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IFC SIGNS AGREEMENT FOR INDUSTRIAL GASES PROJECT IN EGYPT


Tarek Allouba, IFC Cairo
Phone: (02) 579-6565
Fax: (02) 579-2211
L. Joseph, IFC Washington, D.C.
Phone: (202) 473-7700
Fax: (202) 974-4384
E-mail: ljoseph@ifc.org


ALEXANDRIA, EGYPT, May 22—The International Finance Corporation (IFC) today signed a joint venture shareholder agreement to establish Messer Gases Dikheila Company (MGDK), which will supply oxygen, nitrogen and argon in gaseous and liquid form to the Greater Alexandria market at a total project cost of about US$25 million. With the establishment of MGDK, the Alexandria region will, for the first time, have a major producer of industrial gases.
Located at El Dikheila, 15 km west of Alexandria, Egypt’s major port and a key industrial center, the plant will serve the industrial gas needs of Alexandria National Iron and Steel Company, SAE (ANSDK), a major steel producer. It will also serve small and medium enterprises (SMEs), among others, as well as companies in the consumer manufacturing, welding and medical sectors, currently being supplied by production facilities in Cairo. The proximity of a major producer in the Alexandria region is expected to generate savings in transportation costs, resulting in a price reduction.

MGDK’s majority shareholders will be Messer Griesheim GmbH (MG), a German company, which is majority owned by Hoechst AG, and ANSDK, an Egyptian integrated steel mill. MG is a leading global industrial gases company, headquartered in Frankfurt, Germany, with over 100 associated companies in 37 countries. In 1996, industrial gases accounted for 85% of MG’s total sales of DM 2.5 billion. ANSDK, an IFC client, is a profitable and internationally competitive producer of reinforcing steel bars with annual sales of about US$450 million.

On the occasion of the signing, Mr. Jannik Lindbaek, Executive Vice President of IFC said, “We are very pleased to invest in Egypt’s industrial gases sector. MGDK will benefit from Messer Griesheim’s worldwide experience in developing the market through the introduction of new gas applications. Messer Griesheim’s expertise will be complemented by the knowledgeable and innovative management team behind ANSDK’s success. The new plant will also make it possible for SMEs in the region to have a readily accessible and relatively inexpensive supply of industrial gases.”

IFC will be providing an equity investment of about US$1.5 million equivalent, representing 10% of the company’s capital. IFC will also provide a loan of up to US$4 million.

IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.