Electrical Industries Co

# 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: State Company for Electrical Industries Sector Engineering Brief Description Started in April 1967, it has always been a state company. Manufacturer of small motors 1.1 to 7.5 kw, fractional HP motors for air cooler, large and medium motors L.T & H.T (small volume), air conditioner units (using frion) and lighting equipment. Sold exclusively to Iraqi market. Revenue in 2002 (Iraqi Dinars '000s) 30410575 No of Employees 3158 Annual Employee Salaries & Bonus 5300000 Headquarters Address Baghdad, Nasiriya 2. Company Highlights Commodity-type electrical products with limited local raw material inputs beyond labor. Management claims it has a cost advantage on it’s a/c production due to cheap labor and efficient equipment. Claim not yet verified. Company outlined $18.5M USD in raw material needs for next 6 months production, which is greater than revenue. Although no MOU subsidy statistics have been provided yet, this indicates the Company is heavily subsidized and would be grossly unprofitable without these subsidies. Company has made conflicting claims regarding MOU and subsidy support. Either it does not know or it is trying to hide the truth from CPA. Air conditioning system (4T - 22T) manufacturing capabilities are generaly in good condition, needs little investment to improve product type and quality. Compressors for the air conditioning units are imported from different suppliers outside Iraq. Currently local market is supplied with air condiotions of diffrent types from different countries, with little investment Al Waziria can produce system on very competitive price. A/C units use frion, which will prevent it from exporting to many markets. Motor manufacturing factories are in bad condition, needs high investment to improve quality and production on competitive price. Lighting fixtures type and quality are old and need a lot of investment. Small, medium and large motor manufacturing is in poor condition. Fractional HP motor (for air cooler) manufacturing needs investment to improve quality and production. Local market needs this product. With over 21B ID in debt and little cash, Company is a big winner from CPA policy to cancel inter-governmental debts. Allocated $2.5M USD for 2H 2003 operating budget and provided with 2mw off of grid. 3. Facilities Name Province City Grid Damage % Power Needs Al-Waziriah - Fractional Motors Baghdad MB436921 0.8 5 mw Taji Factory Taji 1 mw Value of All Plant & Equipment Before War, and Initial Purchase Dates and Prices for Major Items Plant value was 29,939,003. Initially 2,000 was paid for the plant in 1965 and opened in 1967 4. Products Product Name Unit Measurement Design Capacity Available Capacity 2002 Production 2002 Revenue Window Airconditioners Units 25000 14534 5726396 Water Pumps Units 939000 355000 240856 113202 Industrial Motors Units 20000 8000 1320 Light Fixtures Units 60000 30000 61100 Flourescent Equipment Units 1500000 800000 110850 Flourescent Lights Units 1735000 1735000 325500 Electric Motors Units 500000 185000 93458 635514 Domestic Water Pump Units 5000 2250 0 Distribution Boards Units 200000 75000 79359 Central Airconditioning Units Units 2000 800 476 1094800 Ceiling Fans Units 95000 77000 79403 83611 Light Bulbs Units 35750000 17487000 7055000 Note on Revenue 50% of 2002 revenue was generated from airconditioners; 25% was from motors; 25% from all others. Description of Importance of Products to Other Iraqi Industries In demand by Iraqi consumers, but imports may be able to satisfy demand more efficiently. Warranty on product 6 months on all products (there is no budget to cover costs) 5. Customers Customer Name 2002 Revenue Subsidized (Y/N) Products Sold to Customer and Unit Pricing Governmental Sector 1939917 Sales Agents 130197 Governmental Employees 107051 Note on Customers Company provided us with list of order (backlog) for 2H 2003 from "specialized co." totaling $22.5M USD. Not clear who this customer is. Other note: 3 largest customers do not account for even 10% of claimed revenue. These stats are unreliable. 6. Suppliers Supplier Name 2002 Purchases Subsidized (Y/N) Products Purchased and Unit Pricing Local Merchants Iraqi, Syrian, Jordanian, Turkish Suppliers Current Payment Terms From Suppliers Payment is immediately upon delivery. 7. Imports & Exports 2002 Import Markets for Raw Materials Suppliers from all over the world - none specified by name. Potential Import Markets in Free Market 2002 Export Markets for Finished Products None Potential Export Markets in Free Market "Ready to export in future to Arab countries and Middle East countries" 8. Competition Description of Competitive Situation No direct manufacturing competition in Iraq for a/c units. Al Hilal, a mixed sector company does a/c assembly, but not full manufacturing. There is also competition from imports. General Company for Marketing provides imports as do private enterprises. Al Qadisya also competes on some products. Market Share Description In the past there was little competition. Recently the market has been provided with similar products (except electric motors) from ouside of Iraq. Actual market share unknown by Company. 9. Summary of War Damage & Looting of Property & Equipment Description of Damage Al-Waziriah plant had 100% damage to management building and quality control lab, and 50% damage to the rest of the facilities. Most machinery was not damaged, though. Current Operating Status Currently operating at 10% pre-war levels due mostly to shortage of raw materials. Incandescent and neon lamp factory, electrical motor factory and cooler pump factory all operating. Immediate Property & Equipment Needs To Restart Operations Air conditioning system factory and fractional HP motors for air cooler factory. Total Cost to Return to Pre-War Condition 25,000,000 ID