Egypt's cabinet granted four companies licenses for steel plants in the country, as the government seeks to boost production and lower imports of supplies for the construction industry.
The four firms are Port Said National Company for Steel, IIC for Steel Plants Management, Al-Marakbi and Al-Wataniya. The companies had won the licenses in December but were later given an extension to make the required payments.
The production capacity of the factories is 2 million tones of rebar and 1 million tones of billet steel, the ministry of trade said in a statement on Tuesday. Two plants will be located in southern Egypt and the other two in the Nile Delta with total investments at 3 billion Egyptian pounds (US$503.5 million).
Demand for new housing in the Arab world's most populous nation has kept its construction sector strong despite the global economic downturn, making Egypt a major market for steel exports, mainly from Turkey.
Analysts say that despite Egypt's political upheaval, which froze property sales and increased new home cancellations, housing demand will still be buoyant in the long-term with young couples getting married each year.
The new licenses would help tackle a domestic shortage of steel rebar and allow property developers to avoid supply bottlenecks, analysts also say.
(US$1 = 5.958 Egyptian Pounds)