Displaying items by tag: Egypt

Italy: Cementir Holding has blamed a fall in earnings in the first nine months of 2024 on “lower results achieved in all geographical areas except Egypt.” It added that sales had fallen due to a decrease in volumes in some places and negative currency effects in Türkiye and Egypt. The group’s revenue fell by 5% year-on-year to €1.24bn in the first nine months of 2024, from €1.30bn in the same period in 2023. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped by 9% to €296m from €326m. Sales volumes of cement and clinker remained stable at 7.98Mt. It noted that volumes increases were reported in Türkiye and, to a lesser extent, in Malaysia and the US. However, volumes of ready-mixed concrete rose by 5% to 3.33Mm³ from 3.18Mm³.

Francesco Caltagirone Jr, chair and CEO, said “The results for the first nine months of 2024 are in line with our expectations and, after several quarters of contraction, signs of a market turnaround in some geographies are emerging in the third quarter of 2024. We are strengthening our competitive position through initiatives such as: the investment on Kiln 4 in Belgium, the restart of the second line in Egypt, the acquisition in concrete in Nordic & Baltic, a new limestone quarry in Malaysia, and the repurchase of a large part of the minority interest in our Egyptian subsidiary, to prepare ourselves for any upcoming market opportunities”.

Egypt: Cemex Egypt has inaugurated new decarbonisation equipment at the Assiut cement plant, aligning with its ‘Future in Action’ sustainability strategy. The technology repurposes residual material into energy, incorporating high-efficiency separators and improvements to the calciner process, reducing CO₂ emissions by approximately 32kg/t of cement produced, totalling a reduction of 290,000t/yr.

President of Cemex Egypt & UAE, Yago Castro, said “The inauguration of the decarbonisation equipment at the Assiut plant is a testament to our ongoing efforts to create a more sustainable future for our communities and the planet. At Cemex, we are committed to leading climate action in the industry, using the highest alternative fuels substitution rate in the cement industry in Egypt.”

Energy has been the theme for a couple of cement news stories of note from Egypt this week. The first concerns the government’s impending plan to centralise distribution of mazut (heavy fuel oil) to cement plants to help them cope with ongoing power shortages. Earlier in the week Cemex signed a deal with the Assiut Governorate to operate a second municipal solid refuse processing unit in the country. The company’s first Regenera facility, in Mahala, started operations in May 2024. Another story from mid-September 2024, along the same theme, covered the inauguration of an 18MW waste heat recovery (WHR) unit at Heidelberg Materials Egypt's Helwan Cement plant.

The wider story is that the country has faced so-called load shedding, or power rationing, since mid-2023 due to falling gas production, rising energy demand and negative currency exchange effects making it harder to buy fuel imports. The power cuts were extended in duration in July 2024 due to a heat wave. The government then said in late September 2024 that it is making investments to prevent domestic power cuts in 2025.

The cement stories mentioned above show some of the ways cement companies cut their energy costs. Two potential ways of doing this are to increase the use of alternative fuels (AF), such as municipal solid waste, or to install a WHR unit. Titan Cement, for example, reported AF thermal substitution rates of above 40% in Alexandria and above 30% in Beni Suef in the first half of 2024. The local press hasn’t reported power shortages amongst the country’s cement producers, but the plans to control the distribution of mazut suggest that either ‘something’ has happened or the government is trying to avoid ‘something.’ Readers may recall that producers have periodically faced step changes in power supplies over the years. In the mid-2010s, for example, lots of plants switched from heavy fuel oil and gas to coal. The energy price fluctuations following the start of the Russia - Ukraine war in 2022 then saw the price of coal rise.

However, what the foreign-owned producers have complained about in the first half of 2024 is the declining exchange rate of the Egyptian Pound. Cementir, Cemex and Titan Cement all noted this. However, Titan reckoned that International Monetary Fund and European Union investment had actually eased the economic situation in the first half of the year leading to an increase in the number of large construction projects.

