Power shortages affect cement production in Egypt

Byyyp

Updated Wed, 12 Mar 2014 00:00:00 GMT

The Egyptian cement industry is suffering from increased energy shortages that have forced production rates to drop and prices to increase, according to a statement released by the cabinet. The country is experiencing a gas shortage, as the government subsidy system favours exporting natural gas as LNG rather than using it for power generation.

As reported by the Daily News Egypt, Interim Prime Minister and head of the cabinet Ibrahim Mehleb, met with the Minister of Foreign Trade, Industry and Investment, Mounir Fakhry Abdel Nour, the Minister of Energy and Electricity, Mohamed Shaker, the Minister of Petroleum, Sherif Ismail, and the Minister of Environmental Affairs, Leila Iskander, to discuss the impact of energy shortages in the country. Medhat Stephanos, head of the cement industry at the Federation of Egyptian Industries (FDI), and Omar Mehana, board member at the FDI, were also in attendance.

In January, the Egyptian Natural Gas Holding Company reduced gas supply to cement plants by around 50%, which resulted in a decrease in cement production. The resulting rise in the price of cement is expected to have a negative effect on construction activity and the implementation of infrastructure projects across the country.

The cabinet’s statement noted the urgent need to address the power shortages and expand Egypt’s use of new and renewable energy sources. In order for cement manufacturers to increase production and meet demand, the country may permit the use of coal as a power source, providing that the companies comply with strict environmental regulations.