Egypt's Rebar Manufacturer Al Gioshy Plans New Investment in Q1 2019

According to the latest reports, Egypt, one of the key rebar manufacturers, Al Gioishy plans to increase the volume of its investment to EGP 800 million (USD 45 million) in the first quarter of 2019.

Out of the total investment of about EGP 300 million investment is planned to increase its production capacity from existing 240,000 tonnes to 500,000 tonnes. The new investments are likely to create more than 400,000 new job opportunities during the current year.

Al Gioshy also plans to offer a stake of its share on the Egyptian Exchange (EGX) in 2019. The company export nearly 30% to 40% of its production and aims to expand in the African markets.

Egypt's steel market scenario

Egypt is the largest steel-consuming country in North African region, however, the local billet producers in the country are burdened by the rising share of billet imports in the country and also high production cost due to extravagant energy prices.

In fact a number of billet manufacturers in Egypt has been demanding the Ministry of Trade and Industry support and dumping the imposition of protection fees on imports of billet after the United States imposed tariffs on steel imports and led to a large global surplus of this commodity, in addition to the demand for protective tariffs on imports of rebar.

Egypt's actual billet production is about 3-4 MnT per year and the country has 9 factories that are engaged in billet production.

On the other hand, one of the key rebar producers Ezz Steel's Chief Marketing Officer, George Matta said in an event that the rebar producers in Egypt are likely to benefit from higher steel demand and the lower rate of imports in 2019.

Domestic rebar producers in Egypt are set to benefit from reduced imports into the country due to its trade protection measures. In Dec'17, Egypt imposed permanent anti-dumping duty on rebar imports. These are applied to material from China at 29%, from Turkey at 7-22.8% and from Ukraine at 17.2-27%. However, before the permanent duty was imposed, a temporary duty was announced by the country's government in early Jun'17. The price of rebar in 2018 increase by 17% against 2017and averaged at EGP 12,138/MT (USD 686/MT) ex-works, including VAT of 14%.

Steel consumption in North Africa will hit 23.8 MnT in 2019 from an estimated 22.8 MnT in 2018 according to Ezz Steel forecast. Meanwhile, the World Steel Association expects that apparent steel use of finished products in North Africa region will reach 20.2 MnT in 2019, up from 19.2 MnT in 2018. In 2017, the steel consumption in North Africa was 18.4 MnT.