The market doesn’t need “new cement licenses” and the drop in the companies’ profits affirms on the monopolism absence
“Al Masry Al Youm” conducted an interview with Mr. Sergio Alcantarilla - Chief Executive Officer at Arab Cement Company ACC, where he stated that despite the political reform reflections on the sector, the Egyptian market is attracting new investments, while praising the banking sector’s success in providing the currency required by the companies working in the industry while excluding the plans of the funding companies from massively being affected by the interest rate price hikes on the loan that was recently offered especially in light of the number of initiatives offered by the Central Bank of Egypt CBE for the several production sectors including tourism, small and medium-sized enterprises and industry with affordable interest rates.
Alcantarilla praised the new investment law that was recently issued as the law includes many incentives, noting that the main factors that attract the foreign investors when he makes his investment decisions is the availability of the clear economic policies, along with his capability to exit the market easily and how the low is fairly applied on all investors.
Regarding the company’s investment strategy, he said that the company is currently injecting new investments valued at EGP231 Mn to implement 3 projects including the completion of turning to use coal as an energy source through establishing a new coal mill, along with a cement mechanical transport project to reduce electricity consumption, and finally a project to recycle production waste.
Furthermore, he added that the company’s total investments within the Egyptian market are valued at $650 Mn, noting that the company acquires 7% of the market’s volume. He added that the company targets to reach sales volume worth 4, 5 Mn tons by yearend, in addition to developing its export activity as the company exported 200K tons during H1.
The company won’t present to receive any new license because it doesn’t need these licenses over the upcoming 6 years, especially in light of the availability of the energy production that satisfy the requirements of the national projects and the local market needs.
The government had offered 14 licenses to produce gray cement at 9 governorates during the last period, however they didn’t decide on the remaining licenses after announcing the winning of 3 companies established by the Industrial Development Authority on the new licenses in last November that include the Egyptian Cement Company at Suhag and El Sewedy Cement Company at Ain Sokhna and Southern Valley For Cement at Beni Suef. Furthermore, Alcantarilla expected that the local consumption would reach 74% of the maximum energy production that is estimated at
73 Mn tons annually, while the consumption won’t exceed 53 Mn tons by 2017 end despite the urban development projects currently implemented by the country. Regarding the company’s plans to use coal, he added that the company targets to be more depended on coal within the energy mix to reach 82% after the new coal mill start operating with investments worth $10 Mn.
