Q1 First of all we want to thank you for receiving us and taking your time to be here with us. My first question would go to the decision of ISPAT to invest in algeria. Why did you decide to come to algeria and why did you decide to take over SIDER?
A1 On the one hand, we have not taken over SIDER, we only have taken over 10 subsidiaries of SIDER. We came here because we are in the steel business. LNM Group is in the steel business. As you probably are aware of we are the second largest steel manufacturer in the world. Our strength is steel. And then the steel mill was offered to us and we found that it has a lot of opportunities in algeria. On the other hand algeria has a national market and if you look at the market of the Maghreb (Morocco, Tunisia) which is immediate next to algeria, then you see there are no other steel mills in this region. So this is a big advantage.
Second thing is Annaba, being a port city, is also close to the Southern European market. So looking at all these facts, we found that this is a very good proposition, that helped us into not only getting to algeria but also gave us an opportunity to get into Africa. Because, as you know, before coming to algeria we had no presence in this part of the world. We were present in other parts of the world, but not Africa. That is also one of the reasons why we came algeria.
Q2 To better understand ISPAT here in algeria, could you give us some key figures like number of employees, turnover, net results, etc…?
A2 In fact as far as net results and this kind of figures are concerned, I cannot give it to you as we just took over the company on October 18th, 2001. When we took over the number of employees here in Annaba, we had almost 10,200 employees and we have also taken over the mines at Houanza and Boukhadra, that is known as ISPAT Tebessa, and there we have almost 1,500 employees. So in total we have almost 12,000 people employed. Turnover wise, as I told you before we took over last year, but this year our projected turnover will be somewhere between the 300 to 350 million USD.
Q3 Could you give us an image of the Maghreb area in terms of siderurgy industry?
A3 If you look at the Maghreb area, algeria is the only steel producer of raw materials. There is no other steel producer either in Morocco or Tunisia, when I say Maghreb I consider only to Morocco, algeria and Tunisia which are the natural markets for us. Morocco has some cold drilling facilities, which is the processing line after the main steel is manufactured that is hard coil, the primary material that comes out of, as a feed to the subsecond market for processing. Morocco has a similar market, Tunisia has also such market for wide rolls and a very small quantity for hot rolls, etc … So basically if you see the Maghreb market algeria is the major consumer and the major producer of steel (liquid steel) in this whole region.
Q4 Your activity in algeria started on October 18th, 2001. We can say your presence in the algerian market is quite short. But can you tell us what has been the balance until now?
A4 We have increased the production to around 30% from what it was in the third quarter of 2001. We have regained the market share, which the previous company had lost because of non-performance. We have maintained the employment. We have trained and motivated people to work harder and the results of this policy is that at ISPAT Annaba the average supply was one reek or two reeks a day, it has now gone to 5 reeks a day. They accepted us, we have been here for the last nine months and we are continuing to make things work.
Q5 We have been also hearing that you are planning to increment production to 3 million tons for the year 2004. What measures are you taking to reach this goal?
A5 3 million tons might be a little too optimistic. Anyhow we are definitely trying to increment our production between 2 and 2.5 million tons. We are starting certain units that were shut down; they will be working again within the next few days. We will be modernizing different parts of the plant. Due to that, production will increase again, I have already told you we increased production of 30% but the plant has the capacity to grow up much more in production. So we are modernizing different parts of the plant which have been neglected during these last few years, we are taking them back into operation and this is the way we will get back to the targeted figure of 2.5 million tons. | Q6 The local press has been telling a lot of things about ISPAT lately, all of them good. There are a lot of people who see you as an example of the privatization process algeria has undertaken. Could you tell us the advantages you have experienced by entering the algerian market?
A6 From the commercial point of view there is a good market. Secondly, what is very important is that we have seen there is capability and a lot of will from people to do things better, which was not fully tapped. Another advantage we found here are the port facilities, the vicinity to Europe and the local market are also important advantages that you find here. Of course there are certain governmental advantages that we cannot forget in the sense that the government has been very supportive until now. Well there are also hike ups, when you come into such a state where everything is public except us and you want to change the whole system, well there are hike ups. But generally from the government side we got all the possible support. And that is a good advantage for an investor to come here.
Q7 Could you tell us about your professional career and what has been the biggest satisfaction as manager in algeria?
A7 I am a technical engineer with 33 years experience in different fields of operations. I started my career in petrochemicals and then switched over to steel and then I started in the managerial job instead of an operational job. I have been working for ISPAT since 1996, before coming to algeria I worked for ISPAT in Kazakhstan as Director of projects then I shifted here. As a manager here the biggest challenge has been changing the way people think and getting them motivated towards the way of working at ISPAT. That has been a challenge and we have been successful in doing that. It is due to the fact that ISPAT is a well known company, we have been welcomed because of our reputation and the second thing is that the people really wanted guidance, somebody to tell them how to do things in a practical way and then we could provide them that guidance and that right direction. We have got results and that is a big achievement because when you go to countries where everything is 100% public owned, the biggest difficulty is to change the mentality from public to private, which I think we have achieved. That is something to be proud of.
Q8 As one of the major investors in algeria, what is the final message you would like to transmit to other investors about investing in algeria?
A8 I would like to say that what people today are always afraid of in such countries is the number of employment they have to maintain. We were not afraid of maintaining those 10,000 people. What is nice to see is how to use this workforce in a really positive way. A certainty is that in every new country you want to invest there is an amount of risk, but that particular risk has to be taken if you want to grow in business. This is the strength of the LNM Group, we go to new countries, we establish ourselves and we get into the mainstream of that country and succeed. So we are always taking risk and we have been successful, but what we do, what is essential and why to come here is, what we call in our terms, due diligence. They know the business they are getting into and I am sure that they will also be successful. |
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