CAIRO: Bidding on eight licenses to build new cement factories in eight governorates across the nation started Sunday, with the highest bid reaching LE 251 million and the lowest at LE 22 million.
Only six new licenses were granted to six bidders after two companies suddenly withdrew from the auction for allegedly not submitting their letters of guarantee.
The top winner was Cement Wadi El Nil, paying a whopping LE 251 million for a license in Beni Sweif governorate.
El-Sweidi Cement came in second, paying LE 201 million for the Suez license. El-Arabia El Watania paid LE 200 million for the Menya license, while El-Nahda for Industries paid LE83 million for the Qena license.
North Sinai Cement – mainly owned by tycoon Mohamed Farid Khamis, chairman of Oriental Weavers – won the bid for the fifth license in North Sinai for the unexpected low price of LE44 million. The final winner was Egypt Kuwait Holding, with an LE22 million license to build a factory in Assuit.
Initially, the auction began with nine companies – each with an annual production capacity of 1.5 million tons – competing for the eight licenses. A second auction for acquiring expansion licenses followed on the same day with five cement companies bidding for two licenses.
All six winners are to pay 25 percent of the total cost of the license within 30 days and the remaining 75 percent within 90 days. After finalizing the payment process, companies will acquire licenses and building permits within a week.
Members of the auction’s supervisory committee included representatives of ministries of trade, finance, investment, housing, environment, petroleum, and electricity, as well as the Industrial Development Authority (IDA).
The ministry of trade and industry previously stipulated that bidding companies use a minimum of 20 percent of local components in their production processes, which constitute LE4 billion of total investment in the projects.
Egypt’s total annual production capacity of cement reaches 38 million tons, with 30 million bound for local production and the remaining 8 million for export. The ministry estimates that Egypt’s total consumption of cement will soar to 55 million ton per year by the year 2011, a figure that will create a deficiency between supply and demand. Hence, there was a need for such an auction that aims to open new production plants and increase cement supply across the nation.
