The new project costs about EGP 3 billion, of which EGP 1 billion was used in equity and EGP 2.3 billion in loans to finance equipment and part of the working capital.
The steelworks is expected to add 1.5 million tons of range to the company's capacity. The company plans to export approximately 10% of its long production, primarily wire rod, as it is used in various sectors internationally.
Ezz Group's total production volume reached 5 million tons in 2021, of which about 3 million tons of rebar and 2 million tons of flat steel. The group currently only has 13,000 tons of steel rebar in its inventory.
Rebar consumption in Egypt increased from 6.8 million tons in 2020 to 7.4 million tons in 2021 and is expected to reach around 8 million tons in 2022.
A source from the Ezz group said the administration sees more room for growth in the coming years, especially if bolstered by growth in local logistics and market liquidity, confirming that per capita steel consumption in Egypt is on the low side compared to any comparable country.
The expected growth in domestic consumption is driven by national megaprojects currently underway, where the impact of the project is significant in the fourth quarter of 2021, which is expected to increase steel consumption by approximately 1.25 million tons per year.
Another growth catalyst is the end of the suspension of building permits and the implementation of the new construction regulatory framework, which implies hidden demand.
Comments
No comment yet.