Some industries are getting harder than others from rolling blackouts: Factories in the steel, livestock, food production, petrochemicals, and fertilizers industries are facing operational disruptions due to ongoing power cuts and gas shortages that are squeezing companies’ bottom lines. We spoke to several industry insiders from various industries about the challenges that businesses face and what they’re doing to try to find a solution.

For some, gas shortages eclipse electricity issues: The primary concern isn’t the power cuts — which have been happening since 2023 — but the more pressing issue is the shortage of natural gas supplies, an industry insider from a leading foreign fertilizer manufacturer in Egypt told Enterprise. “The industry relies on natural gas for about 60% of its raw materials,” the source explained. The factory his company runs was shut down for ten straight days at the beginning of the month, operated intermittently for a week, and then halted production again four days ago due to a complete lack of gas supply.

This is causing fertilizers prices to skyrocket: Fertilizer prices in the open market have surged due to production disruptions, with prices soaring over EGP 20k per ton, marking a 50% m-o-m increase and over 110% y-o-y, Giza’s Farmers’ Syndicate head Magdy Abou El Ala told Enterprise. Abou El Ala added that farmers are currently unable to find any quantities of urea fertilizers from traders. “When available, the price doesn’t drop below EGP 1k per bag, compared to EGP 500-600 before the crisis,” he noted, adding that the price for subsidized bags at agricultural cooperatives is approximately EGP 300.

Ripple effect on agricultural prices: Abou El Ala warns that the agricultural sector is bracing for an increase in crop prices due to the dual impact of fertilizer shortages and seed varieties’ inability to withstand the ongoing heatwaves. This combination of factors will likely lead to reduced supply and in turn higher prices in the coming period. Farmers’ Syndicate head Hussein Abu Saddam also commented on the situation, telling Cairo 24 that gas shortages at fertilizers plants are poised to increase summer vegetables and fruits up 25%.

Poultry farms are struggling to maintain their stock during heatwaves: Poultry farms are experiencing significant losses on the back of power cuts, with entire barns in several farms suffering the loss of all their chickens, according to two sources from the Poultry Producers Union. The Cairo Chamber of Commerce’s poultry division head Abdel Aziz El Sayed highlighted that extended power cuts negatively impact farms’ production capacity, telling Hapi Journal that “the high temperatures without adequate ventilation and cooling due to power cuts lead to increased poultry mortality.”

Home appliances production to nearly halve: Hassan Mabrouk, head of the Home Appliance Division at the FEI, estimated a 40% reduction in home appliance production due to power cuts, according to statements he gave to Hapi Journal. “No facility is spared from the load-shedding plan,” he said, noting that ongoing power cuts during working hours will inflict severe losses given the rising operational costs.

The steel industry has far not been as badly affected: Steel factories have not yet felt the brunt of the power cuts and no significant complaints have been reported yet, according to Ayman El Ashry, CEO of El Ashry Steel. However, a source from the sector told us that while power cuts do not heavily impact the steel industry, the steel melting process is sensitive to sudden power outages, leading to a significant waste of raw materials. Under normal circumstances, wastage is around 1-2%, but unexpected power cuts can put that at 5%. Moreover, restarting a furnace could take three to four days, significantly raising operational costs.

But the food industry hasn’t been as lucky: The primary challenge for food manufacturers is the stoppage of natural gas supplies that occurred earlier this month, head of the Federation of Egyptian Industries’ (FEI) food division Ashraf El Gazayerli told Enterprise. The chamber engaged with the Industry Ministry to resolve the crisis within a few days, but the issue resurfaced two days ago and new talks are currently underway. Despite gas supply shortages, production has not halted entirely, as some factories have reserves, El Gazayerli said with the caveat that to avoid future production stoppages, the resumption of gas supply is critical.

Federation of Egyptian Chambers of Commerce in talks with the gov’t: Egyptian Chambers of Commerce head Ahmed El Wakeel told Enterprise that the Federation of Egyptian Chambers of Commerce is in continuous talks with the government to resolve the crisis as soon as possible. However, he could not specify a timeline for resolution, adding that “we hope the crisis will end soon.”

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