Lafarge Egypt considering cement licence bid

Lafarge Egypt considering cement licence bid
Published: 03 March 2010

Lafarge Egypt will only bid for one of eight new cement licences if the government guarantees its energy needs as well as a suitable site for the company.

"We are waiting to see the conditions for the new licences," Ahmed Shebl, managing director of Egyptian unit of the world’s biggest cement maker, told Reuters on Tuesday.

"In 2007, they wanted investors to supply their own energy needs. This won’t be attractive for us. We have five production lines served by a single electric grid. I cannot introduce a new line and use a different energy grid."

Egypt will offer cement licences with capacities of 1.5Mt  each by mid-year, the second bid round of its kind in two years, to boost cement production in a country where buoyant demand has defied a regional construction downturn.

Lafarge has a total market share of 21 per cent for grey cement, with the second largest cement plant in the world.

It did not participate in the 2007 bid round, having entered the Egyptian market when it purchased the cement operations of Orascom Construction Industries in December 2007 for EUR8.8bn.

Egypt had granted six greenfield cement factory licences in late 2007. Many of the firms struggled getting off the ground, with Egypt’s Industrial Development Authority cancelling the licence of North Sinai Cement and El Wadi Cement late last year.