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 Strategy
 ANSDK in brief
ANSDK at Al-Dekheila, near Alexandria, Egypt, is one of the most efficient steel producers in the Middle East.
The company was established to meet Egypt's needs for rebars, a basic construction input.
About 1,522,000 ton per year are produced using the direct reduction process with imported iron ore pellets and domestic natural gas as the reducing agent, using electric arc furnaces, continuous casting and modern rolling mills, which were judged to be the best technology for Egypt in view of the large rebar output required to meet domestic needs
Available Sizes
| High Tensile Deformed Bars |
- Deformed Bars 12m length straight
- Deformed Bars in Coils
- In Dia 850mm/Out Dia 1250mm/Coil length 2000mm |
| Size |
D.Bars |
D.Coils |
| 8 |
- |
O |
| 10 |
O |
O |
| 12 |
O |
O |
| 14 |
O |
O |
| 16 |
O |
|
| 18 |
O |
|
| 20 |
O |
|
| 22 |
O |
|
| 25 |
O |
|
| 28 |
O |
|
| 32 |
O |
|
| 35 |
O |
|
| 40 |
O |
|
| Mild Steel |
- Plain Bars 12m length straight / folded (0~16mm)
- Plain Bars in Coils
- In Dia 850mm/Out Dia 1250mm
- Coil length 2000mm |
| Size |
Bars |
Plain Coils |
| 6 |
- |
O |
| 8 |
- |
O |
| 10 |
O |
O |
| 12 |
- |
O |
| 13 |
O |
O |
| 14 |
O |
|
| 16 |
O |
|
| 18 |
O |
|
| 20 |
O |
|
| 22 |
O |
|
| 25 |
O |
|
| 32 |
O |
|
| Plain Wire Rod |
- Plain Rod in Coils
- In Dia 850mm
- Out Dia 1250mm
- Coil length 2000mm |
| Plain Coils |
Size |
Plain Wire Rod |
| O |
5.5 |
O |
| O |
6 |
O |
| O |
6.5 |
O |
| O |
7 |
O |
| O |
8 |
O |
|
9 |
O |
|
10 |
O |
|
11 |
O |
|
12 |
O |
|
13 |
O |
|
14 |
O |
* Bar lengths of 14, 16, 18, and 24 M are produced by special agreement
Specification
ESE 262/97
(24/35) (36/52) |
ASTM A615/97
GR 40 - GR 60
ASTM 706/95 |
B 4449/97
GR 250 - GR 460 |
6407/69
FEB 44K |
NFA 35 - 016/86
GR 400 1-2-3 |
AISI
1006 - 1008 - 1010
1012 - 1018 - 10600 |
INTERVIEW WITH
Mr. I.S. MOHAMMADAIN CHAIRMAN OF ALEXANDRIA
NATIONAL IRON & STEEL COMPANY
Monday 23 November 1998
1/ Q: Can you give our readers a background of your company and its main activities?
ANSDK, which is the abbreviation for Alexandria National Iron & Steel Company, is an integrated steel mill. This means that it is carrying out all manufacturing processes starting from raw materials, which we receive in the form of oxide pellets, until we get the finished product, which is rebars (the abbreviation for reinforcing). The steel bars are used for reinforcing the concrete for all sorts of buildings, tunnels, bridges, ports and all sorts of structural buildings, a lot of which are needed now in Egypt. The demand is not bad. There are some good activities in the construction sector. So, ANSDK provides the local market with about 35% of its needs of rebars. We started our activities here in 1986. From the start it was a joint-venture company with very powerful Japanese partners, which had a 10% participation. Those partners are NKK, Kobe Steel of Japan and Tomen which was formerly called Toyomenka. It also included the participation of the IFC, International Finance Corporation. So, it was one of the first joint ventures in Egypt. We started at a nominal production of 750,000 of rebars per year. Also, Within those 12 Years we have doubled the production.
Luckily, all our production is basically in the local market and a part of it, which is about 20%, is exported to neighboring Arab countries like Saudi Arabia, Tunisia, and Algeria. Our product also exists in other markets with a satisfactory reputation.
What helps in this matter is the better quality which we are enjoying starting from our raw material. One thing that gives ANSDK an advantage in is that we choosing our raw material, which is the iron oxide from Brazil. This raw material contains about 67% of iron (Fe content). Iron oxide comes from different sources but this kind of ore is very rich in iron and free from impurities. Then we have the natural gas from off shore fields near AbuQuir – Alexandria. When the natural gas is heated and reformed it produces two reducing agents: Hydrogen and Carbon Monoxide. Both of them have high affinity for oxygen. When they pass through the iron oxide, they leave it as iron alone. That is how we get our iron which we call "sponge iron". It is the purest form of iron, which comes from virgin ore with which we start our steel making process. Normally, a steel factory would start with scrap but we use a high percentage of sponge iron. Sometimes it reaches 90% of our charge to our furnaces. This gives an advantage to our product because we start with high pure material.
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On the other hand, what I meant by having an integrated steel mill is that we make the iron itself and afterwards we transfer this iron into steel. The direct reduced iron (DR) is melted in electric furnaces and then we cast it into billets. These billets are rolled into bars in the down stream rolling mills. We have a high efficient control of our product, either during the processing and or for the finished product. We have the laboratories and the most up to date machines for testing and inspection. We are happy that in the year before last we were granted with the ISO 9002 certificate, which proved that we are up to the international standard in our quality system and that we can go on consistently with good quality.
After mentioning these points, I must add that we were also taking care of the environmental aspect. All of our conveyer belts are covered so that there are no emissions, the direct and fugitive fumes from our furnaces are controlled, collected and pass into filter bags so that what is coming out is clean and free from dust. Accordingly, we were able to get the ISO 14001 certificate. We are in the course of installing a monitoring system measuring and recording all kinds of pollution such as high temp., sound, fume, etc to be under our full control.
