Egypt: Arabian Cement to reduce US$ loans

Egypt: Arabian Cement to reduce US$ loans
30 January 2017

The Arabian Cement Company plans to accelerate the repayment of US dollar loans owed to banks during the current year to decrease the total value of these debts to EGP40m (US2.1m), compared to EGP65m (US$3.46m) in 2016.

An official at the Arabian Cement Company told Daily News Egypt that the company made the decision to avoid the high cost of dollar debts after the Egyptian pound’s floatation in November, which increased the dollar price from EGP8.88 to more than EGP19.

The source added that the loans in US dollars are a crisis for all companies operating in the Egyptian market, including the cement sector, due to decreased exports to regional markets such as Libya, Syria, and Yemen as a result of the security situation.

Arabian Cement will try to increase its sales in the domestic market through marketing and penetrating new distribution places. Most of the company's sales are company-to-company sales, while the Arabian Cement exported very small amounts to Yemen.

The results of the work for the first nine months of this year have shown that the company achieved a net profit of EGP157.6m, compared to EGP246.1m in the same period last year – a decrease by 36 per cent.

However, the company spent EGP80m to add a new coal mill to increase the amount of burning coal, agricultural, and industrial waste to be used in the plant furnaces, and to raise the operation capacity.

The new coal mill project comes as part of three projects that the company intends to implement with a total of EUR7m to establish a mechanical crane instead of an air crane with a high power consumption.

The company did not implement its plan to establish a cement grinding plant in Brazil with a capacity of 230,000tpa due to lack of investment feasibility of the project, given the adverse conditions experienced by the Brazilian economy.

Published under Cement News

Tagged Under: Arabian Cement Company Egypt