Summary of Proposed Investment
Project Number
8638
Company Name
ALEXANDRIA NATIONAL IRON & STEEL CO.
Date SPI Disclosed
Mar 6, 1998
Country
Egypt, Arab Republic of
Industry
Manufacturing
Status
Completed
Sector
Integrated Steel Works
Department
Regional Industry - MAS Africa
Environmental Category
B - Limited
Previous Events
Approved : May 7, 1998
Signed : Aug 4, 1998
Invested : Sep 30, 1998
Project Description
Summary Of Project Information (SPI)
| Project Name | Egypt-Alexandria National Iron and Steel Company, S.A.E. |
| Flat Steel Project |
| Region | Middle East |
Sector
Project No8638
Projected Board DateApril 10, 1998
Company NameAlexandria National Iron and Steel Company, S.A.E., ANSDK - the "Company"
Technical Partner and/or Major Shareholders
ANSDK’s main shareholders include a number of Egyptian public sector companies (64%), its Employees (14%), a Japanese Consortium (JC-10%) composed of Nippon Kokan, Kobe Steel and Toyo Menka Kaisha (renamed Tomen) and IFC (5%). In November 1997, the Company decided to increase its capital in two tranches in order to partly finance the proposed flat steel project. A number of public sector shareholders refrained from participating in the first tranche, which was implemented in December 1997, thereby diluting their combined shareholding from 64% to about 56%. Public sector shareholding is expected to further decrease to less than 50% after the second tranche of the capital increase is mobilized, thereby privatizing the Company. New private shareholders would include Schloemann-Siemag AG (SMS) of Germany, a major steel equipment supplier, which would own about 1.5% of ANDSK’s final capital. The JC would maintain its shareholding to 10%, while the Employees would increase their share of ANSDK’s final capital to about 16%.
Project Cost Including proposed IFC investment
Project Cost of about US$625 million (including an IFC A loan of US$60 million, a B loan of about US$100 million and an equity investment of about US$11 million equivalent thereby maintaining IFC’s present shareholding of 5%).
Location of project and Description of site
Located in El-Dikheila, 15 km West of Alexandria, in Egypt, ANSDK is an integrated steel mill complex occupying an area of 1.4 million m near the Mediterranean coast. The proposed flat steel plant will be located on ANSDK’s current premises, and will, as a result, benefit from the existing and well-provided infrastructure facilities.
Description of Company and Purpose of Project
The proposed project consists of building a “Direct Reduced Iron” (DRI) based integrated flat steel plant, comprising a DRI furnace, electric steel making shop, thin slab caster, on-line hot strip mill and the necessary utility and other related facilities. The project, which benefits from the strong technical support of the JC and SMS, will produce flat products in the form of hot-rolled coils (HRC) to serve primarily the growing domestic market. HRC can be used as a finished product in a number of industries such as the construction, manufacturing, pipe-making or light engineering industries, and also as a feedstock for cold-rolled and coated steels. The demand for flat products in Egypt is currently met by a technologically obsolete and inefficient state-owned company, and imports. The project supports the Government of Egypt’s privatization program. It will contribute to capital markets development and increased competitiveness of the manufacturing sector, as well as create about 535 new jobs and attract significant foreign direct investment to Egypt. The project is also expected to strengthen the domestic steel industry and develop the engineering industry, which is presently constrained by a lack of quality steel. This would be a strong generator of employment. Finally, the project would accelerate a transfer of technology and know-how of the highly complex flat steel production process. IFC assisted ANSDK in evaluating and making appropriate changes to the project configuration and cost. IFC is also assisting the company in implementing the financial plan, and is expected to play a catalytic role in helping the Company mobilize a major portion of the debt finance. IFC''s involvement is also essential to work out the arrangement for the privatization of the Company through dilution of the public sector shareholding.
Environmental Category and Issues
This is an environmental review category B project; principal issues involve compliance of existing operations, air emissions, recycling of primary waste materials, liquid effluents, noise and company load on infrastructure, and environmental management and employee health and safety. The sponsor has presented plans to address these issues and which demonstrate that the proposed project will comply with applicable governmental and World Bank requirements: The company’s existing operations are in compliance with Egyptian and World Bank guidelines. Dust emission control at the new Direct Reduction Plant (DRP) will include the use of a dry dedusting system. Lime and limestone fines obtained during the process will be sold to cement industries. ANSDK’s air emissions will comply with Egyptian and World Bank guidelines. The scrap produced in the steelmaking process is recycled into the process. ANSDK’s slag is crushed and separated. Hereby, metals are extracted and residual slag is sold to the construction industry for asphalt, and concrete filling as well as for road stabilization material. ANSDK has a domestic sewage and an industrial wastewater treatment system. The effluent discharges meet local regulations and World Bank guidelines. The noise level at the DRP will be reduced by enclosing the compressor, and the steelmaking plant will be designed to reduce the sound power level. ANSDK’s management has recently created an environmental department to direct and manage all the activities related to environment, health and safety issues at the plant. The company provides employees with appropriate personal protective equipment.
The is from the Public Information Center.
| Date SPI sent to PIC | March 6, 1998 |
“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”
For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 974-4384
Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).
Sponsor / Cost / Location
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