Full-year Egyptian demand declines due to uprising

Egypt's cement consumption in 2011 decreased by an estimated eight per cent to 45.2Mt according to a report by CI Capital, following an increase of three per cent to 48.9Mt the year before.

Economic turmoil in the wake of political uprisings has reduced the demand for housing and infrastructure construction. Due to continued political and economic uncertainty a further decline of 2% to 44.5Mt is expected in 2012. However, the government has announcement plans to build 75,000 residential units which should help demand stabilise over the 2012-13 period.

Cement production in 2011 fell by about 2% to 46.9Mt. In addition to lower demand, a number of manufacturers had to deal with labour strike action and attacks, which led to disruptions in production. Sinai-located factories found themselves exposed to the ongoing attacks on the Israel and Jordan-bound gas pipeline. Securing energy supplies has also changed. For example, Sinai Cement has switched from natural gas to the more expensive fuel oil. Another production decrease of 2% to 45.9Mt is expected for the current year.

Capacity utilisation declined to 84% in 2011 compared to 98 the year before before and an average 95 per cent over the 2006-10 period.