IDM is a joint venture between Ganope, Petrojet and Enppi. Star Oil and Gas Limited and Petro Materials are also partners in the entity. IDM’s mission is to utilize state of the art manufacturing technologies to produce, assemble, thread, maintain and repair casing and tubing threads. IDM services Qarun, Bapetco, Agiba, Petrobel, Khalda and Petrosilah. Egypt Oil and Gas Newspaper recently had the privilege of interviewing IDM Chairman and Managing Director Mohamed El Gohary.
You are a veteran of the oil and gas industry, what changes have you witnessed in your tenure?
I have long and varied experience as I have been in the petroleum sector for thirty-two years. I have extensive experience optimizing local manufacturing strategies for the oil and gas industry, particularly as it pertains to manufacturing necessary components such as casing.
In 2007, I was Chairman of EPHH Rig Manufacturing. I think perhaps one of my biggest accomplishments at EPHH was overseeing the successful completion of six locally manufactured rigs.
Afterwards, I moved to IDM in 2009 and my time here has been incredibly rewarding, but also very challenging. In my capacity as Chairman of IDM I serve as a representative for EGPC and the Ministry of Petroleum. We registered the company and started construction in July 2009. IDM started the production phase of machine preparation in the later part of 2010, and actual production commenced at the end of January 2011.
The factory team made considerable achievements in 2012. However, domestic concerns substantially affected the market, particularly the price of imported materials. This was a substantial complication for us as our raw materials are imported from China and Japan.
I believe that Egypt should put more emphasis on the local manufacturing market. We have the potential to be a key supplier of essential materials for the oil and gas sector. I see immense opportunity there. We have the capability and technicians who understand the industry. With more focus on local manufacturing, I think Egypt could see tremendous growth.
What challenges have you faced since your inception in 2009?
The first year of production coincided with 25th of January revolution. This was challenging to say the least. During that time it was very difficult to enter the market, yet we did so while maintaining our exceptional quality standards. We successfully navigated the challenges and exerted considerable effort to meet our goals. In 2011, we achieved profits of around $15 million USD. In 2012, we achieved sales revenue of nearly $37 million. It is also worth mentioning that IDM has additional contracts and purchase orders with an estimated value of $80 million USD.
In 2013 we are focusing on aggressive expansion of our market share with a renewed focus on regional exportation of our products. I also hope to start our second phase, with a renewed focus on tubing and heat treatments. The ongoing political unrest and revolution previously hindered our efforts in that regard. I hope to see increased financial and political stability in Egypt to continually pursue that goal.
How did the labor disputes in Ain Sokhna affect your operations?
We continually strive to create an environment of mutual respect with our employees. We work very hard to maintain good relations. Our policy is and always has been to keep our labor comfortable. We ensure that our laborers operate in safe conditions and we do our best to give our workers all the social benefits and the rights to which they are entitled. We were able to successfully overcome the strike through respectful and collaborative negotiation with our employees. As a result of this, the strike resulted in minimal interruption to our operations.
IDM has been recognized for accomplishments related to health, safety and environment. Can you tell me about IDM’s efforts in that regard?
Compliance with health, safety and environmental regulation is something we continually strive to improve. I’ve found that in order to compete in the international market one must comply with international standards of health and safety. Manufacturing is a challenging sector; we have, and will continue to make considerable efforts in this regard to ensure safe and efficient operations in our plant and support locations. We have received industry-wide recognition for our accomplishments in HSE and we will continue to excel in this regard.
What are your goals for 2013?
Our short-term plan is to aggressively increase our export volume regionally. In 2012 we successfully exported casings to Iraq, and I hope to continue in this vein. We hope to export to Libya and we are currently working now to export to UAE. Our long-term plan is to expand our manufacturing services. Currently, there is only one mill in the Middle East that produces similar services and it is located Saudi Arabia. We would like to establish a production mill in Egypt. We also hope to upgrade to the local manufacturing of casings. We hope to expand our business to produce a new thread for premium connection with Japanese companies (JFE) and we want to take the license from them. Also we are currently negotiating with a Chinese company (TPCO) to take their license as well. We had a good start in 2013 and I have every confidence that we will continue to meet and exceed our goals this year.
By: Julie Herick