{"id":666301,"date":"2025-06-01T00:00:00","date_gmt":"2025-06-01T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/how-is-the-govt-working-to-strengthen-the-iron-and-steel-industry\/"},"modified":"2025-06-01T00:00:00","modified_gmt":"2025-06-01T00:00:00","slug":"how-is-the-govt-working-to-strengthen-the-iron-and-steel-industry","status":"publish","type":"inside_industry","link":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/how-is-the-govt-working-to-strengthen-the-iron-and-steel-industry\/","title":{"rendered":"How is the gov\u2019t working to strengthen the iron and steel industry?"},"content":{"rendered":"

The steel industry is in for a revamp<\/strong>: <\/strong>The Madbouly government is rolling out a new plan to enhance the local iron and steel industry, which includes issuing new licenses for billet production, localizing feed-in industries, and implementing unified industrial policies. The plan was announced by Industry Minister Kamel El Wazir during a meeting<\/a> with local producers last month.<\/p>\n

The end goal: <\/strong>The plan aims to see the industry achieve self-reliance on raw materials, cut down on imports, and improve production quality to meet international standards.<\/p>\n

The road to get there: <\/strong>The government will issue new steel billet production licenses to produce inputs with specific properties to feed into the market\u2019s demand for use cases ranging from weldable and earthquake-resistant iron to materials suited for marine and saltwater environments. The Industry Ministry also plans to meet local billet demand by reallocating excess production from existing producers to rolling mills, based on each mill\u2019s capacity, as a temporary measure until the new billet plants begin operating, El Wazir said.<\/p>\n

SOUND SMART-<\/strong> Iron billet is a semi-finished metal product used primarily in rebar production, which is a key material in construction. It is also essential to rolling mills that process it into finished products, making its availability and price directly impact local steel prices. It is produced by melting iron ore or scrap, pouring it into molds, and shaping it into metal rods. <\/p>\n

Competition is high:<\/strong> A total of 13 local companies<\/a> are eyeing the new billet production license \u2014 including Algioshy Steel and Ashry Steel.<\/p>\n

A gap in the market: <\/strong>The government aims to close the 2 mn ton billet gap between local supply and demand and achieve self-sufficiency through the new licenses, Ashry Steel\u2019s Ayman Ashry told EnterpriseAM, adding that the licenses are expected to fully cover the deficit, reduce the cost of import, and enhance local supply. <\/p>\n

By the numbers: <\/strong>Egypt has a licensed production capacity of 10 mn tons of billet per year and local consumption stands at around 8 mn tons a year, yet Egypt still imports 1.6 to 2 mn tons annually, El Marakby Steel\u2019s Hassan El Marakby told EnterpriseAM. He explained that this is largely due to some of the integrated-cycle plants operating below capacity, and rolling mills lacking licenses to produce billet, forcing them to rely on imports.<\/p>\n

High local production costs are a key hurdle to localization:<\/strong> The cost gap between locally produced and imported billet \u2014 which favors imports \u2014 is significant, according to El Marakby. He attributes this to the lack of local raw mining materials, forcing factories to import them, as well as higher energy costs compared to exporter countries that have an abundance of raw materials and use high-capacity, lower-cost furnaces. The lack of import tariffs further weakens the competitiveness of local producers and slows down expansion plans.<\/p>\n

The government is working to change that: <\/strong>The government is pushing to localize and deepen iron and steel supply chains to ease pressure on FX and transform the country into a regional industrial hub. The aim is to enhance Egypt\u2019s competitiveness in global markets and expand production in industries where it has a comparative advantage and specialized capabilities, the cabinet said in a statement<\/a> last week.<\/p>\n

Egypt already has some competitive advantages<\/strong>, including access to technology, technical know-how, skilled manpower, and a large domestic market, Ashry said. Egypt\u2019s geographic location, modern infrastructure, and trade agreements also boost its potential to convert these advantages into export opportunities through increased production.<\/p>\n

The government also wants to meet industry needs locally:<\/strong> The state is working towards providing all the materials steel producers require locally to support a fully integrated value chain. This would allow manufacturers in sectors like engineering and industrial production to access inputs locally instead of relying on imports, which would strengthen their export capabilities, Ashry said, adding that the iron and steel industry is considered the backbone of several sectors, including construction, automotive, appliances, and engineering.<\/p>\n

REMEMBER-<\/strong> Egypt has made several strategic moves this year to boost the local steel industry including inaugurating the second phase of Suez Steel\u2019s facilities<\/a>, which include a pelletizing plant \u2014 with an annual capacity of 5 mn tons of iron ore pallets \u2014 as well as the country\u2019s first heavy section and rail factory with a capacity of 800k tons per year.<\/p>\n

And there\u2019s more to come: <\/strong>Earlier this year, China\u2019s Xin Feng kicked off construction on the first phase of its USD 1.7 bn integrated industrial complex<\/a> in Ain Sokhna. The first phase will include four factories for automotive brake components, household appliance parts, standard fasteners, and hot-rolled steel coils and the second phase will add five more factories including one for steel structures.<\/p>\n

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