CAIRO, 22 January 2021 – The iconic Egyptian Steel and Iron Company, founded in 1954 by Gamal Abdel Nasser, is going under and, with it, a proud history, officials have confirmed.
Most of the steel and iron that went into the building of the famous Aswan High Dam came from Egyptian Steel and Iron Company, whose opening was lauded as partial fulfillment of the realization of Nasser’s dream to industrialize Egypt.
Liquidation means the company’s 7,500 workers will be sent home for good and a company whose history is linked to almost all major development projects in Egypt’s history will be retired.
Workers at the state-owned company are not taking the news kindly.
They have taken to demonstrating daily just outside the company premises in the hope of saving the firm and, with it, their jobs.
The workers believe that the government of Egyptian President Abdel Fattah el-Sisi can save the company if, as they allege, Cairo where not shutting down public businesses for the benefit of army-owned firms.
The workers allege that Cairo is more supportive of private firms owned by individuals who partner with the army or senior officials of the army.
President Sisi, who was an army general until he won power in a 2013 military coup, opened a big steel factory in 2019 in the city of Suez.
The company is owned by the Egyptian army and investors connected to the military, according to the Middle East Eye newspaper.
Critics, who believe Cairo could work to bring the company from loss to profit, point to similar decisions last year to shutdown some state-owned textile companies as well as the state-owned National Cement Company.
Some of the workers were cited Friday by the Middle East Eye newspaper as saying that they will only leave their beloved company to be liquidated “over our dead bodies”.
The Egyptian government says it has exhausted all reasonable options for keeping the firm afloat.
Cairo has committed to pay a total of $129 million in compensation for the 7,500 workers who will be going home for good.
Some Egyptian members of parliament are speaking up against the push for liquidation instead of restructuring.
MPs who support keeping the firm open argue that upgrading and retooling the company would cost less than liquidating it.
“We will not allow a loss-making company to keep living on money borrowed from the government,” said Hisham Tawfiq, Egypt’s Minister of Public Enterprise Sector.
He said the decision to send the company into liquidation is “final”.
The company has accumulated far too many losses and too big a debt to be revamped without a fresh input of capital from investors who are nowhere in sight, Egyptian authorities have maintained.
The company’s debt has reached $548 million, according to the Egyptian government.
Once the only steel company in the country, its current production (down to only 10 percent of its peak production capacity) is a mere fraction of Egypt’s overall steel production of 11.8 million tonnes.
The breakdown of the company’s machinery, the closure of some of its plants and mismanagement have been listed as some of the shortcomings of the company.