Strategic partner and JEDCO resurrect National Steel Industry

AMMAN — National Steel Industry Company will resume production by mid-July, shareholders were told this week by Vice Chairman and General Manager Hisham Al Mufleh.

Chairman Ghassan Al Mufleh said during the ordinary general assembly meeting that the investment injected by the strategic partner saved the company from obligatory liquidation.

"The company is now in a much better situation and in the final stages to restart operations," he told shareholders.

According to the chairman, the company surmounted the difficulties that afflicted it in the past due to liquidity shortage.

He said that investments and loans provided by Nasri Al Mufleh & Partners Trading Company and Jordan Enterprise Development Corporation (JEDCO) have salvaged National Steel Industry.

"With JD1.8 million from Nasri Al Mufleh & Partners Trading Company, the company was able to repay the remaining debt owed to the Arab Bank, cover the expenses during the period of modernisation and  development, and buy the 57,375 square metres of land on which the factory is situated," he wrote in the 35th annual report.

Al Mufleh said during the general assembly meeting that, because there would be no working capital by the time the upgrading is completed, the strategic partner also agreed to extend a loan without interest to supply the company with liquidity needed for buying raw materials and sustaining the production line.

The annual report showed a JD1.1 million deficit in working capital at the end of last year as total current liabilities amounted to JD2 million while total current assets stood at JD0.9 million.

The chairman expressed appreciation to JEDCO for  supplying National Steel Industry with a JD1.4 million soft loan that enabled it to sign up the Indian firm K.N. Engineering Works to  renovate the production line and raise its annual output capacity to 120,000 tonnes.

Expecting production to restart during the second half of this year, he hoped that the company would regain its position in the Kingdom's steel manufacturing.

At present, the company is engaged in commercial activity buying and selling processed steel as well as selling iron filings.

This business earned the company JD122,226 in sales last year.

According to the balance sheet as of December 31, 2014, fixed assets increased to JD4 million, of which JD2.8 million was the net value of property, equipment and machinery, and JD0.9 million were projects under execution. The remaining JD0.3 million were financial assets at fair value.

With capital at JD2.2 million after restructuring, net shareholders equity boiled down to JD1.9 million when taking into account JD0.8 million of accumulated losses and JD0.6 million of mandatory reserves.