The Petroleum Ministry has proposed that the Ministry of Trade and Industry import cement from overseas to meet local demand instead of building new cement factories. The Petroleum Ministry claimed that importing from abroad is a better economic alternative, as it will decrease the amount of gas and oil consumed by domestic factories.
Meanwhile, negotiations are being held between representatives of the Industrial Development Authority (IDA) and the Egyptian Natural Gas Holding Company regarding the issuance of eight new cement factory permits and the energy they will consume, said government sources. The Industry Ministry of Trade and Industry plans to issue the permits in mid-2010.
However, according to the Petroleum Ministry, the gas and oil demanded by these new factories would exceed the projected allocations to the industrial sector.
The government plans to limit the growth of energy-intensive industries–including iron, cement and compost–in favor of clothing, food and other less energy-intensive industries, said sources speaking on condition of anonymity.
Previously, the Ministry of Trade and Industry announced it would issue eight new cement factory permits in the first half of 2010. The factories were expected to open in 2014 to satisfy local demand.
Based on the projected rise in local demand by 2017, it is illogical to import cement, said official sources from the Ministry of Trade and Industry.
According to a study by the Industrial Development Authority, local cement consumption will reach 77 million tons in 2017, but production will only reach 58 million tons, even with six new factories operating. Permits for those six factories were issued in 2007 to satisfy rising local demand.Sources also said the importation of 17 million tons of cement in 2017 will negatively affect Egypt’s balance of trade and turn the country into a cement-importing country susceptible to international price fluctuations.
The President of the IDA Amr Assal told Al-Masry Al-Youm in a telephone conversation that the entire matter will soon be in the hands of the Supreme Council for Energy.
Translated from the Arabic Edition.
