The Egyptian cement market has been growing at an average rate of 9 per cent a year since 2005, when consumption stood at 28.5 million tonnes. In 2011, consumption rose to 48.6 million tonnes.

As a listed company, Suez Cement was affected by Egypt’s political upheavals in early 2011. The company’s market capitalisation at the end of 2011 was £E4.1bn, down more than 40 per cent compared with 2010, and just a quarter of its 2005 peak of £E16.4bn.

The company achieved sales of 10.2 million tonnes in 2011, worth £E4.8bn, down 21.6 per cent from 2010. Its gross profits were £E1.09bn, while net profits decreased by 54 per cent to £E569m compared with the previous year. Suez Cement attributes its poor performance to the combined effect of lower volumes and prices, and higher wage costs.

Demand was also affected after several construction and infrastructure projects were put on hold in Egypt.

Demand dropped 1.7 per cent to 48.6 million tonnes in 2011 from 49.5 million tonnes in 2010. The small drop was largely due to the demand from unlicensed construction activity in the country, which offset drops in planned construction.

The firm’s cement prices have come under pressure from new entrants to the market.

Egypt’s economy was hit hard in 2011 by  protests, curfews and gas shortages. Recent moves by President Mohamed Mursi to wrest control of the state means uncertainty in Egypt is only going to continue. This does not bode well for firms such as Suez Cement, which require stability to grow their businesses.