# 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: Al Mishraq Sulfur Industry Company
Sector Chemical
Brief Description Started in 1970, the Company extracts and refines Sulfur from the largest sulfur deposit in the world. Sulfuric acid used in myriad industries worldwide. Aluminum sulfate used for water treatment and sulfur powder used in agriculture. Critical to local Iraqi industries.
Revenue in 2002 (Iraqi Dinars '000s) 10000000 (Extremely depressed due to below market prices)
# of Employees 1278
Annual Employee Salaries & Bonus 1500000
Headquarters Address Al Mishraq (53 KM south of Mosul, 25 KM north of Gaeta)
2. Company Highlights
Largest proven supply of sulfur in the world worth $25B USD at market rates (500 million tons).
Cost of production of only 20% of current market prices of $50-60/ton USD (subsidies not yet quantified).
Open market value of domestic demand expected to grow to $25M USD per year. Export market much larger.
Security situation is terrible, with local villagers (employees) raiding facilities on nightly basis. Everything is getting looted, even pipes.
At one point, over 1,000 people were actively looting the facilities. Less now that most everything has already been stolen.
In response to mgmt request for them to return to work, employees destroyed loading equipment.
Need to fix looting damage to begin operations. Cost: $15M USD, and growing.
Improving capacity will cost an additional $20M to $30M USD.
Current inventory of finished product of 800K tons (ready for sale) valued at at least $40M USD, enough to fund compete rehabilitation of plant.
Inventory of 400K tons recently torched in act of arson (used to have 1.2M tons). Not only was inventory destroyed, but local wheat crop (worth $40M USD by one estimate) also polluted and unusable.
While huge inventory is good for value-sake, it means there is no immediate demand pressure to restart operations.
Allocated $500K USD for 2H 2003 operating budget and provided with zero mw off of grid. Money will be used for equipment to sell finished inventory and for security measures. No electricity provided since Company is at least one year from restarting.
3. Facilities
Name Province City Grid Damage % Power Needs
Sulfur Production Line Ninevah Mishraq 0.8 15 mw for all
Aluminum Sulfate Plant Ninevah Mishraq 0.5
Sulfur Power Plant Ninevah Mishraq 0.5
#4
Value of All Plant & Equipment Before War, and Initial Purchase Dates and Prices for Major Items Original equipment purchased in the 1970's and 80's for a total of $80M USD. Water and steam boilers are in terrible shape, due to aging and looting. Sulfur purification unit was build by Freeport Co, a US company, in 1990 for $40M USD.
4. Products
Product Name Unit Measurement Design Capacity Available Capacity 2002 Production 2002 Revenue
Sulfur Powder tons 26000 20000 8000
Sulfur tons 820000 400000 300000
Aluminum Sulfate tons 48180 35000 7000
Description of Importance of Products to Other Iraqi Industries Needed in water treatment, agriculture and various industrial manufacturing processes. However, since so much finished product is in inventory, immediate resumption of production is not necessary to satisfy demand.
5. Customers
Customer Name 2002 Revenue Subsidized (Y/N) Products Sold to Customer and Unit Pricing
MIM SOEs Y
Agriculture Ministry Y
Water Authority Y
Jordan Y $21 USD / ton
Syria Y $29 USD / ton
6. Suppliers
Supplier Name 2002 Purchases Subsidized (Y/N) Products Purchased and Unit Pricing
No raw materials used, except for water and electricity. Only suppliers are for equipment
Freeport Co. (US) Zero Yes Bought purification unit for $40M USD in 1990.
Current Payment Terms From Suppliers Not applicable.
7. Imports & Exports
2002 Import Markets for Raw Materials None
Potential Import Markets in Free Market None needed, except for equipment.
2002 Export Markets for Finished Products Jordan: 300K tons currently under contract at 30% market price. Syria: 125K tons at 50% market price. Both need to be renegotiated.
Potential Export Markets in Free Market Entire world. Domestic demand not enough to justify production rates and supply. Therefore, export market is critical to Company success.
8. Competition
Description of Competitive Situation None in Iraq except for sulfur recovered from oil, which Company handles but Oil Ministry technically owns. 500K tons of recovered sulfur in inventory at Oil Ministry.
Market Share Description Domestic market is currently 150K tons/yr, expected to triple in next few years. Company has 100% market share of Iraqi demand. Company believes total worldwide demand for sulfur is 5M tons per year.
9. Summary of War Damage & Looting of Property & Equipment
Description of Damage $15M USD caused by looting. Heavy damage to offices, plant and equipment. Entire facility is almost completely destroyed. Almost all pumps, motors, cables and control equipment stolen. Additonal $20M worth of finished inventory destroyed in fire.
Current Operating Status Not operating. Needs 12 months to rehabilitate damaged property & equipment.
Immediate Property & Equipment Needs To Restart Operations Fire fighting equipment to put out any fires caused by looters or by loading finished sulfur inventory into trucks during upcoming sales (sulfur is volatile).
Total Cost to Return to Pre-War Condition $35M USD
10. Inventory Status
Raw Material Status Massive reserves.
Months of Material Supplies & Production Rate Virtually unlimited at current production rates.
Immediate Raw Material Needs None
Finished Products Supply (Units and Value) Current inventory of finished product (ready for sale) valued at $50M USD.
11. Fuel & Electricity Needs
Description of Fuel Needs
Description of Electricity Needs 15 mw
12. Other Needs to Restart
Working Capital Needs None until security situation is fixed. Anything purchased will be looted.
Security Needs Security situation is terrible. Plant and equipment are spread across 17 sq km. Local villagers and employees continue to loot what little is left. Local village elders encouraged whole villages to loot facilities saying, "steal everything, the Americans will replace it all with new equipment".
Other Needs Reduction in current workforce and replacement of incompetent and corrupt locals. Company only needs 60% of employees.
13. Strengths, Weaknesses, Opportunities & Threats
Description of Strengths Massive reserves of sulfur.
Description of Weaknesses Uneducated and undisciplined workforce.
Description of Opportunities Rebuild and upgrade mining and refining operations to increase output for export market. Could produce 5M tons per year worth $250M USD.
Description of Threats Not clear how mining and production costs, without subsidies, compares to cost of extracting sulfur from oil.
21. Notes
The Company extracts sulfur from deposits 200 meters below ground by pumping hot water into the deposits and forcing liquefied sulfur to rise to the surface. Water is obtained free of charge from river abutting facilities. 14 cubic meters of water is used for each ton of sulfur extracted.