File Photo: Egypt's cement (Photo: Reuters)
Demand for cement has witnessed a drastic decline in the Egyptian market with a surplus in production amid the COVID-19 crisis, managing director of Misr Cement Co. (Qena) Tarek Talaat said.
Talaat made his comments during a webinar held on Wednesday by INTERCEM on recent developments and the future outlook for the cement industry in Egypt.
Talaat said that despite government efforts, including reducing natural gas and electricity tariffs, the sector needs further state initiatives to stimulate demand for cement and related products and bridge the gap between consumption and production.
He also predicts that the ready-mix business will thrive over the coming period as a result of the state allocating EGP 400 billion for the construction sector in 2020/2021.
Meanwhile, CEO of Lafarge Egypt Solomon Baumgartner said that Lafarge is focusing on the four pillars of climate and energy, circular economy, environment and the community.
Baumgartner said that Lafarge Egypt has set up a roadmap to eliminate CO2 emissions by 2050, and that the company has partnered with the German Development Cooperation (GIZ) to reduce plastic waste leakage in Egypt.
Meanwhile, senior associate at Pharos Holding for Financial Investments Mark Adeeb said that the government initiatives in reducing energy tariffs are not offsetting the low profitability.
“For the sector to improve, the government should intervene to encourage demand on cement products in the short term. Sector consolidation will eventually take place in the medium term, while healthy growth of demand, together with higher utilisation rates, will be witnessed in the long term,” Adeeb said.
The webinar also addressed the impact of the pandemic and the wider economic scenario for the country moving forward, in addition to highlighting some of the cement sector’s endeavors made in recent years to maintain a cleaner and more sustainable industry in Egypt.
Established in 1985, INTERCEM is the world’s first independent international conference dedicated exclusively to the global cement sector, conducting its conferences in 50 cities across the globe, including Cairo.