EPC in Algeria

April 12, 2016 NECIM OURABAH

Construction begins on Amouda Engineering’s greenfield cement plant at El Beida, Algeria.

A booming housing market in Algeria is offering compelling opportunities for new players to enter the cement production market. One such new entrant is Amouda Engineering, SARL, who has entered into an agreement with FLSmidth for the construction of a 6,000 tpd greenfield cement plant, located in El Beida (Laghouat), approximately 400 km from the capital Algiers.

Under an EPC (Engineering, Procurement and Construction) contract with a value of more than EUR 200m, FLSmidth will supply the engineering, equipment supplies, construction, commissioning and training.

Contract negotiations started in early 2013, originally based on an EP project. However, when discussions regarding the project execution started, it became clear that FLSmidth’s experience and expertise in managing a construction project of this size meant it would make good sense to extend the agreement into a turnkey contract. Fouzi Aloui Ghrissi, CEO of Amouda Engineering has been highly satisfied with the support from FLSmidth.

 “FLSmidth believed in our project and supported us at an early stage, so we consider FLSmidth as a partner, not a supplier.” - Fouzi Aloui Ghrissi, CEO of Amouda Engineering

Per Mejnert Kristensen, Group Executive Vice President of FLSmidth’s Cement Division, is pleased at the progress made by the two parties.

 “EPC solutions are increasingly requested by the industry and we are very happy that Amouda Engineering chose FLSmidth as the preferred supplier based on a very close collaboration and our extensive knowledge of the region.” - Per Mejnert Kristensen, Group Executive Vice President of FLSmidth’s Cement Division

Algeria is a very important and familiar market for FLSmidth, having supplied around half of the country’s cement plants. 

“The advantage of the project being based on an EPC delivery model is simplicity for the client. We will take responsibility for completing the greenfield plant so that it is handed over to Amouda Engineering ready to operate. We handle all the details and interaction with the many suppliers throughout all phases, including the construction.” - Erik Bonde Pedersen, EPC Project Director at FLSmidth

Amouda Engineering is responsible for developing the supporting infrastructure and analysing the soil before construction can begin. Amouda is also responsible for submitting the engineering works, prepared by FLSmidth, to the local authorities. 

A telling feature of the negotiation process was the open dialogue between representatives of FLSmidth and Amouda Engineering. This enabled all possible issues to be resolved constructively and for the project planning to proceed efficiently.

With most of the engineering work already completed, construction of the plant is scheduled to begin in March 2016. The project involves a close cooperation between FLSmidth and several suppliers, including its longstanding partner in the northern African region, Orascom Construction. FLSmidth and Orascom have successfully completed several construction projects together before.

Introduction to the market
The cement market in Algeria shows many positive signs. Increasing need for residential housing is one factor driving local demand, and there is currently insufficient production capacity to meet Algeria’s requirements. The El Beida plant will help to fill a void in the central and southern part of the country. But as a completely new entrant to the market, Amouda Engineering is wisely taking a measured approach to its new business venture.

Production start-up at the new El Beida cement plant will follow a phased approach. The first equipment to be commissioned will be the grinding, storage and dispatching facilities. At this stage, clinker will be imported from other facilities. This will allow El Beida to gain early market share over a few months before the plant reaches full production.

The second phase will be the commissioning and performance testing of the clinker production equipment. When the plant goes fully on stream, it should already have considerable market support.

A close partnership between FLSmidth and Amouda Engineering will continue throughout this phased approach. FLSmidth will drive the commissioning, with Amouda providing local resources.

Erik Bonde Pedersen explains that one of the conditions that contributes to an upbeat cement industry in Algeria is the level of knowledge about cement production. “There are many experienced cement production engineers in the country, which will help Amouda make good ground in the market.”

The agreement does however include training to ensure that all the operating staff are fully up to speed with the state of-the-art equipment being supplied by FLSmidth.

Following the official handover of the fully operational plant, which is expected to occur in 2018, FLSmidth will continue to provide technical assistance for a period of six months in the areas of mechanical, process and electrical engineering.

Scope of supply
FLSmidth is delivering all equipment for the plant, including the following main equipment:

• ATOX®,  52.5 RAW MILL
• ROTAX 2®, 5.25 X 62 M KILN
• 2 X OK™ 36-4 CEMENT MILL

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