DUBAI: Ezz, Egypt s largest steel producer, said its sales of rebar products would likely grow 13 percent in 2008 on housing construction in Egypt, while flat steel sales would stall.
In terms of rebar, we will end this year with 13 percent growth, Chief Marketing Officer George Matta said on the sidelines of a conference sponsored by London-based magazine MEED.
He also said Ezz Steel s flat steel sales would not grow in the second half of 2008 because the international financial crisis had reduced demand.
Flat sales are mostly in international markets, while sales of long, or rebar, products are mostly local. Ezz has a market share of about 65 percent in Egypt.
Egypt s economy should grow between 6 and 7 percent in the current fiscal year, which ends in June, the government has said. Investors, many from the Gulf Arab region, are pouring billions of dollars into real estate projects in the most populous Arab country.
Ezz also said it plans to build a flat steel production plant in Suez with an annual capacity of 1 million tons as it looks to tap long-term demand across the Gulf and Europe.
We plan to establish a 1 million ton flat capacity in Suez to have 3 million tons by 2012, Matta said, adding that the company is in talks with banks for financing.
Ezz, which signed a deal last year to invest $750 million in a steel plant in Algeria, its first outside Egypt, has said it would boost production from its 2007 level of 4.8 million tons, about 92 percent of its capacity.
The company has said it would begin expanding capacity in 2010, reaching about 6.3 million tons per year in Egypt and 3 million tons in Algeria.
We like Ezz s investment in flat production because (we) believe that consumption will grow over time as Egypt moves up the industrial value chain, said Patrick Gaffney, analyst at Cairo-based investment bank EFG-Hermes. We expect steel prices to fall in Egypt over the next year, albeit at a more gradual pace than in the past.
Ezz has said its net profit would grow by more than 12 percent in 2008, beating last year s figure.
