Egypt to offer 12 new production licences

Egypt to offer 12 new production licences
Published: 24 August 2010

Egypt will offer new licences for 12 cement production lines as it aims to boost cement output by 40 per cent by 2015, the cabinet said on Monday.

Egypt’s construction industry has grown even as it stalled elsewhere. Cement demand rose 25 per cent last year, driven largely by housing needs of a growing population and a cash-fuelled economy, but has since slowed.

"Demand is increasing by eight per cent a year," Cabinet spokesman Magdy Rady said. "It is expected to reach 77Mt in 2015 so we need to boost output."

He said licences for 12 lines would be offered and said that some licences could cover more than one line.

Egypt has said it planned on issuing eight to 12 licences by mid-2010, but the decision had been pushed back several times as the government said it may not be able to supply energy to firms that obtain the licences.

Trade and Industry Minister Rachid Mohamed Rachid said in April firms may opt to import their own energy supplies, in what could potentially raise the cost of investment in the new licences higher than had been expected.

Monday’s cabinet meeting did not settle outstanding questions on energy supplies to the new licences, but approved a recommendation from the Trade and Industry Ministry proposing cement firms build their own power plants.

While the details of the licence conditions were yet to be drafted, Rady said the energy question should not be a concern.

"We will not put out a licence, without guaranteeing that the energy is there," Rady told Reuters. "Any energy scheme will be facilitated by the government."