El Wadi Cement will not be reissued a cement license after the country’s Industrial Development Authority (IDA) said it wanted to open up the region’s booming construction sector to further competition.
Egypt, which reopened the cement license’s bidding process in May, has blocked El Wadi and other cement firms with existing operations from bidding in an effort to boost competition and bring down prices, it said.
"The license will not be returned. We have already announced the bid. Their land has been withdrawn and other bidders are now on the table," Amr Assal, the IDA’s head told Reuters. "It’s too late."
In February, the IDA cancelled El Wadi’s and North Sinai Cement’s production licenses over start-up delays and financing shortfalls in November and gave it two months to appeal to a licensing committee but neither met the conditions set.
El Wadi Cement secured a €150 million ($185 million) loan from French bank Credit Agricole, in a bid to regain the production license, reported al-Mal newspaper.
El Wadi filed a court case in early June seeking to regain the license or be granted financial compensation up to LE 250 million ($44 million).
A court decision is unlikely before winning bids are announced. The deadline for submitting a bid is July 1 and a decision is expected by the end of the month.
"Of course, the judicial system can make any decision it pleases. If it makes one in two or ten years, we will all be obliged to follow the ruling," Assal said.
This is the second loan El Wadi Cement said it secured. In February it added a $328 million loan from Liechtenstein bank LLB.
The country’s construction industry has continued to grow in the wake of the global financial crisis, although it stalled in other parts of the Middle East, with consumption rising 25 percent and production topping 50 million tons per year.
Egypt is planning to issue eight additional cement licenses this year, as it aims to boost production capacity to 80 million tons a year by 2015 from 50 million.
