EPC for Egypt’s energy expansionOctober 26, 2021
Mohamed Hathout, chairman and CEO of KAHROMIKA, talks to The Energy Year about the company’s activities and strengths in the Egyptian energy industry and its plans for growth within Egypt and the region. KAHROMIKA is a construction company active in the power, oil and gas, industrial and infrastructure sectors.
What is KAHROMIKA’s involvement in the Egyptian energy industry?
With 50 years of valuable history, KAHROMIKA has proven itself to be the major energy contractor in Egypt and the MENA region for electrotechnical works, and this continues to translate into tremendous success through extensive participation to most of the energy contracting works for electromechanical constructions of energy generation, transmission and distribution, petrochemicals, oil and gas, industrial and infrastructure projects at Egypt and the MENA region.
Regarding oil and gas, we were involved in mechanical works for the Zohr Onshore Gas Complex Project at the largest gasfield in the Mediterranean Sea, as well as in fabrication of tanks and many other activities such as E&I works. However, in the last few years, we have mainly been involved with the power sector, which now represents more than 90% of our activities.
As the conducting studies and forecasts declare no potential need to establish mega thermal generation projects until 2027, KAHROMIKA due to the current demand found it necessary to enhance our involvement at the energy market to act as EPC contractor for energy transmission and distribution projects, and also to utilise our previous experience with wind farm mechanical installations, E&I and infrastructure works for solar parks to get new opportunities in this field. In addition to that, we are interested in exploiting renewable energy in the production of green hydrogen.
We have worked as an electrical and mechanical contractor for all the original equipment manufacturers in the energy generation market, along with the main contractors. We have worked with General Electric, Siemens, Alstom Power, Hitachi and Doosan, so we are already known to these companies, which is an advantage as we aim to be involved in all of the new power plants.
We are also actively involved in works and supplies manufacturing for the national project for the development of Egyptian rural villages – the “Haya Karima” (Decent Life) Initiative – which is the largest integrated development project in Egypt. As the quality of the supplies is mandated for this initiative and controlled by prequalification and shortlisting of the manufactures who will meet such requirements, our workshop facilities were qualified for the fabrication of the steel structure works and electrical poles for Haya Karima.
KAHROMIKA’s formula of success includes being competitive on cost and high in quality, and delivering projects on time and with a high level of safety.
What are the company’s main contracts in Egypt at the moment?
We are working with the Egyptian Electricity Holding Company and its affiliate power generation companies, as well as with the Egyptian Electricity Transmission Company. You can see this through our participation in the power generation plants over the last two to three years. KAHROMIKA participated at 52 power plants built (steam – gas – oil) for more than 20 GW of power generated.
We have worked on two supercritical power plants – Cairo West and Assiut – each of around 650 MW, with Doosan Heavy Industries & Construction. We provided mechanical installation for steam turbines, condensers and generators, and auxiliaries along with E&I works.
KAHROMIKA constructed more than 45% of EHV and HV transmission lines of 500/220/66 kV in Egypt, 128 GIS and conventional substations of up to 500-kV rating and more than 1,000 kilometres of 220/66-kV underground cables.
Have you been providing mechanical installation services to other plants?
Yes – for instance, we have recently completed the mechanical installation for two supercritical boilers at the South Helwan supercritical power plant for AC BOILERS S.P.A. (formerly Ansaldo Caldaie). We also did eight units for the heat recovery steam generation with AC BOILERS S.P.A. for the Al Shabab Power Project Phase II. In the last year and despite the Covid-19 pandemic events, we achieved successful completion of a fast-track project, the triple bundle 500-kV double circuit OHTL Benban III/Toshka II for the Egyptian Electricity Transmission Company.
How has KAHROMIKA fared since the pandemic began?
In 2020, we were doing well. Revenue increased by 70% compared to 2019, to EGP 800 million [USD 50.9 million]. However, in 2021 the pandemic impacted the infrastructure plans for new projects, so we are not expecting to have as much revenue for this year.
But overall, while most companies faced problems in 2020 because of Covid-19, we did well. For us, a challenge comes in being in competition with many players around Egypt. This is especially true for overhead transmission lines, power generation units, mechanical works and E&I works.
How successful has the company been in recent overhead transmission line tenders?
In the last few tenders issued in 2020/2021 by the Egyptian Electricity Transmission Company, we had a success rate of more than 50%. These were tenders that we were invited to. We are currently doing the overhead transmission lines for Salwas, Girza, and participating in activities related to light rail transit. We are making good progress.
What are KAHROMIKA’s plans in the short term?
We are focusing on EPC works for the Egyptian Electricity Transmission Company. We are also thinking of having our own production lines. We have not yet finalised our facilities, but we are thinking of setting up a production line for materials related to the electricity sector. Our timeframe for this would be within 8-12 months.
What are your expansion plans in the MENA region?
Due to Covid-19, we faced a lot of problems in moving from one country to another as the needed services are specialised and couldn’t be outsourced. Nevertheless, we moved recently into Libya to begin preparations to work there, and we already have offices in-country. We believe it will be a good opportunity for us, but things are moving a little slowly.
We’ve previously worked in Algeria and in the Gulf area. We currently have branches in Kuwait and Saudi Arabia, and we are trying to enhance our branch offices in the MENA region. Apart from that, we aim to enlarge our business in Africa.
KAHROMIKA’s shareholding structure is: Arabia Investments Holding (AIH) (51%),
Holding Company for Construction & Development (39%), and Elsewedy Electric Co. (10%).