thyssenkrupp’s global sales reached €42.7bn in fiscal year (FY) 2017/18, according to the Country CEO, Thore Lohmann, who is responsible for the Industrial Solutions business in Egypt.
Daily News Egypt interviewed Lohmann to learn more about the company’s activities and expansion plans, in addition to the firm’s five years plan in Egypt, as well as the details of their last major order for a fertiliser complex in Egypt from El Nasr Company for Intermediate Chemicals (NCIC).
What is the firm’s five-year strategy plan in Egypt?
Egypt is one of our core markets. Therefore, we are marketing our full technology portfolio in the segments of mining, cement and chemicals starting from small engineering and licensing up to full EPC lump sum projects.
Secondly, we are bringing our full service knowledge to the country, providing original spare parts, field services up to operation and maintenance of entire plants.
We have a strong local presence with more than 200 employees, mainly engineers. With fostered stability in the country and the gas discoveries, we see huge opportunities in Egypt. Additionally, there is not only a big consumer market, but also export opportunities to neighbouring countries.
These are the main elements that drive our growth strategy for the next years.
The recently signed project with NCIC is underlining the market potential and at the same time the trust of our customers in thyssenkrupp as a reliable partner in the country.
Can you tell us more details about this order?
thyssenkrupp’s plant engineering business has won a major order from the Egyptian chemical and fertiliser manufacturer NCIC (El Nasr Company for Intermediate Chemicals). The order for the engineering, procurement and construction (EPC) of a new fertiliser complex was signed in Cairo in March 2019. thyssenkrupp is realizing the project in a consortium with the Egyptian company PETROJET. The order value for thyssenkrupp is in the mid-three-digit million euro range.
The new fertilizer complex will be built in Ain El Sokhna, around 100 km southeast of Cairo, close to the existing NCIC phosphatic and compound fertiliser complex. It is expected to go into operation in 2022 and produce up to 440,000 tons of ammonia, 380,000 tons of urea and 300,000 tons of calcium ammonium nitrate (CAN) every year. The new plants are part of NCIC’s plans to expand its current product portfolio to include high-quality nitrogen fertiliser for local and export markets. Nitrogen is a key nutrient for plant growth and of critical importance for industrial agriculture.
When will the project be completed?
The project will be completed in roughly three years from now. We started in January, so start of production is expected by early 2022.
How will this project provide job opportunities for the youth in Egypt?
We expect new jobs to be created not only at our organization but also at various local suppliers. Accordingly, there is a huge impact on the employee side in the country. We are carrying out this project with our partner Petrojet, who is also undertaking several jobs during construction. Typically, hundreds of workers are involved in the construction of such a large project.
What is the importance of having this project in Egypt?
The new plants will turn natural gas into ammonia. This intermediate product will be turned into three different types fertilizers. They will be either used by the local farmers or exported to the markets around the world. The added value of turning the natural gas into high-quality fertiliser is huge.
What attracted the firm in Egypt to do such a great project?
Egypt’s ideal conditions are the reasons for this attraction. In addition of abundant gas resources, Egypt has land availability and the country enjoys a strategic location.
Finally, Egypt has a history of industrialization with a large base of skilled workers who can operate such plants. The Egyptian government was the first to start the fertiliser business in the region. Most of the other neighbouring countries in the Middle East followed this path.
To sum it up, the resources of the country are very good in terms of natural resources as well as human resources, in particular qualified engineers.
What is the value of thyssenkrupp’s investment portfolio in Egypt?
As thyssenkrupp, we are here with two different business areas, one is the Elevator Technology business area, and the second one is Industrial Solutions.
In the elevator technology business area, we work in the metro, airport, and large residential projects. We have roughly 450 employees, thereof almost 400 are field staff (workers on the ground), who are all Egyptians. They are working on the installation and maintenance of elevators, escalators, and passenger boarding bridges.
In the Industrial Solutions business area, we have roughly 200 people on the ground, undertaking engineering, construction, as well as human resources services. We believe that our most valuable asset are our people. We invest in our employees, for example by conducting trainings and granting them the chance to travel abroad.
In your opinion what are the challenges that Egypt faces in the petrochemicals sector?
In the past years, the whole industry was suffering from the shortage of gas. But the situation has improved a lot this year. New discoveries in Egypt are now in production and connected to the gas grid.
The gas resources are fostering Egypt’s position as an energy hub as well as a hub for chemical products.
Do you think that Egypt could be a hub for exporting gas?
Yes, it is possible. But the value chain of what can be built up in the country is much longer than selling the gas. The production of chemical base products is quite important for the promotion of an industrial backbone. Using the gas in the country for manufacturing of goods and exporting them, is creating more benefit for the country and its people. Natural resources can be used to produce all kinds of petrochemicals, including fertilisers, polyethylenes, and all the substances which can be produced out of natural gas.
Therefore, the chemical industry, especially the petrochemical industry, is very important for the country.
How can you evaluate the reform programme in Egypt?
We see the economic reforms that the government agreed with the IMF as necessary and positive. Particularly the cutting of the subsidies in the oil & gas sector and the free float of the currency brought financial stability back to Egypt. Additionally, the measures in the security sector brought the tourism back and increased the financial situation of the country. This is quite important for the country and for the people, and also good for the country’s economy.
How can you evaluate the economic conditions in Egypt?
I have been here in Egypt for five years. The economic conditions have largely improved since then, and we now have a quite stable business environment.
During that period, did you lay off any of the workers?
During the period from 2011 until now, we have not dismissed any of our workers, and we kept them all. From 2014 onwards, we even hired people. To be exact, we have hired 70 new engineers, and we are still in a growth mode and want to hire more people.
The people are our main asset.
Do you think that the government has to take specific procedures to enhance the investment environment?
The country is focusing on foreign direct investments, and I think that investment in general should be enhanced and supported.
The people, the government, and the companies in Egypt need to reinvest in the country. thyssenkrupp is doing this.