% or 80% stakes in ENAP."
ENGI is in a similar financial situation. In 1990, they doubled capacity and increased quality controls in a time of recession. "In fact, we did even better since we created a company in 1998 in partnership with APMEL, the 5th largest gas industry in the world" adds ENGI Chairman, Lahocine Boucherit. "The plant started producing at the beginning of the year, and has just doubled its nitrogen production. Furthermore, we have just sealed a partnership contract with ILDI of Germany, a major gas company". These new partnerships will enable ENGI to expand regionally, with a foothold in the Tunisian market, and the potential to increase export operations. In the meantime, ENGIis in the midst of talks for partnership projects in the field of precious gas, services and development.
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The development of the Algiers Stock Exchange will depend on the success of IPOs from companies like ENAP and ENGI, which will hopefully set a trend for all other companies under the State-owned CPS holding to go public as well. Abdelmadjid Attar, Chairperson of CPS (the Chemistry, Pharmacy & Services Holding co.), believes that "if privatization is only done through partnerships, the Stock Exchange will never develop. That is why companies should be listed step by step in blocks of 20%, in order to develop trading on the Stock Exchange".
This two-prong strategy, promoting partnerships while increasing the capital base of the stock market, promises to set the basis for an opening of the Algerian economy. It also aims at reducing hydrocarbon dependence through export diversification. Apart from oil and gas, Algeria exports less than US$ 400 million worth of mining products, agro industrial products, and fertilizers. |
ALGERIA,
