Egypt's Float Glass Plant Exceeds Expectations
George, Alan, The Middle East
Alan George reports from Cairo
Domestic consumption is increasing as shops and offices are refurbished or new buildings constructed. EGC is having trouble coping with demand
"What happened was beyond expectations. We were able to create this plant on time, not one penny over budget, and its output has been been of international quality," said Mohammed Abdel Wahab, chairman of the Egyptian Glass Company (EGC)."I have to say", he added, "that no-one was expecting success on this scale".
Located in 10th Ramadan City, an industrial new town some 60 kilometres north east of Cairo, EGC started production in mid-1998. The nominal `pull' from the furnace is 400 tonnes per day.
"We started almost from day one at the nominal capacity, and we have achieved an average furnace pull of 400-415 tonnes per day and an average yield of 90 per cent," said Abdel Wahab, a former Egyptian industry minister. "Now, we sometimes produce 380 or 390 tonnes of saleable glass per day."
From a standing start, EGC has captured "at least 90 per cent" of the local market, he said, adding: "It is not 100 per cent only because we don't have the capacity." Sales in 2000 are expected to reach E125-130 million [pounds sterling].
Formed in February 1995, EGC is a shareholding company with private sector management. But its shareholders include both private investors and public sector enterprises. Some 60 per cent of the E150 million [pounds sterling] equity is held by several state-owned banks and insurance companies, while 10 per cent is held by the Saudi-Egyptian Industrial and Development Company, a government-to-government venture.
Initially, it had been hoped 30 per cent of the equity would be held by private subscribers but interest proved lukewarm. They took up only 12 per cent and the balance of 18 per cent was divided between the other founder shareholders.
In December 1997, the UK's Pilkington, whose technology EGC uses under licence and which has a technical assistance agreement with EGC, acquired a 10 per cent stake derived from the equity originally earmarked for private investors. EGC attracted a $50 million loan from the Kuwait-based Arab Fund for Economic and Social Development (AFESD) and a $22 million loan from the Jeddah-based Islamic Development Bank. Egyptian commercial banks provided a E88 million [pounds sterling] loan.
The main design and construction contract, which went into effect in January 1996, was won by the Italian glass engineering company Inglen, which has wide international experience of building float glass plants and which also designed and supplied the batch plant. Subcontracts for the melting furnace and annealing lehr (the latter an installation where the ribbon of glass is cooled slowly) went to France's Stein Heurtey. The float bath was built under licence from Pilkington, while the cutting line was supplied by Germany's Grenzebach Maschinenbau. …