Egyptian market only supporting 40% of local cement production

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Egypt: Medhat Istafanos, the head of the Cement Division at the Federation of Egyptian Industries (FEI), says that the market is only supporting 40% of local production. He blamed this on a slowdown in building activity and a lack of government-backed infrastructure projects to make up the shortfall, according to the Al-Ahram newspaper. Noha Bakr, an executive director at the cement division of the FEI, also blamed a construction ban on agricultural land.

The country’s 24 cement plants have a production capacity of 85Mt/yr but only 48Mt were sold in 2018. Cement sales have fallen since 2017 and are expected to reach 49Mt in 2019.

Producers are exploring options to increase cement exports. Walid Gamaleddin, the president of the Export Council for Building Materials and the Metallurgical Industries, has called for the government to support industry exports. The minister of trade and industry discussed a programme for cement-export subsidies with officials from the sector in late July 2019 that would include encouraging agreements to export cement to the African countries. The Central Bank of Egypt (CBE) has also instructed the banking sector to support cement companies that needed to restructure their debts. The merger of smaller companies to form larger conglomerates has also been encouraged.

However, growing exports of Egyptian cement is challenged by its relative high cost compared to other countries. Istafanos said that Egyptian cement is US$12/t higher than its competitors.

Last modified on 07 August 2019


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