Egyptian joint venture Lafarge-Titan Group will spend close to $180m to boost its cement production capacity by about 50 percent, a senior company executive said on Wednesday.
Medhat Stefanos, the group’s commercial director, told Reuters the investment in its Beni Suef cement plant will increase the company’s production capacity to 4.7Mta from 3.1Mt.
"At least 50 per cent of the new investment will be financed by banks and the rest from our accumulated profits in Egypt," he said.
Lafarge-Titan was established in 1999 as 50-50 joint venture of Lafarge Cement and Titan . The joint venture has two subsidiaries in Egypt, Beni Suef Cement and Alexandria Portland Cement .
It acquired a licence in October, through Beni Suef Cement, to add an extra 1.5Mta production capacity for E£134.5m (US$24.41m).
The Egyptian government expects local consumption of cement to reach about 55Mta by 2011 and auctioned eight licences in October to add more capacity to the sector, which currently produces 38Mta, of which 30Mt are consumed locally.
"I am not sure consumption will reach the 55Mt level but it will definitely increase," Stefanos said. "The strong economic performance and the appreciating pound will push the upward cycle longer until it stabilises ... by 2011."