(AFP FILE PHOTO)
The Ministry of Industry and Foreign Trade should have postponed studying issuing new licences for steel and cement manufacturers until the energy issue has been solved, head of the Chamber of Metallurgical Industries Mohamed Hanafy said Sunday.
The minister, Mounir Fakhry Abdel Nour, announced Sunday that his ministry is currently preparing tools and regulations for issuing operating licences in the steel and cement industry. Abdel Nour added that he will discuss the issue with the cabinet this week.
Hanafy said the government should look for methods to provide energy to steel factories, which have a gap between their production capacity (11 million tonnes per year) and their actual production (6.5 million tonnes per year).
“The currently-operating factories don’t have all the needed tools to operate with full capacity such as energy, electricity and foreign currency,” Hanafy said.
Hanafy said the Industry Ministry can issue the licence by 2017, as construction companies and developers would need steel to build Egypt’s development projects, such as the New Capital.
“Currently, most of the development projects are in the study phase, so there is no need for new licences,” Hanafy noted, stressing that the already-existing steel factories are covering the market needs.
In September 2014, Abdel Nour said his ministry did not study issuing licences for steel and cement industries operations, “because the country is suffering from a huge energy crisis”. However, he expected at the time that this issue will be solved due to the new investments that will be pumped in the energy sector in the areas of natural gas, oil, solar energy and coal.
On 14 October, Abdel Nour issued a decree imposing temporary protection fees on imported steel. The new figures include paying a percentage of 7.3% of the total value for one tonne, no less than EGP 290 per tonne, for a period of 200 days.
Abdel Nour said the decision is to protect Egypt’s steel industry from the significant increase in steel imports. He added that the procedures were based on the decision of the advisory committee that considered complaints of local producers.
Following the raising of the prices of petroleum products in July 2014 for fuel consumers and manufacturers, local steel producers have complained of being negatively affected. They said that the decision has opened the door for imported steel.
