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Continuous blackouts hit Egypt metal industries hard

Local metal industry faces losses due to rolling power cuts nationwide, as production falls and machinery is damaged

Hend El-Behary , Thursday 23 Aug 2012
metal industries
Metal industrie (Photo: Reuters)
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Each time the Egyptian government says the economy will recover soon, as stated amid the visit of the International Monetary Fund to discuss a controversial $4.8 million loan, the situation gets worse.

Egypt’s industries are suffering blackouts that last for long periods each day across the country. The power cuts phenomenon is not only affecting homes, but also the core of industrial production, which means jobs and national income.

The increasing number of power cuts in recent weeks has sparked protests in various governorates across the country. Cuts in Cairo and other major cities can last up to 90 minutes and occur every couple of days.

However, in villages power cuts are more frequent and can last five hours or more. In the summer heat and during Ramadan, the effect can be debilitating for many people.

Factories have experienced massive loses, especially metals and aluminium factories, which depend mainly on electricity. Blackouts have not only interrupted production but have damaged machinery.

“Factories blackouts led to LE70 million ($11.6 million) in production losses,” said Mohamed Hanfy, director of the Metal Industries Chamber. One of cement factory in Beni Suef city has lost around LE30 million.

Industries consume around 23 per cent of the national electricity supply, with 42 per cent for houses. Metal industries, which represent about 15 per cent of all industry, consume around five per cent of available power, Hanafy reported.

Some factories are trying to negate the effect of blackouts by relying on generators, but a parallel crisis then looms: there is a dearth in diesel fuel that operates such generators, Hanfy continued.

“In the short term, we should rationalise electricity consumption. But the crisis will never be resolved unless a long term strategy comes into effect, by expanding power stations and generator units,” he said.

“We consider metal industries as a day and night industries, because they are working 24-hours continuously,” said Soliman Noamani, sales manager of the biggest steel producer in Egypt.

Noamani added that Ezz Steel factories have been suffering blackouts, despite taking precautions to ensure that machines are not damaged.

Meanwhile, small factories are suffering from the same crisis. Electrical outages halt their production, lower revenues and disrupt working schedules.

“We lost around 40 per cent of our production, as there are no working machines,” said Hossam El-Hawary, owner of a rote iron factory in Al-Abaseya industrial district.

“We have a fuel crisis. I don’t believe in rationalising as its just lowers the cost on the government but it won’t fix the problem itself,” El-Hawary said.

A new power station at Damietta (around 300 kilometres north of Cairo) and another at Abu Kier in Alexandria governorate have received investments worth LE12 billion and have started generating an additional 1800 megawatts of electricity.

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