The high profitability of the cement industry enhance workers to claim their share
The trade unionist’s battle at Torah Cement, a unit of the Suez Cement group of Companies (SCGC), continues in spite of administrative resistance. SCGC is a subsidiary of the multinational Italcementi Group, the world’s fifth biggest cement maker. The Egyptian firm provides the Italian group, according to Reuters, with it’s third largest market by revenues after France and Italy.
Having staged numerous sit-ins over the past few weeks and engaged in many negotiations and legal proceedings with both the company’s management and the ministry of manpower and immigration, Torah Cement’s 1,000-strong work force and trade union are using all possible avenues to attain their 10 per cent profit share - their legal right.
On Tuesday, 15 March a delegation of 11 trade unionists from Torah Cement were attacked by thugs at the Airport Sheraton Hotel after trying to attend the SCGC’s general assembly, which typically consists of the firm’s board of directors, trade unionists and government representatives - as the government still maintains a stake.
“Thugs the size of door frames grabbed me and broke my leg,” shouted the exasperated head of the trade union, Mohamed Abdel Monsef.
Abdel Monsef claimed that Omar Mehana, board director of the SCGC, hired the thugs in order to deny the delegation’s entry in the hall where the assembly was gathering.
The board had earlier announced that it would not grant its work force their profit shares, infuriating workers and inciting unionist action. After being denied entry into the assembly, the delegation vowed to continued their sit-ins.
Ramadan Omar, general-secretary of the Torah Cement trade union, stated that the goal of the sit-in would not be disrupt the company's production but to deny the management entry into the company’s headquarters.
Surely enough, the company held a press conference the next day at the factory and resumed its sit-in which drew the attention of the ministry of manpower and immigration.
The company’s trade union delegation have recently presented a draft proposition, outlining the distribution of LE43bn - equivalent to the10 per cent profit share, according to financial results the management announced earlier this month.
On Tuesday, 29 March the draft, which had to be ratified by Torah Cement’s trade union and management under the auspices of Minister of Manpower Ahmed Hassan El-Borai, was rejected by the management’s representative.
According to corporate law no 159, adopted in 1981, workers have the right to at least 10 per cent of the revenues or the equivalent of their wages in one year as a share of the profits. But this article has never been adhered to in Egypt.
The struggle by Torah Cement workers to receive their share of the profits began in 2005, after the company’s privatisation. "Profits shot up after privatisation. The company was sold for LE2.5bn while the annual profit exceeds LE1bn," emphasised Mohamed Ramzi, a company trade unionist.
The company, which employs more than 3,000 workers, was bought out by Italcementi in 2005. Since then unionists within the Torah branch have staged strikes and sit-ins demanding their shares.
“Torah Cement and El-Mahla Textiles were the first companies to organise strikes in 2005 opposed to company policies on profit-sharing,” stated Abdel Monsef.
The unionists have since filed 17 cases against their company, but six years later not a single one has managed to find its way through the courts.
Ahram Online failed to obtain the management’s reaction to the ongoing protests. After thugs attacked the delegation, Ahram Online went to the Torah Cement facilities to speak with the management, but was refused entry.
Upon reaching the facility’s entrance, we were told by security over the phone that any answers could be attained by a visit to the company headquarters in Qattamiya, however our interlocutor refused to pass on the phone numbers of those headquarters or the numbers of any available person in charge. Meanwhile, the chairman didn’t respond to numerous attempts at reaching him via his mobile.
Torah Cement workers are not the only workforce demanding their legal share of the profits. Many labourers in Egypt’s cement sector are struggling to attain this right. Factory workers at Lafarge, the world’s number one cement group, recently posted the same demand.
They organised a sit-in for 13 days that ended 21 March. They managed to obtain a 15 per cent increase of the annual prime and a 100 per cent increase of the monthly prime via the recruitment of 130 labourers working through subcontracting with a promise to recruit a further 300 in the next year.
The main demand of the workers was, however, not granted; they only received 3 per cent of the annual profits instead of the legally assured 10.
"We will raise a memorandum to the minister of manpower, of industry and to the supreme military council. Anyway, we will be watching and if any other company takes the 10 per cent of profit's share, we will insist on getting the same right," stressed Moustapha Fawzi, member of Lafarge’s trade union in Al-Ein Al-Sokhna plant where the sit-in was staged.
"The workers of other companies in the cement industry are asking for the same which is understandable since the sector’s profits are very high,” stated Omar Taha an analyst at investment bank Beltone Financial. On average, the profit margin of cement companies in Egypt is about 40 per cent while it doesn't reach the 20 per cent in other countries. Furthermore, demand has increased, even during the global crisis.
"The cement sector has not experienced a fall like that of iron and steel in Egypt. At the time of the crisis, sales increased by 25 per cent, "addsed Omar Taha. According to the Financial Times Middle East, Egypt has strongly contributed to the profits of cement companies during the crisis.
"In 2009, sales of Lafarge rose 36 per cent in Egypt, against a fall of 24 per cent in North America,” cites US Daily - the same is true for other cement plants.
Egypt became a paradise for international producers with the privatisation of public cement plants in the early 2000s. The last cement company to be privatised was Suez Cement in 2005, a key date in the history of this industry, marking the full liberalisation of the sector.
Monopolising 22 per cent of the local market at the time, the state-owned Suez Cement was a force to balance prices in Egypt. But the government of Ahmed Nazif, appointed in 2004, decided to accelerate the process of privatisation. Thus, the last state owned company was privatised. SCGC is comprised of several companies with production facilities in Suez, Torah, Qattamiya, Helwan and El-Minya.