The industrial equipment maintenance company (MEI), a subsidiary of the Sonelgaz group, signed Tuesday in Algiers, with General Electric (GE), an order in the amount of $ 7.5 million, of locally manufactured spare parts, for the needs of the energy installations managed by the American group in Algeria as well as its customers abroad.
The document was initialed by MEI Managing Director Idir Yettou and GE Power MENA Vice President Midhat Mirabi in the presence of Energy Minister Mohamed Arkab and Sonelgaz Group CEO Chaher Boulakhras.
This is the first order under the purchase contract concluded in 2017 between MEI and GE for a total estimated amount of $ 990 million over 20 years, according to the explanations of Mr. Arkab.
In fact, discussions were initiated in 2016 with the company GEAT, the fruit of a partnership between Sonelgaz and GE, to set up a long-term maintenance contract for power stations equipped with gas turbines. In return, GEAT and the American partner must provide support for MEI workshops and guarantee a purchase contract for spare parts of the same duration as the maintenance contract.
Thus, the MEI workshops located in Msila were brought up to the standards of the American manufacturer as part of the qualification and certification process, finalized in 2019 by GE.
The analysis of MEI’s capabilities and its means made it possible to decide on the type of spare parts that must be launched in manufacturing. As a first step, the choice was made on high-tech, high-value, noble pieces.
Ensuring a multi-year load plan covering a period of 20 years from 2017, the MEI / GE purchase contract is characterized by its « flexibility »: it begins with an annual amount of $ 1 million the first year and increases in crescendo to reach an annual amount of 90 million dollars when MEI grows in competence and carries out the manufacturing with competitive costs, that is to say a total amount going up to 990 million dollars over all the period, notes the minister.
The amount of the first order represents the forecast amount decided for the years 2017, 2018 and 2019, i.e. $ 7 million, but taking into account the amount of purchase orders issued for the qualification phase ($ 585,000), the total amount of orders reached $ 7.585 million.
For the 2020-2024 period, the forecast volume will be $ 117 million, adds Mr. Arkab stressing that part of MEI’s production will be exported through GE subsidiaries abroad, particularly in Africa.
Regarding the integration rate, Mr. Boulakhras said that it would be around 30% in a first step before gradually going to 100%.
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