The Egyptian cement industry has been suffering from increased power shortages that have forced production rates to drop rapidly and prices to increase. According to the latest reports, production has come to a halt at ten cement plants following Egyptian Natural Gas Holding Company’s (EGAS) decision to temporarily cut off the gas supply. The plants reportedly account for approximately 70% of Egypt’s cement output.
EGAS supplies around 800 million ft3/d of gas to the country’s industrial sector – 150 million ft3/d of this is allocated to the cement sector. In recent months, frequent power cuts and energy shortages have resulted in the government’s decision to redirect gas supplies from some cement plants to power plants. In January 2014, the Egyptian Natural Gas Holding Company reduced gas supply to cement plants by around 50%, which resulted in a decrease in cement production.
An official from the Federation of Egyptian Industries (FEI) told local press that the plants have not yet officially announced that they are stopping production; however, employees have been given over three weeks off due to the gas shortage. Plant owners are reported to be holding discussions with the Egyptian Prime Minister regarding the revision of gas prices in order to ensure that the cement industry can continue to operate. The FEI noted that the halt in production was costing each of the plants approximately EGP15 million per day.
Edited from various sources by Rosalie Starling