Liquidation of state-owned factories deepens the Egyptian industry crisis

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Despite achieving significant profits during the last period, the Egyptian government announced its intention to liquidate the Nasr for the Coke Industry, one of the few remaining industrial fortresses from the 1960s, which confirms that the Egyptian national industry under President Sisi’s rule is experiencing a bleak stage called “liquidation instead of development.”

According to the government decision, “Al-Nasr for Coke Industry” will become the fourth public company to be liquidated and its workers displaced during the past few years, in what appears to be a systematic plan to get rid of public sector companies that have always played an essential role in enhancing the country’s national security, whether in times of peace or circumstances of war.

National industrial castle

The Nasr for Coke Industry was established in 1960, and its production began in 1964 with one battery with 50 furnaces with an annual production capacity of 328,000 tons of metallurgical coke. The second battery was established, and the production began in 1974 with 50 furnaces with an annual production capacity of 328 thousand tons. The third battery started its work in 1979 with 65 furnaces with an annual production capacity of 560 thousand tons of coke, while the fourth battery was established in 1993 with 65 furnaces with a production capacity of 560 thousand tons per year, bringing the production capacity of the four batteries to 1.6 million tons per year.

The company includes four factories: the coke factory, the tar distillation factory, the nitrate factory, and the multi-purpose unit. The company also owns three berths: a berth in Alexandria port for the export of coke abroad and the unloading of coal, the raw material for coke, at a daily rate of about 4000 tons/day with a capacity of 45 thousand tons. And a berth at Dekheila port in Alexandria to unload coal at a daily rate of about 3000 tons, totalling 100 thousand tons. And the last berth on the Nile River is to receive boats designated for transporting coke and coal at a loading and unloading rate of about 4000 tons/day.

The company produces coke of various sizes, benzene, ammonium sulfate 20.6% nitrogen, pure porous ammonium nitrate, polar tar, naphthalene, sodium sulfonate colourant, crude tar, creosote oil and many other products used in the agricultural, industrial, mining, chemical, construction, military production and scientific research fields. The company covers many of the needs of the national strategic industries and exports part of its products to Europe, Asia, America and the Arab countries. The company’s nitrate factory, for example, produces 33% nitrate, which is used by Factory 18 for military production, according to a contract between them worth 100 million pounds. It also has between 5,000 to 6,000 tons per month of dilute nitric acid used in various industries and distributed to more than 100 customers. In addition, the company produces ammonia and nitrate solutions, and these products are used in dozens of already existing industries.

Most of the sugar factories in the Republic and some of the casting factories and several other industries are based on the coke produced from Nasr Coke, which means that the liquidation of the company threatens these industries strongly, and may push them to import from abroad, which costs its budget the burdens of providing foreign exchange at a time when it is facing a severe crisis in its provision.

Profits despite loss policies

The Minister of Business Sector, Hisham Tawfiq, justified the decision to liquidate the company with “severe losses and the futility of developing it.” In contrast, the company’s financial reports confirm that it achieves excellent profits despite working with only 25% of its capacity, as it achieved 114 million pounds in earnings from early July 2021 until the end of April 2022. Its sales volume during the same period amounted to 613 million pounds. In addition, the company has no accumulated debts and regularly pays the financial dues to its 1,169 workers. These large profits were achieved despite the deliberate losses carried out by the Ministry of Business Sector and the Holding Company for Metallurgical Industries, to which Al-Nasr for the Coke Industry is affiliated. These wasteful policies are represented in issuing a decision to stop importing coal from abroad for its manufacture and failing to develop batteries to comply with the Ministry of Environment requirements.

Suffice it to mention that the Holding Company for Metallurgical Industries cancelled more than one plan to develop the batteries of “Al-Nasr for the Coke Industry”, the latest of which happened in 2018 when it contracted with the Ukrainian company Fash Mash to extend the battery (1) and build a new battery with a total investment cost of about 100 million dollars. And then cancelled the development plan without reason, which made Al-Nasr for the Coke Industry subjected to a fine of 9 million dollars. Some resources from the company revealed, in previous press statements, that the policies of loss appeared strongly in charging the company with unnecessary expenses, such as appointing a large number of consultants as well as hiring contractors from outside it, in addition to gradually reducing the production during the past five years from an average of two thousand tons per day of coke to an average 30 tons per day, which of course raises the cost and leads to losses.

Even if the company achieved losses in previous years, this does not require its liquidation, the displacement of its workers, and making the homeland lose one of its industrial fortresses; instead, it calls for its support and development to enhance the reasons for its already existing success. But this is not part of the plans of the Sisi regime, which sees liquidating the company and obtaining its properties and lands, which are located in distinct investment locations, as a priority over strengthening the national industry.