Industry

Egypt: Reducing automobile tariffs

The Egypt automotive industry has staged a comeback in the first months of 2010, following disappointing sales figures in 2009. This strong performance appears to dispel the worry that Egypt's reduction of tariffs in line with free-trade agreements could push out local manufacturers. In March, GB Auto, Egypt's largest automobile assembler with a 30 per cent market share, posted a net income of LE89.9 million (€12.12m) for fourth-quarter 2009, a more than six-fold annual increase from LE12.1 million (€1.63m). GB Auto's CEO, Raouf Ghabbou, told international press that his company's recovery began in third-quarter 2009. On the back of these strong results, the company announced it would soon begin producing buses and trailers for the Middle East and Africa. "We will start exporting from the second quarter of this year," Ghabbou said. Most neighboring countries lack developed auto industries, and Egypt has the competitive advantage over European and Asian manufacturers in its low-cost production and proximity. Iraq is already receiving GB Auto vehicles as of February, and the company has said it expects to send 36,000 units this year. The Automotive Marketing Information Council reported in March that Egypt's January 2010 automobile sales were up 63 per cent year-on-year, from 10,765 to 17,551 units. The growth was led by passenger car sales, which were up 96.4 per cent from 7105 to 13,951 units. The spike in car sales can be attributed to rising consumer confidence as the global economic crisis appears to be in remission, and World Trade Organisation (WTO) agreements coming to play in 2010 are expected to generate further growth. (Source: OBG)

Foulath opens US$3.5bn integrated steel plant

Bahrain-based Gulf United Steel Holding Company (Foulath), a leading global steel investment vehicle, in late April inaugurated its mammoth steel-manufacturing complex in the Kingdom built at a cost of US$3.5 billion. A ceremony to open the complex was held at the new steel complex in Hidd Industrial Area in Salman Industrial City, which stretched across 1.3 million sq meters, said a Foulath statement. It is the world’s first fully integrated steel manufacturing facility and home to Foulath’s three investee companies - Gulf Industrial Investment Company (GIIC), United Stainless Steel Company (USCO) and United Steel Company (SULB). The GIIC, a world-class pelletizing company, is one of three merchant plants in the world and the only one located in the Middle East, while USCO is the region’s first manufacturer of stainless steel and SULB will become the region’s only producer of beams and medium and heavy structural steel sections. Together these companies are the only ones in the world that manufacture everything -from iron ore to pellets to finished products at the same site, the company said in a statement.

Saudi Arabia eliminates import duty on steel rebar to ease shortage

A rise in steel prices and a shortage in steel rebar supplies have prompted Saudi’s government to lift the import duty on steel rebar, thus avoiding delays in completion of construction projects. Saudi Arabia has taken a major step by lifting the import duty on steel rebar to alleviate a shortage in the Kingdom as prices rise for rebar feedstock. There are no import duties on rebar now because of a shortage in Saudi (Arabia) and we want to encourage traders to ship the steel here,” a Ministry of Trade and Industry spokesman said. “This is a time when prices are high and traders don’t want to pay duties on shipments,” he added. “Over the last few weeks steel prices rose due to strong demand in the local Saudi market. The government’s decision to lift the steel import duty will cut costs and increase imports in order to meet the growing demand in the local market,” said Said Al-Shaikh, chief economist at the Jeddah-based National Commercial Bank. As Saudi Arabia embarks on massive construction projects, demand for steel is expected to rise this year by eight percent with consumption nearing 6.4 million tons, Saudi Basic Industries Corp. (SABIC), which accounts for about half of domestic production capacity with its Hadeed subsidiary, said recently.

Qatar opens US$5.7bn smelter plant

Qatar has officially opened Qatalum, which it described as the “world's most efficient and environmentally friendly aluminum smelters,” it was announced. HH the Emir Sheikh Hamad bin Khalifa Al Thani officially inaugurated the US$5.7 billion plant, which is located south of Doha at the Mesaieed Industrial City. The smelting plant was established in 2006 as a joint partnership between Qatar Petroleum and the Norwegian company Hydro and is significant for its capacity to produce 585,000 metric tons per year of premium quality aluminum ingots.

FII calls for rehabilitating stalled plants

The Federation of Iraqi Industries (FII) calls on the government organizations to work on rehabilitating the stalled plants that make 80per cent of all plants in Iraq. “The industrial sector is vital and that is why all out-of-order Iraqi factories must be running again,” demanded Nizar Ali Mohsen, the FII chief, in statements to the press. “This important sector, unfortunately, has not received the financial appropriations that would help it rise again, particularly in light of Iraq’s current economic system that is heading towards market economy,” he added.