Middle East Carbon’s Chairperson Walid Abu Raya appealed to Governor of Suez Abdel Majid Saqr on Saturday to reconsider his decision in which he refused to approve the company’s license to operate.
It is worth noting that that the General Authority for Investment and Free Zones (GAFI) approved the renewal, however, the governorate has not.
Middle East Carbon’s investments have increased to exceed EGP 300m, making its factory one of the largest in Africa and the Middle East. The company specialises in the production of carbon that is mainly used in the iron and steel industry.
The company was also planning to increase its export volumes by the end of this year to $50m (equivalent to approximately EGP 1bn), but the failure to renew the license led to the suspension of the entry of crude shipments required for production since the beginning of July 2022, which negatively affected the company’s plan.
Abu Raya explained that the factory exports more than 50% of its production and employs about 600 workers — whether directly or indirectly — adding that this decision will displace many families.
He also stated that the factory exports about 80,000 out of 140,000 tonnes annually to the Middle East and Africa.
Furthermore, he noted that the most prominent companies to which it exports to are Bahrain Steel, Emirates Steel, Kuwait Steel, Sohar Steel, Jindal Shadeed in Oman, Rajhi Steel and SABIC in Saudi Arabia, and Foulath in Tunisia. Above all that, the company plans to penetrate several new markets after its license is renewed.
Additionally, the company is continuously working to direct dollar liquidity into the Egyptian market in a way that enhances the strength of the economy.
Abu Raya also explained that the company had succeeded since the beginning of the Russian-Ukrainian War in covering part of the gap that Russian suppliers in the Middle East and Africa used to fill in terms of exporting carbon coal, which contributed to opening the market completely to the Egyptian state’s product, as exports to those countries may reach more than $150m.
He added that the company had to refuse some of these contracts as a result of the decision not to approve the renewal of its license.
Abu Raya further elaborated that there are some contracts with Saudi Arabia, Kuwait, Bahrain, and the Sultanate of Oman that were completely halted due to the inability of crude to enter the factory, which barred the processing of a ship at port with 5,000 tonnes of crude, thereby costing the company a daily delay fine of $7,000.
The factory obtained the renewal of its environmental license from the Ministry of Environment last January for a period of two years after fully ensuring that the factory was operating in a way that complies with all environmental laws.
The factory also obtained an environmental approval from the ministry on the shipment that arrived on 16 July, however, it is barred from being process until the governorate gives its approval as well.
“We sent a distress call to the GAFI, the Cabinet, and the Investment Disputes Settlement Committee to consider the decision to prevent the entry of crude into the factory for a while, and no response has been received so far. Moreover, the factory is about to grind to a halt, which affects the contracts made with internal and external authorities.”