Established in 1994, Al Ezz Steel Rebars (ESR) started operations with a capacity of 0.4 million tons that increased in 2003 to 5.3 million tons per annum of both long and flat steel. ESR has three major subsidiaries: a 90.7% stake in Ezz Steel Mills (ESM), 50.3% ownership of Ezz El Dekheila (EZDK), and a 75.2% stake in Ezz Flat Steel (EFS). In 2006, 23% of long products, and 58% of flat products were exported. The company enjoys a local market share of around 68%.

Al Ezz Steel Rebars plans to expand both locally and regionally. It was granted a license to establish a new DRI plant located in Suez with a capacity of 1.7 million tons per annum at a total investment cost of USD270 million. The company will further construct a new melt shop at EFS with an annual capacity of 1.35 million tons at a total investment cost of USD250 million. In addition, Al Ezz Steel is to set up a steel complex in Algeria with an annual capacity of 1.5 million tons per annum, to increase to 3 million tons per annum in the second phase. The investment cost of phase I is estimated at USD750 million. The company’s total capacity is expected to reach 8.1 million tons per annum in 2012.  

Consolidated 9M07 revenues increased by 52.1% YoY to reach EGP11.99 billion, of which 54.4% was contributed by EZDK. GPM declined to 24.1% in 9M07, down from 28.3% due to the increase in raw materials prices. The company registered EGP917.2 million in bottom line for 9M07, up from EGP739.0 million in 9M06. We note that Al Ezz Steel will witness an increase in capacities in FY10 and thus we expect an accompanied increase in revenues to reach EGP27.2 billion and EGP32.4 billion in FY10 and FY11, respectively.