🏭 The Egyptian government is accelerating its support of the cement industry as a vital means to achieving the ambitious national export target of USD 150 bn at a time when the sector is seeing a hike in demand and an expansion in production and exports. Obstacles facing manufacturers are being resolved, and investment incentives are being set in place to ensure the stability of the local market and to bolster the competitiveness of Egyptian products in regional construction and foreign markets, Federation of Egyptian Industries Egyptian Cement Division Chairman Ahmed Shireen Korayem, told EnterpriseAM.

The cement market is heading towards sustainable growth, held up by momentum from major national projects, the reinstitution of the 2008buildinglaw, stable exchange rates, growing confidence from investors, government incentives, and positive analyst expectations.

Demand for cement is expected to receive a strong boost driven by several key factors — among them is the implementation of massive national projects, including Ras El Hekma and New Alamein, alongside the reinstatement of the 2008 building law, which will contribute to stimulating private construction activity, according to research by Al Ahly Pharos. Sustained exchange rate stability helps boost investor confidence, whereas the broader economic scene suggests a positive shift in trust, with more developers and contractors willing to resume work compared to two years prior.

The industry is also seeing increased demand from regional reconstruction markets, as well as European, African, and US markets. This creates significant opportunities for local factories to boost exports, Korayem explains, further noting that the sector continues to coordinate with government bodies to develop new plans to meet this growing demand, while ensuring local market stability.

Cement production rose 20.3% y-o-y in the first eight months of 2025 to some 42 mn tons. That said, local selling prices haven’t decreased, according to market data seen by EnterpriseAM. This comes as research from Beltone seen by EnterpriseAM indicates that annual production reached 70.5 mn tons in August, up from 61.5 mn in the past year, an early indication of a revitalized market.

Local sales by cement companies also rose by some 13.3% y-o-y in the first eight months to 34 mn tons. Korayem expects local demand volume to exceed last year’s level of 47 mn tons, indicating a recovery in the construction sector, and supporting production expansion and export plans.

Exports rose marginally by 2.2% y-o-y over the first eight months of the year to 13.9 mn tons — 7.5 mn of finished cement and 5.4 mn of clinker. Despite the increase, export revenues dropped 7% over the period to USD 581 mn, according to data from the General Organization for Export and Import Control.

Strong and unexpected market discipline and the wait for idled capacity reactivation led to local cement prices stabilizing at EGP 4k per ton over the past four months, according to Beltone. While demand is on the rise, and exports remain resilient amid price stability and improving market fundamentals, policy intervention remains the main uncertainty factor that could limit the sector’s short-term re-rating potential, according to Al Ahly Pharos.

The government has introduced incentives to cement manufacturers in hopes of supporting increased supply in the local market, as announced by the Industry Ministry earlier this month. Factories that increase production and direct it to the local market receive discounted fees for procedures related to modifying production capacity in operating licenses. These incentives aim to encourage increased capacity, contributing to lowered prices and a supply surplus, according to Korayem.

This follows the government giving cement factories just one month to restart production lines earlier in July. Since the quota system was cut in May, cement prices have remained stable near USD 81 per ton — EGP 3.8k — up from USD 50 per ton — EGP 2.1k — last year. This stability indicates a balance between supply and demand, rather than regulated pricing, according to Al Ahly Pharos.

Cement stocks rose on the EGX’s Building Materials Sector index last Sunday following the government’s decision to grant producers financial incentives, leading the sector to the highest sectorial gain of ~3.6%. Beltone raised the target prices for all four of its covered cement companies in early October, maintaining a buy recommendation. Arabian Cement’s target share price was raised by about 39% to EGP 55, Sinai Cement by 20% to EGP 67.2, Misr Beni Suef Cement by 13% to EGP 246, and Misr Cement (Qena) by 73% to EGP 114 per share.

The government plans to issue two new cement production licenses before year’s end to boost production capacity and curb rising prices. Each license is set to include a dedicated production line with a capacity ranging between 1.5-2 mn tons annually, following forecasts that local cement consumption will rise to 52 mn tons by year’s end, up from 47 mn in 2024. A memo by CI Capital seen by EnterpriseAM, however, notes that acquiring existing projects is the most economically viable option for current market players looking to expand.

What will the market look like in 2026? Total demand — including exports — is projected to reach some 68 mn tons in 2026, according to Beltone. It also sees the average local retail price dropping to ~EGP 3.1k per ton (USD 50), compared to EGP 3.9k per ton in 4Q 2025. This projection is 11% higher than previous estimates of USD 45. The current price difference of USD 13-15 is not likely to be sustained in the medium term due to production surplus, currently at 76 mn tons, supported by clinker availability. Local demand is also expected to slow from 11% growth in 2025 to mid-single-digit levels as shipments approach historically high rates, according to Beltone.

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