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
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