One effect of the currency problems upon the cement market has been a focus on exports. At the start of September 2024 the Federation of Egyptian Industries said that national cement consumption in 2024 was expected to drop by 4% year-on-year to 45Mt. However, exports were projected to rise to 15Mt. The first and second most popular destinations so far in 2024 have been the Ivory Coast and Ghana. Yet, exports to Libya, the third biggest external market, may have had the biggest effect. These have been blamed for creating a shortage of trucks that was causing delays to the local construction sector. The round-journey from Egypt to Libya can take up to 12 days. This has left building sites bereft of raw material deliveries because all the trucks are elsewhere! Vicat acknowledged the growing importance of imports for its business in Egypt in its half-year report for 2024. It said that ‘sluggish’ domestic market conditions “were more than offset by growth in cement and clinker volumes for export to the Mediterranean and Africa regions.”

The wider picture of the cement sector in Egypt remains one of overcapacity with integrated capacity estimated above 70Mt/yr. The government introduced cement production quotas in mid-2021 and this stabilised prices (and profits). The recent state of the local economy may have strained this, but the latest round of external investment appears to have buoyed things for now. Although the effects of the Israeli military action in Lebanon may have unforeseen consequences upon neighbouring markets. In the meantime, cutting energy costs and growing exports offer two ways for producers to raise their profits.

Egypt: Starting in October 2024, the Egyptian Ministry of Petroleum and Mineral Resources will centralise distribution of mazut to cement plants to ensure continued operations amidst the country's power shortages. Deputy PM Kamel El Wazir announced the plan, responding to requests from cement producers for a reliable fuel supply to maintain the stable production and distribution of cement.

Cement plants are required to submit a report on quarry material prices over the past three years, highlighting price increases and their impact on the industry. The Cement Division of the Building Materials Industry Chamber also requested consistent export support payments, the extension of investor rights to quarry resources, and the testing of pozzolanic cement for standard compliance.

Egypt: Cemex has signed an agreement with Assiut Governorate to operate its second Regenera facility in Egypt. This facility processes about 7,000t/month of municipal solid refuse, treating it to generate alternative fuels before compost production, thereby ensuring minimal residual materials go to landfill. The Assiut agreement follows the first Regenera facility in Mahala, which began operations in May 2024. Cemex has invested over US$2.5m in an alternative fuel dryer at the Assiut plant.

Egypt: Cemex has won a place on Fortune's 2024 Change the World list for its sustainable business practices. This recognition, the fourth for Cemex, highlights its collaboration with VeryNile to clean the Nile River and develop sustainable solutions for discarded materials. Supported by the Ministry of the Environment, VeryNile focuses on removing inorganic matter from the Nile, upcycling plastics, and converting non-recyclable materials into alternative fuel for Cemex's Assiut cement plant. This initiative not only reduces pollution but also improves water quality for the local community and provides alternative employment for 150 local fishermen and women affected by contamination of the Nile.

CEO of Cemex Fernando González said "We are once again honoured by Fortune's recognition of our sustainable business model, which aligns environmental conservation with social empowerment. The VeryNile initiative exemplifies how companies can collaborate with NGOs and society to change the world for the better."

Egypt: A new waste heat recovery system has been inaugurated at Heidelberg Materials Egypt's Helwan Cement plant. The US$30m system is expected to produce 18MW of energy, equating to a saving of 40,000t/yr of CO₂ emissions.

Egypt: Egypt's cement consumption is expected to drop to 45Mt in 2024, a decrease of 4% from 47Mt in 2023, reports Arab Finance newspaper. According to Ahmed Shireen, head of the cement division at the Federation of Egyptian Industries, the country is also projected to export 15Mt of cement. Local production capacity stands at 92Mt/yr. Recent reductions in transport availability have reportedly been exacerbated by exports, particularly to Libya, causing a significant cement shortage. This has reportedly impacted local construction projects and contributed to a 20% price increase since 1 August 2024.

Egypt: Sinai Cement recorded a reversal in consolidated net profits from net losses of US$1.63m in the first half of 2023 to US$13.3m in the first half of 2024. Sales rose from US$48.3m to US$55m in 2024. The company reported an increase in standalone profits, from previous losses of US$1.5m in 2023 to US$659m as of 30 June 2024. However, net sales declined from US$48.3m in 2023 to US$31m in the first six months of 2024. For the quarter ending 31 March 2024, Sinai Cement achieved consolidated net profits of US$6.17m.

Egypt: Cementir Holding’s Aalborg Portland Holding has acquired an additional 25% stake in Sinai White Portland Cement (SWCC) from Sinai Cement Company for approximately €30m. This represents Sinai Cement Company’s entire stake. Following this transaction, Cementir will indirectly hold 96.5% of SWCC’s share capital.