Back to the complete issue
Monday, 28 September 2020

Cement producers call for gov’t intervention to salvage ailing sector

The cement industry is calling for gov’t intervention to save crippled sector, saying it is time for the state to explore “radical” solutions, Al Shorouk reports. The call came during a meeting of the Cement Division of the Federation of Egyptian Industries, during which division head Medhat Stephanos claimed that the sector is facing a 40 mn-tonne shortfall in demand this year. Demand is likely to come in at around 43 mn tonnes this year, compared to 83 mn tonnes of supply, he said. This is only a slightly grimmer prospect than the one offered by Arabian Cement earlier this month, which forecast demand to fall to 45 mn tonnes this year from 49 mn tonnes in 2019.

Background: Things have gone from bad to worse for the cement industry since a supply glut began in 2016. The inauguration of a large state-owned cement factory in 2018 intensified preexisting supply issues, quickly leading to several companies suspending operations, some temporarily but others permanently. Now, with demand taking a further hit thanks to the covid-19 pandemic and the government’s six-month ban on construction permits, six more producers are apparently on the verge of collapse. You can read our deep dive into the cement industry from earlier this year, when prospects for the sector already looked bleak.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.