{"id":565872,"date":"2021-05-10T13:52:07","date_gmt":"2021-05-10T13:52:07","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/05\/10\/cement-producers-might-have-to-cut-production-to-finally-fix-the-supply-glut\/"},"modified":"2021-05-10T13:52:07","modified_gmt":"2021-05-10T13:52:07","slug":"cement-producers-might-have-to-cut-production-to-finally-fix-the-supply-glut","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/05\/10\/cement-producers-might-have-to-cut-production-to-finally-fix-the-supply-glut\/","title":{"rendered":"Cement producers might have to cut production to finally fix the supply glut"},"content":{"rendered":"

<\/a> Cement producers could be asked to cut production by at least 10%<\/strong>, as part of a proposal put forward by the Egyptian government to reduce the supply glut that is crippling the industry, two unnamed industry executives and a senior source told Reuters<\/a>.<\/p>\n

What\u2019s the plan?<\/strong> Cement producers would reduce production by a baseline of 10.52% plus an additional 3.71% for each production line and 0.65% for each year since they began operating, according to one executive. This means cuts of at least 14%, while older and larger plants could face reductions of more than double that, one of the sources said.<\/p>\n

There could be some pushback from foreign firms: <\/strong>The executives welcomed government action to tackle the problems in the market but said that the proposals are \u201cunfair\u201d for foreign companies with a long history in the country. \u201cWe don\u2019t think [the proposal] is particularly fair, it\u2019s biased towards some local players at the moment,\u201d said one executive.<\/p>\n

Cement has been flooding the market for years:<\/strong> Sales are less than half of the sector\u2019s annual production capacity, which has surged to 85-87 mn tonnes in the past three years. Making matters worse was the new military-owned Beni Suef plant that came online a couple of years ago, which is adding another 13 mn tonnes of cement to the market every year.<\/p>\n

Demand fell further last year:<\/strong> Annual sales declined to 41.7 mn tonnes last year from 43.8 mn in 2019. Some 49.5 mn tonnes were sold in 2017.<\/p>\n

Without action, the problem will likely get worse later this year<\/strong> when another 2 mn-tonne plant<\/a> is opened by Egyptian Cement in Sohag.<\/p>\n

Some have doubts about whether production cuts are the solution:<\/strong> Some market participants claim that cuts will only lead local prices to rise, suggesting that boosting exports<\/a> could be a solution. Authorities should require factories to export at least 5% of total production to reduce some of the extra supply instead, cement distributor and head of the Cairo Chamber of Commerce\u2019s building materials division Ahmed El Zeiny previously told us.<\/p>\n","protected":false},"excerpt":{"rendered":"

Cement producers could be asked to cut production by at least 10%, as part of a proposal put forward by the Egyptian government to reduce the supply glut that is crippling the industry, two unnamed industry executives and a senior source told Reuters. What\u2019s the plan? Cement producers would reduce production by a baseline of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10135],"tags":[1002,633,4231],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-565872","post","type-post","status-publish","format-standard","hentry","category-speed-round-basic-materials","tag-cement","tag-enterprisepm","tag-speed-round-basic-materials","wpautop","entry"],"acf":{"mongo_id":"dce8e2fd-6a12-472b-bab6-fc72d9848ad3","is_powered_by":true,"story_type":"1","photo_url":"","photo_position":"above","related_issue":[565865],"teaser":"","voice_url":""},"yoast_head":"\nCement producers might have to cut production to finally fix the supply glut - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2021\/05\/10\/cement-producers-might-have-to-cut-production-to-finally-fix-the-supply-glut\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cement producers might have to cut production to finally fix the supply glut\" \/>\n<meta property=\"og:description\" content=\"Cement producers could be asked to cut production by at least 10%, as part of a proposal put forward by the Egyptian government to reduce the supply glut that is crippling the industry, two unnamed industry executives and a senior source told Reuters. 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