Attempts to reverse liquidation plans of Egyptian Iron and Steel Company
An offer from a Ukrainian firm to modernize and operate Egyptian Iron and Steel Company could reverse liquidation plans that have placed the jobs of 7,000 Egyptian workers at risk. State owned Metallurgical Industries Holding Company, the parent company of Egyptian Iron and Steel, informed Egyptian Exchange “An official offer from the Ukrainian government-owned Vazhmash company to rehabilitate and develop Iron and Steel’s Helwan plant via a profit-sharing scheme with the Egyptian government has been submitted and is currently under review.”
According to the official offer, the Ukrainian company’s proposal consists of a 36-month modernization plan aiming to increase the plant’s production capacity to 1.2 million tonnes under the Ukrainian company’s leadership, followed by a 20-year period during which the company would be jointly managed via a partnership between Vazhmash and the Metallurgical Industries Holding Company.
In exchange for financing the required investment, Vazhmash proposed a profit-sharing scheme whereby it would take 90% of the profits while the holding company would take the remaining 10%. Vazhmash has conditioned its offer on Egyptian Iron and Steel’s slate being wiped clean of debts, which the Public Enterprise Ministry has said stand at LE 10 billion, with Vazhmash proposing that the holding company pay off any outstanding dues before the deal is finalized.
The offer also pledges to keep 4,000 out of the current 7,000 workers on the payroll, with spending on each worker to average USD 500 dollars per month including salaries and other benefits, such as health insurance. The fate of the company’s other 3,000 workers is unclear.
Vazhmash’s offer comes three weeks after the last operating furnace of Egyptian Iron and Steel Company was shut down and an official party appointed to manage its liquidation. Instructions issued in May also forbade company bus drivers from transporting workers to the Helwan plant.
Protests against the closure of Iron and Steel, once the pride of Egypt’s burgeoning post-independence industrial sector, have erupted multiple times since the January decision to liquidate the company. In the latest incident, 10 workers were detained for two hours after a spontaneous sit-in held by employees after the company’s final furnace was suddenly extinguished in May.