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Egypt’s cement manufacturers will cut production for 12 months from 15 July to reduce the oversupply that has plagued the industry for the past three years.
Decision 56 of 2021 was announced on 5 July by the Competition Protection Authority with the backing of the Industrial Development Authority.
The 23-member Cement Association of the Egyptian Federation of Industries welcomed the decision, noting that it would ‘preserve the plurality of the market, the cement industry, its jobs, and the interests of the consumer.’
Last week, Reuters reported that the competition authority has set the baseline cut at 10.69 percent, with additional cuts of 2.81 percent for each production line and further cuts depending on the company's age.
Ahmed Al-Zaini, Chairman of the Building Materials Division, Federation of Egyptian Chambers of Commerce (FEDCOC), said cement prices increased in the range of 50 to 100 pounds in the days following the announcement of the decision.
He said at present, the average price of a tonne of cement delivered to the factory ranges between 725 and 850 pounds, and to the consumer ranges between 900 and 1,000 pounds.
Egypt’s total annual cement production is between 85 to 87 million against consumption of 47 to 50 million tonnes per year, according to the Chamber of Cement Industry of the Federation of Egyptian Industries.
(Writing by Eman Hamed; Editing by Anoop Menon)
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© ZAWYA 2021
