![Labourers apply cement as they carry out construction work on a new twin-tube road tunnel along the Suez Canal in the Egyptian city of Ismailia on September 4, 2018. [KHALED DESOUKI/AFP via Getty Images]](https://i0.wp.com/www.middleeastmonitor.com/wp-content/uploads/2020/09/GettyImages-1026726156.jpg?fit=1199%2C800&ssl=1)
The cement industry in Egypt will incur heavy losses following a 60 per cent decline in demand for the first time in the sector’s history, a local economist has warned.
Mohamed Saleh told the Al-Araby Al-Jadeed news site that as many as 23 companies currently operating in Egypt produce about 85 million tonnes of cement annually, while the local market’s needs do not exceed 58 million tonnes.
Last week, CEO of Lafarge Egypt, Solomon Baumgartner Aviles, warned that he expected five or six companies to leave the sector by next year due to a large surplus in production, amounting to 33 million tonnes annually.
Aviles held the Egyptian government responsible for the sector’s collapse after stopping the issuance of building permits in Greater Cairo, provincial capitals and major cities, for a period of six months.
During the first half of 2020, Arabian Cement Company reported losses of about 5.6 million Egyptian pounds ($0.3 million) while the Sinai Cement company recorded losses of 245.6 million Egyptian pounds ($15.6 million), while Tourah Cement company suspended production altogether due to a financial crisis caused by the oversupply in the local market.
Cement demand in Egypt has been declining since the army inaugurated a $1 billion factory in 2018, adding an annual production of 13 million tonnes to the existing supply of 79 million tonnes.
This has added to the financial burdens which companies are experiencing as a result of the increase in fuel, electricity and water prices, which led to an increase in the cost of production, transportation and storage.
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