CAIRO: The Egyptian General Authority for Industrial Development (GAID) has approved a proposal by Qena Cement Company to build a new cement plant in Aswan with an investment worth LE 570 million. The authority has allocated one million square meters for the construction of the plant.
Misr Cement Company (Qena), founded in 1997 by the Egyptian Federation for Construction and Building Contractors and producing more than 1.5 million tons of cement annually, is one of a handful of privately-owned companies that entered the market a few years ago in order to capitalize on the export opportunities available in the industry since environmental regulations have weakened the market in developed countries.
While the demand for cement is still high, concern over the production of this environment polluting commodity has forced international leaders in the industry to turn to cement facilities in third world countries, where environmental standards are still low and regulations are not rigid.
In Egypt, the cement sector, which until 1999 was lagging behind the global industry due to low utilization of production facilities and an unhealthy dependence on imports, has undergone a massive transformation as the government has strategically used the environmental issues facing foreign companies in this industry to the nation’s benefit.
Major stakes in cement companies were sold off in a series of privatization plans, while local companies have entered the market in order to gain a share of the profit that multinationals in Egypt, who have established operations in the country as part of their expansion plans, have been enjoying at sky-high prices.
Once the price war began, the market capacity increased and imports took a nosedive, all of which benefited the Egyptian economy and turned the Egyptian cement industry into an independent export player.
Due to the Ministry of Trade and Industry’s collaboration with GAID, various industries are expected to grow by leaps and bounds over the coming years.
According to an article published by Al Ahram Weekly in January 2006, a number of industries witnessed substantial development and growth last year alone. In fact, in 2005, 865 new factories were set up and 339 factories expanded their capacities.
Exports grew in 2004/2005 to $13.82 billion up from $10.45 billion in 2003/2004. Further growth of 20 to 25 percent is targeted in 2006. Industrial growth is targeted to increase by 5.5 percent
With a mandate to increase the competitiveness of local industries, GAID, which was established in October by a 2005 presidential decree, is an economic authority affiliated with the Ministry of Foreign Trade and Industry, was charged with implementing industrial policies and policies for the development of land for industrial purposes. According to the stipulations of the decree, a fund is to be established for enhancing and developing industrial zones and for raising their capacity to attract investments and encourage competitiveness.
