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Saturday, 23 March 2019

Egypt parliament discusses crisis of National Cement Company

The only state-owned cement company in Egypt is hit by a financial crisis and striking workers

Zeinab El-Gundy , Tuesday 6 Mar 2018
Egyptian Parliament
Egyptian Parliament (Reuters)
Views: 3307
Views: 3307

Egypt's House of Representatives discussed on Tuesday ways to alleviate the crisis at the state-owned National Cement Company, as a worker sit-in entered its seventh day.

At least 2,000 workers in the company have staged a sit-in at its factory in Helwan to protest a January reduction of monthly bonuses and the shutdown of some production lines due to recent company financial losses.

The House of Representatives' industry committee held a hearing session with a number of MPs, the CEO of the National Cement Company and a delegation of company workers.

Among the MPs at the hearing were parliamentary speaker Ali Abdel-Aal, head of the human rights committee Alaa Abed, head of the manpower committee Gabali El-Maraghi and Helwan MP Dina Abdel-Aziz.

Parliamentary speaker Ali Abdel-Aal said that he altogether rejects strikes and sit-ins under the current national circumstances and made it clear that "the age of twisting the state's arm is over."

"Getting rights through illegal ways is completely unacceptable," he said on Tuesday.

In his statement before parliament, head of the manpower committee El-Maraghi said that the National Cement Company was the last remaining state-owned cement company after all others had been privatised.

El-Maraghi also added that there had been attempts to get rid of factory workers through early pensions and to sell its assets to luxury guest resorts.

Helwan, a southern suburb of Cairo, was known for its hot springs resorts for the wealthy during the area's heyday in the 1930s.

In late 1950s, the suburb was gradually transformed into a major industrial city hosting factories of the Egyptian Steel Company and National Cement Company, among others.

MP Abed, head of parliament's human rights committee, said that the parliament would fulfill the legal demands of the workers.

In statements to the media over the past week, workers have demanded that the company be investigated by the Administrative Control Authority to determine the reasons behind the huge financial losses.

The workers are also demanding the formation of a committee to study how to reduce the factory's high production costs.

Financial Woes

In statement issued in February, the National Cement Co. announced its financial losses for the first half of fiscal year 2017-2018 reached 136.7 percent due to the floating of the Egyptian pound a year earlier.

The company, which was founded in 1956, announced EGP 496 million in losses by December 2017, compared to EGP 209.5 million in December 2016.

The company also recorded EGP 736 million as revenues in December 2017, compared to EGP 840.2 million in December 2016.

The statement attributed those huge losses to the floating of the Egyptian pound against other currencies, as the well the increase in the prices of gas and fuel.

In early February, Egypt's stock market delisted the National Cement Co. due to its financial crisis.

The majority of shares in the National Cement Co. is held by the state-owned Chemical Industries Company, while 5% were listed in the stock market and the rest owned by the Al-Awkaf authority.

In January 2018, the company decided to shut down two of the factory's four cement production lines due to inability to meet environmental conditions set by ministry of environment.

Within a month, the board of the Chemical Industries Company prepared a detailed feasibility study about transferring its factories outside the residential areas in Helwan to a land offered by the government.

Workers have expressed fears that the proposed move will lead to more layoffs.

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