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Al-Ahram Weekly

Taming cement prices - Economy - Al-Ahram Weekly

Egypt's cement factories are to operate at full capacity to cover local demand and limit price increases On the back of a major increase in cement prices, coupled with a shortage of supply, Kamel Al-Wazir, the deputy prime minister and minister of trade and industry, has instructed Egypt's cement factories to work at full capacity. Cement prices have been following an upward trend, recording around an 85 per cent year-on-year increase to surpass LE4,000 per ton. Al-Wazir gave cement companies nationwide a one-month grace period to restart idle production lines and address challenges hindering production, considering it a top priority to meet domestic market demand. Surplus production may be exported once local needs are fulfilled, he said. He added that sales prices at the factory and to the final consumer must be recorded on cement bags. In July 2021, the Egyptian Competition Authority (ECA) approved a request submitted by 23 cement companies to work at a percentage of their total capacity due to the oversupply in the local market, leading to a decline in the value of local sales. The decision was extended twice and has continued to be renewed annually since then. However, following the recent surge in cement prices, the ECA suspended the decision to reduce production for the two months of May and June. Reactivating idle capacity is meant to ensure that the production of cement, a strategic commodity, continues without disruption and to stabilise the market. It will make cement available in adequate quantities and at suitable prices, restore supply and production chains, and protect consumer rights, the Industry Ministry stated. Ahmed Al-Zeini, head of the Building Materials Division at the Chamber of Commerce, said that the recent price rises were due to a reduction in production capacity, making it difficult to meet market demand. When production was first curtailed, the price of cement stood at LE800 per ton, he said, expecting prices to decline once full capacity is restored. Ahmed Sherine Karim, head of the Cement Division at the Federation of Egyptian Industries, attributed the price increase to a sudden spike in demand, coupled with low production due to maintenance work at several factories and the stoppage of nine production lines, which had caused a supply shortage. Medhat Stephanous, former head of the Cement Division at the Federation of Egyptian Industries, said that a cause of the price hikes had been the surge in demand for cement abroad. Egypt's monthly cement production amounts to approximately five million tons, of which four million are allocated to the domestic market. One million tons are exported monthly to different markets. According to the Building Materials Export Council, Egypt exports cement to 95 countries, with African countries topping the list. Exports have increased over the past three years, rising from $465 million in 2021 to $670 million in 2022, marking a 44 per cent increase. Exports reached over $770 million in 2023, a growth rate of 14 per cent, and climbed to $913 million in 2024. Cement companies had halted exports for several years due to high local production costs, which made Egyptian cement less competitive. The energy crisis in Europe caused by the Russia-Ukraine war had prompted countries such as Turkey and Spain to halt cement exports. Stephanous said that the recent price hikes were due to increased costs as a result of the appreciation of the dollar against the pound, leading to higher fuel costs and a rise in shipping expenses due to regional geopolitical tensions. The Ministry of Industry, in coordination with the relevant authorities, said it will carry out a nationwide inspection campaign of all Egypt's cement factories to ensure compliance with the directive to operate all licensed production lines. Stephanous noted that returning to full production capacity will take time, with the production lines requiring maintenance. Al-Zeini said that resuming full production would help to restore market stability by September. * A version of this article appears in print in the 17 July, 2025 edition of Al-Ahram Weekly Follow us on: Facebook Instagram Whatsapp Short link: