Egypt’s cement sector will shake off a property crisis and expand production capacity by 30 per cent by the end of 2012, helped by a growing population, infrastructure demand and exports, an industry executive said.
"The cement sector can currently produce 50Mta and I expect it to reach a capacity of 65Mt by the end of 2012," North Sinai Cement Chairman Abdel Hameed Selmy told Reuters in an interview on Thursday.
Several new players are due to enter Egypt’s cement sector in the coming 18 months after the previous government handed out licences to boost output against a backdrop of surging demand.
The popular uprising in February has forced the government to slash its economic growth forecast and deepened a crisis in the once-booming real estate sector, a major cement consumer.
Selmy said the sector faced challenges such as unclear regulation and unstable demand due to the unrest that unseated Mubarak. But he was optimistic there would be enough buyers to justify the extra cement industry capacity.
"The future is very promising," he said. "The market has an increasing population and demand for infrastructure. I think stability should come once (September) elections are over."
North Sinai Cement is about to resume construction of its first, 1.8Mta line after it was delayed when the government withdrew its licence.
Selmy brushed off the long-term damage from legal challenges to sales of state land that are hammering real estate.
"The Egyptian cement industry is not threatened by what is happening in real estate," said Selmy. "It can always shift to exporting and the global market is receptive to Egyptian cement because it is highly competitive in price and quality."