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Ezz Steel owns a 53.2 percent stake in Al Ezz Dekheila Steel SAE (Alexandria, Egypt), which manufactures flat and long steel products. Al Ezz Steel Mills SAE, in which Ezz Steel owns a 90 percent stake, produces long steel products. Ezz Flat Steel SAE, in which Ezz Steel owns a 75.2 percent stake, produces flat steel products. The present combined production capacity of Ezz Steel is 5.3 million tons. The firm employs about 6,000 people.

According to industry reports, Ezz Steel is planning a horizontal integration of its rebar production facility. This process will make use of liquid steel flexible for production of rebars and flat products, and will enable the firm to quickly respond to market demand. With the horizontal integration expected to be completed by mid-2011, Ezz Steel's revenue from rebar is estimated to grow at a 13.1 percent compounded annual growth rate before interest, depreciation, taxes and liabilities.

Steel analysts are optimistic that the global steel scenario will improve by 2010. Ezz Steel already has charted out augmentation plans that will increase its production capability to 6.3 million tons per year by 2010-11. This includes expansion of rebar production capacity by 1 million tons per year, which will take the total rebar production capability of the company to more than 4 million tons per year.

In its Egypt Metals Report 2009, Business Monitor International (BMI; London, England) predicts that the construction sector in Egypt is set to grow 5 percent in 2010. Crude steel consumption in the country has been forecast to increase 0.8 percent, while usage of finished steel products will grow 3.9 percent by 2010. The report indicates that by 2013, Egypt's steel imports will increase 77 percent to 5.27 million tons, while demand for finished steel products will grow 65 percent.

GLOBAL STEEL INDUSTRY POISED FOR RECOVERY FOLLOWING TOUGH FIRST HALF . . .

The global steel industry faced a tough time in the first half of 2009, with the worldwide financial crisis causing industrial production in many regions to decline considerably, particularly in the first quarter. However, according to research by Industrial Info Resources (Sugar Land, TX), recent statistics show signs that the industry may be on its way to recovery.

Some countries – notably Japan, Italy and Turkey – registered declines as high as 20 percent in production during the first three months of the year. In contrast, China recorded an increase in industrial production of almost 6 percent in the same period. The International Monetary Fund has revised its world economic forecast to a 2.5 percent growth in 2009, following the gloomy prediction of a 1.3 percent decline it issued in April.

Steel production, following relatively flat worldwide production figures for the first quarter of 2009, has shown a slow but gradual increase in the April to July 2009 period, rising from 89 million tons in April to almost 104 million tons in July.

China continues to record significant growth in its economy and reflects the global trend in increased steel production during the April to July 2009 period, with figures of just more than 43 million tons in April rising to almost 51 million tons in July. Unlike many western countries, the motor vehicle industry in China recorded a 38.8 percent growth during the first half of 2009, largely on the back of government incentives and cuts in sales taxes.

Other countries in the Asian region for the most part have not followed the Chinese trend. India and South Korea have both recorded relatively flat steel production figures, with figures for India ranging from a low of 4.1 million tons in February to a high of 4.7 million tons in March, and those for South Korea ranging from 3.2 million tons in February to 4.2 million tons in May.

The steel industry in Japan hit a low in February this year when it recorded a production of 5.5 million tons. However, steel production increased to 7.7 million tons by July, with inventory of ordinary steel products declining between December 2008 and April 2009, before picking up in May and June 2009.

The decline in the U.S. appears to be slowing down, with many sectors reporting slight improvements from June to July this year. The new orders index in the manufacturing sector rose from 49.2 percent in June to 55.3 percent in July. Steel production in the U.S. appeared to follow this trend, rising from 4.3 million tons in June to almost 5 million tons in July.

After a poor first quarter, Europe's largest steel producer, Germany, began to show an increase in steel production after a low of 1.9 million tons in April, recording a gradual rise over subsequent months to reach 2.7 million tons in July.

It also appears that the various stimulus packages introduced by governments to counteract the global economic crisis have had little effect on steel production figures. This is largely because the packages initiated by the governments were aimed at the construction, automobile and infrastructure areas. Although these packages have the potential to benefit the steel industry, the stimuli will take time to reflect as increased demand for steel.

SANDVIK MATERIALS TECHNOLOGY

(SANDVIKEN, SWEDEN) . . .

is investing in a dedicated service center with its own slitting line in Zhenjiang, Jiangsu province, China, ensuring that delivery times of precision strip to all customers in China can be kept to just one week. The service center is scheduled to open during October 2009 with a main feature of a new slitting line operational during November.

Initially intended to supply strip to customers throughout the Chinese market, the center will offer greater supply flexibility and considerably shorter delivery times, with material finished to size from stock held onsite. It will also open up options to supply other Asia Pacific markets from the first quarter of 2010. The new service center will introduce a considerable number of benefits, not only for existing customers in China, but also for those businesses considering relocation to the region, with fast response times and firm delivery dates for precision strip supplies. Sandvik will be able to provide made-to-order material at short notice, supplied locally, and facilitating fast growth of the market sector in the region.

The service center will focus on finishing and delivering precision strip to customers for the manufacture of flapper valves for compressors used in automotive, refrigeration and air conditioning units. It will also supply material to other important market sectors in the region, such as shock absorber manufacturers. Improved delivery times mean customers will be able to reduce their own lead times, offering flexibility to chase new business. Equally, customers can buy just what they need, when they need it, thus reducing the risks from stock ownership and freeing up capital as well.

"In a competitive market place we see real benefits to both our customers and their customers in our ability to supply material with short lead times directly in the local market," explained Andy McCullock of Sandvik Materials Technology. "This fully equipped service center will facilitate greater physical and operational flexibility, with the logistical capability to ship material to multiple sites, thus accommodating customer specific requirements."

Investment in the new Sandvik service center in Zhenjiang is part of a long term strategy, designed to extend Sandvik Materials Technology’s presence in Asia Pacific. www.smt.sandvik.com/strip