Egyptian Steel to Go Public, Seeks 25 pct of Steel Market

Qatari-Egyptian steel venture, Egyptian Steel (ES), has taken the decision to go public by selling part of its shares in the stock exchange, the company's chairperson told Reuters Sunday. During Reuters' Middle East Investment Summit, Ahmed Abu Hashima said that ES is currently in talks with "an international company" to manage the initial public offering (IPO). The timing and amount of the offering has not been set yet, he added. Earlier in Novermber, Egypt's government approved a new tax that would deduct 10 per cent from any profits companies make in IPOs. For his part, Abu Hashima denied that the tax would change ES's plans. "I know about this tax, but we are determined on going into the exchange," Abu Hashima was quoted as saying. Egypt has only seen one IPO since that of Amer Group in November 2011.

Abu Hashima also added that he, along with his Qatari partners, has set up a cement company under the name Egyptian Cement. He explained that the venture will seek to acquire a cement license out of seven the Egyptian government is planning to offer. Around $250 million is expected to be invested in the new cement plant, which will have an annual capacity of 1.5-1.8 million tons, Abu Hashima said. A relatively new face to Egyptian business world, Abu Hashima has frequently made headlines in the past two years as he expanded his businesses. "We plan to have 20 to 25 per cent of Egypt's steel market after we start production in all of our plants," he explained.

"There is a growing demand for steel and Ezz Steel is not building any new factories," Abu Hashima said, referring to the company founded by Ahmed Ezz — the majority shareholder of Ezz Steel, Egypt's largest steel maker — who is currently in prison on corruption convictions. ES is currently building a steel plant in the governorate of Beni Suef with total investment amounting to LE1.5 billion and aiming start production by 2014. Abu Hashima added that after establishing a new cement business in Egypt, he will go into tile production.