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Orascom Construction Industries |
     
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Probably no
company in the Middle East can match Orascom Construction Industries (OCI)
in its ability to attract blue chip partners for major building projects
in the region and Africa. A division of the 50-year-old, Cairo-based
Orascom, OCI is considered to be the benchmark in Egypt and the region
for its three major core businesses: construction, the manufacturing of
building materials and infrastructure development.
As of March 1 of this year, OCI was involved in some 34 private and public sector construction projects in the Middle East and Egypt, with a value of about $1.58 billion, $836 million of which was under contract to OCI. Among those projects were Le Meridien, Holiday Inn, Hyatt, Conrad International and Marriott luxury hotels, two power stations in partnership with the French utility ElectricitË de France, a cement plant in Palestine, the world's largest swing bridge which is over the Suez Canal, a natural gas distribution facility in Southern Egypt and a water distribution facility in partnership with the United States government. Under its Infrastructure Group, OCI boasts major alliances with the Nile Valley Gas Company, City Gas Company, Suez Industrial Development Company and Egyptian Container Handling Company, of which it owns 50%. That concern has a joint venture with SSA, Stevedoring Services of America, and a co-op agreement with American Presidential Line, APL. Such port services have been targeted as a growth area for the company, according to OCI president Nassef Sawiris, by taking over market share from outdated government agencies. "Stevedoring and port management are in a great growth phase," Sawiris noted. "Short term, we expect to see a 50% increase." With 1999 consolidated revenues of $448 million, and a net income that year of $56.9 million, OCI likewise has a high profile in building materials, specifically the cement industry. The company already has major strategic investments in United Paints and Chemicals, National Steel Fabrication, National Bag Company, Ready Mix Egypt, National Pipe Company, Messer Egypt and Egyptian Cement Company, which last year increased cement production capacity to seven million pounds from five million in just 18 months. Sawiris predicts the sector will further get a boost when mortgages are made available in Egypt in October of this year. Currently they are not. "The high-end housing sector has been over-supplied, but once the mortgage ruling is passed and good financing is available, the market will pick up," he asserts. OCI is looking outside of Egypt for projects in developing markets in the Middle East and Africa. Palestine is one area of interest, as is Algeria where the company is looking into five or six possible transactions, according to Sawiris. He notes that the improved political climate in that African nation is smoothing the way for numerous infrastructure projects like an airport and an opening up of the utilities sector which could lead to numerous opportunities for OCI. One new area Sawiris is exploring is building and operating airports in Africa and the Middle East.Sawiris says that company focus outside Egypt is, for the moment, Palestine and Algeria, but expansion into other markets is a sure thing if all criteria is in order. "We're targeting markets with an undersupply situation," he says. "They are markets with shortages that have good growth potential." Egypt, however, remains a priority, according to Sawiris. "First we start in the home base and the fundamentals of the economy here are very positive," he adds. "Tourism and natural gas are promising and economic reforms will provide even more opportunities." |