In ANSDK we employ about 2700 people. We provide them with facilities for housing and we help them so that they can own a reasonable housing facility with its actual cost and can pay it in the long term. I believe that when a worker is well paid and enjoys a comfortable living, he or she will certainly give more than take.
2/Q: Could you give our readers an opinion of your company and the amount of sales for last year?
It was L.E 125 billion. In dollars it will be $ 400 million.
3/Q: You said that your company is a joint venture. But, the majority of the shares are still publicly owned?
This is no longer the situation because we have been going on with the privatization process. The private ownership now has reached about 46% and it is expected to reach more than 50% by the year 2000.
4/Q: The steel demand in Egypt is growing by around 7% per year. This demand is fueled by the increasing demand of the construction sector. What has been your policy to face such an increase in demand and to maintain your market share?
We had this in mind all the time. We have been looking into the future and with our new Second Bar Mill of 300,000 tons / year our production will be 1.8 million tons/year that is why we increased our productivity from 750,000 tons to 1,5 million tons. This came after an expansion that took place in 1994 and then the new bar mill of another
300,000 tons/year. In the steel industry you can invest now but you will be rewarded in at least 30 months. We have invested a lot in equipment. In the last expansion we invested about $ 400 million in equipment in order to double production.
5/Q: In terms of exploration and new discoveries of ore and metal, does your company carry out these activities?
No. All of our ore is imported. It should be imported simply because our local ore is not suitable for reduction by natural gas as explained. I said earlier that we reduce the iron oxide by gas. This needs a very high content of iron which is 67% and it is not available in Egypt. What we have is only 43%. This is good for blast furnaces but not for direct reduction, which is the process that gives a very good quality of iron to start with.
6/Q: Since your production has doubled, what are the main guidelines of your strategy today for future growth?
We are an integrated steel mill. For this integration every process has to be balanced with the other. If it is not balanced you have to raise the one before the other. That is what we are doing all the time. For example, last year we decided to increase the capacity of rolling. Instead of having only 1.5 million tons we raised the capacity to be 1.8 million tons and we were able to commission that last September 1998. Therefore, the capacity of ANSDK is 1.8 million tons.
7/Q: The economy is becoming more and more competitive and the government is planning to privatize more companies, especially in the industrial sector. You told us that one of your advantages is producing pure iron. So what are your other main competitive advantages against domestic or foreign competitors?
Let me begin with foreign competitors. ANSDK is following a cost-production campaign all the time, since we have started up till now and at least for a quarter of a century to come. We have to analyze every cost item and see what can be done about it. For example, whether or not we can lower our usage of electricity so that instead of a ton we would use 600 kilowatt or 570 kilowatt. The way in which this is done is by using oxygen injection together with electric power. This will reduce the energy and time. Then we have to produce oxygen. But then we have to produce oxygen. We buy a plant to generate the oxygen required. This is cheaper energy by means of which we can achieve cost reduction. Furthermore, we increase productivity (the number of tons per man). We had a system here that gave more advantages. We work 365 days per year. We do that by following the system of 3-shifts/4 crew. We are utilizing every minute by using more people who are included in the 2700 people. So, we have more working hours than if we were not using that system. This increases production. Depreciation is distributed on more units of production. You can have better cost.
8/Q: Our readers are interested in new business opportunities. In which areas of your activities would you be interested in attracting new business?
This is very interesting because we are just coming into this stage. After reaching a production of 1.8 million tons of rebars and knowing our raw materials, which is excellent, we have consulted with our partners and financiers, the IFC, and our consultants BSCOS (a British Team). We came to the conclusion that we are good enough to go into flat steel business. The 1.8 million tons, that I mentioned earlier, were entirely brown bars and rods. Flat steel strips and sheets require better quality and more effort. They are very useful. All pipes and tubes are made of flat steel (You get a flat strip and you roll it). All the structural components of the mills (beams, H-beams & I-beams) are started from flat steel. It is also needed for gas pipes, 20 inches and width of about
60 inches. Therefore, the flat steel business is very important and its demand is rising in Egypt. We have already contracted with [Schluman Zemen] SMS of Germany. It is under construction and we hope that it will be finished by the end of 1999.
9/ As we say in the United States ‘contacts mean contracts’. So, what about American contacts and what are you doing to promote them further?
We have contacts with the well-known firm "Cargil". They are interested in importing steel. They like our product because it is made of sponge iron. We had a very good amount of our production exported to the States through Cargill. As for Canada, we have some contacts there as well. Flat steel needs finishing and processing and in Canada they have a good steel business for the pickling process. In addition, I also take into consideration our participation with IFC, which is international but it is also partly American.
10/Q: You seem very confident about your company. What about your country, how confident are you about Egypt?
My confidence in our company is derived from confidence in my country and that Egypt is on the right track from the point of view of growth. A country can not function without a very strong infrastructure. The steel industry is imperative for the country to establish the infrastructure. Consider the Cairo network or the bridge over the Suez Canal for examples. ANSDK provides the rebar for them. We participated in these great projects, like the Toshka canal. Now, 24 meters rebars are required. This indicates that there are big products that will consume such material. Therefore, I believe that growth is taking place and that we can feel it as steel producers.
11/Q: Keeping in mind that our magazine reaches more than 4 million readers, what will be your final message to them?
I would welcome them to visit Egypt. |
© World INvestment NEws, 1998.
This is the electronic edition of the special country report on Egypt published in FORBES Magazine,
May 31st issue.
Developed by AgenciaE.Tv |
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EGYPT
