Nassr Mechanical Ind

# Template State Owned Enterprises- Company Overviews OCPA - Ministry of Industry & Minerals Note: All currency figures are in 000's of Iraqi Dinars unless otherwise noted. 1. General Information Company Name: Nassr State Company for Mechanical Industries Sector Engineering Brief Description The company was established in 1984 and it has always been state owned. Company consists of three major divisions: forms and tools, steel foundry and iron frames. Has 3 induction and 1 electric arc furnace. Major customers include State Cement Companies and the Oil Industry. Revenue in 2002 (Iraqi Dinars '000s) 18257000 # of Employees 2473 Annual Employee Salaries & Bonus 7692000 Headquarters Address Baghdad, Taji (35 miles N of Taji, on left) 2. Company Highlights Products in demand by various local industries, especially the State Cement Co. and the Ministry of Oil. One of the most professionally presented Companies in the MIM portfolio from a marketing perspective, however management is incapable of providing financial information that makes sense. It claimed total expenses of 14.2B ID in 2002, then broke it down to components which it claimed were comprehensive even though they added up to only 12.2B ID. All financials are therefore suspect. Internal accounting staff should be replaced immediately. Initially claimed to have operated profitably without subsidized MOU’s since Article 661 forced them to buy materials at open market exchange rates. Later admitted it received $5.5M USD in MOU subsidies in 2002. Restart costs unclear. Company claimed 28B ID needed, but did not specify what for. It may have included equipment upgrades in its calculation. Again, a lack of financial and accounting management at Company is obvious. Company must raise prices or will be grossly unprofitable without raw materials, electricity and fuel subsidies. Iron structures are an inherently local industry due to prohibitive cost of transporting finished products over long distances. Also, local construction allows for easier logistical coordination with rest of construction project. Sister Al Sumood company right next door is in better condition. Was part of Military Industrial Complex but should be combined with Nassr. Both were one company until mid 1990's when company was split in two based on management problem (2 people fighting for DG position - both got 1/2 of old company). Potential to provide products for reconstruction of Iraq's electrical transmission and distribution infrastructure. May receive ISO 9001 certification soon. Company staff and employee protected the site during war and prevented looting. Equipment was not damaged. Company benefits 1.3B ID from CPA policy to cancel inter-governmental debts. Allocated $3M USD for 2H 2003 operating budget and provided with 2 mw off of grid. 3. Facilities Name Province City Grid Damage % Power Needs Taji Headquarters - all 3 factories: Central Tools Room Plant (CTRP), Special Steel Foundary (SSF), Steel Structure Plant (SSP) Baghdad Taji MC28801650 0.3 12 MW Value of All Plant & Equipment Before War, and Initial Purchase Dates and Prices for Major Items Value before war: 10,583,000 ID. Initially $250M USD was paid for the plant and equipment in 1982. 1,440,830 ID spent on initial construction when ID was worth $3. There is a project which is not completed yet at a value of 30,000,000 ID. 4. Products Product Name Unit Measurement Design Capacity Available Capacity 2002 Production 2002 Revenue Steel Structures, 11,758,000 ID (Top) ton 20500 15000 8000 0.62 Casting Parts, 5,656,000 ID (Second) ton 8000 4000 4600 0.3 Moulds, Jigs and Fixtures, 1,358,000 ID (3rd) hour 400000 310000 300000 0.07 Description of Importance of Products to Other Iraqi Industries Oil ministry asked that this Company receive special attention to provide materials needed for various oil projects. Also critical to cement industry. Frames also needed for various industries. Warranty None 5. Customers Customer Name 2002 Revenue Subsidized (Y/N) Products Sold to Customer and Unit Pricing State Cement Companies 0.6 Yes, 10% Oil Ministry & Electricity Board 0.3 Yes, 10% Steel, Iron & phosphate cmpanies 0.1 Yes, 10% Unit Pricing Description: Average prices per unit are: 1,460/ton for steel foundry products, 1,530/ton for steel structures and 2.5/hour for tools and casting parts (all '000s of ID) 6. Suppliers Supplier Name 2002 Purchases Subsidized (Y/N) Products Purchased and Unit Pricing None identified by name Current Payment Terms From Suppliers 100% of payment after receiving raw materials from supplier and after passing QC tests. 7. Imports & Exports 2002 Import Markets for Raw Materials China, Jordan, Syria, Germany and Turkey. 10 to 12 billion ID spent on raw materials in 2002. Not clear how much of that was spent on imports. Potential Import Markets in Free Market 2002 Export Markets for Finished Products None Potential Export Markets in Free Market Steel balls to cement factories in: Egypt, Saudi Arabia, Jordan & Syria with a potential volume of 2500 Ton/year and with an average unit price of 1.3 million ID / Ton 8. Competition Description of Competitive Situation For casting parts for cement factories, no competitors. For steel structure materials, private sector including Hadad Company. For dies & moulds, private sector, including Harari Company. Market Share Description Iraqi market: 65% Steel structure materials, 70% Casting parts for cement factories, 35% Cold & hot working dies & moulds. 9. Summary of War Damage & Looting of Property & Equipment Description of Damage No looting. All the damages occurred when another factory next to NASSR was bombed during the war. Sheds and wall of two factories for steel structure were damaged. Current Operating Status Not operational. Need working capital, repair funding and electrical power supply. Immediate Property & Equipment Needs To Restart Operations Services (water and sewage) systems on the site must start working first. Oxygen and Nitrogen plant must resume work. Sheds and wall of two factories for steel structure manufacturing plant must be repaired a.s.a.p to resume normal work in these two factories. Total Cost to Return to Pre-War Condition 500,000 ID Notes S. Alzaidi note: Nassr has a very good capabilities in manufacturing: Steel structure for sheads, prepainted steel sections for doors, windows, main doors and internal partitions, trusses and frames for warehouses, industrial building with cranes, special steel foundary, heat resistant steel, liner plates for cement mills, steel balls for cement grinding. Steel foundary has a new production line, Nassr need specialists and engineers from German OEM (Kunkle Wagner) to train operators and to carry out a new commisioning to restart the plant. Central tool room plant has a very good capability in: Cold & hot working dies, moulds, jigs and fixtures, special production gauges & special cutting tools which are all vital for industry in Iraq. Nassr has a very good team of design engineers and they use CAD system in design. Central Tool Room Plant has a very good capability in designing moulds for plastic products.