CAIRO: Egypt s ASEC Cement wants to capitalize on the growth of housing and infrastructure demand in the region by more than doubling the cement production it controls by 2013, its chief executive said on Thursday.
It is completing projects in Sudan and Algeria and by March it will start building its first greenfield cement factory in Egypt, which it expects to be operational by 2012.
ASEC, a subsidiary of Cairo-based Citadel Capital, has stakes in cement plants in Algeria, Sudan, Syria, Iraq s semi-autonomous Kurdistan region and Ethiopia, and sees the Middle East as a promising market to develop.
This is a region characterized by a very significant process of growth, particularly in this sector… and still a lot is needed to meet demand for residential housing and infrastructure, Giorgio Bodo, chief executive officer and chairman, told Reuters in an interview.
Lower production costs, high demand and the proximity to overseas markets make the region an ideal platform for cement industry growth, he said.
ASEC, which hopes to achieve its goals by building several plants and acquiring a number of companies in the region, has stakes in Misr Cement Qena in Egypt and Zahana Cement in Algeria.
ASEC subsidiary Al-Arabiya Al-Wataniya (ANCC) will start construction on the 1.6 million ton-per-year grey cement greenfield plant in the southern province of Minya, Bodo said.
ANCC, which will have capital of $155 million, received one of six cement licenses awarded by Egypt in October 2007 to boost production after domestic prices increased.
The government threatened late last year to take ANCC s license away because of start-up delays.
Minya s plentiful raw materials and proximity to most routes make it a desired location, Bodo said.
ASEC s 1.6 million ton-per-year plant in Sudan, Takamol, will be fully operational by April or May, Bodo said. ASEC also owns a majority stake in a greenfield cement project in Djelfa, Algeria, that is nearly half-way built.
ASEC controls 3 million tons of cement production per year. Once Takamol comes on stream, that figure will rise to 5 million, and Bodo sees it reaching 12 million by 2013 once all the projects are up and running.
Our priority now is to be able to finalize the greenfield activities which we started, mainly in Sudan and Algeria and to have these companies operating and generating good results, he said.
ASEC Cement has no plans for the time being to bid for additional cement licenses in Egypt, as they are focused on completing their current projects.
Minister of Trade Rachid Mohamed Rachid said on Wednesday at the World Economic Forum in Davos that the country would offer eight additional cement factories in the first half of this year.
