The General Company for Ceramic and Porcelain Products “SHEENI” is 4.71 percent owned by the Mining and Refractories Holding Company.

The Company was established in 1955 and has been operating as a state-owned joint stock company for the past 42 years. It shares are traded on the Cairo Stock Exchange Market. The Company manufacturers and markets a wide range of products that include sanitary ware, wall tiles, hotel and household porcelain, refractory ferrules, and temperature resistant isolators. The Company represents an attractive runaround opportunity in the ceramics and porcelain industry. The Company production facilities are located on 661 faddans at Sharikat st., Ismailia Canal (Mostorod, Khanka, and Kalyobia Governorate).

10 El Shawarby Street, Kasr El Nile – Cairo

Tel: (20-2) 2508907

Fax: (20-2) 250229

	Authorized Capital LE 25 Million
	Issued and Paid up Capital LE 3.631 Million
	Nominal Value Per Share LE 2

SHEENI’s output of household and hotel porcelain, sanitary ware, wall tiles, and other products is sold to hotels and consumers, as ell as governmental hospitals, schools and housing and construction projects. The bulk of SHEENI’s products are marketed in Egypt and account for 80 percent of the Company’s turnover with exports rising faster than domestic sales. Sales to the private sector accounted for 67 percent, while public sector sales amounted to 10 percent of domestic sales. The balance was marketed through the 12 Company showrooms. SHEENI used to enjoy a dominant market share in household and porcelain. In the sanitary market it enjoys an estimated 10 percent of the local market, and it exports 50 percent of the total exports of sanitary ware from Egypt. SHEENI’s market share for moderate- to medium-priced wall tiles is only 3 percent, and the Company faces price competition both domestic and export markets

Production operations are conducted at a single facility located in Mostorod, Kaloubia, which houses four full production lines with service support units. The Company is currently introducing new technology that will increase output, reduce costs, and increase the proportion of first choice products that will command higher selling prices.

1. Vitreous Sanitary Ware
2. Porcelain Table Ware and Hotels Tableware
3. Wall Tiles
4. Ceramic Balls for Milling
5. Arts Ware
6. Industrial Ceramics
7. Ceramic Rings

   

Sales revenues increased by 11 percent to LE 46.3 million between 1993 and 1997 in an erratic manner. This trend was paralleled by a decrease of gross profit from LE 11.9 million in 1996 to LE 3.1 million as forecast for 1997. These fluctuations impacted the level of earnings before interest, resulting in a loss of LE 4.6 million in 1997 compared with earnings of LE 3.4 million in 1996. At the same time, assets increased by 45 percent from LE 86 million to LE 125 million between 1993 and 1996.

LE Million	94/95	95/96	96/97
Production	53.591	59.621	41.244
Net Sales	50.175	45.396	48.930
Exports	7.417	9.476	5.480
Net Worth	38.684	31.053	29.429
Gross Profit	12.11	11.86	6.62

The Company offers a real opportunity for an eligible investor with a successful track record in the management of manufacturing enterprises. The Company’s profitability over the next three years can be significantly enhanced by adopting a strategy aiming at improving gross margins and reducing inventory levels. Gross margin improvements are expected to stem from the switch from electricity to natural gas and the modernization of the sanitary ware and hotel production lines. These two product lines will account for 54 percent of sales revenues in 1998 and are expected to represent 76 percent of total sales in 2002. Ate the same time, the gross margin for sanitary ware could be improved from 31 percent to 48 and that of the hotel porcelain from 11 percent to 28 percent.

Company Market Share by Major Product Line

Product Line Units sold in Egypt Market Share in %

Sanitary Line 4.000 tons 10

Tiles 1.029.000 M2 3

Household Porcelain 950 tons 45

Hotel Porcelain 1360 tons 45

The Company is concentrating on the moderate to medium price market segment for wall tiles, known as “Kishany”. The Company produces mainly white and color wall tiles of one size (15cmx15cmx6mm) and is now beginning to offer larger size (15cmx22.5cmx6mm) tiles. This market segment is also supplied by Aracemco (a privately held company partially owned by the Mining Refractories Holding Company with a market share of 3 percent), Lecico (the major factor in this market segment with a market share of 36% percent).



The Company is also focusing on the moderate to medium price sanitary ware market segment. Aracemco and Lecico compete with the Company within the same market. The combined market share of these two companies is 70 percent. Ideal Standard, Gravena, and Cleopatra produce market higher quality/price products. Although the Company accounts only 10 percent of the lower and medium price market segment, it has taken a number of steps to protect its position in the market. Over the past three years, the Company has introduced new lightweight products and has been offering a wide variety of plain and decorated products. The 10 percent domestic market share of the Company does not reflect the fast growth of exports of sanitary ware that reached 31 percent of the total sales revenues for this product line. Sanitary ware produced by the Company estimates that its exports of sanitary ware account for 50 percent of Egyptian exports of these products.

The Company estimates that it enjoys a 45 percent market share of the household porcelain market. The Company’s competition in moderate to medium priced table porcelain consists of the Egyptian German Porcelain Company in Alexandria (estimated 40 percent market share), and Limes Egypt (near Cairo) and competition from lower prices tableware from China is perceived as the major competitive threat.