작성일자: 2014.12.14

작성자: 카이로 무역관 노정민(rho@kotra.or.kr), Pakinam Awad(pakinam.kotra@gmail.com)

1. LOCAL CEMENT PRICE

□ City Name: Cairo

Local Cement Price

                                                (EGP)

         Note: 1. Tax excluded (Tax: %)

     2. Average price of cement per ton in local currency (delivered to site)

     3. (#) net weight per bag

     4. All figures to be indicated in National Currency, except for percentage points

     ** Research focusing on cities (including capital) that researched in previous survey is required. Please refer previous research Report

□ Main factor of price fluctuation (Price fluctuation factor, Cement industry market trend, etc.)

 ○ In March 2014, Consumers in Egypt have suffered a whopping 30 percent hike in cement prices over the last week of February 2014 up to the first week of March 2014, as producers offset a rise in energy prices, according to an industry insider. The price of cement per tonne was sold between 750 EGP ($107.7) and 800 EGP ($115) compared with 550 EGP ($79) and 600 EGP ($86.2) a month earlier, according to Mr. Ahmed El-Zeiny, the Head of the Building Materials Division at the Cairo Chamber of Commerce. The Egyptian Competition Authority (ECA) opened an investigation into several complaints and reports about cement price hikes and it was found that cement and brick makers were the first industries hit by energy subsidy reforms in 2013, part of a gradual government program to remove energy subsidies to industry. Egypt’s energy subsidies cost 120 billion EGP ($17.2 billion) in the fiscal year 2012/13 and the government plans to lower it by 20 billion EGP ($2.8 billion) in the fiscal year 2014 which ended in June 2014.

 ○ In October 2014, Mr. Ahmed El-Zeiny said that the armed forces’ Al-Arish cement factory is constructing a new cement production line to be completed by the end of 2015. He added that this is an attempt to fight the monopoly imposed by foreign cement facilities that sell cement at higher prices than the international standards as cement companies sell the tonne of cement for more than 450 EGP, $40 higher than the international price. El-Zeiny said that cement prices have increased by 50% during the past three years. He stated that this led to a 10% to 20% increase in the prices of properties.

 ○ Companies have fixed their cement prices and are subject to regular ministry investigations and inspections, said Minister of Supply Khaled Hanafy. Minister Khaled Hanafy said that investigations are conducted at supply firms, factories, wholesalers, and cement retailers to ensure their compliance with the prices they state. The Minister’s statement added that cement companies announce their prices by the third week of every month. According to the statement, the Suez Cement Italcementi Group, which operates Tourah, Helwan, and Suez cement production facilities, fixed their price at EGP 850 per ton. Amreyah Cement Company set a price of EG 831 per ton, while National Cement put a price of EGP 750 in Cairo and a price of EGP 770 in all other governorates.

 ○ Mr. Omar Mehanna, Chairman of the Board of Directors of Suez Cement Italcementi Group, said that cement prices vary according to market changes and not because the Egyptian ministry obliged the group to do so. He added that the group does not raise the prices of cement unnecessarily. Regarding the use of coal as an alternative source of energy for the production of cement affects the cost of production and consequently, the price of cement gets affected. As for the future prices of cement, Mr. Omar Mehanna expects them to be stable. He also anticipates an increase in the demand for cement in the coming period and a rise in supply as a result of the use of the new energy system, which will bring more efficient results.

 ○ Mr. Medhat Estafanous, Head of the Cement Industry Division at the Federation of Egyptian Industries said that the cement industry is in the final stages of introducing coal as an alternative source of energy. In July 2014, the government raised the prices of gas and fuel causing cement companies to raise their prices due to higher production costs. After the increase, cement companies had to buy gas for $8 per million BTUs compared to $6 previously. Fuel oil prices increased from EGP 1,500 to EGP 2,250 per tonne. The rise in production costs was the main derivative why cement companies were looking forward to using coal as an alternative source of energy this year and it was the main derivative why cement prices increased as well.

 ○ Finally, some cement companies shared with the local press that cement prices are forecasted to increase due to higher manufacturing costs; power represents approximately 60% of the overall cost for cement production and the increase of power price will result in an increase of cement price. Also the impact of the price hike on consumers remains to be seen, as prices are also affected by supply and demand.