Foreign experts and investors are demanding that Egypt lower its energy prices, saying that Egypt's prices are the second only to those of China. Foreign experts have been running studies to decrease financial losses caused through electrical power shut downs in aluminum factories.
Experts participating in the 14th Arab International Aluminum Conference (Arabal) which concluded on Wednesday in Luxor confirmed an increase in rates of aluminum usage in all industries. Consumption of the metal is expected to increase from 40 million tons annually to 100 million over the next ten years, which, they say, underscores the necessity of developing strategies to meet this demand."
The rise in energy prices has become a problem for aluminum factories globally, according to specialists, which necessitates finding alternatives based on renewable energy. Egypt's energy price increases were criticized by experts, as being excessive and the most prominent disincentive to foreign investors hoping to build factories in Egypt.
The conference drew more than 450 participants representing more than 24 countries, and saw the presentation of more than 100 research papers on the development of aluminum factories. Presentations included research papers on methods of reducing energy dependence and protecting the environment, exploring the possibility of using coal or renewable energies like water to provide a permanent source of energy, instead of gas or petroleum, and pointing out the enormous increase in the price of gas and petroleum recently.
Cairo University Physics professor, Hafez Abdallah believes that many of these research papers will be particularly useful to aluminum factories in Egypt. He specifically referred to a paper presented by a participant from Norway in which he attempted to find solutions to the problem of electrical power cuts. This is a problem aluminum factories in Egypt often face, particularly this summer when Egypt experienced a wave of blackouts which cost one factory in Naga Hammadi millions of Egyptian pounds.
Abdallah pointed out that aluminum factories are fundamentally dependant on electricity, to the extent that power inputs constitute up to 23 percent of the cost of the finished product, and cost factories millions of Egyptian pounds at any point when production units are stopped due to power shortages. The basic problem lies in the fact that the unit is designed to work continually throughout the period of its service, which means it can run for five years continuously. He explained that if the unit stops due to a lack of power it automatically becomes unusable, and the factory loses about LE3 million per unit.
Foulid Abekan, head of one of the largest global aluminum-producing companies, said that all aluminum factories face the problem of energy supplies, however there are a number of countries that subsidize the industry since it is one of the larger industries and has a promising future globally. He explained that he would be prepared to invest in Egypt if energy were to be offered at a reasonable price.
Sayyed Abdel Wahab, chairman of the Board of Directions at the Naga Hamadi Aluminum Company, said that one of the largest consulting companies in London had recently undertaken a study which showed that consumption rates of aluminum will increase during the next 10 years to reach 100 million tons per year, while, "We in Egypt produce 320,000 tons annually, which means that we must raise our production capacity to 500,000 tons in the coming period in order to guarantee our survival in the global market."
Abdel Wahab noted that the aluminum industry now contributes to the production of most cars, planes, cables, electrical appliances, building projects and home appliances, which makes it necessary for all nations to focus their energies towards its further development. He explained that his company sells approximately $240 million in Egypt alone, generating hard currency which can be used in other activities.
Mahmoud al-Nasheet, one of the experts from Bahrain, said that in his country they have developed a strategy relying on coal as the energy source, using the best modern techniques which take into account the environmental dimension of burning coal. He explained that they also use the enormous amount of heat produced by burning coal in the desalination of seawater.
Translated from the Arabic Edition.
