• Egypt set to allow coal-powered cement factories
  • New regulations waiting for cabinet approval
  • There are about $13bn-worth of construction contracts to be awarded in the next 12 months

Egypt is looking to boost cement production by 5 million tonnes to 65 million tonnes a year, in a move that will see licences issued to new factories across the country.

In 2014, cement producers suffered from gas shortages, with several plants seeing their gas supplies cut off entirely.

Due to the gas shortage, the Egyptian government granted cement companies permission to use coal as an alternative energy source, although this is awaiting approval from the cabinet.

The cabinet is expected to approve the new regulations in September or October, which have been endorsed by the Ministry of Environment.

Earlier this month, state-owned cement producers controlled by the armed forces lowered their prices by about £E80 ($10.2), which in turn, forced private companies to also lower their prices.

Nevertheless, contractors in Egypt claim cement prices are too high sitting at about £E550 a tonne as a result of Egypt’s ailing energy situation and rising operational costs.

The new regulations will mean the cement producers will be able to run their factories on coal, with the expectation that prices will drop significantly by the end of the year.

Material demand is set to increase across the country in the next 12 months as many construction projects announced as part of the government’s economic plan start to materialise.

According to regional project tracker MEED Projects, there are about $13bn-worth of construction contracts set to be awarded in the next 12 months. This figure excludes the stalled UAE-based Arabtec Group’s 1 million homes project, the major mixed-use development October Oasis and the proposed Airport City scheme, which are waiting for funding.

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