The Tunisian Company of Steel “El Fouledh» continues to implement its program of overall upgrade. This program focuses in its first stage, on upgrading production facilities. Mr. Ammar Chaieb, President and CEO of the company El Fouledh explains this in detail in the following interview:
Since its setting up in 1965, the Tunisian Company of Steel “El Fouledh” has come a long way, Can you tell us about it knowing that it is coming up with a new feature?
El Fouledh is an industry pioneer in Tunisia with view to its importance as a component of industrial development. Indeed, this industry has emerged since the 60s. Within this framework, the Tunisian Company of Steel was established in 1965 to meet the growing needs of the local market.
The move started with raw materials from Djérissa mine and the construction of a blast furnace designed to produce about 200 thousand tons of reinforcing bars.
However, faced with changes Tunisia experienced, particularly in construction and public works, El FOULEDH faced numerous problems, namely the increasing needs of the country by 7% to over 600 thousand tons per year now, while production was limited to 200 thousand tons per year.
The cost of production is also high due to economic uncertainties. It is worth noting in this regard that the capacity of the furnace did not cut these costs besides the increase of the price of coke and other products imported and the low iron level in the local raw materials from Djérissa mine. Hence the importance of importing steel billets from abroad.
To this end, it was decided to stop production of blast furnace by using cleaner and more efficient technology through the use of cleaner products.
You are rebuilding activity?
We chose a new strategy based on recycling scrap metal, since this product has become strategic. In fact, we now have a large stock of scrap. And thanks to the introduction of new technologies, we managed to modernize the recovery of scrap processing since Tunisia is very rich in this material. To this end, this scrap is converted in electric arc furnaces instead of blast furnace. Both ovens have cost the sum of 30 million dinars.
Tunisian society of Steel “El Fouledh is currently pursuing the implementation of its program of overall upgrade?
The goal through this program is upgrading production through the introduction of new technologies.
The first part is dedicated to the production units whose main activity is the processing of scrap and the management and development of waste iron and steel. The company “El Fouledh” produces 200 thousand tons of steel billets, 250 000 tons of reinforcing bars, 15 000 wire products and 10 000 metal products.
In addition to the technical staff and employees of the company, the power of the oven will be increased to reach an annual production of 100 thousand tons of steel billets, given the installation in 2009 of a 2nd electrical oven with the same capacity.
The 2nd oven, made according to Swiss technology, was acquired for 20 million TD. The company engineers and technicians participated at a rate of 25%. It is indeed an entire investment plan involving 50 million dinars, 50% of which were achieved.
This furnace will double the annual production from 100 to 200 thousand tons of steel billets. Its operation is based on advanced computer systems combining security, energy savings (30%) and lowering of the duration of the casting from 100 to 75 minutes.
The second stage involves finding a strategic partner and the opening of the company capital to an investor enjoying international reputation in terms of production.
The goal is to reach at least 700 thousand tons per year, with a strategic partner with a production and a cost as low as possible. In this context, a study of positioning, restructuring and financial restructuring will be completed before the actual start of search for a partner in 2010 by tender in accordance with specifications ensuring the important principles that are preservation of the strategic nature of this activity and the preservation of a majority stake in favor of the state (51%).
After completion of this program, our ambition is to reach a production of at least 700 thousand tons per year, which may be still below the country’s needs by integrating into the global economic system in this area.
The economic dimension of this program joins the environmental dimension insofar as the company “El FOULEDH” is planning , with the assistance of national bodies concerned, to upgrade the environment of the port on the south side of Lake Bizerte about one kilometer from the factory.
El FOULEDH company has four plants including one for steel billets, knowing that our company is the only manufacturer in Tunisia with an added- value of great importance.
The second is reserved for rolling bars while the third is reserved for the production of iron wires, and the last is devoted to the manufacture of metal structures and poles.
Can you tell us about the financial situation of the company during the past year?
The company suffered losses, for several reasons. With the halt of the furnace and the adoption of recycling scrap metal, industrial activity becomes more balanced. It earned 600 million dinars in 2009. Nevertheless trading activity is still losing up to 16 million dinars during the same period