CAIRO: Last Sunday’s auction for six licenses to build greenfield cement plants across the nation spurred dismay among various industry players, most of whom failed to win the bid.
Several cement companies revealed their intentions to file lawsuits against the Industrial Development Authority (IDA) – the entity that ran the auctions – accusing it of manipulating the auction and granting licenses that are inconsistent with companies’ production capacities.
Cleopatra Cement – owned by Mohamed Aboul Enein, prominent businessman and Member of Parliament – as well as UAE-owned International Development and Investment Co. and National Cement are currently looking into suing the IDA after failure to win any of the six licenses. In addition, Delta Cement said it would file a lawsuit for being banned from entering the bid.
Initially, nine cement companies began bidding for eight licenses Sunday to build cement plants in eight different governorates, in an attempt to increase domestic supply. However, two companies abruptly withdrew from the auction due to a lack of interest in the remaining licenses in Sohag and the New Valley governorates.
The six winning bids for the greenfield licenses ranged from a minimum of LE 22 million to the highest bid of LE 251 million, bringing in a total of LE 801 million.
Licenses to expand annual production by 1.5 million tons went to Assiut Cement for LE 202 million and Beni Suef Cement for LE 134.50 million.
Proceeds of the auction are expected to generate LE 2.65 billion for the government to be used to build infrastructure of industrial zones nationwide, announced Minister of Trade and Industry Rachid Mohamed Rachid.
Still, allegations of manipulation and favoritism surrounded the auction, as several cement company officials said the bidding was predetermined to land on international cement companies rather than domestic ones.
“Such allegations are unfounded, as three licenses went to local cement companies, an IDA official told Daily News Egypt. “The auction was fair and just and void of any bias.
Indeed, El-Sewedy Cement – owned by Egypt s El-Sewedy Group, the parent company to El-Sewedy Cables – won the second license in Suez. Egypt’s El-Nahda Industries, partly owned by National Cement and several other state-owned enterprises, won the plant in Qena. The third one is North Sinai Cement, owned by Mohamed Farid Khamis, the main shareholder in Oriental Weavers.
On the other hand, the top-winning bid went to Nile Valley Cement, which is majority-owned by Horus Cement that is partly managed by Financial Group-Hermes Co. for Investments. British-owned Al-Arabiya Al-Wataniya won the plant in Minya, while Egypt Kuwait Holding took the one in Assiut.
Still, some companies complained that expansion licenses were granted to non-Egyptian companies – namely local affiliates of Mexican company Cemex and French company Lafarge – again accusing the IDA of favoring international companies.
“These objections are groundless, and what proves my point is that they come from companies that failed to win the bid, the IDA official added. “It’s only a reaction to their loss.
